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House of Lords

Thursday, 21 October 2010.

11 am

Prayers-read by the Lord Bishop of Blackburn.

BBC and British Council


11.07 am

Asked By Lord Judd

The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, we regularly discuss our mutual global priorities with the BBC World Service and the British Council, both in the UK and in posts overseas, including the ones which the noble Lord mentions. This in no way detracts from the independence of the two organisations, which we strongly support. My right honourable friend the Foreign Secretary has made plain the importance he places on both these institutions as key partners in projecting British values.

Lord Judd: I thank the noble Lord for that reply and I do not for a moment doubt his personal commitment to these organisations. Does he agree that the BBC and the British Council are very special assets in the history of Britain? With their commitment to integrity, learning and expertise, they have been an invaluable lifeline to those struggling for freedom and yearning for access to reliable information and analysis. Does he further agree that whatever financial manoeuvres may currently be under way, nothing must be done to undermine the effectiveness of these organisations or to water down the contribution that they make? It is not just the size of the audience, it is the importance to people who are leading the struggle for freedom.

Lord Howell of Guildford: I do not just agree but most strongly agree with what the noble Lord says. His commitment is also very admirable in relation to these two institutions. They are taking, over four years, some budget cuts. That must be accepted, but practically every institution except one or two is also taking some reductions. To concentrate on the World Service, its new position within the BBC overall, but still under the strong governance of the Foreign and Commonwealth Office, will be enhanced and strengthened. As to purposes, while I cannot say the same in terms of precise expenditure, we will see a strengthened performance for these brilliant institutions.

Baroness Falkner of Margravine: Will my noble friend assure the House that, while the budget for the World Service has transferred to the BBC, the Foreign

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Office and its priorities, particularly its emphasis in the strategic review on adaptability, will still be at the forefront of the decisions that are taken? As regards the Burmese service, one hour of broadcasting has 8.3 million listeners in a country which is desperately in need of free and impartial information. Will our foreign priorities still determine what decisions are taken in Bush House?

Lord Howell of Guildford: The short answer to my noble friend is yes. The BBC will remain in the same relation of governance to the Foreign Office as now, and in fact no language service can be closed without the written approval of my right honourable friend the Foreign Secretary. On the Burmese service, there were some media reports about closures, but they were speculation-and inaccurate speculation at that-and my right honourable friend made clear to the Foreign Affairs Committee in the other place the value he places on the Burmese service of the BBC World Service. My noble friend can be reassured on the point she has rightly raised.

Lord Wright of Richmond: My Lords, I fully endorse the remarks of the Minister on the value of the BBC World Service and its independence. Can he give an assurance that the spending review will not affect the ability of our posts in this part of Europe to analyse and report on political developments in those countries?

Lord Howell of Guildford: I hope not and that certainly is not the intention. The noble Lord has raised the broader question of the overall effect of budget disciplines on the Foreign Office and on posts. There will be some effects, but they will be mitigated by the fact that the Foreign Office will draw on the support of the Department for International Development and other sources to ensure that, together, the various departments represented in overseas posts remain as strongly and as acutely plugged into local events as ever.

Baroness Kinnock of Holyhead: My Lords, is it not clear that cuts to the Chevening scholarships, the British Council and the BBC World Service completely contradict the Government's declared interest in public diplomacy? Is it not also clear that such cuts in this country mean reduced engagement in other countries, and that less engagement means less influence for the UK? Is this really in the national interest?

Lord Howell of Guildford: I like to agree with the noble Baroness on as many things as I can, but I just do not agree on this. It does not completely contradict anything. If anything, the position of the BBC World Service will be enhanced. The service is taking a cut in real terms of 16 per cent over four years. Final negotiations at the British Council are still going on, but it will have to make some reductions as well. However, we should remember that the British Council is only 30 per cent financed by the Foreign and Commonwealth Office. It raises the other 70 per cent of its finance through its highly successful and growing commercial activities, which I would expect to see expand. So, far from

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completely contradicting anything, what we are doing probably reinforces the importance of these two organisations.

Lord Marlesford: Given that we are all totally supportive of the wonderful work of the BBC World Service and given that it has a major role in nation-building and in the salvation of nations from oppressive regimes, would it not be appropriate for the service to be financed from the DfID budget, which is not being cut, rather than the FCO budget?

Lord Howell of Guildford: As I have explained and as I think my noble friend understands, it is not going to be financed from the FCO budget but by the BBC. However, there are activities that fall clearly within the definition of overseas aid activities which can be financed from that source as well. So I do not think the problem my noble friend is concerned about actually arises any more, or will not arise two years ahead, when this new arrangement is put into place.

Lord Soley: On Tuesday the Government announced in the defence review that they wanted an enhanced soft power. On Wednesday we saw a dramatic cut for the BBC over the next six years, with the licence fee and the incorporation of the World Service into the BBC generally. What discussions have taken place between the Minister's department, the Chancellor and the Secretary of State for Defence on how you enhance and protect soft power if you are also cutting the budget?

Lord Howell of Guildford: My Lords, we have a lot of discussions all the time with the other departments concerned, including the Treasury. The broader question of co-ordination of our soft power projection and our positioning in the world is, of course, a central part of the agenda of the National Security Council, where it is discussed frequently. The noble Lord is right to talk about our soft power as an overall effort involving all overseas departments. We have the co-ordination in place to do that and it is working extremely effectively.



11.16 am

Asked By Baroness Greengross

The Commercial Secretary to the Treasury (Lord Sassoon): The Government believe that it is important to incentivise individuals to save for retirement and recognise the importance of the annuities market. We support the open market option, which enables individuals to shop around for the best rate, and continue to consider ways to make this more effective. Complementing this, we will continue to work with interested groups to

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improve the quality of pre-retirement advice, including seeking independent financial advice, so that consumers can make an informed choice on how best to draw benefits from their pension fund.

Baroness Greengross: I thank the Minister for that helpful reply. However, as we know, many potential annuitants do not realise that there is an open market option. Has the noble Lord considered introducing the approach that the Pension Income Choice Association, PICA, has put forward? It believes that the default option should be for everyone to have the opportunity to review their options when they retire. It would like to see the production of a personalised statement-a sort of passport-which would contain sufficient information for people to use to obtain quotations.

Lord Sassoon: My Lords, I am grateful to the noble Baroness for raising this important topic. Some 450,000 annuity policies are written every year, with around £11 billion in annual premiums. I am aware that the Pension Income Choice Association has recently met my honourable friend the Financial Secretary to discuss its proposals. We encourage consumers to shop around under the open market option and we welcome all suggestions as to how this can be made more effective.

Baroness Hayter of Kentish Town: My Lords, given the importance of this issue, particularly for those with small pots of money, can the Minister assure the House that nothing in the spending review will undermine the plans for a generic financial advice service to help those with small pots, for whom the choice of a good annuity is so important?

Lord Sassoon: My Lords, I can confirm that we want to push on with our proposals for financial education underpinning choices about retirement savings and other important financial services. The Consumer Financial Education Body has been asked by the Government to work up its plans for an annual health check. It publishes a guide on retirement savings. I certainly take the point very well.

Lord Newby: My Lords, following on from that question, does the Minister accept that the key problem with people deciding which annuity to purchase is often that they are not experts and want impartial advice at that point? That is why the Consumer Financial Education Body is so important. Will he redouble the Government's efforts to get the Consumer Financial Education Body to develop an online tool so that people who are looking to decide which annuity they purchase can go not only to the company from which they are taking their pension pot but also to someone who is clearly impartial?

Lord Sassoon: My Lords, I agree with my noble friend that we need to look at all options to make it easier for people to access online and other sources of independent advice. The CFEB was a significant initiative of the previous Government and we are encouraging it to press forward on this issue.

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Earl Cathcart: My Lords, I ask this question with a certain amount of self-interest. Is it the Government's intention to remove the requirement to buy an annuity when a person gets to a certain age? If it was made optional for the owner of the pension pot, they could receive the annual income from that pension, albeit probably smaller than the annuity, and then the capital sum would fall into the estate on death.

Lord Sassoon: My Lords, I am happy to confirm to my noble friend that the Government have announced that compulsory annuitisation at age 75 will end. As an interim measure, we have raised the limit from 75 to 77 years to make sure that people are not trapped in compulsory annuitisation while we consult-as we have been doing-on a new system that gives people greater choice as to how they save for their retirement.

Baroness Browning: Will my noble friend look at the length of time it takes for people who exercise an open-market option to receive their money? Very often, they are quoted two to three months. Of course, there have to be exchanges of paperwork and documentation has to be verified, but there can be significant changes in the fund during that time of process.

Lord Sassoon: My Lords, my understanding is that, thanks to work being done by the Association of British Insurers and others and the introduction of a new electronic transfer system, the actual time taken to make the transfer has come down from 35 days to 11 days. However, if there are other ways of making the transfer process easier, we will of course look at them.

Lord Davies of Oldham: My Lords, is not the real problem for the foreseeable future that, with interest rates low, the returns on annuities will be well below people's expectations? Could not the Government think more radically about this in the longer term? Could we not think of following the pattern adopted by some other European Governments on annuities, whereby people would be able to purchase government bonds at a slightly better rate of interest than obtains at present and at the same time contribute to the Government in the shorter term sums which would help the Exchequer?

Lord Sassoon: My Lords, low interest rates are vital to the growth of the economy. In that context, it is important that people are able to choose between a wide variety of savings products. As well as making more flexible people's choices about their retirement savings, the Government offer not only the opportunity to invest in gilt-edged securities but a range of products through NS&I.

Cyclists: Deaths


11.23 am

Asked By Lord Janner of Braunstone

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Earl Attlee: My Lords, reported casualty statistics do not record the type of injury or whether a cycle helmet was worn. The Transport Research Laboratory's published review of on-road cycle helmet effectiveness, dated 15 December 2009, is available online. The report estimates that 10 per cent to 16 per cent of fatalities could have been prevented and that 30 per cent of serious injures mitigated or prevented if cyclists had worn a helmet that was a good fit and was worn correctly.

Lord Janner of Braunstone: I thank the noble Earl for his Answer. I am sure the whole House will join me in congratulating Mayor Boris Johnson on launching the Barclays bike hire scheme, which has recently had its millionth journey. However, does the noble Earl share my concern for the safety of the scheme, which has placed an additional 5,000 bicycles on our roads in London, with most journeys taking place without a helmet? How are the Government planning to ensure that the wearing of helmets continues to increase, especially as Boris's bikes come with no helmets and you normally own a helmet only if you own the bicycle that you are riding?

Earl Attlee: The noble Lord raises an important point. The Boris bikes have indeed been very successful and the accident rate has been very low. The noble Lord correctly identifies an obvious difficulty. To be effective, the helmet has to be a good fit and be worn effectively. The only solution is for the rider to bring his own helmet. That presents obvious difficulties for an ad hoc journey but the statistics show that the benefits of bicycling far outweigh any risks, in a ratio of 20:1, even taking into account the current rates of helmet-wearing.

Baroness Knight of Collingtree: My Lords, do cyclists have to pass a test of any kind anywhere prior to taking up their cycling? Is it not the case that many of them seem quite unaware that it is not legal even to pedal the wrong way up a one-way street or to sail past a red light?

Earl Attlee: The noble Baroness raises an important point. No test is required to ride a bicycle. However, the Bikeability instructors are properly qualified. The enforcement of traffic offences-and riding a bike illegally is a traffic offence-is an operational matter for the police.

