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House of Lords

Monday, 7 December 2009.

2.30 pm

Prayers-read by the Lord Bishop of Salisbury.

UN: UK Peacekeeping Contribution


2.36 pm

Asked By Lord Hannay of Chiswick

The Minister of State, Foreign and Commonwealth Office (Baroness Kinnock of Holyhead): My Lords, I refer to the Statement made by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs in another place on 25 March 2009. To control spending, the Treasury has capped the call on the contingency reserve for peacekeeping at £374 million.

We estimated that peacekeeping assessed costs could rise to £456 million in 2009-10 and so reluctantly cut back on discretionary conflict activity. From 2010-11, the Treasury will consider a modest request for end-of-year flexibility.

Lord Hannay of Chiswick: My Lords, I thank the Minister for that not terribly encouraging reply, although I know she has done her best, and I regret that a Treasury Minister has not been prepared to come to the House to answer for a matter that is fair and square within the responsibility of the Treasury-because the contingency reserve is not a matter for the Foreign Office. Can she confirm that there will be no question of Britain using its veto on the Security Council to block on purely financial grounds an operation that enjoyed the support of the council? Will she also confirm that the budgets of these peacekeeping operations are set by the UN General Assembly, which does so by majority, and therefore Britain has no control over that? Is it not high time that the Government got out of the trap into which they have fallen and which is squeezing Britain's contribution to conflict prevention and resolution?

Baroness Kinnock of Holyhead: I thank the noble Lord who, we are all aware, has enormous expertise and experience in these matters. I can confirm that the UK would not block a UN mission in the Security Council on financial grounds alone. On the noble Lord's second point, he will be aware that budgets are proposed by the UN Secretary-General and agreed by the General Assembly of the United Nations. In 2009, the Secretary-General asked for $1.5 billion more funding than in 2008. As the noble Lord knows, it is very difficult to influence the General Assembly of the United Nations. We are but one voice in 192 and that

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makes the task very difficult. A decision on full access to the reserve for peacekeeping costs would have to be taken in the context of wider government financing. I thank the noble Lord for his interest and commitment in these matters.

Baroness Falkner of Margravine: Will the Minister confirm that the earmarked sum of £456 million is still adequate to meet expenditure in the current financial year? What does she expect to do if the pound falls further in the financial year 2010-11 in terms of sterling's stability? Will she also reflect on her predecessor's admission that combining assessed contributions and discretionary spending is a bad idea and attempt to revoke it in the next spending round?

Baroness Kinnock of Holyhead: On the noble Baroness's first point, peacekeeping costs are unpredictable, which makes it very difficult to estimate the amount that we need in advance. Without the rules governing our ability to buy in currency in advance, we have done what we can to insulate our budgets from exchange rate fluctuations. Our strategy of forward purchase of our foreign exchange requirements has provided a considerable degree of cost certainty. I am not aware of my predecessor, my noble friend Lord Malloch-Brown, having said what the noble Baroness asserts. I will look it up, but I am convinced that he never made that point as forcefully as the noble Baroness suggests.

Lord Howell of Guildford: Does the Minister recall that we dealt with this subject in considerable detail on 6 July and that her predecessor, the noble Lord, Lord Malloch-Brown, who is, alas, no longer among us-who knows who will go next-was very positive in his response to the noble Lord, Lord Hannay, in saying that there was something wrong with the way in which discretionary expenditure always gets squeezed? We all appreciate that there is no more money, but given that more and more of our international involvements will be multilateral rather than bilateral, is it not time to look at this whole arrangement in rather better detail? It might even be more efficient from the Treasury's point of view as well than the present rather haphazard outcome.

Baroness Kinnock of Holyhead: The current process has been in place for a number of years. I confirm that my noble friend Lord Malloch-Brown is alive, well and kicking. Peacekeeping and discretionary conflict activity are paid for from joint budgets with the Ministry of Defence, the Department for International Development and the FCO. It is important to understand that tripartite responsibility. The Treasury cap on accessing the peacekeeping reserve means that we have finite conflict resources. The budget is under huge pressure because of exchange rates and, more significantly, the big rise in UN and EU peacekeeping around the world, notably in Africa. I know that many Members of this House will be aware that the spending of the EU and the UN on concerns in Africa has increased substantially and that that affects the amount of funding that we have for discretionary activity. The UK pays a significant share of that bill, which means that we have limits on contributing to discretionary conflict interventions from our fixed pot.

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Lord Jay of Ewelme: My Lords, as peace and security are fundamental preconditions for economic development, does the Minister agree that it would be entirely appropriate for a greater sum to be made available from the budget of the Department for International Development to supplement the scarce funds now available to the Foreign and Commonwealth Office?

Baroness Kinnock of Holyhead: I am sure the noble Lord is aware that the assessment that is made when the Department for International Development agrees its funding has to be in line with the OECD conditions. I think he will agree that those strict limits and criteria are very important in terms of what we call "DAC-ability"; that is, whether they conform to our overseas development priorities.

