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The governor and his executives derive their authority from court. Their responsibilities are delegated from it, and they are ultimately accountable to it. However, both the FSC’s work and the executive’s action will need to be consistent with the strategy that the Court of Directors agrees as the best strategy for fulfilling the financial stability objective, and it will be the court that holds executives and the committee to account for supporting it in meeting that objective. Ultimately, though, some decisions in relation to financial stability will be of sufficient importance and magnitude that the Court of Directors considers that the decision should be taken by the entire court. So, in some cases, the sub-committee will be advising the court itself. This is a model with which one is familiar in the private corporate sector.

7.15 pm

Moving on to the subject of membership of the committee, I am pleased to note that one thing that my noble friend Lord Eatwell and I agree on is the need to keep the committee relatively small. There has been quite extensive debate, both here and in the other place, on the question of whether the FSC should comprise a fully executive membership, a totally non-executive membership, or some variation between the two extremes. The Government’s aim in creating the FSC is to provide the Bank of England with an internal forum where executives and non-executives can come together to discuss financial stability matters. The core executive presence will be balanced with a strong non-executive membership and, if deemed appropriate, co-opted members—non-voting members—bringing their outside expertise and insight to the committee.

In addition, the Treasury will have a non-voting representative, not only for the reasons that I explained last week, but also, as the governor points out in his letter, because it is,

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But let me be clear: I am certainly not saying that attendance at the FSC’s meetings should be exclusively confined to these core members.

The noble Baroness, Lady Noakes, asked last week why we were excluding the senior executive directors from the committee. My answer to her is that nothing in the Bill would stop the FSC from inviting other Bank executives, as may be appropriate, to attend all or part of meetings. There is no limit to the number of additional non-voting members that can also be co-opted to the committee. As I said in Committee, the most senior executive with responsibility for financial stability, the deputy governor, is a full member of the FSC, and I would expect the committee to invite other executives to attend as appropriate.

Several noble Lords expressed other concerns about the proposed membership, specifically that the FSA is not represented and that there are no fully independent members. The Government agree that the committee should have recourse to whatever external expertise it considers necessary. Again, this is provided for by new Section 2B(4), the power allowing the committee to co-opt other non-voting members. As the Governor says in his letter:

“It can of course invite the FSA to attend, or anyone else who might help its deliberations, and it will want access to the widest range of information and expertise”.

However, the governor goes on to emphasise that the FSC is, ultimately, part of the Bank. I would like to underline that point. The committee is a sub-committee of the court of the Bank. It is designed to support the Bank in the Bank’s enhanced role in protecting financial stability, which includes the management of new policy responsibilities and, in particular, its lead role in the special resolution regime.

In saying that, I do not mean to suggest that we do not want the tripartite authorities to work together—forfend that be the case, because it is critical that they do work together. I am simply saying that the committee’s functions relate to the Bank’s functions within the tripartite arrangements, and as such it is appropriate for this to be a Bank committee, not a joint committee. I think that the governor’s distinction between internal co-ordination within the Bank and co-ordination between members of the tripartite is very helpful. I entirely agree with him that both are important and necessary, but that we should be careful not to confuse the two mechanisms.

The letter from the governor emphasises the numerous formal and informal channels through which the tripartite authorities can already work, including the tripartite standing committee. The governor is right to conclude that we do not need a second tripartite standing committee. The function of the Financial Stability Committee is to assist co-ordination within the Bank. I am also glad to endorse a further point that the governor makes: in meeting the financial stability objective, the Bank works within the tripartite framework.

The tripartite arrangements are set out in a memorandum of understanding. This is sufficient, clear and transparent. The Government’s view is that the tripartite working arrangements are better encapsulated in a memorandum of understanding than by being codified in statute, as this provides a necessary degree

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of flexibility to refine and enhance the arrangements from time to time. Indeed, we have committed to reviewing these arrangements once the provisions of the Bill have been put in place. In any event, as I have outlined, the Financial Stability Committee sits within the Bank—we do not intend it to be a tripartite body.

I hope that with this rather lengthy explanation I have adequately laid out the Government’s thinking behind the creation of the Financial Stability Committee. The decision about how much detail to set out in statute in relation to matters such as this is, of course, a matter of judgment. During last week’s debate the noble Lord, Lord Higgins, asked me why we were specifying such minute detail about the FSC in the legislation, while at the same time the noble Baroness, Lady Noakes, asked why the Bill is silent about the workings of the committee. I am afraid that this is one of those occasions where I will be unable to please everyone. I believe that by setting out the role and membership of the FSC in legislation, while leaving the flexibility to delegate additional functions and co-opt additional members, we have hit the right balance.