Lord Rosser: My Lords, there will be obvious concern about the effect of the proposed abolition of Cycling England on safety. Perhaps the Minister will wish to comment on that. Apart from the wearing of the helmet, a number of measures can of course be taken to reduce deaths and serious injuries among pedal cyclists. Local government plays a fundamental role in that area. Assuming that it will still have sufficient staff numbers in future to enable it to play a continuing, meaningful role in road safety, what assessment did the Department for Transport make of the impact on making further improvements in road safety for pedal cyclists of the future removal of the ring-fencing of nearly all local authority revenue grants, at a time

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when local authority budgets are being reduced? Did the Department for Transport make such an assessment at all and, if so, what did it show?

Earl Attlee: I am grateful to the noble Lord for giving me the opportunity to explain the situation regarding Cycling England. The noble Lord will remember that the Bikeability project is part of Cycling England. The functions of Cycling England will be absorbed into the Department for Transport. However, the Bikeability project will continue. Funding for it is available until at least the end of this Parliament. As for the issue of local authorities, we believe in localism but it is inconceivable that they will not promote bicycling, because of its obvious benefits.

Lord Greaves: My Lords, I thank the Minister for his comments on the health benefits of cycling which, as he said, far outweigh any risks in a ratio of 20:1. Does he agree that any siren calls for making helmet wearing compulsory should be resisted, particularly in view of the evidence that in Australia, when helmet wearing was made compulsory, some 30 per cent or more of regular cycle users stopped riding their bikes?

Earl Attlee: My Lords, I am grateful for the noble Lord's comments. We have no intention of making the wearing of helmets compulsory because it can be extremely difficult to enforce with the youngsters who are our targets. If we can get youngsters to wear helmets from an early age, we hope that they will carry on wearing them as adults. Wearing rates are, slowly but surely, increasing and we have no plans to interfere with that process.

Baroness Howarth of Breckland: My Lords, this question is about brain injuries and deaths. I am sure the Minister will agree that rehabilitation units that treat those who have been injured can make the difference between new life and living death for those people hurt and their families. Will the Minister, although he is a transport Minister, convey to his health colleagues the need to ensure that specialist units dealing with those with brain injury are protected in the reconstructed health service?

Earl Attlee: My Lords, I take on board the noble Baroness's point about brain injuries. They are devastating and often mean that the victim can no longer take a full part in society. Obviously I answer for Her Majesty's Government, and I shall raise the noble Baroness's point with health Ministers.



11.30 am

Asked By Lord Knight of Weymouth

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The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, unlike housing demand, housing need relates to the incidence of particularly poor housing outcomes: overcrowding, affordability problems, homelessness and unsuitability of accommodation. Our focus in addressing housing need will devolve power to local people and stimulate private investment in new housing through measures such as the new homes bonus. In addition, we have protected many important measures for vulnerable people, including grants for supporting people, homelessness and disabled facilities grants, securing £7.6 billion in investment over the next four years.

Lord Knight of Weymouth: My Lords, the most basic security wanted by families in this country is a job and a home. Yesterday's spending review is at the cost of at least 1 million jobs, but how many will also lose their homes? Government plans allow increases in rents to 80 per cent of the market rent, potentially trebling the weekly rent. This, coupled with a cap on household benefits, means families will be priced out of some areas. When will the Government bring forward a plan that we can scrutinise that shows how cutting the housing budget by 60 per cent yesterday will allow many more affordable houses to be built?

Baroness Hanham: My Lords, the process for affordable housing in future will be that most of the money for housing has been passed down to local authorities, so that they will then make the decisions for themselves about how much housing is needed and at what rents. The new homes bonus will mean that where they build houses, they will get more money for that on the basis of the matching of the council tax. There will be plenty of housing built in future-probably more than was built under the previous Government. Even Andy Burnham admitted that they had not done enough.

Lord Taylor of Goss Moor: My Lords, I declare my interest, which is registered, as chairman of the National Housing Federation. Will the Minister explain what discussions took place with the Department for Work and Pensions so that any new tenant in the affordable homes proposed by the Government at 80 per cent of market rents can be assured that both now and in future, under the new benefits systems, they will be able to be protected by the assurance of the availability of housing benefit to cover their full rent?

Baroness Hanham: My Lords, so far as I am aware, the housing benefit will continue to be paid but there will be a cap on the amount of benefit available for housing. Effectively, that will mean that some people will not be able to afford the rent that they are currently paying. We have drawn attention before in this House to the fact that there are some people in London living in accommodation that could not be afforded even by investment bankers.

Lord Martin of Springburn: My Lords, in most cases, the housing estates throughout the United Kingdom are excellent communities to live in because the tenants

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themselves run the tenants' associations, pensioners' clubs and community centres. If the Government are going to start offering people nothing other than temporary tenancies, that is not going to help stability in our housing communities.

Baroness Hanham: My Lords, I happily endorse what the noble Lord has said about the actions of tenants' and residents' associations. The improvements in estates are a result of such interest being taken.

The new tenancy arrangements will of course be available to housing associations for the variation in tenure. That will not be a diktat. The tenure and affordable rents will be governed by what is required by those obtaining that accommodation. If their situation subsequently changes, discussions will take place as to whether it is correct for them to continue to use social housing, or whether they should be housed in other ways.

Baroness Hollis of Heigham: My Lords, on social housing, is it not the case that if you cannot find a job your HB is cut after 12 months, your rent arrears mount up, you are evicted and you become homeless? Equally, however, if you find a job with an adequate income, you are also likely to lose your home and be encouraged to move into a different form of tenure. So, fail to get a job and you are out; get a job and you are out. Is that decent?

Baroness Hanham: My Lords, I think it is.

Noble Lords: Oh!

Baroness Hanham: My Lords, when the income of some people who are living in subsidised accommodation rises after taking that accommodation, their change in circumstances needs to be taken into account.

We have just discussed housing benefit levels. As far as I can see from the proposals, nobody will be evicted. Everyone will be given an opportunity. Local housing authorities will have the responsibility to ensure that they deal with people decently and respectfully.

Lord Skelmersdale: My Lords, are the Government looking at the knotty subject of succession tenancy in social and local authority subsidised housing?

Baroness Hanham: My Lords, the answer is yes for future tenancies, and no for existing tenancies and arrangements.

Lord Best: My Lords, on housing benefit, am I right in thinking that, following yesterday's announcement in the CSR, somebody in their 30s in a one-bedroom flat who loses their job will find that if they need housing benefit they will have to leave that flat, where they might have lived for some time, and find somewhere to share with other people? That is a fairly tall order in many parts of the country. Is that the position we find ourselves in with the raising of the level for housing benefit?

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Baroness Hanham: My Lords, I need to write to the noble Lord about that, if I may. His question is quite technical.

A noble Lord: Too bad.

Baroness Hollis of Heigham: It was in the Statement.

Budget Responsibility and National Audit Bill [HL]

First Reading

11.37 am

A Bill to make provision for a charter for Budget responsibility and for the publication of financial statements and Budget reports; to establish the Office for Budget Responsibility; to make provision about the Comptroller and Auditor-General and to establish a body corporate called the National Audit Office; to amend Schedules 5 and 7 to the Government of Wales Act 2006 in relation to the Auditor-General for Wales; and for connected purposes.

The Bill was introduced by Lord Sassoon, read a first time and ordered to be printed.

Business of the House

Timing of Debates

11.38 am

Moved By Lord Strathclyde

Motion agreed.

Arrangement of Business


11.39 am

Baroness Anelay of St Johns: My Lords, I have already announced to the House the dates of the Christmas Recess: the House will rise at the close of Business on Wednesday 22 December and return on Monday 10 January 2011. I am now in a position to announce Recess dates up to the next Christmas, in December 2011. I appreciate that I am about to give rather more information about dates than is usually possible. To save noble Lords from reaching for their diaries, they might like to know that a full note is already available in the Printed Paper Office.

The dates are as follows. The House will rise for the February half-term at the close of business on Wednesday 16 February and return on Monday 28 February. The House will rise for Easter at the close of business on Wednesday 6 April and return on Tuesday 26 April. The House will rise for Whitsun at the close of business

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on Wednesday 25 May and return on Monday 6 June. The House will rise for the summer at the close of business on Wednesday 20 July. There will be a September Sitting in 2011. The House will return on Monday 5 September and rise at the close of business on Thursday 15 September. The House will then return on Monday 10 October. Finally, the House will rise for Christmas at the close of business on Wednesday 21 December 2011 and return on Tuesday 10 January 2012. As ever, Recess dates are subject to the progress of business.

Privileges and Conduct Committee: Fourth Report

Copy of the Report

Motion to Agree

11.41 am

Moved by The Chairman of Committees

The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move that the fourth report from the Committee for Privileges and Conduct be agreed to.

The House is being invited today to agree three reports from the Committee for Privileges and Conduct and three consequential suspension Motions. We are debating these reports together, which I hope will be convenient for the House, but I should emphasise that these are three separate reports, relating to three separate cases, and the Motions are entirely free-standing. On the other hand, the three suspension Motions are consequential upon agreement to the relevant reports, as they simply implement the committee's main recommendation in each case.

This is a difficult day for the House, and the task before us in considering these Motions is not one that I-or, I am sure, any noble Lord-will relish. It is made no easier by the fact that the contents of the reports now before your Lordships' House were leaked to the media over the weekend in advance of publication. I can assure the House that we took all reasonable steps to prevent any leak, and I deeply regret that there was a leak, particularly in so far as it caused any distress to the three noble Lords who are the subjects of the reports.

The three reports all relate to claims for expenses made under the Members' reimbursement scheme. In each case the Member concerned designated one or more properties outside Greater London as his or her main residence and, as a result, claimed money under the night subsistence and travel expenses headings in the scheme. The key question in each case, which both the Sub-Committee on Lords' Conduct and the Committee for Privileges and Conduct have considered in turn, is whether the Member correctly designated the property or properties in question as his or her main residence.

I wish at this point to pay tribute to the members and staff of the Sub-Committee on Lords' Conduct. They have taken on a vital, hugely difficult and, frankly,

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painful task. They have done their job with efficiency, rigour and fairness. I put on the record my personal thanks to the chairman, the noble Baroness, Lady Manningham-Buller, and her colleagues on the sub-committee.

In the three cases before us, the sub-committee concluded, in each case, that the noble Lord concerned had wrongly designated the property in question as his or her main residence, and had wrongly claimed sums varying from £27,000, in the case of the noble Lord, Lord Bhatia, to £125,000, in the case of the noble Baroness, Lady Uddin. In each case the sub-committee concluded that the noble Lord concerned had made these claims in bad faith. All three noble Lords appealed against these findings to the Committee for Privileges and Conduct, which I chair. We considered the appeals on Monday 11 October. Our reports speak for themselves but it may be useful if I briefly summarise our most important conclusions, first on points of principle and finally on the specifics of each of the three cases.

First, on the points of principle, we accept entirely the sub-committee's conclusion that in each case money was wrongly claimed, and its calculations as to the amount of money wrongly claimed. However, we regard the repayment of this money as a matter of restitution rather than sanction, and therefore concluded that the length of suspension should not be linked to repayment. Secondly, the appeals contained a number of complaints as to the procedural fairness of the investigations. Although the sub-committee acted entirely properly throughout, and in full accordance with the procedure agreed by the House, we accepted that the procedure itself presents some difficulties.