Lord Richard: My Lords, is my noble friend aware that there is no point whatever in asking the UN to do more and more in the field of peacekeeping and then at the same time turning round and saying that you are not prepared to pay for it? Quite frankly, it is daft.

Baroness Kinnock of Holyhead: "Daft" is a word that I would hesitate to use about the UN, or about the British Government, of course. There are increasing pressures on the UN budget because of the increasing need to respond to urgent and emergency situations, particularly in Africa. Therefore, extra funding is required. However, fluctuations in exchange rates have led to significant pressures on the FCO's budget, not just as regards conflict activity. We have tried to mitigate the worst effects of the depreciation of the pound, but it is very difficult for us to predict each year, on a year-on-year basis, what will be needed in terms of conflict prevention and for dealing with conflicts, particularly in the continent of Africa.

Employment: Public Sector


2.45 pm

Asked By Baroness Miller of Hendon

The Financial Services Secretary to the Treasury (Lord Myners): The main factor influencing the recent public sector employment growth reported by the ONS has been the temporary reclassification of certain banking employees to the public sector. Growth other than this has largely been a result of the Government's decision to invest in front-line services, including vital recruitment activity at Jobcentre Plus to maintain provision of targeted support to help people to find work and move out of unemployment.

Baroness Miller of Hendon: I thank the noble Lord for his illuminating Answer, but does he acknowledge that the level of public employment has risen steadily since 1997? Even if we take note of the points that he made and accept that there will perhaps be many more

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employees in the National Health Service, education and policing, is it not also true that there is an increase in the number of those working in make-work projects that are of absolutely no commercial benefit to Great Britain Ltd?

Lord Myners: The noble Baroness will no doubt be aware that the total number of people working in the public sector is roughly in line with the figure in 1990, when the noble Baroness, Lady Thatcher, was Prime Minister. The total increase in public sector employment since 1997 includes 116,000 more teaching assistants, 41,000 more teachers, 66,000 more nurses and 14,000 more police officers. These are important supports for our community and are consistent with our advocacy and support of good public service.

Lord Peston: My Lords, it is in fact not the case that the share of public sector employment has risen continuously since 1997. That merely shows that it is dangerous for people who do not understand statistics to get involved with them. Is my noble friend aware that in recent years the peak of the share of public sector employment occurred in 1992? I have forgotten, but can he remind us who was in power in 1992?

Lord Myners: My Lords, I think that I have already reminded the House that there was a Conservative Administration on this side of the House at that time. My noble friend is absolutely right. The total percentage of the workforce in public sector employment declined from the mid-part of this decade until the latter part. It has increased only as we moved into a recession. It is perfectly correct and proper that, as private sector consumption and investment decline, public sector expenditure should increase, particularly on front-line services, to help to draw the economy back towards optimal equilibrium.

Lord Newby: Given the state of the public finances and the near inevitability that in future years total expenditure on public sector employment will fall, can the Government give an assurance that any cuts will be via reining back public sector pay increases and bonuses rather than staff numbers, particularly in front-line staff?

Lord Myners: The most important cuts that we need are in inefficiency. As in the private sector, in the public sector there are always scopes and opportunities to improve efficiency and productivity. To that we are committed.

Lord Kinnock: Can my noble friend confirm that among public employees today are senior personnel in the Royal Bank of Scotland who apparently have threatened to leave the country if they cannot be allowed to have very significant bonuses? Can he, with his experience, tell us what on earth we could possibly do if people of such unique talent were to leave the country? I should add that, while I am not certain what we would do, I am prepared to find out.

Lord Myners: My noble friend drifts a little away from the subject of the Question, but I shall respond, as it is a matter that I find particularly interesting. The total number of public sector employees currently

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includes 240,000 from those banks that are temporarily owned on the part of the taxpayer. They will of course return to the private sector as and when these banks are in full private ownership. I shall not be drawn further on the legitimacy of bonus claims, nor will I verify that these people have threatened to leave the country. The board of directors of RBS has apparently threatened to resign if it does not get the bonuses that it wants, but that is rather a silly line for it to adopt and actually a very unpatriotic one. I think that the nation finds that activity shameful.

Baroness Noakes: My Lords, I think that we ought to get back to the Question proper. Public sector efficiency, as shown by the Office for National Statistics, has gone backwards every year since 1997, so the Minister's assertion that this is just about front-line services is clearly inaccurate. We have had many Statements on efficiency-there will be another today-but when will the Government knuckle down and deliver efficient public services?

Lord Myners: I am sure that we can count on significant improvements in efficiency if the party opposite finds itself in government, because it will slash the number of people in teaching, slash the number of people in the National Health Service and slash the number of people in defence and security, thereby increasing and improving efficiency on the crude measure used by the ONS. We are more focused on the combination of quantity and quality.

Baroness O'Cathain: Will the Minister repeat the figure for new teaching assistants, which I think was about 146,000? Is he happy with the outcomes? He talks of efficiency, yet every day we see in the newspapers that we are failing our children on reading, writing and arithmetic and that we are failing those leaving sixth-form colleges, who are not getting sufficient grades. Does the Minster think that that is efficient? Perhaps we should not have employed any of those teaching assistants.

