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Wednesday, 17 June 2009.
3 pm
Prayers—read earlier at the Judicial Sitting by the Lord Bishop of Bradford.
Police: Funding
Question
To ask Her Majesty’s Government what proposals they have for funding Surrey police force this year and next year.
Lord Trefgarne: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. At the same time perhaps I may declare an interest in that I happen to be resident in the county in question.
Lord Brett: My Lords, the Government have provided general grant funding of £101.8 million for 2009-10, and provisionally £104.4 million for 2010-11. This represents years two and three of the three-year settlement, providing a background of stability and continuity against which the police and all stakeholders can plan with much greater certainty and confidence. In addition to general grant, Surrey will receive approximately £15.4 million from specific grants and capital provision for 2009-10.
Lord Trefgarne: My Lords, I am grateful to the noble Lord for that reply. Is he aware that funding for the Surrey police force has, uniquely in the United Kingdom, been capped by Her Majesty’s Government at what is in fact below the level of last year; that Surrey faces some unique security threats, and that this capping sits ill with the threats to which I have referred?
Lord Brett: My Lords, I think that there may a slight overuse of the word “unique” by the noble Lord. In the first context it is not used correctly, because last year Lincolnshire found itself in the same situation, so Surrey is not unique. I suspect that the noble Lord’s second use of the word is not accurate either. While there are problems with Surrey—the great M25 motorway goes through it—there are also great motorways in the north of England, the west of England, and many other areas. The arguments about this can be seen by noble Lords if they take the time to read the proceedings of the 90-minute debate held in another place two days ago. They will see that the very adequate response given by the Minister in the other place answers the points raised by the noble Lord.
Lord Imbert: My Lords, is it sensible or fair that although Surrey has been adjudged by the Audit Commission to give excellent value for money—the commission commented that Surrey police authority has a very low level of central government grant—it has the lowest proportion of band D properties in the
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Lord Brett: My Lords, it is not the Government who are scrubbing anything. If the word “unique” is to be used, it is that Surrey uniquely is a police authority that twice in two years has gone beyond the cap, knowing in advance what was likely to happen this year. It is now the case, of course, that there are no central targets. Each police authority must manage its own affairs within the money raised locally and provided centrally. In that sense, Surrey is in the same situation as any other county. It has an excellent police force, as the noble Lord rightly said, but there again the number one police force happens to be that for the county of my birth, which is Lancashire.
Lord Bradshaw: My Lords, will the Minister acknowledge that the police authorities all around London, not only Surrey, suffer huge losses of experienced people to the Met because it pays more money and has a better pension scheme based on the final year’s salary? Will he make sure that the Government once again look at the funding of authorities around the periphery of London and do something about the quite unjust boundary between the police forces?
Lord Brett: My Lords, as the noble Lord knows, funding is a matter of continuing review. While it is true, perhaps, that Surrey would raise the argument that it loses police officers to the Met—the so-called doughnut effect—that also applies to other counties that border on the Metropolitan Police area. All those other areas have met their requirements within their budget.
Lord Tomlinson: My Lords, does my noble friend agree that there is a paradox in noble Lords opposite frequently asking for more and more decentralisation of responsibility and, when they get it, they do not like the consequences of their own decisions?
Lord Brett: My Lords, my noble friend makes an accurate comment. It is, of course, a question of human nature.
Lord Howe of Aberavon: My Lords, is the noble Lord aware that the amount per head proceeding from the Government in the present year at some £93 is well below the average for police authorities as a whole of £132, and that the Surrey figure has been reduced by 39 per cent in real terms over the past 10 years? Will he take account of my own experience when I was Chancellor of the Exchequer and the Member of Parliament for East Surrey and found it possible to be generous, as he ought to be in the present circumstances?
Lord Brett: My Lords, we can spar about percentages and amounts of money across the Chamber without necessarily getting to the root of the problem, which is that the Surrey Police Authority and all other police authorities have a responsibility both to raise money from council tax payers, which we want to ensure does not exceed a certain amount, and to do an excellent
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The Minister of State, Department of Energy and Climate Change (Lord Hunt of Kings Heath): My Lords, if we are quick, we can hear the noble Baroness first and then my noble friend.
Baroness Hanham: My Lords, is the Minister satisfied that the reductions in the police force—there are reductions—as a result of the budget cuts will not give credence to the Home Office’s own predictions on the effect of the recession of a rise in theft and burglary offences, racist attacks and terrorism? What assurance can the Minister give the House that the police forces will remain with adequate manpower to deal with that?
Lord Brett:My Lords, the responsibility that the noble Baroness charges me with is, of course, a charge on the local police authorities. They have resources—indeed, Surrey has £5.8 million in unallocated reserves—which they can use in whatever way they want. This carries with it a responsibility to act in accordance with the wishes not only of the council tax payers of Surrey but of taxpayers at large. In that sense, the assurance the noble Baroness seeks is found in the activities of every other police authority that is living within its budget.