As we say in our report on the noble Baroness, Lady Uddin, there is a tension between ensuring that noble Lords under investigation enjoy appropriate procedural safeguards and preserving the informal and parliamentary nature of such proceedings. I believe that the House would not wish to turn internal disciplinary hearings into full-blown, adversarial court proceedings, with prosecution and defence lawyers and the cross-examination of witnesses. In fact, the House has explicitly agreed, more than once, that proceedings should be kept relatively informal. On the other hand, we need to ensure, in accordance with the principles of natural justice and fairness, that all evidence is properly tested and that no noble Lord is found guilty on the basis of hearsay.

I should at this point remind noble Lords that these three investigations were all initiated in the previous Parliament, and so were conducted in accordance with the procedures agreed in December 2008. They are the last investigations to be conducted under these procedures. We now have a new Code of Conduct and a new set of procedures. The independent Commissioner for Standards, Mr Paul Kernaghan, will conduct any future investigations and present his findings to the sub-committee, which will, where appropriate, recommend a sanction to the main committee. This is, I believe, a better and clearer procedure. It separates the investigative and sentencing functions, and allows for an appeal against both elements to the main committee. The commissioner will have considerable freedom of action, and will be able to test all relevant evidence thoroughly. At the same time, I am sure that the sub-committee, along with the

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commissioner, will wish to reflect on the findings in these reports in the coming weeks, and consider whether our procedures could be improved still further.

I now turn to the three cases. In each case we found that the so-called "main residences" designated by the noble Lords were not appropriately designated. They were properties outside London, designated as main residences by noble Lords who, before, during and after the periods in question, resided substantially inside London. They did not reflect any natural interpretation of the term "main residence". No entitlement to public money should have been claimed on such a basis.

In the case of the noble Lord, Lord Paul, we disagreed, on the balance of probabilities, with the sub-committee's conclusion that he had acted in bad faith in wrongly claiming amounts under the expenses scheme. However, as paragraph 8 of our report states, noble Lords have a duty to take reasonable steps to ensure that any money claimed from public funds is properly payable. We consider that the noble Lord, Lord Paul, was grossly irresponsible and negligent in this regard. For that reason, and bearing in mind that he repaid a total of £42,000 to the House at the start of the investigation, we recommend that he be suspended from the service of the House for four months.

In the case of the noble Lord, Lord Bhatia, we dismissed his appeal and upheld the sub-committee's finding that he wrongly claimed over £27,000, and that in so doing he did not act in good faith. In judging the relative severity of sanction in the noble Lord's case, we took into account the relatively short period within which he made his claims, and the fact that, after receiving the sub-committee's report and shortly before the committee met, he repaid the money to the House. However, he has not apologised or acknowledged that he acted wrongly. We therefore recommend that he be suspended from the service of the House for eight months.

Finally, I turn to the sixth report, on the conduct of the noble Baroness, Lady Uddin. I have already indicated our concerns over the status of untested third-party evidence, such as the statements made to the police by her neighbours in Maidstone. We decided, after careful consideration and without intending any reflection on the quality of the evidence, that it would not be fair in her case to attach any weight to it. We then considered the noble Baroness's own evidence, her letters, written statements, oral evidence and her appeal. It was clear to us that she had not advanced any reasonable interpretation of the term "main residence". As the sub-committee points out, in so far as she attempted to offer an interpretation, it was one in which the word "main" had no meaning. She chose, over a period of years, to designate as main residences properties which she repeatedly described as "bolt-holes". A bolt-hole is not a main residence, and the noble Baroness's designations were wholly unreasonable. We therefore upheld the sub-committee's finding that she wrongly claimed just over £125,000 over a four-year period, and that she should repay this money to the House. It will be for the Clerk of the Parliaments to arrange repayment.

We further found that in making these claims, the noble Baroness, Lady Uddin, did not act in good faith. She has not acknowledged that she claimed the

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money wrongly; nor has she apologised in terms. In view of the length of time over which these claims were made, and the sums involved, we recommend that she be suspended from the service of the House for the remainder of the current Session of Parliament-in other words, until Easter 2012.

In conclusion, we cannot ignore what has happened in these cases. It is clear that there was abuse of the Members' reimbursement scheme and that the House has a duty to act in those cases where such abuse occurred. I therefore commend these three reports to the House.

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, I support the Motion in the name of the Chairman of Committees. As the noble Lord said, we find ourselves on an extremely difficult and sad day for this House. The allegations made against the three Members of this House were serious, and the findings of the Sub-Committee on Lords' Conduct and the Committee for Privileges and Conduct are serious. Their recommendations and the reports speak for themselves.

I join the noble Lord, Lord Brabazon of Tara, in expressing gratitude to the members of the Sub-Committee on Lords' Conduct, chaired by the noble Baroness, Lady Manningham-Buller, for the thoroughness with which they conducted their investigations. I should also like to express my thanks to the Clerks of the House for the exemplary service given to the sub-committee and to the Committee for Privileges and Conduct.

As a member of the Privileges and Conduct Committee, I believe that all three Peers concerned fell short of the standard of conduct that the House and the public are entitled to expect, and we must as a House act decisively. The public expect us to react with firmness and unity to demonstrate our abhorrence at wrongdoing.

The one light in this sorry situation is that the House has already taken decisive action to reform an outdated system of expenses. As from the start of October, we introduced a new transparent system of daily allowance based on attendance. I firmly hope that, as a result, this will be the last time that we as a House find ourselves in this position.

The committee's findings are disturbing and the conclusions reached are grave, but they are, in my judgment, fair and just. I commend the reports to the House and hope that noble Lords on all sides will join me in supporting the Motions before us.

Baroness Royall of Blaisdon: My Lords, I, too, support the Motions. These are serious matters-serious for the Members involved, serious for this House and serious for Parliament, politics and the public beyond. We should not forget either that a number of parliamentarians, including two Members of your Lordships' House, are currently facing criminal charges to be tried in court on similar serious matters. But important though the matters before us today unquestionably are, it is important to remember that these are matters that relate to a different moment. When allegations on a number of issues were first

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made last year against Members of your Lordships' House, we were, in retrospect, in a poor position, our machinery outdated, our procedures similarly so, and our systems not suited to modern scrutiny.

As has been said, on these issues we have come a long way. No system is ever perfect. Any system or procedure is of course capable of improvement. We must not be complacent, but at the same time we now have a new procedure for making complaints, a new system for considering complaints, a new code of conduct against which complaints can be considered, and a new system of financial support for Members of this House. All of that has been reviewed, considered, examined and adopted within a relatively short space of time. Perhaps it was not at the speed which some outside this House would have wanted, but we have done it and what we now have-what this House has itself brought into play-is a whole range of new machinery and new procedures. Getting to this point has not been easy, but whatever we have been able to do has been right.

Today is again another day which is not easy or comfortable for anyone in your Lordships' House. I feel great sadness. But I believe that the committee has come to the right conclusions on the cases before us and on the report from the sub-committee, and the House should support the Motions before us. The sub-committee did indeed face a very difficult task in dealing with the matters before it, and I, too, thank the members of the sub-committee and their staff for their work. At the same time, however, I believe that the main committee's judgments in relation to the sub-committee's report, including where it has diverged from the sub-committee's recommendations, are right. I believe that the language of the sub-committee's reports was in part misplaced. I believe that its inclusion of untested hearsay evidence was incorrect and that the penalties proposed by the sub-committee were not appropriate.

As a member of the full committee, I believe that we are right to make the recommendations we are putting before the House today. I welcome especially the proposal for the new Commissioner for Standards to examine issues relating to process that have arisen in the course of bringing the committee's report before your Lordships' House and, in particular, to addressing the question of the means by which all relevant evidence can be taken into account in our procedures. That shows that we are ready to examine, and examine continually if necessary, our procedures to make sure that they work and continue to work and to ensure that they are just. This is the right way forward for this House.

On the explicit sanctions before this House today, some may suggest that we were wrong, for instance, to alter the penalties proposed by the sub-committee, but I do not believe that we were wrong to do so. I believe that the approach taken by the full committee is the right one. The committee has judged that the three Members of your Lordships' House did wrong and we are proposing stringent penalties in response. Just as last year when we took the decision to suspend members of your Lordships' House for the first time since the age of Cromwell, so today we are proposing that we impose penalties of a severity never seen before in

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either House of Parliament. That is a tough action to take and a tough action for Members of this House to bear. Although they did wrong, as the report before you correctly concludes, I do not believe that this House will not feel sympathy for the Members involved. I know that I do. However, being aware of their difficulties and indeed, sympathising with them as colleagues in your Lordships' House, should not for a moment pull us away from our responsibilities. We have a duty to this House, the Members of this House, to Parliament and to politics as a whole to right the wrongs where we find them and to take action as necessary to put our House in order. I have no doubt that this House will do so today.

Baroness D'Souza: My Lords, this is a most uncomfortable and disagreeable business, but one from which this House must not, indeed cannot, shirk. I add my thanks on behalf of the Cross Benches to all officials and Peers alike who have been involved in bringing these reports to your Lordships' House.

Adherence to the code of conduct is a weighty personal responsibility. We in the Privileges and Conduct Committee have been obliged to judge our colleagues-a task that all of us would have preferred to avoid. However, the cases before us affect us all in many different ways. We are undoubtedly tainted by evidence of wrongdoing. The reputation of the House is at stake, which in turn affects the work that we do. The press, grossly duplicitous as it has been in some methods of investigation, has allowed-encouraged, even-the wider public to perceive this House and its work as redundant at best and unworthy of public funds at worst.

We have to face these charges. We must acknowledge and never underestimate how we are now regarded; and we have to do something to redress the balance. Much has been achieved in recent months but part of the long journey back is how we respond to the report of the Committee for Privileges and Conduct before us today and the evidence contained therein. In arriving at our conclusions, the committee relied almost entirely on the evidence directly gained by the sub-committee's, and our own, questioning, and not on press reports. Our findings uphold the sub-committee's main conclusions with some adjustments to the recommended sanctions. In particular, we found that any acceptable or natural meaning of "principal" or "main" residence did not and could not apply in these cases no matter how generously the criteria are interpreted.

Distasteful as it is, none of us here can ignore such evidence painstakingly developed by the sub-committee on noble Lords' conduct, nor can we by our decisions minimise the culpability or impact. To do so would be to deal with these cases less robustly than warranted and, in effect, pull up the drawbridge and refuse to take account of public anger. We have chosen to invoke serious sanctions which I believe are entirely justified by the sub-committee's report. In so doing, the intention is not only to apply standards that prevail in the world beyond this House but to strengthen the code of conduct and to help restore public confidence in this House.


Lord Alli: My Lords, I have thought long and hard about whether or not to intervene in today's debate. There are those who advised me to keep quiet and not

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rock the boat, but I have some serious worries about these reports and I believe that it is right and proper to share them with the House. By way of background, I have read the committee's reports on each of the three cases, and two aspects of these investigations trouble me. The case I am most familiar with is that of the noble Baroness, Lady Uddin, so perhaps I might be allowed to use the committee's finding in her case to illustrate my concerns.