As I said earlier, we continue to make efforts to ensure that the tripartite authorities continue to work well. Noble Lords pointed out an apparent inconsistency between the FSA urging banks to conserve capital and the Treasury urging them to lend. I do not see an inconsistency; there is common language, and the FSA, the Bank of England and the Treasury have achieved that through the tripartite system. For instance, the variable scalar—the noble Baroness asked me in a previous debate to define and explain this, which I failed to do but will happily do now: it determines capital through cycles rather than at a single point of time—was evidence of the tripartite authorities working effectively. I add that it is also evidence of the Treasury working effectively to conserve stamps because now I do not have to write to the noble Baroness explaining what a variable scalar is, although I have a suspicion that she knew and was just testing me, rather than seeking the information.

I say to the noble Lord, Lord Turnbull, that the ability is there to co-opt members, which should allay concerns about a “gene pool”. I agree with his observation about an organisation where the route to the top appears to be confined to people within it. That is a generalised organisation; I would not limit it to the Bank of England. I would simply say that any organisation is enriched by ventilation, as he described it—by having external people come in. The recreation of a new court with predominantly new members will be an important part of refreshing the Bank.

The Financial Stability Committee and its explanation in statute will address some of the shortcomings of the Financial Stability Board. The chair of the Court of the Bank of England and the executive were never entirely clear about the nexus between the board and the independent members of court. The Financial Stability Committee makes clear that this is a joint committee that brings together the external viewpoint of the independent members of court with the internal executive of the Bank.

The suggestion was made that we should abandon the concept of the Financial Stability Committee as further regulation will be forthcoming in due course.

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That may well be the case. The situation we have been through means that it is incumbent on us to look at existing regulatory arrangements, and I share with the noble Lord, Lord Northbrook, the hope that we will see the noble Lord, Lord Turner, participating in those discussions in this House. However, it would be unwise for us to delay this necessary and important addition of a new committee at the heart of the Bank in anticipation of legislation that may or may not be produced at some later stage.

Taking my guidance from my noble friend’s suggestion that I should be humble, I humbly invite my noble friend to withdraw his amendment.

Lord Eatwell: My Lords, I am grateful to noble Lords who took part in this—I was going to say “short” debate, but it has become rather a long one. I am also grateful that everyone who spoke, except one, agreed with the force of my argument—that particular one being the Minister.

I was a little surprised to be lobbied by the Governor of the Bank of England, although in these febrile times I probably should not use the word “lobbied”. The governor should have declared his interest.

With regard to what the Minister said, the notion that there should be a financial stability objective is entirely shared. I am sure that the Bank of England has thought that financial stability has been its objective for the past 300 years, and maybe it is a bit surprised that it has to be told again—but never mind; if it is deemed to be neater to ally the financial stability objective with the monetary stability objective, that is fine.

I still do not understand the particular statutory need for the Financial Stability Committee. The core of the governor’s argument was that the committee will be advising the court and the executives are responsible to the court, so the court is the key strategy-making organisation and is responsible for the balance sheet and so on. In my structure the court would have received advice not just from the independents but from the FSA—it would have had a wide range of advice coming into it, on which it could perhaps have made more effective decisions.

One element of my amendment that the Minister did not mention at all is that the amendments would make financial stability an overt objective of the Financial Services Authority. He did not address that issue or indeed the fact that it would be the role of the Financial Stability Committee, as I formulate it, also to advise the board of the Financial Services Authority. The Minister told us forcefully last time that financial stability was the responsibility of the Financial Services Authority; he said it was embodied in the Financial Services and Markets Act. If that is so, why does the authority not also require a committee to advise it? I suggest that the structure I have proposed is the economical way to provide a wide range of advice both to the court and to the board of the Financial Services Authority, and would be an efficient means of securing the integration of financial stability policies across the piece for both the Bank and the authority, which is what the country really needs.

