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Money is being well spent. I can assure the noble Lord, Lord Patten, that when he is out on the doorsteps canvassing in Wincanton this weekend, he will have regular reports from voters on how they see the real value being delivered by the Government’s initiatives to support them through these difficult times. I give way to the noble Lord, Lord Patten, out of great respect for him.

Lord Patten: My Lords, perhaps the Minister can explain why so many UK companies are bent on heading for the exits, leaving these shores and seeking tax domiciles overseas, which a great litany of companies have done in recent months?

Lord Myners: My Lords, with all respect to the noble Lord, out of more than 3 million incorporated companies in the United Kingdom, how many have moved overseas? We are talking about fewer than can be counted on the fingers of two hands. We have taken action to make the UK a location of choice for international business. We are the European headquarters of so many global companies and are constantly working to ensure that our tax system makes it an attractive location for companies with international activities. There is no cross-border exodus of which I am aware, and we are committed to take action.

Given that I have accepted a couple of interventions, I shall go on with my endorsement for two more minutes if the noble Lord, Lord Forsyth, will permit me to do so. The noble Lord, Lord MacGregor, among others, asked about funding. Gilt yields are historically low. The premium of sterling borrowing to bund and

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euro rates is low, and contrary to the suggestion of the noble Lord, Lord Forsyth, the yield curve incline is fairly flat. On 23 April, Robert Stheeman, the CEO of the Debt Management Office, said that he had every confidence that the DMO would be able to fund the Government’s requirements.

I know why the NIESR is such a good body now that I know that the noble Lord, Lord Higgins, is the governor. It said in its spring review last month that even at its peak, it did not expect debt interest to exceed levels seen in the early 1980s. The debt service costs are lower than in the early 1980s because inflation and interest rates are so low. When we faced these problems in the past, it was against a background of 14, 15 or 16 per cent inflation and even higher interest rates. There was not a lot of talk about that from Members on the Conservative Benches today when they spoke about economic management.

The noble Lord, Lord MacGregor, asked about the assumptions on interest rates in the Budget. They are derived from forward yield curves; they are not forecasts. He also asked me to speculate on the impact of interest rate changes on the cost of public finance. It is simply impossible in complex economies to hold all other factors constant and move one factor, because there are consequences of a change in interest rates, so you then need a multiple factor model. Although I would like to answer the noble Lord’s question, I cannot. I am not going to answer the question from the noble Lord, Lord Selsdon, about the quantum of debt, because first he asked about total debt, then about debt over the next five years and then about the total cost of bureaucracy. I suspect that what is bureaucracy to one person is efficient implementation to another. I will certainly write to the noble Lord on the debt figure. If I can find someone who will help me to define bureaucracy for the purpose of giving him a numerical answer, I will do so.

We are looking forward to the economic upturn. At the heart of this year’s Budget is our ambition to build for the future. That means funding to unlock housing projects that will build thousands of new homes, ambitious targets for our digital communication infrastructure, investment in our national transport networks and hundreds of millions of pounds to support low-carbon energy generation. The financial services global competitiveness review—which, I must tell the noble Lords, Lord Northbrook and Lord Forsyth, was published this morning before the debate started—talks about the optimistic outlook for the financial services industry. The noble Lord, Lord Northbrook, raised a point about tax—perhaps he was being a little mischievous. The review was jointly chaired by the Chancellor of the Exchequer and Sir Win Bischoff and includes a number of leading people from the business sector. You could not put a cigarette paper between them in their view of the right approach to taxation for an efficient economy.

I have greatly enjoyed the debate and hope that I have answered most of the questions. I very much look forward to the summing up of the noble Lord, Lord Forsyth—at least, I think I do. I once again congratulate him on stimulating a debate that has brought out the very best of this House in the calibre and quality of the people who sit on these Benches.



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4.22 pm

Lord Forsyth of Drumlean: My Lords, I do not want to disappoint the Minister, but I was not going to spend a lot of time going over the arguments or responding to his points. We have had a very good debate. Like him, I love this place because I cannot think of anywhere else that would have two former Chancellors, very experienced Ministers, professors of economics and industrialists all contributing to a debate of this kind. I hope that, if nothing else, it will get across to the country the extent to which we are in a very big jam. We need urgent and effective action. I hope that it may even impress on the Minister that hoping that something will turn up and doing nothing until the election because it would be politically difficult will not be in the interests of his party or the country.