My first concern relates to the process and natural justice. As the House will recall, the initial investigation arose out of an article that appeared in the Sunday Times. A sub-committee of the Committee for Privileges was set up to investigate and to determine the facts of the case, and the subsequent appeal happened on 11 October. My concerns centre on the procedural failures of the sub-committee, the standard of proof adopted by the sub-committee and the weight that the sub-committee gave to the information collected by the Sunday Times. The sub-committee is mandated by this House to apply a civil standard of proof to its deliberations. This was not the standard used in the case of the noble Baroness, Lady Uddin, and I welcome the full committee's recognition that the sub-committee should not have placed the weight that it did on the information published by the Sunday Times from the neighbours of the noble Baroness. In doing so, the sub-committee did not give the noble Baroness the ability to address the evidence, call witnesses or cross-examine any of the individuals quoted in the Sunday Times, but relied instead on hearsay.

I also note from the report of the full committee that it accepted that the procedures followed by the sub-committee were unsatisfactory, and it has recommended that the new commissioner and sub-committee review those procedures. I hope that the Chairman of Committees will today confirm that the findings of the review will be published.

It also seems unjust, unreasonable and unfair that any noble Lords facing such a serious set of allegations should not be entitled to legal representation. I note with some concern the comments made by my noble friend Lady McDonagh in her letter to the committee, which is on page 215. I believe that we should now amend our procedure to ensure that it is the right of any Member of this House to be properly represented in any investigation, particularly where the outcome could lead to the suspension of that Member. I am, however, perplexed, given that the procedures were so at fault, that the evidence was untested and that there was a lack of legal representation, how the committee could apply the heaviest of sanctions in this case without itself testing the evidence.

I now want to address a second and equally troubling aspect of all three cases. That is the element of race. Let me say from the outset that I do not in any way wish to accuse any member of the committee or the sub-committee of racism. That would be quite improper and wrong, but it cannot have escaped your Lordships' attention that the only three Members of your Lordships' House who were referred to the Committee for Privileges and Conduct and subsequently investigated under these procedures were all Asian. I have reviewed the list of Members-some 20 in total-who have had expense complaints referred to the Clerk of Parliaments, and I

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cannot find any consistent pattern for the referrals. When one combines inconsistency in approach and the disproportionality of the sanctions, my concerns deepen. Something clearly has gone wrong, so I ask that the Leader of the House, with the support of other noble Lords who perhaps have more experience in this field, look into the matter and report back to the House. I further ask the noble Lord, if there has been inconsistency on the basis of race or otherwise, that the House be allowed to review these sanctions to ensure equal treatment.

I said at the beginning that I thought carefully before speaking today and that it was a very difficult decision to make, but I hope that noble Lords will accept that I do so out of genuine concern for the reputation of this House. I recognise that members of the public have a right to expect the highest standards of behaviour from Members of your Lordships' House, and those who do not meet them should rightly be punished. However, in the rush to apologise for an expense system for which we should all be embarrassed, it should not be at the cost of justice or fairness for all, regardless of race.

Baroness Flather: My Lords, I, too, want to say a few words, but they are rather different from those of the noble Lord, Lord Alli. This is a very sad day for me personally, because the three Peers are all Asians. When you are a member of a minority and you read in the press that three members of the same minority have been found to have cheated on their expenses, it is hard to bear. I do not say this to suggest that the committee and sub-committee behaved in any way incorrectly; I do not mean that. I have looked at the reports and I have no complaint to make.

What I want to say is how distressing it is for me personally to find the 80th richest man, the noble Lord, Lord Paul, saying that he did not understand what "main" and "residence" meant. When I made my submission to the SSRB, I said that perhaps he did not understand the English language and the meaning of "main" and "residence". Those words are fairly straightforward; we all know what they mean. If we do not, I suggest that we should not be sitting in this Chamber, as all the proceedings are conducted in the English language.

The noble Lord, Lord Alli, says that the noble Baroness, Lady Uddin, has been treated badly and that things have not been looked at properly. As far as I remember, the Chairman of Committees said that she had herself admitted that the two places that she called her main residence were bolt-holes. The basis on which the decision was taken was possibly what she herself admitted about that.

We ought to let this matter rest. I think that it is very sad. Frankly, I do not have any sympathy for the two very rich gentlemen, the noble Lords, Lord Bhatia and Lord Paul. I do have sympathy for the noble Baroness, Lady Uddin, but this is how things have come out. I have looked at the reports fairly carefully. They are clear and readable and they answer nearly all the questions for me.

We call ourselves "noble Lords". When I came here in 1990, the behaviour of Members of the House of Lords was expected to be above this kind of thing; we

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were not expected to do this sort of thing. I remember clearly that, if I did not understand anything, I went to the finance department or to the clerks to the Parliament and asked them what I should do. They were always available to us to give advice. If we are in doubt, clearly we should take advice. We should not just carry on and say that we did not understand. I do not accept that someone cannot understand that, if they never stay somewhere, that place is not their main residence.

I am disappointed and distressed and I am sad that this involves three Asian Peers. The noble Lord, Lord Paul, said something about Indian culture. I do not know which Indian culture he was speaking of; I do not know of that culture. The only Indian culture that I know of in this regard is buying honours, which certainly is Indian culture. I hope that it does not apply to him.

The Chairman of Committees: My Lords, the noble Lord, Lord Alli, asked me a number of questions, to which I hope I can reply and give him and the House some assistance. He asked whether the findings of the review would be published. Indeed they will be. Any changes to the procedure that were agreed by the Committee for Privileges and Conduct would of course require a report to the House and the agreement of the House. I think that that answers that point. He also referred to the letter in the Uddin report from the noble Baroness, Lady McDonagh. I refer him to the letter that followed from the noble Baroness, Lady Manningham-Buller, which is on pages 216 and 217 of the report. I and the other members of the Privileges and Conduct Committee were satisfied by that letter.

The main question raised by the noble Lord, Lord Alli, was why these three Peers were referred to the sub-committee for investigation whereas most other Peers facing allegations of wrongdoing were cleared by the Clerk of the Parliaments. Under the procedure agreed by the House in 2008, the Clerk of the Parliaments investigated complaints about alleged abuses of the system of financial support, resolving them himself where possible. He was able to do so in the vast majority of cases. However, the House also agreed that he could request the Sub-Committee on Lords' Conduct to assist him in investigating a complex or serious complaint. The Clerk of the Parliaments took the view that cases that had been subject to formal police investigation were, by definition, of a serious nature. This is why he referred the cases of the noble Lord, Lord Paul, and the noble Baroness, Lady Uddin, to the sub-committee. In addition, the House Committee in January discussed the extent to which the Clerk of the Parliaments in conducting these investigations should rely on written assurances from Members. The committee agreed that he would be,

In the case of the noble Lord, Lord Bhatia, no such written assurances were provided, and the Clerk was therefore unable to reach a conclusion on the case. He therefore had no option but to refer the case to the sub-committee. I can give the noble Lord an absolute

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assurance that it was not in the least bit because the three Peers were Asians. I do not think there is anyone on the committee or the sub-committee who would not endorse that completely. I hope that helps the noble Lord, Lord Alli, on the points that he made.

Motion agreed.

Privileges and Conduct Committee: Fourth Report

Motion to Resolve

12.11 pm

Moved By The Chairman of Committees

Motion agreed.

Privileges and Conduct Committee: Fifth Report

Copy of the Report

Motion to Agree

12.12 pm

Moved By The Chairman of Committees

Motion agreed.

Privileges and Conduct Committee: Fifth Report

Motion to Resolve

Moved By The Chairman of Committees

Motion agreed.

Privileges and Conduct Committee: Sixth Report

Copy of the Report

Motion to Agree

12.13 pm

Moved By The Chairman of Committees

Motion agreed.

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Privileges and Conduct Committee: Sixth Report

Motion to Resolve

Moved By The Chairman of Committees

Motion agreed.



12.13 pm

Moved By Baroness Valentine

Baroness Valentine: My Lords, before opening this debate I would like to declare that I am chief executive of London First, a not-for-profit business membership organisation.

It is a great pleasure to introduce this debate today; I thank my noble friend Lady D'Souza for allocating me the time. I look forward to the contributions of noble Lords from all sides of the House; there is much expertise and experience to draw on. In particular I would like to pay tribute to the excellent report prepared by the Economic Affairs Committee back in 2008 which sought to deal with many facets of this complicated subject. The committee concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result.

There have been significant recent developments in government policy on immigration. A decision has been made to introduce a permanent cap in April of next year, and in order to avoid an influx ahead of this date a temporary cap was implemented in July. The aim of this cap is to accelerate the reduction of immigration into the UK, a trend that had begun under the points-based system introduced by the previous Government.

Her Majesty's new coalition Government are right to be concerned about migration. Politicians reflect the views of the voters, and immigration was undoubtedly an election-time door-step issue. As recession has hit, people are understandably concerned that immigrants may be taking their jobs or creating an unwelcome burden on public services. In some respects, both concerns are valid: foreign waiters are prepared to live and work in more challenging conditions than their British counterparts, while the cost of education provision to immigrants and their dependants was recently estimated at £13 billion.

The other side of the argument is equally politically and economically obvious: the Government are reliant on economic growth as a pathway out of recession. As the public sector shrinks, so the private sector is expected

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to take up the slack. That private sector growth is partly reliant on the attraction of world-class talent to work in the UK.

One of the UK's strengths is the global reach of its service sector economy. It is the second highest exporter of professional services worldwide. London, which is particularly successful in this sector, contributes more in tax than it receives in public spending by some £15 billion or more a year. One seventh of London's businesses are foreign-owned. Many of the world's largest companies have invested in substantial bases here. These are global organisations; they compete with the best worldwide. They must be able to recruit the best people and move people and teams from A to B as and when required. If they are not allowed to, then the A or B in which they eventually base themselves will not be Aberdeen or Birmingham but Amsterdam or even Beijing. I am more concerned about highly talented international business people and academics leaving the UK than I am about limiting their entry.

I was struck by a lecture given by Sir Howard Davies, where he argued that an economy such as London's-a varied and global centre of excellence-ebbed and flowed according to the combination and concentration of talent. Rather than a fixed number of ever present companies in certain sectors, London's economy is a fluid agglomeration of the world's brightest and best. The UK must build upon its considerable

not cap it.

Beyond the political and economic arguments there is a question of what kind of Britain we want-of what we value about the country in which we live. I know what my answer is. I value the academics who make our universities among the best in the world; the students whom we educate and send back to their countries with vital ties and connections to our country; the 13 scientists working at the Medical Research Council's laboratory of molecular biology who have received Nobel prizes, only five of whom are British. I value the Russian ballet dancers, the European fine artists, the American sports stars, the Caribbean reggae artists and even the Australian soap stars, all of whom add vibrancy to our society.

Let me offer some names and achievements: Rudolf Nureyev at Covent Garden; Anish Kapoor at the Royal Academy of Arts; our Olympic aquatic centre designed by Iraqi-born architect Zaha Hadid; the structure of DNA, discovered at Cambridge University by James D Watson, who came here from Chicago. I understand, however, that Karl Marx had his application turned down.

What should inform an effective policy response to the Government's twin ambitions of managing migration and growing the economy? Let me explore the different types of migration in more detail. First, illegal immigration is undoubtedly an issue, on which I would urge the Government to focus with urgency. Secondly, there are the asylum seekers, of whom those with legitimate cases should be given appropriate protection. Indeed, we should pay tribute to waves of migrants, such as Huguenots in the 17th century or the east African Asians in my lifetime, who have enhanced our culture and our economy. Thirdly, there is a difference between EU and non-EU immigration. The Government have

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no direct power to limit EU migration. Finally, there are the categories identified by the UK Border Agency. Tiers 1 and 2 migrants are defined as highly skilled and skilled respectively, tier 3 migrants are low skilled and tier 4 are students.

