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Lord Foster of Bishop Auckland: My Lords, does my noble friend agree that we can further increase the competitiveness of the regions only when we start taking more notice of real engineers than of financial engineers?
Lord Davies of Abersoch: My Lords, I will answer this one very carefully. Our economy has changed significantly over the past 10 to 20 years. There is no doubt that in areas such as advanced engineering we now excel. We have to ensure that we are training and skilling up the right workforce, which is why we are putting a focus on apprenticeships and why I as the Minister am spending a huge amount of time with the advanced engineering groups to make sure that we are delivering.
Lord Teverson: My Lords, given the importance of RDAs, how do the Government intend to make them answerable to local people and local communities?
Lord Davies of Abersoch: My Lords, three independent reviews have all said that they are adding value. Their boards are accountable, and they are working very closely with the local authorities. We believe that that is sufficient.
The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, we are in the 24th minute.
Alcohol: 15 and 16 Year-olds
Question
3.30 pm
To ask Her Majesty’s Government what steps they will take to reduce consumption of alcohol among 15-16 year olds, in the light of the finding by the European School Survey Project about levels of drunkenness and alcohol consumption in the United Kingdom among that age group.
Baroness Thornton: My Lords, although overall alcohol use by young people, including for 15 to 16 year-olds, is falling, unfortunately those who do drink are consuming more alcohol more often. Our youth alcohol action plan, launched last year, set out the steps we are taking to tackle the harms caused by young people's drinking, through a combination of enforcement, action with industry, and improved education and information for young people and their parents.
Lord Avebury: My Lords, we have had an alcohol harm reduction strategy for the past seven years, yet the levels of alcohol harm in terms of ill health, crime and social dysfunction have certainly got worse over that period. Apart from consultations and discussions, what can the noble Baroness tell us about actual measures that the Government are taking to reduce the amount of alcohol consumed by young people, particularly in this age group?
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Baroness Thornton: My Lords, it is certainly true that the recently published report shows that the UK has among the highest levels of alcohol use for binge drinking—the third highest, after Denmark and the Isle of Man. It is also true that we can see some improvement in a fall in the number of young people drinking at all. But many youngsters regard getting drunk as normal and acceptable, which is deeply worrying. The fact that a third of youngsters are getting alcohol at home from their parents is also a matter of grave concern. The youth alcohol action plan aims to tackle this problem. In addition, we are introducing a new offence of persistently possessing alcohol in a public place and amending the police’s powers to confiscate alcohol from young people who have it in their possession. We are also legislating for a new mandatory code of practice for alcohol retailers with compulsory national conditions, aiming to ban the most irresponsible practices and promotions which encourage people to drink excessively or to promote binge drinking. In addition, we are making drug and alcohol education statutory as part of the PSHE for young children and providing further guidance and advice for parents.
Lord Walton of Detchant: My Lords, is the Minister aware that Professors Chris Day and Chris Record of Newcastle upon Tyne have reported a most alarming increase in the incidence of cirrhosis of the liver in young adults, resulting, almost invariably, from heavy alcohol consumption beginning at an early age? Many of the young people in the age group referred to in the Question have no difficulty in obtaining alcohol, purchased for them by friends or relatives from cheap offers in supermarkets and off-licences. Is it not time that the Government considered carefully the proposal from the Chief Medical Officer to impose a minimum price on alcohol?
Baroness Thornton: My Lords, the noble Lord is completely correct, as ever. Deaths from liver disease are now occurring at younger ages. Alcohol abuse in adolescence can damage not only children’s lives but also their brains and long-term memory. The Chief Medical Officer has said that the education of children, young people and their parents is vital. He recommends that young people under 15 should have no alcohol and that those over 15 should have very small, infrequent amounts, under adult supervision.
On minimum pricing, the Government have not ruled out taking action on very cheap alcohol, because it is so clearly linked to people drinking more, resulting in subsequent harm and death. The mandatory code for the alcohol industry will include measures on irresponsible promotions. However, we believe that the actions should be appropriate and our decision should take into account the wider economic impact during this difficult time. It would not be right to penalise the overwhelming majority of responsible drinkers.
Baroness Verma: My Lords, what has been the cost of the alcohol reduction strategy for England? Does the Minister accept that the Government have so far failed to address the serious problem of under-age
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Baroness Thornton: My Lords, I do not have in front of me the total cost of the youth alcohol action programme, but I shall make sure that it is sent to the noble Baroness. Under-age drinking is a problem that we face along with all the countries of Europe, and the Government are taking it extremely seriously. We are dealing with it through ministerial-level committees, and we are determined to work across government with law enforcement and education, and through responsible licensing. However, it is not a problem that will be resolved immediately.
The Lord Bishop of Chelmsford: My Lords—
Baroness Massey of Darwen: 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, shall we hear from the right reverend Prelate first?
