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House of Lords

Tuesday, 15 December 2009.

2.30 pm

Prayers-read by the Lord Bishop of Chester.

Leave of Absence

2.36 pm

The Lord Speaker (Baroness Hayman): My Lords, the Conference of Speakers and Presiding Officers of the Commonwealth will be held in New Delhi from 4 to 8 January 2010. Accordingly, I seek leave of absence from your Lordships' House from 5 to 7 January.

Public Finances


2.36 pm

Asked By Baroness O'Cathain

Lord Davies of Oldham: My Lords, the financial crisis and global downturn have had a profound impact on the public finances, particularly tax receipts, in the UK and in other countries. Discretionary fiscal stimulus was introduced to provide support when the economy was weakest, limiting the severity of the downturn. As the economy is forecast to emerge from recession, borrowing in the medium term is projected to fall markedly through government consolidation measures announced in and since the 2008 Pre-Budget Report. The Fiscal Responsibility Bill will enshrine these consolidation plans in legislation.

Baroness O'Cathain: I am very grateful to the noble Lord for that reply, but I am afraid that I do not really believe it. Will the Fiscal Responsibility Bill contain a schedule to show us exactly where the public debt will be reduced and what public spending will be taken from what departments and when?

Lord Davies of Oldham: My Lords, the Bill is quite clear in what it intends to do. It will make these measures taken by the Government directly answerable to Parliament. That is the way in which we will consolidate the decisions that have been taken in the past year and a half, which have a long-running perspective to them in terms of government borrowing. A code related to the Bill will spell things out in more detail, but the Bill is clear about the responsibility of the Government to report and to stick to these measures.

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Lord Newby: The terms of the Fiscal Responsibility Bill would mean that, if there were a recession in five years' time, it would be illegal for the Government to increase public expenditure to combat unemployment. Does the Minister agree that this proves that the Bill is just a case of political posturing and that it is not worth the paper it is written on?

Lord Davies of Oldham: No, my Lords, it is a reinforcement of the Government's intent with regard to their public borrowing plans for the future as we emerge from this deep recession. If the noble Lord is suggesting that we are likely to see in the near future anything like the recession that we have had over the past two years, his judgment is very different from that of everyone else concerned with the British economy and the international economy in terms of recovery from this recession. The Bill makes clear the Government's strategy for emergence.

Lord Campbell of Alloway: Is it right that we are the only country in the European Community not moving out of recession? If so, why is that?

Lord Davies of Oldham: Like all other countries in the European Community, we are moving out of recession and the indications are that we will resume growth next year.

Lord Lawson of Blaby: Is the Minister aware that-in addition to a deficit that is getting on for £200 billion this year and is projected by the Treasury, somewhat optimistically, to be another £200 billion next year-if the £200 billion of quantitative easing that has occurred is going to be neutralised and not turned into inflation in the future, another £200 billion of gilts will have to be sold to mop it up? Has he made any judgment as to whether the financial markets are prepared to buy gilts on that scale and, if so, at what price?

Lord Davies of Oldham: My Lords, of course the Government are concerned about the market response to government projections, but the noble Lord will have rejoiced that the market looks very calm, if not supportive, as far as the decisions taken last week are concerned. The noble Lord is right: of course we face challenges with regard to the future. No one underestimates the problems of reducing this substantial debt, but it is quite clear that the Government are determined to do so and will be increasingly answerable to Parliament to guarantee that they do.

Baroness Noakes: My Lords, the Minister referred to a code when he responded to my noble friend Lady O'Cathain. The code to which he is referring under the Fiscal Responsibility Bill is in fact the code for fiscal stability, which has been required ever since the 1998 Finance Act and did not stop the Government wrecking the economy of this country. The Minister then said that the Bill would make the Government answerable to Parliament. In what way will being answerable to Parliament under this Bill help to avoid the mess that we are now in?

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Lord Davies of Oldham: I wonder whether the noble Baroness is broadening her geographical perspective in suggesting that the decisions taken by this Government wrecked the economies of the United States, Germany and all other advanced countries over this recent recession. It is quite clear that we have been facing a worldwide phenomenon of crisis in all the significant economies. What is interesting is that we approached this crisis with a lower level of debt than most other countries.

Lord Soley: Given the seriousness of this economic crisis and its impact on Britain, would it not be logical for the opposition parties to sign up to this legislation? It is straightforward and simple. It is a clear message and it ought to be important for anyone who aspires to government.

Lord Davies of Oldham: My Lords, I agree with my noble friend and suggest that he watches this space.

Lord Howe of Aberavon: Does the noble Lord not perceive that it would be insufficient to restrain only the Chancellor of the Exchequer? It would be essential as well to restrain the First Lord of the Treasury.