Lord Desai: My Lords, is it not likely that capping will lead to beheading if there is a 10 per cent cut across the board—and especially in the Home Office budget—if we have the misfortune of the party opposite coming to power?
Lord Brett: My Lords, far be it from me to intrude on private grief, but I am sure that the sponsor of the Question will bleat even more loudly in his annual Question next year or the year after if we get to the stage of having a Conservative Government and they do as they say and take £930 million out of the Home Office. Cutting police funding by the same 10 per cent as the rest of the Home Office could lose us 15,000 police officers, exactly the number of extra police officers delivered since this Government came to power in 1997. That means 30 officers off the beat in every constituency in England and 188 in Surrey.
Sri Lanka
Question
3.09 pm
To ask Her Majesty’s Government what financial help they will give to Sri Lanka in addition to contributions to international aid agencies to help with the resettlement of Tamils out of the displaced persons’ camps and into their former homes.
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Lord Brett: My Lords, DfID recently announced an additional £5 million in humanitarian funding to Sri Lanka, bringing the total committed to £12.5 million. That money will help the Government of Sri Lanka to meet their pledge to return 80 per cent of the 280,000 displaced population to their homes by the end of the year. All DfID humanitarian aid to Sri Lanka is provided directly to humanitarian agencies that are neutral and impartial in all contexts. The UK has no plans to provide funding to the Government of Sri Lanka.
Lord Naseby: My Lords, I thank the Minister and the Government for that Answer with regard to the £12.5 million. It is extremely welcome and much needed. Is he aware that in the refugee camps there are four United Nations organisations and four international organisations that have free access, while 14 others have to work through the government agent? The greatest problem is resources. Is he aware that India has found 1 billion rupees, while Her Majesty’s Government have spent £650 million on infrastructure projects in Iraq? Will they perhaps consider diverting some of the aid budget to six infrastructure projects in Sri Lanka?
Lord Brett: My Lords, I welcome the noble Lord’s comments and his appreciation of the Government’s endeavours. Some 50 per cent of the £12.5 million has been spent on international agencies and NGOs; I could spend the next minute regaling your Lordships with them, but I will not, on the basis of short answers to short questions, although I am happy to provide that information if he wants me to. About £6 million remains to be spent on the endeavours that the noble Lord mentioned and we keep under review the need for humanitarian aid. The question of diversion, though, is not an issue.
Lord Desai: My Lords, are Her Majesty’s Government making any effort to consult the diaspora Sri Lankan groups here to try to form a Sinhala-speaking and Tamil-speaking people’s reconciliation group? That could help with reconciliation back home in Sri Lanka.
Lord Brett: My Lords, my noble friend makes an interesting point. It is and has been the Government’s view that there is no military solution to the problems in Sri Lanka. Thankfully, we have a ceasefire in hostilities and we now need to build on a political solution using humanitarian aid not only from the United Kingdom but, as has been said, from India and other quarters, and to try to rebuild a community that understands the problems that it has been through and how to avoid them in the future.
Lord Avebury: My Lords, the Minister mentioned the commitment that the Secretary-General received when he was in Sri Lanka that 80 per cent of the IDPs would be returned to their homes by the end of the year. How does he think that the many different agencies that are involved in Sri Lanka can be co-ordinated to ensure that the right balance exists between returning people to their homes and improving the appalling conditions in the camps? Does he think that the entitled donors have any role in securing the political settlement that he just mentioned?
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Lord Brett: My Lords, the noble Lord raises important questions. Through our high commission in Colombo, we are taking the opportunity to co-ordinate our efforts with international bodies, first, to look at the humanitarian situation but, beyond that, to look at the development of that country, which will depend on the international financial institutions that are being asked to provide assistance. In the political sense, it has to be for Sri Lankans to come together with the will to sit down and find a political solution. If they do that, I am sure that they will find no lack of international contributors to assist both the political and economic processes.
Baroness Rawlings: My Lords, what contact have Her Majesty’s Government had with the Chinese Government regarding their support for the Sri Lankan Government on the Tamil question?
Lord Brett: My Lords, I thank the noble Baroness for her question. I confess that, while of course I have studied my voluminous brief for many hours, I could spend 10 minutes trying to find the answer without having a clue where to find it, because I do not think that it is there. We have an ongoing dialogue with the Chinese Government on many issues and this is one of them. I will take her question on board and seek to provide an answer.
Baroness Howarth of Breckland: My Lords, how will the aid be monitored in relation to those refugees who will be taken out of the camps and repatriated? I ask this particularly knowing that many women and children in those camps have been both physically and sexually abused and will need very careful therapeutic and tending help, as well as all the practical help that they need. There is a worry about how that will be monitored through the system.
Lord Brett: My Lords, the first responsibility for that will, of course, fall to the Government of Sri Lanka, but the noble Baroness is absolutely right in saying that it is important to ensure that it is provided. The presence of the United Kingdom and such international non-governmental organisations as the International Red Cross will assist in that. I am sure that the United Kingdom Government will do everything that they can to ensure that such monitoring takes place.