There is a whole range of issues to which I do not think that the Minister responded, but the speeches that we have heard stand for themselves. I beg leave to withdraw the Motion.

Motion withdrawn.

Government Communications

Motion to Take Note

4.24 pm

Moved By Lord Fowler

Lord Fowler: My Lords, I am sure that this will be a much calmer debate than the debate that we have just had, dealing as it does with one of the Government’s outstanding successes: government communications. We will see.

First, I thank the journalists and government officials who gave evidence to the committee, and I pay particular tribute to Sir Robert Phillis and his highly skilled team, which reported in 2004. I also thank our committee clerk Chloe Mawson, and our committee specialist Peter Hills-Jones, who have both rightly moved on to higher things. They both made a major contribution to the work of this committee and its predecessor on the BBC charter. Last, but in no way least, I also thank the very hard working members of my committee, some of whom are here this afternoon.

Let me make clear from the start my belief that there is an important role for government communications; I can hardly say less given that, when I was Secretary of State for Social Services, I ran a very high profile campaign on HIV/AIDS using radio, television and the press. I do not deny for a moment that the Government are entitled to advertise when, for example, there is a public health danger or to employ press officers to answer questions about departmental policies. There is no disagreement on that point.

Indeed, I would go further and say that as many high-flying civil servants as possible should serve for a period in the press office so that they understand what is involved and, frankly, to keep their feet firmly on the

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ground. That might prevent the kind of conversation that I once had with the Treasury about public spending, in which I pointed out that the cut that it was proposing went smack against what had been in my party’s manifesto, and got the reply from one of the Treasury officials, “Oh, Secretary of State, that’s just politics”. The more you can keep civil servants adjusted to what is actually happening outside the House, the better. I therefore welcome the Government’s sympathetic response to our proposal that as many officials as possible should have press office experience, and their assurance that they will examine ways in which this can be done practically and with the least cost.

I have no quarrel with the principle of government communicating either with the public or the press, but we then come to crucial questions about the scale of government communications and their purpose. The committee believes that it is of the utmost importance that information provided by the government service should be accurate and impartial, and that there should be no hint of party political bias. This is obviously of the greatest importance now in the period leading up to a general election. If government press officers were to be misused to put out party messages, that could be an unfair influence at a crucial time.

Special advisers have a different role from that of departmental press officers, but they too are governed by the Civil Service Code. In reviewing the effort of the government communications machine as a whole, it is obviously crucial that its cost should not be excessive. On the question of cost, it is clear that there has been a substantial increase in the costs of the government information machine under the present Administration. That simply cannot be denied. It was clear from the beginning in 1997 that changes were to take place. In his evidence to us, Sir Robert Phillis explained that,

Government Information Service—

In the two years following the 1997 election, 17 of the 19 departmental heads of information left office and a number of political special advisers were appointed to work in communications. What has happened since? The number of press officers in government departments in Whitehall has increased by 72 per cent in the past 10 years. In December 1998, there were 216 press officers. By September 2008, this number had risen to 373. At the same time, the number of special advisers has also risen sharply by no less than 92 per cent since 1996. In that year, there were 38 special advisers. In 2008, there were 73.

In terms of overall cost, it has been extraordinarily difficult for the committee to find a total of all government spending. Departments such as the Foreign and Commonwealth Office, the Ministry of Defence and the Department of Health were able to provide such information, which sometimes raised a range of questions. For example, the Department of Health planned to spend double the amount on communications in 2008-09 than it did in 2007-08; that is, £107 million compared to £52 million.



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But the extraordinary point is that the Government are unable to give a total cost figure for all departments. The suspicion must be that if they did so that figure would be very high. They say that there are problems here of definition, but that ignores the fact that three government departments were able to provide such information. They defended in a generalised way the increases that had taken place. They said that the demands of the media were now much greater than ever before, while ignoring the fact that many of the so-called new news platforms do not have their own reporters, as we pointed out in a previous report, but rely on agency copy and do not carry out an investigative or truly reporting role.