Lord Davies of Oldham: My Lords, the Bill refers to no individual Minister but to the responsibility of Her Majesty's Government and their answerability to Parliament. I am sure that the noble and learned Lord shares my view that that is an impeccable proposition.

Lord Stoddart of Swindon: Do we really need a Bill at all? Surely what we need in this country are a responsible Government who put the country before party-political considerations and a free Parliament of people who are concerned about their country and will hold the Government properly to account.

Lord Davies of Oldham: My Lords, we are all concerned about our country. The noble Lord may take a certain independent stance but I hope that his independence is not trammelled by the fact that he will have noted that unemployment levels during this crisis have been the lowest in the developed world.

Visas: Non-EU Visitors


2.44 pm

Asked By Lord Clement-Jones

Lord Brett: My Lords, the cases cited reflect concern that the points-based system prevents the entry of legitimate artists and academics. We do not believe this to be so. Implementation has generally been smooth,

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successful and well received. Where there have been teething problems, we have addressed them and we continue to fine-tune to ensure that we are delivering a system which is robust, objective, responsive and fair.

Lord Clement-Jones: My Lords, I thank the Minister for that reply. He spoke about "teething problems". The current visa arrangements for artists and entertainers have had an appalling effect on arts and cultural exchange in this country. They have affected music, theatre, literature, dance, opera and the visual arts, and education. While there have been some minor improvements, they have not been fundamental. There are still major issues to be resolved; for example, questions of training for UKBA officers, clarity of guidance, stamping of passports even, biometric machinery and the sheer discretion given to immigration officials. When will Ministers take a grip of this real issue and make sure that these problems are resolved?

Lord Brett: My Lords, the noble Lord does not do justice to what the Government are seeking to do, working with the arts and entertainment taskforce and the National Campaign for the Arts-the independent body representing people in culture of all forms. There have been a number of major changes. Ministers have taken a keen interest. My colleague in the other place, Phil Woolas, has met the NCA twice. He meets the task force regularly-they met as recently as 24 November. Among the changes that have been made is a system whereby performers who normally require a visa but who come to the UK for less than three months are not required to apply in advance. We also have provision to accept applications for entry from countries in which the artists are performing, rather than having them go back to their country of origin to do so. We have created a new entertainer visa category for performers who do not require sponsorship. As a consequence, costs are now less for the entertainers, who pay a lower visa fee. In addition, we have retained a route for overseas film crews on location shoots. We have made these and a number of other concessions and changes to meet the wishes of the sector concerned. I believe that we have support for the changes from the NCA and the task force.

Lord Tomlinson: But did my noble friend not note that the noble Lord, Lord Clement-Jones, included education among the areas that he criticised? Is it not the case that in both the public and private sectors of higher education the number of overseas students who have entered this country in the present year has greatly increased, which is partly because of the efficiency and the effectiveness with which the points-based system is working in higher education? It is clear that there are still problems to be ironed out, but, overall, this country has benefited enormously from the increase in immigration to higher education in this country.

Lord Brett: My noble friend makes an important point. Students from overseas are a valued part of our community. We have to take a balanced approached to immigration laws, but those students are of great advantage. My noble friend is right that there are welcome indications of an increased number of students. We are carrying out a review also of the tier 4 category

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to ensure that the increase is among those who are legitimately entitled to be here. A review has been called by the Prime Minister and its outcome will be known early in the new year. We shall see whether any changes need to be made in that category.

Baroness Gardner of Parkes: My Lords, I have raised this question in the past with regard to Commonwealth artists who wish to come over here, because the scheme is based on the Australian points system. As I have often said, no one goes to Australia to become a world-famous artist. They tend to come from there, and people such as Joan Sutherland have established their world career here. The Minister said in response to my previous question that flexibility would allow those people to continue study for longer. I have had good reports back on that point. So there is a greater element of flexibility than there was in the past, is there not?

Lord Brett: The noble Baroness is correct. I thank her for her support. Australian artists have been doing missionary work in Europe and beyond for many years.

The Earl of Erroll: Many high-tech companies are probably going to have to relocate their training facilities abroad because they cannot bring people in to train here. This is causing us to slide down the global knowledge economy scale. Does the Minister think this is useful for the UK?

Lord Brett: The Minister does not recognise the situation described by the noble Earl. If he wishes to write to me and give me chapter and verse, I would be more than happy to investigate.

Baroness McIntosh of Hudnall: My Lords, would my noble friend agree with me that this Government have on the whole had an admirable record in support of the arts in this country and indeed in supporting artists from this country in their efforts to take their arts elsewhere? Would he also agree, however, that this particular issue has caused some concern in the arts community, as he has already indicated? Would he assure the House that the matter will be kept under review so that any inadvertent abuses are caught before they turn into problems?