It is clear from both the governor’s intervention and the Minister’s remarks that the Government are not going to accept any change on this. It is also clear, I

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notice with interest, that the Minister accepts the argument that this may be a temporary arrangement, looking forward to the more coherent structure of regulatory legislation and institutions which is likely to come later this year. If this is indeed a temporary arrangement and the Minister has gone a tiny way towards accepting the validity of the arguments on the need for co-ordinated activity, it would be churlish of me to divide the House in those circumstances. I therefore beg leave to withdraw the amendment.

Amendment 87 withdrawn.

Amendments 88 to 98 not moved.

Consideration on Report adjourned until not before 8.30 pm.

Benefits: Non-British Citizens

Question for Short Debate

7.30 pm

Tabled By Lord Roberts of Llandudno

Lord Roberts of Llandudno: My Lords, I appreciate the opportunity to share my concerns and anxieties regarding the well-being and survival of many who for different reasons find themselves here in the United Kingdom. When one looks at the turmoil which faces our own citizens, tremendous sympathy goes out to them. But that does not mean that at the same time we should not look wider to see what other problems there might be.

Some in this country have entered illegally. I am not sure whether it is my Liberal heart or my Methodist heart that has great sympathy with them. Certainly, realistically, those who are here illegally should be returned home as gently and as swiftly as possible. Last year, I welcomed the announcement that we had halted any removals to Darfur, Zimbabwe and, as regards those of the gay community, to Iran, where they faced persecution.

The condition of some of the people who come here illegally is numbing. In my own part of North Wales only a week or so ago, some such Chinese immigrants were found to be paid tiny wages and to be forced to sleep and rest in a disused restaurant refrigerator. Such circumstances cannot be tolerated: we think of the sacrifice that some of those folk have made just to come here, dreaming that the streets are paved with gold, when we know of our own experience that that is not so.

The Minister might be kind enough to tell us how long people who have failed with their asylum claims have to wait to be returned home. Some of those people who have not succeeded have to be here for many months before a decision is made. How satisfactory is the present system? Is it causing added harm and cost to the United Kingdom? I want to applaud and pay tribute to places such as Harmondsworth, with their concerned and caring approach to those who have failed the asylum process.

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Others who come here are citizens of the European Community. They have every right to be here and most of them will make a success of their stay. A proportion of them—it could be anything; 5 per cent or 10 per cent—do not make a go of it. For those we have the gravest concern. May I say how much we appreciate the work that is already being done for them, especially by voluntary organisations? I visit the Dallow centre in Whitechapel and see what is happening there. I work with the Barka Foundation, taking those from Poland who have not made a success of it back home. I hear of the good work carried out by some local authorities. We appreciate the work that is being carried out. I suggest that in London we need the boroughs to work together in greater co-operation. We need a pan-London strategy.

How can Her Majesty’s Government help in the present situation? It is untrue that migrant workers who arrive here can immediately draw benefits: they cannot. They have to join the workers’ registration scheme. They pay £90 and it is 12 months before they are able to access any UK benefits. Ninety pounds might be little for most of us but to them it could be a great deal of money. People who come here with £300 and think that that will be enough to see them through find that that charge is levied before they can start to take the work that will enable them to claim benefits later. Is it possible for us somehow to delay the charge payable by them until they have started working and have the extra money that enables them to pay that particular fee, or to pay by instalments?

Furthermore, they have to have a national insurance number, which sometimes takes a long time. How can we speed up that process, giving everyone who wants to work here their national insurance number? When we debated the UK Borders Bill; now the UK Borders Act, I tried to persuade the Government to prepare and make available multilingual information packs that could be distributed in the villages and towns in which the folk who come to the UK live, advising them about the problems and opportunities and where help could be obtained.

I wonder whether the Government could reconsider that point. In other countries there is an emergency telephone number for those at a loss. I was walking in Victoria Street a fortnight ago and a perfectly respectable person there had arrived from Lithuania who could not get a job. There was no work going. Such people find themselves with their pennies and hope gone. Could we have a government-sponsored or supported helpline for such people?

I want to say how much we appreciate the work of the National Association of Citizens Advice Bureaux. It does a tremendous job and we owe it a great debt. Last week I was so pleased that the Minister said we might look at the possibility with our European colleagues at having benefits that were paid in Poland and could be drawn from the Polish Exchequer here in the United Kingdom when people got into real need. Will the Government please explore that possibility?