Lord Myners: I am shocked by that final observation. My experience is that classroom assistants significantly improve the productivity and efficiency of schoolteachers. We believe that augmenting highly skilled teachers with others working alongside them on work that requires less training and preparation is a worthy way of meeting needs in the classroom.



2.52 pm

Asked By Lord De Mauley

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Young of Norwood Green):My Lords, provisional data published in October show that there were a record 234,000 apprenticeship starts in the 2008-09 academic

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year,compared with 184,400 in 2006-07-and a miserable 65,000 in 1996-97, before this Government took over.That represents the highest number of apprenticeship starts and achievements ever in an academic year. When final data are returned by providers, we expect apprenticeship start figures for 2008-09 to rise by approximately 2 per cent to 3 per cent.

Lord De Mauley: My Lords, I thank the Minister for his Answer. But is it not the case that, in the last quarter of 2008-09, the number of people starting an apprenticeship plummeted by 20,000, or 36 per cent, on the same quarter in the previous year? The Government boast of moves to promote apprenticeships, including new apprenticeship training agencies and group training associations, but those will provide only 14,000 places over three years. Is that not a drop in the ocean compared with a fall of 20,000 in no more than three months?

Lord Young of Norwood Green: My Lords, I am informed that the figures that I have given you for 2008-09 are correct, and they show an increase of approximately 2 per cent to 3 per cent. We believe that our record on apprenticeships is second to none and that we rescued a system that was dying on its feet. We are spending more on this than we have ever spent before. We are also determined to recruit more within the public sector; we have, as the noble Lord knows, set ourselves an ambitious target of something like 21,000. We are making significant progress. I am not in a position yet to announce the figures, but we are driving hard and have ministerial champions in each department. I am confident that they will make a significant contribution.

Lord Morris of Handsworth: My Lords, although the House will welcome the number of apprenticeships recently announced by the Minister in traditional areas such as manufacturing, what steps, if any, are being taken to create apprenticeship opportunities in rural areas and communities?

Lord Young of Norwood Green: To reassure my noble friend, we have a number of schemes to try to drive up the number of apprenticeships. I instance group training associations. We have invested another £10 million to encourage the creation of those organisations, where small and medium-sized employers can shelter under that umbrella and encourage the creation of more apprenticeship opportunities. Generally, the drive for apprenticeships around the country is being led by the National Apprenticeship Service, which came live last April, but it is the cumulative result of a number of government initiatives to drive up apprenticeships that will ensure that we create more of them in rural areas.

Lord Cotter: My Lords, with the enactment of the apprenticeships Bill, there is concern that there will be a requirement for prescribed standards-in particular, for off-workplace training. Does the Minister agree that we need to listen to employers and businesses to meet their concerns and to ensure that the apprenticeship schemes meet their particular requirements, which can be special in many cases?

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Lord Young of Norwood Green: I agree with the noble Lord that we should. We have created what we believe to be a demand-led system. We have created the sector skills councils which, as I am sure the noble Lord knows, are employer-led. We Ofsted-inspect the learning scheme. We believe that we have taken every precaution. If he has specific examples where he feels that the system is failing, I would welcome the opportunity to examine them, because we want to ensure that our training schemes deliver value for money.

Lord Trefgarne: My Lords, I declare an interest as a former chairman of the relevant engineering sector skills council. How many of the apprenticeships to which the Minister has referred are in the engineering sector, which is so important to our economy?

Lord Young of Norwood Green: I will have to write to the noble Lord to give him the precise number but, in the area of his concern-which we are addressing, because we share it-we have identified the new skills strategy. It sets out a new ambition for a modern class of technicians to secure our economic future and to drive growth. We will create up to 35,000 extra advanced apprenticeship opportunities for 19 to 30 year-olds over the next two years, and many of those will be in the engineering area, so we are addressing that.

Lord Davies of Coity: My Lords, is my noble friend aware that in the 1950s, I served a five-year apprenticeship, which delayed by three years my National Service, which I then served in the Air Force? Secondly, does he believe that the Government should have been encouraging apprenticeships 10 years ago, not two years ago?

Lord Young of Norwood Green: I thank my noble friend for that information. I believe that we have been encouraging apprenticeships for more than 10 years now. As I pointed out in my opening remarks, the scheme we inherited was dying on its feet: there were only 65,000 apprentices and only just over a quarter were completing their apprenticeship. If we wind the clock forward 10 years, we now have more than a quarter of a million apprentices, and more than two-thirds are completing their apprenticeship. That sounds like a Government who are focused, concentrating and, more importantly, delivering on apprenticeships.

Baroness Sharp of Guildford: Why are the Government cutting back on the number of adult apprenticeships when, in a demand-led system, there is excess demand for adult apprenticeships, whereas it is quite difficult to find employers willing to take those aged under 19?

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