Banks: Lending
Question
3.15 pm
To ask Her Majesty’s Government what further discussions they have had with banks regarding their lending to businesses and house buyers.
The Financial Services Secretary to the Treasury (Lord Myners): My Lords, at the 2008 Pre-Budget Report the Government announced the creation of a new lending panel which meets regularly to monitor lending to businesses and households. The lending panel is supported by the home finance forum, the consumer finance forum and the small business finance forum, which consider mortgage lending, consumer
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Lord Barnett: My Lords, I thank my noble friend for that Answer. Does he agree with what the Deputy Governor of the Bank of England said last week? It is worth quoting. He said that unless banks increase their lending,
Also last week, the Prime Minister said that the banks have agreed to lend an additional £70 billion above what they had lent the previous year. But those are promises. In practice, there is ample evidence that the banks are still not lending as they should. I am sure that my noble friend is aware that in the case even of small business loan guarantee schemes, matching funds are required. In housing, where the banks previously lent 125 per cent, they are now—when prices are lower—demanding at least 40 per cent. Is the panel doing anything about that? After all, at the moment, all that we have are promises. What action do the Government or the lending panel agree to take in the event of the promises not being kept?
Lord Myners: My Lords, I agree with Mr Paul Tucker’s comments. It is essential that the availability of credit is increased to support lending and economic activity, and that indeed is happening. It is happening particularly for larger companies, which are being supported by the capital markets through equity raising and bonds, but also for smaller businesses. The Government have done a considerable amount in this respect to encourage the process. The lending agreements that we have with Lloyds bank and Royal Bank of Scotland commit those institutions to lending an extra £14 billion and £25 billion this year. HSBC has committed to lend an extra £15 billion, Barclays an extra £11 billion and Northern Rock up to an extra £5 billion. These agreements with those banks that have entered into the extended credit guarantee scheme and the asset protection scheme are legally enforceable. They are monitored on a monthly basis and I regularly meet the chief executives of banks. The week before last I met the chief executive of HSBC; last week I met the Abbey National and this week the Co-operative and Nationwide.
Lord Forsyth of Drumlean: My Lords, does the Minister not recognise that the Government’s own plans to raise some £900 billion in the gilt markets will inevitably force up interest rates, adding to the burdens on those businesses that are able to obtain loans, and therefore reduce the speed of recovery?
Lord Myners: My Lords, I am afraid that the noble Lord misdirects himself. If he looks at the evidence, he will see it suggests that there is considerable confidence in the gilt-edged market. I now have direct responsibility within the Treasury for the Debt Management Office, a very professional unit that continues to fund our needs and requirements in an entirely practical way which is not damaging to interest rates. Therefore, we are not squeezing out the availability of funds to business and to private sector borrowers.
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Lord Newby: My Lords, the Minister paints a pretty rosy picture of the increased levels of lending by the banks. Is he aware that in many cases the banks require from existing small business customers much higher levels of security and higher fees which, given the economic situation, those small businesses are unable to find? These businesses are therefore not able to roll over their loans. Will the Minister speak to the banks, particularly those in public ownership, and ask them to address those problems as well as the global quantum to which they are committed to lend?
Lord Myners: My Lords, as I indicated to my noble friend, I have regular meetings with the chairmen and chief executives of our major banks, and of course I discuss this issue. The total cost of borrowing to businesses has been drawn down as a consequence of much lower interest rates and the positive effects of the Bank of England’s quantitative easing programme. However, we have seen a widening of margins and increasingly demanding terms around collateral and covenants which significantly reflect the fact that banks are being more prudent now and moving away from the somewhat reckless terms they offered prior to the crisis. The noble Lord, Lord Newby, cannot have it both ways. We want bankers who are not only sensible and prudent but who recognise that they need to support their customers. I and the Government are absolutely committed to ensuring that that happens so that this economy can recover as quickly as possible.
Lord Brooke of Alverthorpe: My Lords, my noble friend did not mention—
The Minister of State, Department of Energy and Climate Change (Lord Hunt of Kings Heath): My Lords, I think that we should hear from this side.
Lord Brooke of Alverthorpe: My Lords, my noble friend did not mention a meeting with Northern Rock. Newspaper reports indicate that it is likely that Northern Rock will be sold. Would it not be beneficial if he had a meeting with Northern Rock and they talked about perhaps using it as the experimental base to try to advance lending both to people seeking to purchase a home and also to businesses as well?
Lord Myners: My Lords, I met with the chief executive of Northern Rock last week.
Lord Lang of Monkton: My Lords, what evidence is there that the policy of quantitative easing is actually helping to ease banks’ lending, or is it the case, as is widely suggested, that much of the cash is going to overseas banks, and much of the rest of it is going to our own banks for the understandable purpose of reinforcing their own balance sheets?
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