My colleague will speak about asylum seekers later. I want to point out that in 2007, nearly 50 per cent of all refused asylum seekers were from Zimbabwe, Iran, Iraq, Sudan, Afghanistan, Somalia, the Democratic

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Republic of Congo and Eritrea. Prior to a change in 2003, refused asylum seekers from those areas would almost certainly have been given exceptional leave to remain in the UK. That has been changed with remarkable consequences. We now have the humanitarian protection and discretionary leave categories. As a consequence, whereas 20,135 individuals obtained exceptional leave to remain in 2002, only 405 did in 2007. We would like to see some change there.

In reviewing the treatment of asylum seekers in the UK, the Joint Committee on Human Rights recently reached the following conclusion:

“We have been persuaded by the evidence that the Government has indeed been practicing a deliberate policy of destitution of this highly vulnerable group. We believe that the deliberate use of inhumane treatment is unacceptable. We have seen instances in all cases where the Government's treatment of asylum seekers and refused asylum seekers falls below the requirements of the common law of humanity and of international human rights law”.

Under Section 95, the asylum seeker has some payment and some way of supporting himself—although it is only 70 per cent of the social security benefit that UK residents would receive. However, that has changed and they can lose that and become totally destitute. Section 9 of the Asylum and Immigration (Treatment of Claimants, etc.) Act 2004 would withdraw all benefits from failed asylum seekers. This drives them into destitution. We should look at this again. When the new immigration Bill comes before the House, we intend to table amendments that will delete that clause.

In conclusion, the measures we take now are inhumane. They are against our ordinary traditions. The Joint Committee on Human Rights says:

“The policy of enforced destitution must cease. The system of asylum seeker support is in a confusing mess. We have seen no justification for providing varying standards of support and recommend the introduction of a coherent, unified, simplified and accessible system of support for asylum seekers, from arrival until”,

they leave our shores, their voluntary departure. I urge the Government to look again, in a more humane way, at this legislation.

7.41 pm

Lord Judd: My Lords, I am sure that I not alone in wanting to thank the noble Lord, Lord Roberts of Llandudno, for raising this issue this evening. The warmth and commitment with which he brings his unashamed Welsh non-conformist values into our debates adds to the quality of our deliberations in this House. Long may that continue.

I was therefore surprised by one sweeping point that he made at the beginning of his remarks that rather took me by surprise. He said that some were here illegally, and should of course be sent home. I wish that I thought that it was quite as simple as that. Given the dreadful story behind the situation of some of those who are here illegally, it seems that they have precious little choice but to be here. It is not quite as simple as the noble Lord suggested. I am sure that he would agree with me that, in this policy area, the Government face one of the most difficult and complex tasks. I am sure that many of us have good will towards the Government as they try to grapple with it. It is a difficult issue, and not helped by the wilful misrepresentations of some of the media.

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It is important to remember that, within the sphere of those who remain without permission, there are, as the noble Lord, Lord Roberts, suggested, different categories. There are certainly those with no protection needs in the UK who should return. But there are also those who cannot leave the UK through no fault of their own. For example, they may be stateless and have no country to return to. Their Government may not provide them with travel documents, preventing their return. They may be too sick to travel, or there may be no viable route whereby they may return home.

There are those who, having been in the UK for a long period, have developed strong ties with it, such as entering relationships and having children. There are those who genuinely believe that it is unsafe for them to return because of armed conflict and repressive regimes. In some cases, the UK Government recognise that it is not safe for these people to go home, even though they have not granted them asylum in the UK. For example, in 2005, they refused asylum to some people from Zimbabwe but have not removed them. Perhaps slightly more equivocal is the issue of the non-Arabs from Darfur.

We know that there is acute hardship among these people. Just think of it amidst the weather that we have been enduring for the past couple of days. Some are totally destitute, dependent on chance and spontaneous charity to survive at all. This is in a country that we are struggling to keep as one of the leading economies of the world.

Some must survive under Section 4. It was calculated last September that there might be some 10,000 in that situation. They have accommodation of a sort provided, and must then survive on £35 a week in vouchers. How many of us, as we look at our expenses in the House of Lords, would like to think of surviving on £35 a week? We must keep a sense of perspective about these things. It is less than two-thirds of the basic income support rate. If we have something called the “basic income support rate”, that presumably means that it is the basic income level. These people are somehow expected to survive on less than two-thirds of it. The vouchers are inflexible. They cannot be exchanged for cash, and in attempts to do so the unofficial rate means that they are worth only £25. They cannot be used for clothing. They cannot be used for medicaments, sanitary items or even basic essentials such as paracetamol.

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