The Lord Bishop of Chelmsford: My Lords, will the Minister accept that there is some evidence to suggest that the worst problems of alcohol consumption are among the adult middle classes? Will she accept also that we could help young people by having a slightly more disciplined approach to alcohol in the adult community?
Baroness Thornton: My Lords, the right reverend Prelate points to the issue of parenting: it is parents who raise their children, not the Government. We believe that parents are best suited to take decisions about young people, but we recognise that it is our responsibility to provide young people and their parents with clear information and guidance on the harms associated with young people drinking. The Department for Children, Schools and Families is also taking seriously the issue of what children and young people, particularly the 15 to 16 year-old age group, do on Friday and Saturday nights, and where they go. We are therefore investing in youth clubs and recreational facilities to provide alternatives to binge drinking.
Lord Brooke of Alverthorpe: My Lords—
Baroness Sharp of Guildford: My Lords—
Lord Hunt of Kings Heath: My Lords, shall we let my noble friend in?
Lord Brooke of Alverthorpe: My Lords, does the Minister agree that some of the responsibility for our problems rests with the drinks industry? How is the voluntary code on alcohol labelling working in the industry as she sees it? Is she content with the progress being made? If not, what steps are the Government taking to make sure that the drinks industry implements the voluntary code? If it does not, are the Government prepared to legislate to make sure that it does?
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Baroness Thornton: My Lords, we think that information on labels is being used only to a limited extent. No, we are not happy. We are reviewing it for a second time. We shall take action through legislation if we feel that we cannot make more improvement.
Pensions: Fred Goodwin
Private Notice Question
3.38 pm
To ask Her Majesty’s Government whether they will explain the discrepancies between the account given by Sir Tom McKillop in his letter to the Treasury Select Committee and the account so far given to Parliament about the role of Ministers in approving the pension severance and retirement arrangements of Sir Fred Goodwin.
The Financial Services Secretary to the Treasury (Lord Myners): My Lords, there is no discrepancy on matters of substance between Sir Tom McKillop's letter to the TSC and the account that I gave in my evidence to the TSC on 17 March.
For the convenience of the House, perhaps I may restate the points from my previous evidence. I have made it clear both in my evidence to the Treasury Select Committee and in statements to this House that I met Sir Tom McKillop and Mr Bob Scott, then chair of the RBS remuneration committee, in the late afternoon of Saturday 11 October and was informed that the directors of RBS had decided on the previous day, the Friday, that Sir Fred Goodwin would have to stand down as chief executive of the bank. The following evening, at 8.35 pm, I spoke with Mr Scott by telephone. During the conversation, I was told the then estimated transfer value of Sir Fred Goodwin’s pension. I have always been clear about this fact, both to the Treasury Select Committee and to the House. To the Treasury Select Committee, I said:
- “I was telephoned by a director of RBS, Mr Robert Scott, and during the course of that conversation was told of the then estimated transfer value of Sir Fred Goodwin’s pension”.
That is the response to Q2659. My Written Answer to the noble Lord, Lord Taylor of Warwick, on 5 March stated that,
- “I was informed of an estimate of the capitalised value of the pension late on 12 October 2008”.—[Official Report, 5/3/09; col. WA172.]
But at no stage prior to February of this year was I, or anyone else in Government, as far as I know, made aware that a decision had been taken to treat Sir Fred Goodwin for pension purposes as if he had left at the request of the employer. This treatment allowed Sir Fred to claim his full undiscounted pension from the age of 50 and thereby nearly doubled the value of his pension.
My statement to the Treasury Select Committee was that,
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about the size of the pension. That was in response to a question from Mr Fallon at Q2671, which was part of the session which covered the Saturday meeting. I had earlier in the evidence session given a detailed account of that meeting and the phone call on Sunday.
My account of the meeting to the TSC is entirely consistent with my other statements, with Sir Tom’s letter and with the record of the meeting made by Mr Charles Randell, a partner of Slaughter and May, which is available on the Treasury Select Committee website. This statement, and Sir Tom’s letter, also confirms the very clear principles, including no rewards for failure, that I said I expected to be at the heart of the decision to be taken by the board of RBS.
Mr Fallon has also asserted that I saw the compromise agreement between the board of RBS and Sir Fred. Sir Tom’s letter does not suggest that that is the case. I did not see the compromise agreement.
The records show that my answers to Parliament do not support the conclusions drawn by Mr Fallon. I am writing to the right honourable John McFall this afternoon and will place a copy of that letter in the Library of the House.
Baroness Noakes: My Lords, I thank the Minister for that extensive response and wish him a very happy birthday, although I am sure that he would rather be spending it somewhere else this afternoon. For all he has said, the fact remains that there is a serious disagreement. The former chairman of RBS, Sir Tom McKillop, backed up by his senior independent director, said in a letter sent to the Treasury Select Committee that the circumstances relating to Sir Fred Goodwin’s pension have not been accurately represented. These disagreements include the terms of Sir Fred’s departure, the cost of his pension and whether or not it was discretionary.
