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Thursday, 11 December 2008.
11 am
Prayers—read by the Lord Bishop of Chester.
Introduction: Baroness Campbell of Loughborough
11.06 am
Susan Catherine Campbell CBE, having been created Baroness Campbell of Loughborough, of Loughborough in the County of Leicestershire, was introduced and took the oath, supported by Lord Coe and Baroness Morris of Yardley.
Banking and Financial Services
Question
11.11 am
To ask Her Majesty’s Government what steps they will take regarding the comprehensibility of offerings made to the public by the banking and financial services industries.
Lord Davies of Oldham: My Lords, the Government have given powers to the Financial Services Authority and the Office of Fair Trading to ensure that financial services firms provide clear explanations of their products. The FSA has set firms a deadline of the end of this year to improve their documentation where it has identified deficiencies, and it will continue to review the situation.
Lord Harrison: My Lords, I thank my noble friend for that Answer, but I have had sight of the Lloyds TSB offer for HBOS. Does he agree that you need Galileo’s lenses to read the small print, Roger Bannister’s stamina to get through the 349 pages and Wittgenstein’s brain to understand it? Will he impress upon the banks that they need to communicate effectively with the public and give them some plain speaking about plain English?
Lord Davies of Oldham: My Lords, I am surprised that my noble friend has asked that question, as I thought that he had the qualities that he identified to cope with the issues. Of course, I agree that the complexity is daunting. The authorities are concerned to ensure that the basic outline of the documents is clear and that potential investors know the exact nature of the product. A great deal of complexity is bound to be attached to a rights issue and there is bound to be a longer document as well. If my noble friend’s burden is that there should be clarity about financial products, that is exactly the Government’s objective.
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Lord Forsyth of Drumlean: My Lords, will the Government take on board the need for clarity in their own advice to the banks? In particular, can the Minister explain how the banks are expected to improve their lending to businesses and others while paying penal rates for the money provided by government and, at the same time, being urged by the Government to repair their capital reserves? Surely the banks are being told by the Government to do one thing in public and another in private.
Lord Davies of Oldham: My Lords, I do not think that that is the case at all. The noble Lord will be all too well aware that throughout history banks have had to balance these competing demands, and that requires judgment. That is why, where they are successful in business, they merit the rewards, and in the past they have often had quite high rewards for the work that they do. The current position facing the banks is challenging, but does anyone doubt that the current position facing all businesses in this country is challenging, when we are facing the greatest downturn for a considerable number of decades? The noble Lord will appreciate that when the banks are asked, in particular, to ensure that families and small businesses are supported and are able to get finance, that is a proper and legitimate demand from a Government who have invested considerable public sums in making the banks viable.
Lord Peston: My Lords, if I may be allowed to return to the Question on the Order Paper, is not the problem much more to do with the general public using a bit of common sense? If, for example, Northern Rock were offering depositors a higher rate of interest than Nationwide, surely the general public should simply be told, “Why don’t you use your common sense?” Is Northern Rock better at running an organisation than Nationwide, or is it, as it turned out, run by a bunch of chancers?
Lord Davies of Oldham: My Lords, my noble friend seeks to tempt me, as he often does, in these difficult areas. Of course, we expect an informed public to use common sense and judgment on the respective valuation that they attach to the products of different banks, building societies and financial agencies. However, we are concerned about the levels of financial literacy in this country. Education has somewhat neglected this crucial part of the citizen’s role. In this day and age it is important to recognise that we need to inform our citizens better and provide the educational background on which that can be established.
Lord Jones of Birmingham: My Lords, I declare a vague interest as a solicitor admitted to the roll of solicitors of the Supreme Court. As noble Lords know, it is a profession that never uses one word when 10 will do. I should like an acknowledgement from the Minister that if the knee-jerk reaction to the banking crisis is to be more and more regulation, the result will be more and more complicated documents from the legal profession and its clients. The only way in which to comply with the regulation will be to draft everything to cover everybody’s posterior, and we will end up with a more, rather than a less, incomprehensible system.
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Lord Davies of Oldham: My Lords, I had not realised that the noble Lord, Lord Jones, was capable of a vague interest in anything; he always shows the most extraordinary enthusiasm about all matters. Of course the issue he raises is important. In the way in which this present crisis is tackled, we have thoughtful policies that will produce results for the long-term health of the economy. This is not a knee-jerk reaction but a prompt reaction because the crisis requires urgency. It is not a knee-jerk response as the House will see as we develop our debates on the Banking Bill. The Government have thought the issue through carefully and that will stand the scrutiny of the House. On more general policies, it is pretty obvious that the only criticism voiced by critics of the Government, and by the main Opposition party in particular, is, “We don’t know what we would do”.