Taking tier 4 first, I understand that students from within and outside the EU accounted for roughly 230,000 migrants in 2009-40 per cent of the total. We should value students for their subsidy, in effect, of our world-class learning institutions and for their contribution towards forging links between the UK and fast-growing developing world economies. Cambridge University trains the world's leading mathematicians and South Tyneside College trains the world's leading marine navigators. However, poor monitoring of this category has allowed for bogus colleges and bogus students, so I encourage the Government to take firm steps to address this issue.

On tier 3 migrants, while entry for low-skilled workers from outside the EU has been closed since the points-based system was introduced, low-skilled migrants from inside the EU enter this country freely. These people are the greatest threat to British workers and the most likely net users of public services. The solution certainly lies in making work pay, so I welcome the Government's focus on the relationship between welfare benefits and employment. However, once in the job market, if British workers are to compete with their continental European counterparts, they must be at least comparably skilled to do so. There is no quick fix on this front. Apprenticeships, job-related training and a concerted focus on employability in our education system are the only solutions. This takes time and effort on the part of both the Government and employers.

Finally, let me focus on tiers 1 and 2-highly skilled and skilled-non-EU migrants. This is the group that we drive away at our peril, and the group most likely to make UK residents better off with their presence, as the Economic Affairs Committee recommended. There were 55,000 such migrants last year, making up less than 10 per cent of the 567,000 total. This was a decline from 66,000 in 2008, following the introduction of the points-based system. These individuals are almost exclusively net contributors to UK plc, contributing directly to the Exchequer through tax and national insurance, and indirectly, through their employers or the businesses that they set up, the extra UK jobs created as a result and their spending power. Their interaction with public services and the benefits system is low.

The most striking statistic about those in tiers 1 and 2 is that they are net emigrants from the UK. When those 66,000 non-EU migrants entered the UK to work in 2008, 74,000 left. In other words, what we have in this country is a brain-drain of top talent. The UK is already exporting the talent on which the Government are reliant for private sector growth. In a global market, UK residents are increasingly looking overseas for top employment opportunities, which is an issue that, I am afraid, we cannot address directly, short of shackling people to their desks or confiscating their passports.

Let me comment further on the categorisation within tier 2. Tier 2 sanctions entry of skilled workers who fill skills gaps. First, I suggest that experience and business

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culture should count alongside a narrow definition of skills. Let me give some examples. A global engineering company may need Japanese speakers with knowledge and experience of infrastructure projects in Asia-knowledge and experience that a British engineer just will not have. A Moroccan bank may want to get a toe-hold in Britain and to bring in a Moroccan chief executive to set it up. Someone who has worked on the multinational acquisition of an energy company by a water company may be helpful to a comparable deal being facilitated in the UK.

Secondly, we should seize skills opportunities as well as simply meeting gaps. Think about the concentration of expertise in a place such as Silicon Valley. It is the most successful centre for IT entrepreneurship in the world and has achieved that by attracting talent worldwide. Sequoia, the venture capital company that backed Google, Cisco and Oracle, has said that it likes backing first-generation immigrants because of their hunger and drive. Motivated, talented people brought together with capital in a culture of enterprise provide a potent recipe for success. In my view, this is how we need to think about London and the UK-a centre for ideas, talent and experience drawn from around the world which, given the fuel of additional motivated talent, can create further economic added value and promote growth.

To sum up, as is perhaps apparent from what I have said so far, I am not persuaded that the Government will achieve either their political or their economic objectives by implementing a tier 1 and tier 2 cap on non-EU migrants. However, I understand the bind that the Government are in. What we are trying to achieve is to grow the economy while tackling voters' migration worries. Therefore, my plea to the Home Secretary and officials in the Home Office is that they work with business and, jointly, think a little out of the box. To misuse a phrase, they should find a third way.

Let me throw some ideas into the mix. Perhaps it is worth lifting the bar a little for tier 2 entry and say to companies, "Yes, you can employ non-EU immigrants, but only if you really need them and if they really are the best". Perhaps employers could be asked to demonstrate the net positive impact on UK residents as a result of recruiting employees from non-EU countries. Perhaps employers could pay a deposit on each worker that they bring in, refundable only when that amount has been repaid in income tax and national insurance. Perhaps employers could sponsor an apprentice for every migrant that they recruit.

If the Government say to business, "We want the best businesses here in the UK and we are prepared to work with you to make that happen", I am inclined to believe that, complex though the issue is, with our multi-talented public and private sectors, a solution can be found. I eagerly await all that follows. I beg to move.

12.28 pm

Lord Ryder of Wensum: My Lords, I thank the noble Baroness for securing this debate and I am delighted to see my noble friend on the Front Bench. I begin by declaring an interest as chairman of the Institute of Cancer Research, a college of the University

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of London. The institute employs 850 scientists drawn from no fewer than 55 countries. Following the Government's research assessment exercise in 2008, we were ranked as the United Kingdom's leading academic research institution-above Oxford, above Cambridge, above Imperial College and above every other university in this country. During the past five years, we have discovered and developed more anti-cancer drugs than any other organisation in the world and have secured more journal citations than any other institution. I am proud to proclaim that the Institute of Cancer Research is the world's leading cancer research organisation. It is a global centre of excellence in the heart of London. Yet it cannot be sure of retaining its international pre-eminence unless the Government adapt their interim cap on immigration. Not only does the cap jeopardise our global status as a world centre of excellence, it also endangers the country's status as a world centre of scientific innovation and excellence.

World-class institutions such as ours must be free to bring in the right people at the right time, the brightest and the best. Our principal complaint is over tier 2 visas affecting the recruitment of clinical research fellows and post-docs. Let me cite an institute example to underline my case. Peter Fong, a clinical research fellow from New Zealand, was the lead author in the New England Journal of Medicine in 2009. He reported on the phase 1 trial of the PARP inhibitor Olaparib. This drug has shown spectacular results in targeting tumours and, according to the former president of the American National Academy of Sciences, Fong's work will,

Today we could not recruit Peter Fong. Instead, no doubt, he would be working in the United States.

Research of our quality cannot be mothballed and restarted at a later date. We shall be left behind, to the detriment of cancer patients and the growth of the British economy by way of the pharmaceutical industry. The pharmaceutical and medicinal industry ranks first in the trade league table of our 16 major industrial sectors, providing us in this country with a trade surplus of well over £3 billion a year. GSK and AstraZeneca are two of the top six pharmaceutical firms in the world, exporting to China, India and the USA. They could not achieve their successes without the talents of the international scientists discovering drugs at the Institute of Cancer Research and elsewhere in our nation.

Clearly the Business Secretary grasps the meaning of this argument otherwise he would not have stated that the cap is damaging British industry. If he cannot persuade his colleagues in the Home Office to see sense, then the Prime Minister must intervene without delay. It is all very well for the Chancellor to talk the talk about economic growth but, when his own Government are staunching economic growth, surely the system should be changed, and changed soon. After all, Britain can boast at least seven immigrants as Nobel laureates. How many of them would have plied their trade in our country under the existing system? I share the view of Sir Paul Nurse, a cancer scientist and a Nobel Prize winner: what sort of policy allows footballers into our country but not scientists who can stimulate economic growth?

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Let me end with some good news and another warning. A fortnight ago the institute announced that our drug Abiraterone will be on the market next year. It will revolutionise the treatment of advanced prostate cancer across the world, bringing in huge revenues to this country. Unless the cap is adjusted-and one cap should not fit all-I wonder how many more of these revolutionary and wealth-creating drugs will be invented by the Institute of Cancer Research and our brilliant scientists drawn from 55 countries. If my noble friend cannot enlighten us-I do not envy his position today-the Prime Minister should be approached for an answer. All the best Prime Ministers come to realise that the shortest mistakes are better than the longer ones.

12.35 pm

Lord Giddens: My Lords, I congratulate the noble Baroness, Lady Valentine, on initiating this debate and on her compelling and eloquent presentation of it.

Immigration is one of the most contentious issues of our time, not only in this country but in Europe, the United States and elsewhere. In the Netherlands, two murders linked to immigration and cultural divisions have served to polarise the country. The German Chancellor, Angela Merkel, only a couple of days ago on television, declared multiculturalism dead in her country. A well known and best selling book recently published in Germany argues that "Deutschland muss Deutschland bleiben"-Germany must remain Germany.

Against this backdrop, Britain stands out as a multicultural success story, with London in the lead. Whatever problems there may be around ethnicity in London, there is nothing like the levels of physical separation and deprivation that mark the huge housing estates around the edges of Paris, or the ghetto neighbourhoods of Antwerp and Rotterdam. London's pre-eminence as a global city, mentioned by the noble Baroness, is directly related to its dazzling cultural diversity. Even in this country, multiculturalism seems to have become unpopular in some political circles but I stress that it is the only political philosophy which is compatible with a globalising world and an open economy such as ours.

The notion of multiculturalism, however, has been tarnished by those who, more or less, completely misunderstand it. I would include-if I am allowed to say this in the context of the British Parliament-the German Chancellor in this category. Multiculturalism does not mean accepting value relativism. It means, on the contrary, promoting active dialogue between those who hold different values to produce common perspectives on the world. Multiculturalism does not mean letting different communities develop as they will. It means, on the contrary, seeking to establish contacts between communities; making sure that ghetto neighbourhoods do not develop; introducing active policies such that one prevents those sorts of developments which one sees in so many other countries around the world. In this respect so far, as I mentioned, not only in London but in other cities we have been remarkably successful.

Multiculturalism does not mean sacrificing national identity. It is entirely compatible with, and indeed a core part of, the establishing of a national history-Britain is already an extremely diverse country from several

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centuries back-and it is compatible with an overall framework of democracy and an overall framework of ethics associated with democratic politics. Do the Government actively support multiculturalism such as I have defined it?

I welcome the cultural diversity arising from immigration as a positive value. However, it is also true, as the noble Baroness clearly said, that immigration has created significant economic benefits. Large segments of the economy over the past 20 years would have been almost inoperable without it. The NHS is a prime example, as is the university sector. One quarter of all immigrants are students, paying for the courses they take and bringing about £2 billion into the country. There are many hidden benefits from students who enter universities here because they go back to their own countries and propagate the virtues of British education and of British society more generally.

The coalition paints a picture of Labour progressively losing control of immigration, but I would say that the opposite is the case. Labour floundered at the beginning of its period of tenure, but developed a progressively more sophisticated system as time moved on. The points system instituted towards the end of the Labour Government mirrors those of Canada and Australia, which are the most successful multicultural countries in the world.

Like the two previous speakers, I have serious reservations about the Government's policies in this area. First, the idea of a cap on non-EU migration has already been criticised. That criticism seemed mild, because I think that it is the worst example of electoral populism and is actively dysfunctional. As has been mentioned, none other than the Business Secretary Vince Cable has said that it will be "very damaging" to the economy. Many companies are already deciding not to invest in projects because of worries about the availability of specially skilled labour power. The Government must surely think again on this issue, whether in the way in which the noble Baroness suggested or otherwise. It will not do as a policy which could be reconciled with the demands of a recovery from recession and job creation.