We did not have time to go further into this issue without unduly delaying our report, but perhaps I may suggest that this would be a proper subject for the Public Accounts Committee to investigate and see whether the public are getting value for their money. It is ludicrous that the Government cannot make some estimate of the money that the taxpayer is spending in this area.

Other members of the committee will speak for themselves on the subjects in this report that they consider important, but there are two particular areas where we made proposals and where the Government’s response causes me concern. The first is special advisers. We said we believe that it is of key importance that Ministers made clear at all times that special advisers must follow the guidance available and stay within the limits set down. The Government’s response was complacent. They said:

“The Civil Service Code also applies to special advisers and this makes clear that they always act in a way that is professional and that deserves and retains the confidence of all those with whom they have dealings”.

The Government were saying not that special advisers should act in this way but that they always did act in this way. Their response was dated 2 April.A few days later on 11 April, this explanation was effectively blown out of the water by the case of Damian McBride, a special adviser to the Prime Minister—a very senior special adviser at that—misusing public funds to try personally to smear political opponents. If ever a special adviser was guilty of dragging politics into the gutter it was Mr McBride. It marked a new low in British politics and raised the question why a man like this was ever employed inside the Government, let alone at No.10.

Let us be clear where responsibility for special advisers lies. Again, I quote from the Government’s response to our report. They say that the Ministerial Code makes it clear that the,

I repeat, the “appointing Ministers”. So, if those words mean anything, it is that the Prime Minister is responsible for his special advisers and other Ministers are responsible for theirs. Being responsible does not just mean saying that when something goes wrong, “I take full responsibility and I have sacked him”, it means making it clear to special advisers from the start what they are expected to do and what under no circumstances they can do. That is what taking responsibility means.



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I welcome the fact that in their response the Government agree with us that codes of conduct will now be made available not just to special advisers but also to Ministers. However, by itself, that is not enough. Ministers must recognise that they are responsible and accountable for the conduct of their special advisers and they must do their utmost to avoid any abuse by them.

My second concern is on announcements to Parliament. The committee recommended that the Prime Minister should draw to all Ministers’ attention the guidance in the Ministerial Code that the most important announcements of government policy should be made in the first instance in Parliament. The House will note that we recommended that the Prime Minister should make this clear. The Government’s response was, again, deeply complacent. They said that our recommendation simply reflected the current position. When Parliament is in Session, they said, the most important announcements of government policy should be made in the first instance to Parliament. The Government therefore proclaim themselves totally satisfied, and yet three weeks after that response, where does the Prime Minister choose to make his statement on MPs’ allowances, the abuse of which had rightly caused grave public concern? He did not make it in Parliament where he could be questioned and where by definition it was most relevant and, I would argue, most appropriate. He did not even make it to the Lobby, where he could be questioned. He made it as a deliberate act of policy to YouTube where there was no opportunity for questions. Quite rightly, the policy eventually came to grief. The Prime Minister was not exactly in Oscar-winning form, but the graveyard humour over his performance should not disguise one fundamental point. By any measure, it was probably the most extraordinary bypass of Parliament that any of us can remember.

I do not deny for a moment that over the years and in previous Governments there have been attempts to bypass Parliament. Of course that is true. I remember remonstrating with one Minister of the Conservative Government in the mid-1990s when I was on the Back Benches on the grounds that one popular newspaper seemed to be getting an extraordinary string of exclusive stories from his department. So I do not quarrel with that, and what I emphasise and underline is that the recommendations of this all-party committee apply to all Governments of whatever persuasion. But what I do say to the Minister is this: in almost 40 years in Parliament, I cannot remember a time when politicians and Parliament itself were held in lower esteem than they are today. There are many factors to this, but the impression of sleaze is added to immeasurably when the Prime Minister’s own special adviser conspires to reveal untruths about the personal lives of political opponents and uses public money to do so, while the best way of downgrading Parliament and making it irrelevant is by deliberately ignoring it and making statements outside the Chamber.

The truth is that in spite of the Phillis committee report and in spite of our own report, there is still a very long way to go. If we believe in democratic government, it should not be about fixing the news, about burying bad news on a day of world catastrophe,

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or about trying to blacken the personal reputation of opponents. There is a challenge here for government and for any party that has aspirations to be a Government. We need honesty and openness, and the responsibility for achieving those must rest on Ministers themselves. That is one of the key recommendations of our committee.

