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House of Lords

Thursday, 5 March 2009.

11 am

Prayers—read by the Lord Bishop of Norwich.

Schools and Youth Organisations: Twinning


Asked By Lord Roberts of Llandudno

The Parliamentary Under-Secretary of State, Department for Children, Schools and Families (Baroness Morgan of Drefelin): My Lords, this Government encourage international school links through my department’s international website, the Global Gateway, and programmes such as the International School Award and the Teachers’ International Professional Development programme. The British Council isthe United Kingdom’s international organisation for educational opportunities and cultural relations. Through its offices in Israel and the Palestinian Territories, it has supported a number of bilateral links with youth organisations in the United Kingdom.

Lord Roberts of Llandudno: My Lords, I thank the Minister for an encouraging reply, but in the present situation should we not be even more vigorous in our attempt to build twinning between youth organisations and schools in the United Kingdom and in Israel/Palestine? Do we not need not only to construct roads and schools but to rebuild the many thousands of young lives that have been traumatised in recent months?

Baroness Morgan of Drefelin: My Lords, I am sure that we all share the noble Lord’s sentiments and concerns. My department’s research shows that about 50 per cent of secondary schools in this country are involved in twinning. The noble Lord was concerned particularly about relationships with Israeli and Palestinian schools. I can reassure him that we are supporting exchange through the international teacher development programme and working hard, through our Global Gateway website, to support schools to twin sustainably and for the long term.

Baroness Morris of Bolton: My Lords, the British Council’s excellent Connecting Classrooms programme promotes trust and breaks down barriers to understanding. Does the Minister agree that if these twinning arrangements are entered into, it must be done so wholeheartedly? I say that because I have just come back from visiting some Connecting Classrooms programmes in Kuwait. While enormous enthusiasm was shown by the Kuwaitis, I have to say that some of the responses from the UK were lukewarm. That does more harm than good.

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Baroness Morgan of Drefelin: My Lords, I am sorry to hear the noble Baroness report some lukewarm responses from the UK, which is disappointing. We have worked hard through the International School Award to encourage schools to make a serious commitment to having an international perspective in their work. Our aspiration is for all schools to be given an International School Award over time and to have a framework that encourages them to think globally about their curriculum. So far, we have given 1,500 schools this award; but the noble Baroness is absolutely right that it is not enough. We shall do our best to ensure a more enthusiastic response.

Lord Janner of Braunstone: My Lords, I thank the noble Baroness for her positive reply to a useful and positive Question. Is she aware of the exceptional work of an organisation called the Hand in Hand Centre for Jewish-Arab Education in Israel, which was founded to build peace and understanding between Jews and Arabs in Israel through the development of bilingual and multicultural schools and curricula? Does she agree that twinning Hand in Hand schools with schools in the UK, particularly integrated schools in Northern Ireland, would help to promote peaceful co-existence through shared learning environments?

Baroness Morgan of Drefelin: My Lords, I am aware of the important work that is going on in Hand in Hand schools. I understand that my right honourable friend the Foreign Secretary visited a Hand in Hand school recently. My noble friend has an important point to make. We see through the work of these schools a joining up of Jewish teachers and Israeli/Arab teachers teaching in their own languages, bringing children together and encouraging a culture of tolerance among students. The British embassy in Tel Aviv has supported this work with funding of £28,000 from its bilateral programme budget. It is important and we can see great merit in this approach.

Baroness Walmsley: My Lords—

Lord Kilclooney: My Lords—

Baroness Trumpington: My Lords—

Noble Lords: Oh!

Baroness Trumpington: What is so funny, my Lords? This is a very serious question, Minister; will you take it as such? Are there any arrangements, such as exist for older pupils in America, for exchanges between this country and China? For instance, my American goddaughter, aged about 16, spent six weeks in China, to both countries’ great advantage.

Baroness Morgan of Drefelin: My Lords, I can assure the noble Baroness that there are indeed such arrangements for exchange.

Lord Kilclooney: My Lords, the noble Baroness speaks about twinning with schools in Palestine. Have any schools in Gaza been twinned with the United Kingdom?

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Baroness Morgan of Drefelin: My Lords, an enormous amount of twinning work goes on between individual schools and international schools. I have obviously asked the question the noble Lord has put. The reliable data on the number of twinned schools come from the International School Award. I am afraid that I can only say reliably that a small number of schools are twinned with schools in the Palestinian Territories. I cannot say on the record how many might be in Gaza. Obviously it is an extremely difficult situation for Palestinian children who are resident in Gaza.

Baroness Walmsley: My Lords—

Lord Turnberg: My Lords—

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, it is the noble Baroness’s turn.

Baroness Walmsley: My Lords, can the Minister see the benefit not just of twinning but of tripleting? If a UK school were to twin with both an Israeli and a Palestinian school it might make it easer for the Israeli and Palestinian schools to speak to each other through their arrangement with the UK school.