Secondly, as has been mentioned by the noble Lord, Lord Ryder-I shall put it more generically-the Browne report, if implemented as it stands and placed in the context of the cap, could be seriously destructive. Simply, it is likely to cause top scholars not to want to come to this country or not to stay in the country. It will deter the overseas students that we need from coming to the country. The combination of these two policies looks to be lethal. I am a great admirer of the Minister, who is an esteemed colleague of mine at the LSE, but I do not see how he can accept the policy of a cap on migration as it currently stands and as it seems to be planned for the future.

12.42 pm

Baroness Hamwee: My Lords, I, too, thank the noble Baroness, Lady Valentine. She has expressed far more powerfully than I could the connections between immigration, skills, training and so on. However, I was glad to see the Home Office's consultation paper acknowledge that connection. Like other noble Lords

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who have spoken already, I would like to see that thought followed through more effectively, because this is not just a narrow regulatory function of the Home Office and the UK Border Agency.

Although the consultation has closed, I am sure that the Government are still listening. It was about how limits should work in practice. I am glad to say that, from what I have seen, the public have interpreted that very widely, making representations not just about how the cap should fit but about how big it should be. They make the point that underlying policy is to strengthen the UK's economic base by boosting trade and employment.

I follow the noble Baroness in finding it perverse that the debate is driven partly by how many people leave the UK. We talk about net immigration figures, with a base which seems to be artificially low because it was taken at the worst point of the recession. Taking net figures rather obscures the numbers coming in and going out.

I knew that comment would be made today on the many types as well as levels of skills and sectors, as well as on the training needs of the country. The issue is not directly referred to in the Home Office consultation, but I should say that, coming as I do from west London, where plumbers and builders have been difficult to find over the years, I know that west London now realises what a good thing it is that Poland joined the EU, and there has come about an enthusiasm for Polish workmanship.

Other noble Lords will no doubt speak of the tax take. That tax is available to the Treasury. The better the availability of tax, the better is the economy. The IFS has published research that shows that migrant workers from eastern Europe are net contributors to UK public finances, while native Britons are sadly a net drain. That must make us think about the likelihood of workers from outside the EU contributing even more.

The academic and scientific communities have quite properly achieved some coverage of their concerns about the restrictions. There are parallels in the creative industries. The UK's cultural sector is of huge importance to our economy. Tourism and sales of recorded product are direct benefits. Indirect benefits are our reputation and the factors which encourage major companies to locate here. They make the UK a place, among its global competitors, in which people want to be and to work.

I have nothing against elite sports people, but I am unclear as to why sport, coupled with religion, is singled out for the special treatment to which reference has already been made. There are others who are sought after in different sectors for a range of activities but who are not as high up the scale as the elite. We could not function if we had only elite people working here. Thinking just of the performing arts, I stress that it is necessary to facilitate immigration. In some cases, it should be done on a medium-term or longer-term basis; for instance, for dancers who are members of a company. Sometimes, shorter visas are needed; for instance, if one of our companies is involved in a co-production with a foreign company. Through the Industry and Parliament Trust, I have been lucky

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enough to see close up how some of our companies in this sector operate. What one sees on the stage is only a part of it. The focus on education and outreach work is impressive. Skills are required to dress, design and light a production. When I went to the Royal Opera House, I met a young woman working in the armoury who had undertaken an apprenticeship. These skills are transferable-although I accept that armourers may need a little adjustment.

It is a big subject, and six minutes is too short for it. I end by asking the Government to keep at the forefront of their mind the UK's role as a global player in so many sectors. Our immigration rules should be a facilitator, not a constraint.

12.48 pm

Baroness Prashar: My Lords, I, too, thank the noble Baroness, Lady Valentine, for securing this debate. I welcome her constructive, balanced and creative approach to this very difficult and complex area.

The economic consequences of immigration and its effect on cultural identity and social cohesion have always invoked strong feelings. Regulations concerning immigration are frequently adjusted in response to changes in the economic situation or to accommodate shifts in public attitudes towards immigration.

The Government's pledge to lower the number of people coming to the UK from outside Europe and to introduce an annual cap on non-EU immigration is a response to such concerns. But this response is flawed, because the imposition of a cap to limit immigration from non-EU countries is not in the economic interests of the UK. It will send, and has already sent, a negative message to the very countries that we want to engage with. We have been warned of that by businesses, banks and lawyers, and we have seen articles in the Times of India and in Australia about this approach. The Law Society warned that the UK could lose large volumes of legal transactional work to other jurisdictions if we are not allowed access to the best talent in strong and emerging economies such as India and China, as well as in the USA and Australia.

Indeed, as has already been stated, Vince Cable said that if we are going to attract more investment from foreign companies, whether from India, Japan, America, Korea or wherever, we need access to high-level manpower. That has to be respected. As the noble Baroness, Lady Valentine, said-and as Vince Cable recognised-the dilemma facing the Government is in trying to reconcile two different objectives, one of which is to assure the British public that immigration is under control while the other is to have an open economy where we can bring talents from round the world.

The current approach seems to be playing to populist sentiments at the expense of the economic importance of what needs to happen. We have for some time operated a managed immigration approach and the current demand-driven scheme already affords adequate controls and meets employers' real-time needs for specific skills. Attracting those falling within the entrepreneurial and investor categories cannot be separated from overall reductions in immigration levels. There is some empirical research showing that the two are interlinked. There is a link between trade and investment

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levels and immigration levels, which shows that stronger and more extensive migrant networks make it easier for would-be entrepreneurs and investors to invest.

In today's global economy, which is becoming increasingly fluid, companies want labour to move with greater ease between jurisdictions. A cap could inadvertently prevent global businesses from moving employees with specialist skills. This concern has already been voiced by some large companies. On any grounds, a cap on the non-EU immigrants is not a sensible policy. It contradicts the Government's commercially driven foreign policy and will not address the issues for which immigration ultimately acts as a proxy-for example, to deal with poor housing and the strain on public services.

Our managed immigration approach allows immigrants under those schemes to bring skills into the UK which are in short supply. Figures show that the numbers coming in have declined in any event, other than those coming in for the purpose of study. Yet increasing the number of international students should be welcomed because international students, as it has now been widely recognised, bring substantial income to our institutions and to the wider UK economy. UK universities receive approximately £30 million in fees, with a similar amount being spent on living expenses. In addition, there is income for our public and private sector colleges. Following the recent review by the noble Lord, Lord Browne, and the likely changes to higher education funding, this income will be even more vital in the future. It is unfortunate that, amid controversy over net immigration, an impression is being given that international students are in some way part of the economic and social problems. It is forgotten that international students have to pay-and prove that they can pay-the full cost of the education. They have no recourse to public funds and very limited entitlement to work.

With the changes introduced in March and August this year, the system is considerably tightened with restrictions on which institutions can offer which courses and who can come for what amount of time, with or without dependents. I would like to hear whether the noble Lord can assure the House that international students who come for a temporary period to learn, and who bring benefits in terms of trade, diplomacy and international relations, will remain outside any target for a reduction in net immigration. Will the Minister also tell the House whether the Government will reconsider their policy of capping, in the light of representations that they have had from businesses, bankers and lawyers and the responses that they have had to their consultation?

12.54 pm

Baroness Manningham-Buller: My Lords, first, I join others in thanking the noble Baroness, Lady Valentine, for initiating this debate. I want to declare a number of interests. First, I am a governor of the Wellcome Trust, which funds to the tune of about £600 million a year fantastic and extraordinary research, primarily in this country but also around the world to improve human health with real, therapeutic outcomes. Secondly, in that capacity, I am also a governor of the

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Sanger Institute, which mapped a third of the human genome and whose current difficulties with immigration rules were recently outlined very graphically in the Times; I shall say more about that anon. Thirdly, I am a vice-chair of the council of Imperial College, which is also affected by these current arrangements.

I start by saying, first, that I very much welcome the ring-fencing of the science budget in yesterday's comprehensive spending review, but there is no point doing that and keeping the current arrangements on the senior cap. I will come on to describe what is happening there. Others, notably the noble Lord, Lord Ryder, have described that the UK is a world leader in science. I can say that because I am an arts graduate who barely knows what a molecule is but, in my time in these wonderful organisations that I am now associated with, I have been fantastically impressed by their skill and the scale of, and dedication to, what is undertaken.

Secondly, our universities need to be globally competitive. Universities elsewhere in the world are coming forward in leaps and bounds. There is a whole lot of further discussion on that to do with the report of the noble Lord, Lord Browne, but those universities and institutions need to be able to attract the brightest and the best students and academics, from wherever they come. That phrase, about the brightest and the best, was indeed used in the Government's consultation paper. We need them for research-research which is making incredible discoveries every day-and to train the best in the next generation of students. Yet what we have at the moment is artificial protectionism that is, in some respects, actually preventing a brain drain in.

We are told that the knowledge economy is key. Wherever they come from, if we bar academics of the highest talent from coming here, they will be snapped up elsewhere in the world. Our key institutes are already suffering from the restrictions on skilled people; we have already heard about the area of the noble Lord, Lord Ryder. For example, the Sanger Institute, which is doing breathtaking work moving what we have learnt from the genome into therapeutic benefits for patients, has 17 people from outside the EU working there, only three of whom would now get in.

On Monday and Tuesday I, with other Wellcome governors, spent two fascinating days in Cambridge visiting a lot of institutes which are partly funded by the Wellcome Trust. I heard tales of some of the current research. I do not pretend to your Lordships that I understood it all, but I understood enough to recognise that there was some exceptional work going on. If I say that I heard from a PhD student who came from Belarus, a fellow who came from China and from others from around the globe, your Lordships will understand that I found this very exciting. In my past career, within my service, I worked only with British citizens and their children and grandchildren, but science attracts a range of different people from around the world. If we have a cap that makes it almost impossible for them to get here, we are doing not only them but our science and our economy grave damage.

Noble Lords might imagine that, in my bath at night, I am reading the new national security strategy. Your Lordships might wonder how I am going to

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connect that with today's debate, but I shall read a bit of it out because it is absolutely pertinent to what we are discussing:

"We are a global leader in science and technology, medicine, creative industries, media and sport, and home to some of the top universities in the world. We continue to attract large flows of inward investment ... Economic growth in the coming decades is likely to be driven by the world knowledge economy"-

and there is reference to our world-class universities. Investment does not mean only money coming in; it is people-students and academics.

I hope that the Minister will be able to reassure us that the sentiment expressed elsewhere in this document-that our prosperity and security require us to retain open markets and resources, and be a strong advocate of free trade-applies also to the most skilled people who want at the moment to come here, who have been coming here for generations and who we need to continue to come here.

At the very least, if nothing else, in refining this blunt instrument, I hope that the Government may consider why, in the guidelines for why a person should come in, their previous earnings earn them double what their qualifications do. This is extremely foolish and dangerous.

1.01 pm

Baroness Gardner of Parkes: My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on this debate. I agree with all the points that have been raised about the tier 1 and tier 2 people and how important it is. I know so many young bright Australians who come over and not only learn a lot but make a great contribution to science here.

In the title of the debate, "Economic and cultural impacts of immigration in the United Kingdom", the word "in" makes it easy to spread the debate a bit. Is it on, into or within it? It could be anything. So, I intend to talk about a basic group that is already in the UK: the invisibles. I am not for a moment suggesting a general amnesty; I am not going into that. However, we had a question only yesterday about tax avoidance and tax evasion. We have thousands of people, long-term residents in the UK, who are totally invisible. They could be people living next door to you. If we could bring those people forward-I am talking specifically about long-term residence, which is a qualification for the right to settle in the UK, or at least to be here with indefinite leave to remain-this would be a great source of income tax and national insurance. These people are certainly not paying those things now because they have no idea how they would even get on to the ladder and into a position where they were entitled to be here legally.