Lord Newby: My Lords, the noble Lord referred to an initiative being taken by the FSA, but as the noble Lord, Lord Harrison, implied, this initiative appears to have failed so far. Will the Government look at the example of the pharmaceutical industry where there is a distinct professional body of medical writers whose sole role in life is to try to bring some clarity to the product coming from that industry? Will the Minister suggest to the FSA that it should look towards establishing a new cadre of financial writers whose sole role in life will be to make products clear for consumers?
Lord Davies of Oldham: My Lords, I am grateful to the noble Lord for that constructive suggestion. We all appreciate the fact that there have been improvements in communications to the general public about medicines. If we can learn lessons from that to apply to financial products, I am sure that the FSA will do so.
Roads: Blood Alcohol Limit
Question
11.19 am
To ask Her Majesty’s Government what assessment they have made of the potential reduction in road accidents if the legal blood alcohol limit for drivers were reduced from 80 to 50 milligrams per 100 millilitres.
The Minister of State, Department for Transport (Lord Adonis): My Lords, there has been a considerable reduction in alcohol-related road casualties over the past 30 years. Fatalities have fallen by two-thirds since 1979 and fell by 18 per cent in 2007 alone. The UK statistics compare favourably with those of other countries. Evidence is inconclusive on whether a lower prescribed limit will further reduce casualty numbers. However, we are consulting on further measures, including whether the limit should be reduced from 80 to 50 milligrams.
Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer. Does he agree with Professor Richard Allsop of the Centre for Transport Studies at University College London that reducing the level from 80 to 50 milligrams would save 65 deaths and
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Lord Adonis: My Lords, my noble friend refers to the assessments made by Professor Richard Allsop of University College London. They are estimates of possible savings and rely heavily on assumptions about changes in driver behaviour resulting from a reduction in the legal limit. We need more evidence to test those assumptions; in particular, we need a better data set on accidents involving drivers at between 50 and 80 milligrams. For this reason, we are collecting up-to-date police reports on the breath-test levels that they find in all tests at accidents. We are also developing a new drink-drive roadside survey and digital breath-testing equipment to deliver comprehensive data on all breath tests. However, my noble friend is right about the need vigorously to pursue those who are engaged in drink-drinking. Our publicity campaigns have been highly successful. In recent years, we have seen a substantial reduction in the number of accidents, including those involving drink-drivers, and we wish to see it sustained.
Baroness Coussins: My Lords, does the Minister agree that, whatever the limit, it is unlikely to be effective unless it is rigorously enforced so that people genuinely believe that there is a realistic chance that they will be caught if they drink and drive? Will he undertake to encourage the police to enforce the law consistently across all areas of the country, including at non-recordable levels of offence? I declare an interest as a former chief executive of the Portman Group, which ran many drink-drive campaigns—or campaigns against drink-driving, I should say.
Lord Adonis: My Lords, I absolutely agree on the importance of enforcement. The likelihood of enforcement has the greatest bearing on whether drivers are likely to break the law. We have tough penalties for drink-drivers in this country. The comparative data show us in a favourable light with other European countries. We believe that that rests in part on our stiff penalties and consistent and tough enforcement of the law in this area.
Lord Walton of Detchant: My Lords, will the Minister include in the consultations to which he referred the British Medical Association, which has been pressing for a reduction in the legal limit for some considerable years and has accumulated considerable evidence to support that case?
Lord Adonis: My Lords, we are consulting all interested parties and we will welcome the BMA’s views. We would also welcome the evidence to which the noble Lord referred because at the moment the evidence is inconclusive. I stress to the House that, although we have a higher limit than most European countries, we have a much better road safety record than most of
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Lord Roberts of Llandudno: My Lords, how does the Minister justify our being out of step with 23 of the other countries of the European Union, which have the 50 milligram limit, not the 80 milligram limit? Also, how many police forces will follow the example of the four police forces in Wales, which are going to breathalyse randomly during the Christmas period? Last year, 19,000 random tests were held and more than 500—558, I think—were found to be above the limit.
Lord Adonis: My Lords, the noble Lord is absolutely right to say that most other European countries have a lower drink-drive limit than we have, but our road-deaths record is better than that of almost all those countries. The latest figures—those for 2006—record 5.4 road deaths per 100,000 of the population in the United Kingdom. That compares with 8.9 in Austria, 10.2 in Belgium, 7.7 in France, 14.9 in Greece, 9.7 in Italy, 9.2 in Portugal and 9.4 in Spain. All those countries have a lower limit, so there is clearly no direct relationship between a lower limit and deaths on the road, including deaths related to drivers under the influence of alcohol.
Lord Tomlinson: My Lords, does my noble friend agree that when we talk about clarity of communication, as we were earlier, the clear communication that ought to go out in this festive season is that the only safe level at which you ought to be behind the wheel of a car is zero?
Lord Adonis: My Lords, I entirely agree with my noble friend. We need to be absolutely clear in our message to drivers and our message could not be clearer in the “Think!” campaign, which makes it abundantly clear to drivers that those who are under the influence of alcohol will be treated in the way in which all other criminals are treated when they have broken the law.