I am sure that the Minister will agree that the Government will need to find a way of proving which version is correct. The Minister referred to some notes taken by the lawyer from Slaughter and May, which he says is on the public record. Can he assure us that, if there are any other contemporaneous independent records of what took place, they will be put in the public domain, because it is damaging to Parliament, if nothing else, to have this constant exchange of versions of stories that plainly disagree with each other?
Lord Myners: My Lords, first, as I said earlier, I think that there is very little disagreement between Sir Tom and myself. In fact, in a 28-paragraph letter I think that I was in agreement with Sir Tom on 24 of the paragraphs. The critical factor was whether the board of RBS had discretion. When Sir Tom asserts that the board did not have discretion having formed the view that it was not going to terminate the employment of Sir Fred Goodwin, a certain chain of actions followed. My query, and that of UKFI under advice from its lawyers, is that the board did have discretion. It seems odd that it paid Sir Fred Goodwin 12 months’ compensation for loss of office, a payment that you make when you terminate somebody’s contract, yet also asserted that his employment had not been terminated. That seems entirely consistent with the assertion that I made earlier to the Treasury Select
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The noble Baroness asked about contemporaneous records. I am pleased to say that the only paragraph in Sir Tom’s letter where there is a material difference between my own view and that of Sir Tom relates to the telephone conversation with Mr Robert Scott. That telephone conversation which, as I said, took place at 8.35 pm on Sunday, 12 October, was listened to by a Treasury official. A note exists of that call, which records precisely the representations that I have made to this House and to the Treasury Select Committee. In particular, it is very clear that no explanation was given of the basis on which Sir Fred’s pension was souped up.
Lord Newby: My Lords, I thank the Minister for his reply, the substance of which we accept. Does he accept that this row about who said what to whom serves only to hide the fact that it was the arrogance and greed of Sir Fred Goodwin which led him to demand such an excessive pension in the first place and his arrogance and greed which now lead him to keep it? Sir Tom McKillop, among many disastrous decisions as chairman of RBS, approved the pension in the first place and still shows no shame in having done so. Will the Government now refuse to pay the pension—period—to Sir Fred, whose negligence probably disqualifies him from it under the Pensions Act 1995? If he does not like it he can sue. Finally, will the Government now concentrate on the major challenges facing RBS; namely, to end its involvement with dodgy tax avoidance schemes and to devote all its efforts to increasing the support it gives to honest and decent personal and business customers?
Lord Myners: My Lords, I welcome the opening comments of the noble Lord, Lord Newby. I find it extraordinary that the opposition Benches are fixated with this narrow subject rather than seeking to address the broader issues, but I believe that the noble Lord, Lord Newby, is absolutely correct in his assertion that the only people who made the decision about Fred Goodwin's pension were those on the board of RBS. They were the only people empowered to do so. Their own board minutes and papers are evidence that they made that decision. In my view, they fired Sir Fred Goodwin. That is not their interpretation, but we have asked the new board of RBS to look into that.
Unfortunately, it does not fall to the Government to stop payments arising under a contract, but we have asked the board of RBS to examine whether it thinks that the basis on which Sir Fred’s employment was terminated and how this was explained to the trustees permits the payment of an undiscounted pension. I also endorse the noble Lord’s comments about the importance of RBS getting back to being a properly managed bank, with the traditional virtues of Scottish banking at the core of what it does.
Lord Barnett: My Lords, most reasonable people, at a time when major leaders of the world are here discussing crucial matters, would accept that it is a little odd that the Opposition chose this particular matter at this time. Would my noble friend care to
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Lord Myners: My Lords, my noble friend refers to an Answer given by my right honourable friend the Prime Minister earlier today in the other place. We are certainly investigating the possibility of legal action. We are doing that through the UKFI, the new chairman and the chief executive of the Royal Bank of Scotland. I repeat that this decision on the pension was made by the board of the Royal Bank of Scotland. It was not made by a Minister, and nothing in its working papers suggests that it was. Whether there is a legal option will have to await a decision by the lawyers. I am, however, still hopeful that Sir Fred Goodwin, who has been in communication with Sir Philip Hampton, the chairman of the Royal Bank of Scotland, will see that there is an opportunity for him to make an important and significant gesture by waiving a large part of his pension or giving it to charity. He is still not giving a response on that. I think that the House would join me in encouraging him to make the right decision and cleanse his reputation, for he will not be able to make amends for the huge damage done to that bank by his mismanagement, endorsed and condoned by a board of directors that was certainly not completely up to the mark in a number of respects.
Lord Lawson of Blaby: My Lords—
Lord Hunt of Kings Heath: My Lords, I am afraid that PNQs are not expected to take longer than 10 minutes. We have another PNQ and should move on.
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