During the time that I have handled one particular case-the only case that I have ever dealt with; it has taken three years, but the person has now obtained indefinite leave to remain-I have come into contact with quite a lot of the Latin American community. They have brought to my attention an issue that is important for the Government to look at. They say that if you arrived 10 years ago, the goalpost for long-term residence was 10 years. They quoted one person who, after nine and a half years, found that the

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goalpost was moved to 12 years. After eleven and a half years here, he found that it had moved to 14 years, which is where it is now. It is a bit of an injustice, rather like an employment contract where your employment arrangement is based on the laws and rules at the time of your engagement, that people should be moving the goalposts like that, as well as wrong and a bit anti-British. The Government should look at that. This is just a small thing.

I asked a Question in this House in June 2007 about how one helped someone, and the reply of the noble Lord, Lord Bassam, was interesting. He said that the person I referred to,

Sure enough, they do allow for that, but there are difficulties. This person was referred regularly to pro bono advisers who, after she met them, then told her that it would cost about £10,000 to deal with her papers. That is how I got stuck with her case in the end, and I found that it took three years.

Another thing that the Home Office needs to look at is the wording of some of the documents regarding evidence of residence. The department says that it requires 10 documents for each year of your time here, and it sends you an unbelievable list of the sort of things that it would like you to send in: your credit card, your bank statement, your insurance policies, payslips, P60s and so on. This is for people who are invisible here; they have none of these things, so how on earth could they possibly produce enough of them? Then the Home Office says, "The evidence cannot be from a friend", although it could be from a doctor or a vicar or something. Eventually we sent in 26 documents, and the Home Office wrote back and said, "Not enough". We started looking for more. Then I wrote to the Minister saying, "Most people are advised not to hang on to all these documents for years and years, and this woman has been here for 27 years". Incidentally, the department wanted documents only for the previous 14 years, although she had plenty of documents for the period before then. The situation was extremely difficult. I wrote to say, "How is one expected to produce 140 documents?". The Home Office replied saying no, that was not what its letter meant-it meant 10 documents in all, covering the whole 14 years. I wrote back to say that I thought it would be a good thing if the department sorted its English out a bit so that what it said it wanted was what it actually wanted.

After all this time, this person has managed to get her leave to remain, and I am so pleased that she has got it at last, but the application form is 20 pages long and unbelievably difficult to complete. So many people in this country could make a contribution, and would welcome the opportunity to become legal taxpayers and become part of this society, if only these things could be made clearer. I understand that representatives from other countries-I am talking about Latin Americans in particular, but this probably applies to all-say that if only they could have meetings with the Minister, they could sort out the things that can be done and the things that they find impossible to do. Any additional income from people who are already here, not occupying

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any additional accommodation because they are already in accommodation, and in so many facets of the system-although they are not already with a medical doctor because they cannot be; they have to pay their own bills-would be welcome. It would cost this country nothing, and we might get the benefit from it.

1.07 pm

Lord Judd: My Lords, I join those who have thanked the noble Baroness, Lady Valentine, for having introduced the debate today and for the thoughtful way in which she set off our deliberations. The richness of humanity- of creation, some would say-is obviously its diversity. Any civilised objective for our society would get to the point where we were celebrating diversity rather than seeing it as a threat to be managed. Probably most of us, if we were to look at our own genes, owe something to immigration at some stage in our family life, however far back, and each wave of immigration can be seen in a historic perspective to have added to the quality of our society. It is hard to see any contradiction of that observation.

The quality of our academic and research institutions, as we have heard powerfully expressed in this debate, owes a great deal to migration and to the processes of learning, because learning has nothing to do with national barriers. The very presence of an international community of scholars adds to the quality of the scholarship itself. I make only one qualifying remark in all this: as a responsible society that, in the present economic situation, has ring-fenced our overseas aid and development budget because we feel so strongly about these issues, we should think hard about any inadvertent drain on scarce and invaluable resources of the developing countries themselves that may be generated by our own needs.

We must, however, be realistic. We are told that the market is the way forward. I am one of those who believe that the market has an important part to play but it is far from the whole story. There is a fundamental flaw here: if we talk about the free movement of goods, investment and finance but put a bar on the free movement of people, where is the market? People will follow the money, investments and so on. If we accept that reality, it has important lessons for us in our contribution to international institutions that are concerned with the economic and social management of world affairs. We must accept that we are not operating a global market in any meaningful sense.

The pressures of migration in our society have so often fallen most severely on those communities least prepared to handle them, where the schools, housing, hospitals, general social provision and jobs are not so good. If we want to make a success of our own immigration policy, we cannot separate it from our own economic and social priorities in areas of disadvantage and deprivation. There will be some acute challenges in the context of current economic policy.

Integrated society cannot be forced on people. It has to grow. I do not know whether other noble Lords share my anxiety about the process of the oath of citizenship, with all the qualifications, learning and exams necessary. I wonder how many of our own

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citizens would be able to acquit themselves satisfactorily in those exams. If we are to be a success in this, some kind of transparent consistency in what we say is terribly important.

We must again face up to our inconsistencies with this business of the imperfect market. Our society applauds the father who, faced with unemployment or community decline, goes off to some other part of the country to get a job. We are told that we live in an international market, yet we deplore the responsible father from the other side of the world who goes off to seek a job and ends up here. We talk about him in almost disparaging terms, as an "economic migrant", as though there is something wrong with that. That is an absolutely clear contradiction in our approach to what we believe is responsible citizenship and parenthood.

All this means that we must show great sensitivity and respect in our handling of the immigrant community. That is why the kinds of things that we discussed at Question time yesterday are so alarming. It is not good enough that we do not have the kind of leadership which means that everyone operating in our border agencies, and related activities, inherently understands that they are dealing with people under acute pressure. The inadequacies, failures and contractions in our own society lead to the predicaments in which people find themselves. We must therefore treat them with respect, sensitivity, care and concern. It is worrying when that does not happen.

What I am saying is closely related to security. We know that militants and extremists are recruiting from areas of alienation and disaffection. If we do not get our handling of migration right, and do not have the right culture at every point, we are playing into the hands of the militant and extremist recruiters, who will play on the alienation and disillusionment that so often occur.

All of this requires two things. We will not be able to solve it all on our own and must therefore have an intelligent and committed role in European and global institutions to get it right. Most importantly, however, we must have consistency in our political leadership. It is no good playing to the gallery and to prejudice in the search for votes one day-I am not making a partisan point here, but one that goes right across politics-and the next day blaming the chap in the migration service who mishandles the case. Where, then, are the leadership and context for the culture that matters?

1.14 pm

Lord Newby: My Lords, I, too, thank the noble Baroness, Lady Valentine, for initiating this debate. The recent general election is the first in my political lifetime in which the party leaders have spent much time publically discussing immigration. I am afraid that that debate generated a lot more heat than light. Today's debate gives us a much better chance of a measured discussion of an extremely complicated question.

Harking back to the general election, I am tempted to take up the involvement of the noble Baroness, Lady Gardner of Parkes, in the amnesty issue. However,

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I would like to speak briefly about three aspects: first, highly skilled immigration; secondly, students; and, thirdly, less highly skilled immigrants.

The issue of highly skilled immigrants has dominated this debate. We clearly need a much more sophisticated approach than that currently being adopted by the Government. A small number of people here have a disproportionately significant impact on our economic life. We have been given a number of examples of how the cap doesn't fit. I will give two more, from the oil and gas sector. Tata currently employs 38 non-EU nationals in Aberdeen, which is less than 5 per cent of its UK staff but they are hugely important people. It has been allocated two certificates of sponsorship for the period ending next April. This is undermining its ability to continue basing its geoscience research centre in Aberdeen because the centre is dependent on being able to recruit the most highly skilled and specialist people in this field, wherever they come from around the world. Shell finds itself facing exactly the same problems. Its inability to bring in non-EU citizens for specialist positions is leading it to consider whether it should move some of its specialist functions, possibly to the Netherlands where it already has its headquarters.

These problems are not just in one or two sectors. We need to recruit people for some key country and language specialisms from outside the UK if we are to improve our competitiveness. China, Japan and India are just three such countries. The importance of this, and the significance of the problem, was borne out by the recent Think London FDI barometer, conducted in May and June this year. Of those companies from the Asia-Pacific region, 89 per cent said that the immigration cap was likely adversely to affect their business over the months ahead. The cap does not fit, and it must change.

The noble Lord, Lord Ryder, and the noble Baroness, Lady Manningham-Buller, have spoken eloquently about the need for the best academics to come in to the country. I echo the comments of the noble Baroness, Lady Prashar, on the importance of students from around the world. We have a comparative advantage over much of the rest of the world. We often talk about shifting the balance away from financial services. Promoting our academic sector is one way in which we can do this. An example of how far our attractiveness reaches was impressed upon me by a British Council description of a recent poll in Chile in which students were asked where they would like to go if they could study abroad. While 28 per cent said that they would like to go to the US, 27.5 per cent said that they would like to come here. Chile is on the other side of the planet, a country where English is not the language. Yet we are hugely important to it, and need to build on that strength rather than undermine it.

Less-skilled immigrants from the EU and elsewhere -by far the largest group-are, in a sense, a bigger issue. Unemployment in London is currently 9.1 per cent, the second highest in the English regions. However, within London there are huge numbers of immigrants from the entire world doing jobs that could relatively easily be done by Londoners. This principle applies to a greater or lesser extent elsewhere, but in London it is particularly stark. It was brought home to me a couple

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of weeks ago. Within a couple of hours, I first bought a sandwich at a branch of Pret a Manger in which every member of staff was non-UK born, and then had a meeting with the policy director of Gingerbread, the charity that works with one-parent families. He talked about the vital need for part-time work for single mothers. I am not suggesting that every single mother goes to work at Pret a Manger between 10 am and 2 pm, but the retail sector has huge potential for that group that is not being exploited. The Government and employers should be looking at how we can fill some vacancies through better training of people who are currently looking for work.

Another sector to which relatively large numbers of people come, particularly from the Far East, is the care sector, where the easy option is to import care assistants from the Philippines. I wish the large healthcare providers, in both the public and the private sectors, but possibly particularly in the private sector, would spend more time ensuring that they recruit more local people, who need only an NVQ-level qualification to be able to do the job.

Immigration can and does bring great benefits to the UK. It has to be managed but, with a more nuanced and rigorous approach by government, there is no reason why that cannot be successfully done.

1.21 pm

Lord Rowe-Beddoe: My Lords, I, too, congratulate the noble Baroness, Lady Valentine, on securing this debate. Her experience as chief executive of London First-a most successful organisation in promoting investment, both inward and domestic-and its resulting job creation give particular authority to what she said.

I declare an interest as a deputy chairman of the United Kingdom Statistics Authority. Indeed, "lies, damned lies and statistics" are at the very root of what we are discussing. Immigration is perceived to be an opportunity or a problem, depending on the position in which any country finds itself in the economic cycle. The perception is also influenced by demographics when considering size and infrastructure. For example, projections indicate that by 2050 we could have the biggest population in Europe. Currently we are second only to Malta as the most densely populated country.