Baroness Morgan of Drefelin: My Lords, I am sure that the noble Baroness has the kernel of a good idea there. The Henry Beaufort School, in Hampshire, has twinned with a Palestinian school. It is keen, from the reports that we have seen, to twin with an Israeli school. There are interesting and innovative ideas that could be developed.

Banking: Executive Pay


11.14 am

Asked By Lord Lea of Crondall

The Financial Services Secretary to the Treasury (Lord Myners): My Lords, at the time of making their investment, the Government agreed a range of conditions with banks in receipt of public capital, including in respect of executive remuneration. The Government are clear that remuneration policies must be based on long-term sustainable performance in the interests of all shareholders, taking proper account of risk. The Government have been very clear that bank directors must bring an end to the short-term bonus culture in the banking sector.

Lord Lea of Crondall: My Lords, I thank my noble friend for that reply. My proposal takes a leaf out of President Obama’s book. He is enacting a pay cap of

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$500,000 a year for executives in financial institutions bailed out by the taxpayer. My proposal is somewhat more generous. Does my noble friend agree with the logic of that? It is that, if the taxpayer is now to take all the risks, top executives, who would thereby carry no risk, should not take the lion’s share of the reward? Secondly, does he agree that it is now vital to introduce stakeholder governance and public interest criteria into the private sector, including a remit to reverse the upward spiral of top pay relative to the average, a principle which also needs to be part of the international agenda on multinational banks and tax havens?

Lord Myners: My Lords, all shareholders take risks which relate to equity capital, and the Government, through UKFI, stand alongside other shareholders in that respect. We have been very clear that we find the level and structure of reward in the banking sector unacceptable. We have invited Sir David Walker to lead a report in this area. From my perspective, one of the things that it should address is the insidious influence of external benchmarking and comparators by so-called benefit consultants. There needs to be much more awareness of internal comparators and perceived fairness. The rewards and remuneration for those at the top of the organisation have simply become detached from those of their colleagues and from reality. There should be further disclosure, and there are important roles for shareholders.

I sense a Sir Fred Goodwin question coming fairly soon. It is interesting that, as far as I am aware, not a single institutional shareholder has raised a single question about Sir Fred Goodwin’s pension or the terms of his departure. That is the core of the issue. They were the shareholders when the bank got into difficulty; they were the board of directors when that agreement was reached.

Lord Ryder of Wensum: My Lords, when was the first time that the Minister or one of his ministerial colleagues consulted the Treasury Solicitor or external legal advisers about the pay and pensions of senior bankers, and what was the substance of the advice that they received?

Lord Myners: My Lords, pay and pensions for directors of a bank are a matter for the directors of that bank.

Lord Smith of Clifton: My Lords, does the Minister agree that it is not just a question of payment? Given the ingenuity of the Artful Dodgers who sit on the boards of subsidised banks, is it not the total remuneration package which needs to be regulated?

Lord Myners: My Lords, I agree with you, sir, and fully endorse your observation. It is worth noting that Sir Fred Goodwin earned over £11 million in his last three years at the Royal Bank of Scotland, a figure which was approved by the board of directors and the shareholders.

Lord Barnett: My Lords, leaving aside those who seek to blame the wrong person here, rather than the bank, is there any truth that in the Fred Goodwin case the action was taken not by a contract but by one or two directors, not even the whole board? If that is true,

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is there an opportunity to consider—I am sure that my noble friend would not want to go outside the law—or can he tell us whether the new directors of the board now could change the situation?

Lord Myners: My Lords, that question is legal in content, and I am not able to provide a legal response. However, I can provide some colour and context. Directors of the Royal Bank of Scotland informed Sir Fred Goodwin on the morning of Friday 10 October that he would have to leave the bank. I met the chairman and senior independent director of the Royal Bank of Scotland on Saturday 11 October and was told that that decision had been reached. I specified a number of core conditions. I said that the Government would not expect to see rewards for failure; they would expect to see the cost of executive departures minimised; and they would expect to see mitigation. Those directors went away with that message very clear in their minds.

I was also told by Mr Bob Scott that Sir Fred Goodwin was a man extremely conscious of his contractual rights and was not going to give up any legal or contractual right. Advised as I was that it was a matter of contract, I adopted the same position as my noble friend took in his question: that it is not incumbent on the Government to oblige, require or even suggest to companies that they break a legal undertaking. That was the basis on which I discussed Sir Fred Goodwin’s pension on the evening of Saturday 11 October. To be clear, I did not approve his pension; I was not asked to sign it off; and I was given no papers in connection with it, and quite correctly so. The Government were not a shareholder in the Royal Bank of Scotland at that time. This was a matter for the Royal Bank of Scotland’s board of directors. The decision appears to have been taken by a smaller group of directors, but UKFI is asking further questions about that and no doubt we will learn more in due course. If there is a legal option, no doubt it will consider whether that should be pursued.