Government Information: Leaks
Question
11.26 am
To ask Her Majesty’s Government whether Home Office representations to the Metropolitan Police concerning recent leaks included the suggestion that national security had been compromised.
Lord Brett: My Lords, as the Home Secretary made clear in her Statement in the other place on 4 December, the Cabinet Office requested the assistance of the Metropolitan Police Service in investigating a series of leaks. The reasons for that request, which include reference to national security, are set out in a letter
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Lord Trefgarne: My Lords, I am grateful to the noble Lord for that reply, and indeed for the papers to which he has referred and which he made available earlier this morning. Is it in order for me to study what he has said, and indeed the papers which he has made available, so that I may reflect further on this matter?
Lord Brett: My Lords, I am more than happy to take on board and accept that suggestion. It might be useful for the knowledge of the House if I were to read the relevant aspects of the letter that relate to the noble Lord’s Question. The letter says:
“We are in no doubt there has been considerable damage to national security already as a result of some of these leaks and we are concerned that the potential for future damage is significant”.
The other sentence of some interest is:
“You will not be surprised to hear that we are also concerned that there must be risk to information about sensitive operations which, if leaked, could give rise to grave damage”.
That was from a letter from the Director of Security and Intelligence at the Cabinet Office to Robert Quick of the Metropolitan Police.
Baroness Ramsay of Cartvale: My Lords, is my noble friend as astonished and appalled as I am at the words of the right honourable David Davis, when he was interviewed by the BBC on 28 November about the Damian Green case? Speaking about similar material which he had received when he was shadow Home Secretary and about decisions on whether to make it public, he said:
“In about half the cases we decide not because we think there are reasons perhaps of national security or military or terrorism reasons not to put things in the public domain”.
In other words, it is considered all right for a shadow Front-Bench spokesperson to judge what to do with information, irrespective of the propriety of the source. Does the Minister agree that this is a deeply flawed practice in a democracy with a professional and politically neutral Civil Service?
Lord Brett: My Lords, as a Minister there is a limit to what it is appropriate for me to comment on. It is a line which all Ministers should be careful not to cross. However, I understand that that was a direct quotation and it seems to add considerable weight to the argument that there were leaks to be investigated, which is why the Metropolitan Police Service was asked to investigate.
Lord Forsyth of Drumlean: My Lords, given the damage that was done to the interests of investors and banks, will the Minister explain why the Permanent Secretary to the Treasury has not invited the Metropolitan Police to look into the leaks which have occurred there in respect of the bank bale-outs and Northern Rock?
Lord Brett: My Lords, the Home Office has no responsibility for the banking industry. I understand that the question was asked of me as the Government, but the reality is that this House and the other place have been concerned about issues which are the subject of this investigation.
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Lord Lester of Herne Hill: My Lords, will the Minister confirm that the Home Office and the police are directly bound by the Human Rights Act to balance the right to respect for personal privacy against other compelling interests such as national security? Will he also confirm that although Parliament is exempt from the Human Rights Act, the UK has an obligation under the convention to ensure that the officials of Parliament comply with the right to personal privacy balanced in the way that I have suggested?
Lord Brett: My Lords, it would be a brave Minister who would challenge the noble Lord on the Human Rights Act, and I would not seek to do it. The answer is that I am not absolutely sure. I am positive that the noble Lord knows far more about the subject than me, but I will check and, if necessary, write to him.
Lord Elystan-Morgan: My Lords, last Thursday, when repeating a Statement made in the other place, the noble Lord, Lord West, said that the civil servant at the centre of this controversy had been in post for three years, but had been leaking consistently for the past two and a half years. A question that was not asked then, which I am sure every Member of this House would wish to have answered, is: were those leaks in all cases to Members or Parliament or to a Member of Parliament? I am not asking for names, but I am asking whether there were other recipients of those leaks.
Lord Brett: My Lords, it is important to understand that the Metropolitan Police Service was invited to conduct an inquiry into leaks. The number of leaks is unknown. The leaks were to persons unknown and were made by persons who were not at that stage known. The inquiry is still ongoing. The Government have no direct influence on it and should not have. Therefore, we await the report of the Metropolitan Police. Then we will know. Until then, no Member of this House, including me, has any knowledge of the evidence being uncovered or the people being investigated.
Baroness Hanham: My Lords, we understand that a report has been required from Ian Johnson of the British Transport Police. Will the Minister make sure that this House receives a copy of that report once it is published? When is it expected to be available?
Lord Brett: My Lords, that inquiry was put in place by the Acting Commissioner of the Metropolitan Police. The report is to go to him within 14 days, which on my arithmetic makes it due in approximately one week’s time. One suspects that the acting commissioner would not have announced it in the way that he did had he not expected to make the conclusions of that inquiry public. But that is a matter for the Metropolitan Police and not for the Home Office.
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