4.40 pm

Lord Parekh: My Lords, I thank the noble Lord, Lord Fowler, for introducing the report of the Select Committee on Communications with the clarity and fluency that we have come to expect of him. He will forgive me if I do not agree with all the party political points that he made. Many of the recommendations of the committee are well taken and well argued, and I hope that the Government will give them serious consideration. However, there is one small but rather important gap in the report on which I wish to concentrate.

In his evidence to the committee, Sir Robert Phillis said that the central problem, the focus of his report, was not just “press management or spin” but rather the question of trust—the,

and the consequent disillusionment and disengagement from the democratic process. I would have liked the Select Committee to concentrate on that important question and suggest what we might do about the breakdown of trust between those three agencies.

Democracy, we all know, requires enlightened public opinion. Enlightened public opinion in turn depends on the public having access to accurate facts and to unbiased analysis. For both, the public depend on politicians in general and on the media. If those two groups of people, politicians and the media, are known to resort to lies, or to mischievous and self-serving spin, the public have no basis on which to form their opinion and to make reasonable demands. They also become cynical and fall easy prey to populist demagogues, who claim to tell the truth as it is but in fact do the opposite. We must therefore find ways of guarding the integrity of the public realm and ensuring that our political system is respected for its honesty and truthfulness. Sadly, for the past several decades, this has not been the case.

Politicians and journalists are among the most distrusted groups. A reasonable degree of scepticism is obviously necessary, but total cynicism and mistrust spell disaster for a democratic system. Journalists start with the assumption that all politicians are liars; and politicians for their part start with the assumption that journalists have their own agenda—which often is true—that they are feral beasts, as Tony Blair once called them, and that they are out to trip up the politicians, to take their remarks out of context and blow them out of proportion.

Both groups therefore approach each other with mutual contempt and suspicion, and what we hear and see on the radio and television is each trying to avoid being caught by the other. That, naturally, alienates the public and stifles a robust and public debate. Let us think of the occasion when Jeremy Paxman asked Michael Howard the same question several times, which has now become part of popular legend in this

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country. Was that a reflection on the politician, or a reflection on the interviewer who did not know how to get the information out by indirect means and had to repeat the same question so many times? Changes are needed in our political culture; it is not just a question of the mechanics of communication. The media need to realise that many of our politicians are honourable men and women who are guided by a spirit of public service and wish to do well by their country. Politicians for their part need to realise that many of our journalists are persons of integrity and wish to expose misuse of power and ill judged decisions. We need therefore to create a culture of mutual respect.

That culture requires changes both in the media and among the politicians. Politicians need to be more honest and open with the public—I shall say something both about politicians and the political culture and, a little later, about journalists and the media culture, as well as the changes we need to ensure the mutual respect that I was talking about earlier.

Politicians need to explain why they have taken certain decisions. What alternatives were available to them? What problems did each of these alternatives raise? Why did only a particular policy or decision seem right to them? They need to disclose all the relevant facts, which is what Sir Robert Phillis talks about when he stresses the principle of transparency and openness as central to any good governance. Politicians need to share their doubts, be tentative, and open to criticisms and new ideas. They need to answer questions honestly and not resort to long-winded statements that all but avoid the questions asked. Sometimes, listening to even very sensible people on the television and the radio, I wonder why otherwise sensible people spend so much time avoiding the question when the question could easily be addressed and answered.

Ministers should be more accessible to the public if we want the public to have ownership of the decisions taken by the Government. They need to travel more widely, meet groups of citizens, debate their policies with ordinary citizens and invite new ideas. I am thinking of the kind of thing that I read about when Bill Clinton first became President and went round the country meeting ordinary citizens in city halls and debating with them why the country needed a radical new direction on race. Rather than concentrating only on the press conferences, which are obviously important, we should also be thinking of Ministers addressing selected members of the public on a regular basis. In short, I very much hope that Ministers and others, not only in this Government but all Governments in future, treat the public with respect and are less self-righteous and dogmatic in their approach to their decisions. Political power has a tendency to breed its own pathology, its own isolation, its own secrecy, its own self-righteousness and dogmatism, and we need to guard against it.


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