Earl Ferrers: My Lords, can I ask the Minister about bonuses, which have come under a lot of criticism of late? Are the people who are going to look after the bank of toxic debts going to have bonuses, too?

Lord Myners: My Lords, I suspect that the noble Earl refers to the employees and directors of UK Financial Investments. They are not looking after the toxic debts; they are looking after the Government’s investment in banks. If that is the question the noble Earl has in mind, I will answer it. The non-executive directors of that company have no bonuses at all; the executives—fewer than a dozen—have some modest opportunity for bonuses of marginally more than 10 per cent of their basic salary. I regard that as entirely right and proper as an incentive to performance and a recognition of value delivered.

I see shaking of heads opposite. It would be interesting to know whether the Opposition are now of the view that performance should not be rewarded, incentives should not exist and the Government should get involved in statutory regulation of compensation. For my own part, I do not subscribe to that, and I am fascinated that some on the Conservative Benches seem to be suggesting that they do.

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Visas: Students


11.22 am

Asked By Baroness Finlay of Llandaff

The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My Lords, the Government have further considered their intention to restrict the length of a student visa under tier 4 of the points-based system to a maximum period of four years. I am pleased to be able to announce that we have decided to grant degree students visas for the full length of their course in the United Kingdom.

Baroness Finlay of Llandaff: My Lords, I thank the Minister for that reply with which I am delighted. In relation to medical courses, does he recognise that students must complete their pre-registration year and that under the Medical Act the undergraduate dean is required to sign that they are fit to be fully registered? Without being able to complete that year in the UK, the undergraduate dean cannot verify the quality of practice of that doctor and that potentially devalues the degree that they will have obtained here. Do the Government intend to honour Recommendation 11 from Sir John Tooke’s inquiry that students who are UK graduates from overseas should be eligible for postgraduate training in this country as well, a recommendation that the Secretary of State at the time agreed to?

Lord West of Spithead: My Lords, I thank the noble Baroness for her questions. I was delighted to note from yesterday’s debate that people were pleased that we had shown flexibility in terms of the duration of time people would be here for a course. I will answer the questions in reverse order. Provision for postgraduate doctors and dentists with a place on a recognised foundation programme has been made under tier 4. In order to qualify, the applicant must have successfully completed a recognised United Kingdom degree in medicine or dentistry in a tier 4 institution, a UK publicly funded institution or a UK bona fide institution. I will come back in detail to the other point in writing because it is rather more complex and would take too long.

Baroness Gardner of Parkes: My Lords, I am aware that the visa system is now based on the Australian points system. While I welcome that, it is important that the Government realise that there is one big difference in terms of people who are destined to become world-famous artists, such as Joan Sutherland. They could never have achieved this if they were limited to a specific amount of time in the UK. No one goes to Australia to become world famous but they come from many countries to achieve greatness here. Does the present flexibility, which I welcome, extend to these potentially great artists?

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Lord West of Spithead: My Lords, I hesitate to comment on the importance of going to the Antipodes to become famous. On the noble Baroness’s specific point, I do not know the exact detail. As I understand it, there will be flexibility to achieve this. The aim of the points-based system is to enable us to have some of this flexibility, as is shown in the fact that we have already changed the length of time that a student can stay for a course. That shows that we can change the flexibility of those rules within the overarching tier system. Therefore, that will be there. If that is not the case, I will get back to the noble Baroness in writing.

Lord Wallace of Saltaire: My Lords, will the Minister pay some attention to the sensitivity with which officials in the Home Office implement this policy? As it happens, I heard this morning of an American student at the London School of Economics who was told by the Home Office at the beginning of January that if she did not finish her PhD by the end of February, her visa would be revoked. Does the Minister recall that in early January there was an interesting story in the Times, which said that more officials in the Obama Administration had studied at the London School of Economics than at any other British university? Sensitivity counts in these areas.

Lord West of Spithead: My Lords, I absolutely take that point. This whole area of education is so crucial for this country. As I mentioned in the debate last night, £2.5 billion in tuition fees alone comes into this country every year: not to mention all the cultural advantages and the fact that we have so many world leaders in all sorts of areas who have trained here. That is absolutely taken on board. I know that the Home Office is not known for sensitivity. Actually, I think it has become more sensitive, although I would not say that that is anything to do with me. I absolutely take the noble Lord’s point, and I will ensure that it gets fed back.

Baroness Hanham: My Lords, following up the Minister’s reply in our debate last night, will the Home Secretary’s recent announcement about limiting the number of immigrants coming here affect student applications, and if so how?

Lord West of Spithead: My Lords, the intention is that it will not limit the number of students coming here. In terms of the various tiers, as I am sure the noble Baroness is aware, low-skilled migration remains suspended at the moment. That is an area in which there is an immediate impact. There is some movement in the skilled area of tier 2, but so far as students go there is no intention to limit the numbers.

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