Lord Brett: My Lords, I am happy to give my noble friend that assurance. I know that my ministerial colleague Phil Woolas takes a keen interest in this area and, as I indicated, has regular meetings. On the point made in the original Question about training, guidance and training is given to staff. If we find there are any errors, abuses or what-have-you, we will investigate immediately and ensure that adequate training and guidance is given to avoid what sometimes happens in the process which is not the intention of government or policy. On this occasion, the teething problems have largely been solved.

Lord Willoughby de Broke: On a point of information, the Minister might perhaps help the House by saying how many performing artists have been denied access to this country through this points-based system. I

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appreciate he may not have the answer now, so could he perhaps put a note in the Library about it? Then we might have an indication of how well or how badly the system is working.

Lord Brett: The noble Lord is correct; I do not have a figure in my brief. The reasons why people are denied entry are as important as the numbers of people involved. It can well be for reasons of process that people do not have the required points under the points-based system, or that they do not apply in time, or for other reasons. I will investigate the point the noble Lord makes and take up his suggestion of providing a note.

Baroness Hamwee: My Lords, the Minister refers to training. It is quite clear that problems have arisen because of the inadequacy of training and insufficient knowledge on the part of those delivering the service- and it is a service. Will he acknowledge that, as for artists and for academics coming to speak at conferences, and I suppose for politicians, the UK Border Agency is only as good as its last performance?

Lord Brett: I would certainly agree with the noble Baroness's latter point. Our border patrol service, in the sense that we police our borders and interrogate and talk to would-be entrants, has a high reputation worldwide. It is seen to be friendly and it is seen to be, by and large, efficient. If you are subject to delay, whether it is your fault or the fault of someone else, you will not see the agency in that way. We believe the satisfaction rate is very high, however, and we investigate and seek to put right any errors that are made en route.

Lord Skelmersdale: My Lords, I do not know whether anybody else in the House has been confused by the Minister this afternoon as much as I have. Earlier on, he talked about a fast-track system where people could get their visas at ports of entry-airports, the port of Southampton and so on. Just now, in answer to a question from behind me, he said that one of the reasons for denying a visa in such cases would be the points-based system. While I approve of the points-based system in general terms, is it working in these terms?

Lord Brett: I do not know whether the confusion is in the noble Lord's mind or in mine, but I did indicate that the fast-track system is for artists arriving here from the countries in which they are already performing and who do not require to stay for more than three months. As regards points, under tier 1, one has to acquire points in order to enter. Academics and artists can come under tier 5, but some of the problems from the cases indicated by the Manifesto Club are that it is not clear whether the individuals were in breach of conditions of visas. For example, academic visas do not allow working beyond honorarium-they do not allow people to become salaried. In that sense, therefore, there is no reason why entry may be denied. As I indicated to the previous speaker, however, I will investigate and produce an answer.

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Barnett Formula


2.54 pm

Asked By Lord Anderson of Swansea

Lord Davies of Oldham: The Government keep all aspects of public spending under review, but they have no plans to change the Barnett formula. The Government's funding policies for the devolved Administrations were set out in the updated statement of funding policy, which was published by the Treasury in October 2007.

Lord Anderson of Swansea: My Lords, my noble friend will be aware that the Richard committee-a committee of this House-concluded recently that the old formula did not reflect either today's population or the respective needs of the devolved Administrations. The situation in Wales is even worse in that gross value added per head in Wales is now less than three-quarters of the UK average and is deteriorating. When will the welcome recent agreement reached between the Treasury and Mr Hain, the Wales Secretary, to ensure that Wales is not disproportionately disadvantaged be brought into effect? When will the details of that welcome agreement be announced?

Lord Davies of Oldham: My Lords, my right honourable friend the Secretary of State for Wales indicated after the Holtham review had been delivered that he was looking at future spending. That analysis is going on. I do not think that it is quite an agreement-the term used by my noble friend to identify it-but the Secretary of State for Wales is properly charged of his responsibilities in this area, and he is examining the issue.

Baroness Hollis of Heigham: My Lords, I declare an interest as a member of the Richard committee. The Barnett formula allocates over half the total public expenditure to Scotland, Wales and Northern Ireland on the basis of adjusted 1970s population figures. It gets it wrong, I estimate, by something like £4 billion to £5 billion a year. Does my noble friend agree that local authorities, health authorities and regional bodies are all resourced according to need: in which case, why not also the nations of the UK?

Lord Davies of Oldham: My Lords, that case, as my noble friend has indicated, was included in the House of Lords report on the Barnett formula. The Government are examining this report carefully and are aware of the strength of the committee's position. However, my noble friend will know only too well that an accurate analysis of a needs-based expenditure structure is a very substantial task, and the Government will report on that in due course.

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