While I am sure the Government are well intentioned in introducing a cap, it seems that they propose to use a proverbial sledgehammer to crack a nut. I have a most serious concern as to whether the correct nut is being attacked. Our country is in great and continuous need of attracting and keeping, in the Government's own words, the "brightest and the best". We need them for academia, ICT-we have heard eloquent arguments for this today-banking, business, high-value-added manufacturing, the arts and, yes, even for football, though I feel that the proposed exemption is really a pander too far.

The Office for National Statistics's Migration Statistics Quarterly Report from August 2010 shows in provisional figures that net immigration in 2009 was 196,000 people into this country. This represents an increase of some 20 per cent from the previous year. This net figure resulted, however, from 567,000 persons in and 371,000 persons out. Most importantly, 55,000 of

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those coming in-less than 10 per cent of the 567,000-were work-related non-EU citizens, and 79,000 work-related non-EU migrants departed, as was mentioned earlier. We need these people in our economy.

Referring only to the arts sector, while the number of skilled classical ballet and contemporary dancers, orchestral musicians and other creative workers coming to Britain under tiers 1 and 2 is relatively low, their importance to the sponsoring organisations and our cultural life in general is extremely high. The arts sector's economic contribution impacts most favourably, both indirectly and directly, on the Exchequer and places only very low demand on public services. I remind your Lordships that, according to the Department for Culture, Media and Sport, the creative industries in the United Kingdom, excluding crafts and design, account for 6.2 per cent of gross value added and some 4.5 per cent of UK exports, and in 2008 provided nearly 2 million jobs. It is an industry for which we have worldwide recognition for excellence and receive much applause.

Immigration controls are, I fear, necessary. However, implementing a cap on a small minority-largely comprised of persons whose skills and expertise we need-without addressing the elephant in the room by initiating discussions with the European Union, so as to manage better the current largely unlimited and oft-abused free movement of people within it, would be to the nation's long-term detriment.

1.27 pm

Lord Taylor of Warwick: My Lords, I also thank the noble Baroness, Lady Valentine, for securing this debate, which is both important and timely.

In the United Kingdom, we have only two seasons: this winter and next winter. Although immigration is a controversial issue, I hope we can at least all agree that immigrants do not come here for the good weather. I do not start in this way because I think this is not a serious issue. The fact that immigration has so rarely been discussed in either House, or by the wider public, over the last 12 months indicates that the topic needs to be tackled more often, without fear of causing offence. The immigration debate is too often-sadly, encouraged by the media-conducted in angry terms. You cannot shake hands with a clenched fist.

My children are very proud to be typically British: that is, they are a mixture of African-Caribbean, Polish, Irish, Scottish, Jewish and Indian. Immigration has enriched our culture and enhanced our nation. Many British icons are immigrants or descended from immigrants. We need only to look at the medical profession, our sports stars, showbiz celebrities and, increasingly, the business world.

It was a very different Britain when my father first arrived from Jamaica in the late 1940s, to try to make the grade playing county cricket for Warwickshire. He also hoped to use his skills as a qualified accountant, but the only job he could get initially was cleaning the toilets at the Lucas factory. When he was trying to find accommodation, all he could see were signs in house windows that read "No blacks, no Irish, no dogs". However, he did not become bitter; he got better and eventually made a life for himself. He discovered that

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whatever nationality or colour you are, this country loves winners, not whiners. Scoring a century for Warwickshire against Leicestershire in 1949 instantly transformed him from being described in the local newspaper as "Jamaican Taylor" to "adopted Brummie Taylor". I certainly learnt from him that when you are going through adversity, you do not give up, you get up.

Clearly, the United Kingdom has benefited from immigration. It is vital to continue to attract the world's most talented to come here and drive strong economic growth. Immigration is a big topic with many facets to it, but the noble Baroness, Lady Valentine, has rightly focused on a particular issue of the non-European Union migrant cap. I personally do not believe in unlimited immigration, but I share the concerns of John Cridland, deputy director-general of the Confederation of British Industry, who feels that the interim cap is,

as the figures used for setting it,

If it is essential to have a cap, skilled migrants with a job offer should be given priority since they are able to pay taxes, are relatively few in number and, of course, place low demands on public services. We have heard a lot already from other noble Lords about the need for companies to transfer staff from one country to another, and to keep Britain attractive as a global location for investment for jobs. As the economy gears up for growth, the UK must demonstrate that it is open for business. Companies must still be able to access the best and the brightest talent from all over the world, and not only in the business sector. As we have heard so eloquently from other noble Lords, this applies also to students, academics, researchers and those in the performing arts.

There is evidence that this interim system is being poorly managed and proving a problem for firms trying to keep on valued foreign members of staff or to recruit specialists from abroad. These difficulties will undermine confidence that the permanent cap will work. The migration system must support, not stifle, growth. Research by the International Organization for Migration warns that, on present demographic projections, developed countries will experience labour shortages due to falling birth rates and ageing working populations. So managed immigration can be the solution, not the problem. Yes, the history of immigration has been a chequered one, but there is only one race-the human race. We should not use this interim cap literally to bash a very small section of migrants. They are talented people and we need them. The Government now have the opportunity to help build bridges, not walls, between our diverse communities.

1.33 pm

Lord Bilimoria: My Lords, right up front I declare my interest as an immigrant. When I first moved to the UK from India in the early 1980s as a 19 year-old student, I was warned by my family and friends that, as a foreigner, I would never be allowed to get to the

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top because there was a glass ceiling in this country. How right they were three decades ago, but today I look around this country and see people in the Asian community and from all over the world reaching the very top in every field. Over the past two and a half decades, I have seen with my own eyes the glass ceiling well and truly shattered. Today in Britain anyone can get as far as they want to and as far as their aspirations and abilities take them regardless of race, religion, or background. We are one of the most open and truly multicultural countries in the world. Yet, in spite of this, this Government have imposed a cap on immigration.

I thank the noble Baroness, Lady Valentine, for securing this debate at this crucial time. There is no denying that the previous Government lost control of immigration and of our borders and that hundreds of thousands of illegal immigrants come to this country not to contribute but to sponge off our overly generous welfare state. The Government are absolutely right, and have the backing of the British people, to stop this abuse of our generous nation. But to do this by imposing a cap on all immigrants is not only crude but sheer stupidity, as we are shooting ourselves in the foot by depriving our nation of the immigrant talent that has been a huge factor in, and made a huge contribution to, making this tiny nation a global power and one of the six largest economies in the world.

I must issue a warning. People all over the world are being warned about the dangers of economic protectionism brought about by the economic crisis. Treating immigration with a cap in a closed-minded way and with a kneejerk reaction, as this Government have done, is just as serious for our country as economic protectionism, if not more. Immigrants contribute to just about every sector of our economy in both the public and private sectors-just look at our beloved Gurkhas in the Army and at the NHS, as we have heard. In my own business, I have seen the curry restaurant industry make Indian food a way of life in this country. This year, the Bangladesh Caterers Association celebrates its fiftieth anniversary, yet it has been hit by the points system and now the immigration cap, and is struggling to get skilled staff, particularly chefs. This is a community of pioneering entrepreneurs who are living examples of the Prime Minister's big society initiative. They integrate into their local communities and, most importantly, they put back into their communities. Instead of being grateful to them for the hundreds of thousands of jobs that they create and the billions of pounds of revenue that they generate, we slap them in the face. This is sheer unfairness and sheer ingratitude.

In the catering industry hard work is a mantra and perspiration is a creed. When others play, its staff work; and when others are asleep, they are awake. When noble Lords go into restaurants and hotels around the country do they notice that often there are more non-British-born employees-whether from the EU or outside it-than British-born employees working in those establishments? We need look no further than our very own Peers' Dining Room and the Barry Room, where British-born staff are by far the minority. But would we have it any other way? Our staff are the best in the world and I would not change them for anything.

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My five year-old daughter is privileged to be at one of the best primary schools in this country. She needs special needs help. Recently, we received a letter from her Australian occupational therapist. It states:

"Very sadly in light of the immigration cap imposed by the new Government, certificates of sponsorship have been drastically limited and my company will not be able to sponsor me. I am incredibly disappointed at the thought of having to leave. My company has been trying to recruit a suitable therapist to replace me but to no avail".

Where is the sense in this? Where is the sense in me, my family and my five year-old daughter suffering because of a stupid immigrant cap-a blunt tool? In this debate we have heard from noble Lords example after example of their personal experiences. This is a crude instrument as it does not take into account the skills that we as a country in economic turmoil so desperately need if we are to drive forward in the fields of science, technology, manufacturing, engineering and enterprise-the list goes on.

A letter published in the Times earlier this month from eight Nobel prize winners was a stern warning of the dangerous effects that this cap could have. Since 2007, five out of six Nobel laureates based at British universities were born outside the UK, such as Venki Ramakrishnan at my old university, Cambridge. More than 10 per cent of academics at British universities are foreigners. We can pride ourselves on having some of the best universities in the world. Foreign students, as the noble Baroness, Lady Prashar, said, and foreign academics play a huge role in making this the case. Do we really want to jeopardise this by implementing rules that make it hard for some of the world's greatest minds to come here and enrich us, as the noble Lord, Lord Ryder, said?

The Indian community in this country makes up just under 2 per cent of the population and yet it contributes double that percentage to the economy. But you cannot merely put a price on immigration; it is priceless and enriches our lives in every way. As we have heard, London is a great example of that.

I conclude by recounting my father's advice to me when I came to this country. He said, "Son, wherever you live in the world, integrate fully with the community you live in, but never forget your roots". I am very proud of my Zoroastrian Parsi roots. I am very proud to be Indian. I am very proud to be an Asian in Britain and, most importantly, I am very proud to be British.

I implore the Government: do not throw the baby out with the bathwater. Control the immigration that needs controlling, but do not deprive this nation of the immigrants that we desperately need and the immigrants that have made this wonderful nation of ours world famous for our world-beating talent and for our world-renowned sense of fairness and justice.

1.40 pm

Lord James of Blackheath: My Lords, I too thank the noble Baroness, Lady Valentine, for procuring this debate. I have to say that those who follow me might wish to add a rider to their own congratulations, deploring the fact that she did not stop me speaking, because we had a conversation in advance in which I told her that I had absolutely nothing to contribute to this debate, given that I have no experience of immigration

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or multiculturalism. To demonstrate that, I told her an anecdote that she thought was good enough to be repeated today, and that is what noble Lords are about to get. You must blame it on her afterwards.

My story starts in the trenches of the Somme in 1916 with a Major Alexander Crombie, who came out alive but deeply scarred from the experience and decided that he wanted to make a contribution to world peace. He took what little fortune he had and created a small academic academy with the express purpose of bringing in boys from European nations whom he could then groom for the common entrance examination and place somewhere in the public school system in Britain. This establishment prospered through even the Second World War and had arrived in 1947 at a point at which it had some 25 boys-all bright and intelligent fellows.

In parallel with that, I had been having my own educational crisis which had resulted in my being classified as mentally defective by the London education authority and sent to a school for mental defectives. My father was unamused at this and decided that I had to be removed immediately from that school and that he had to find somewhere to send me. Someone suggested that he talk to Major Crombie, who was then quite an old man. Major Crombie said, "We can't have this fellow in; he can't read and could not even do the 11-plus". My father said, "Never mind; that proves that he is a refugee from the London County Council, so you've got to have him". Crombie looked at a list and said, "What did you say your name was? James? We have 25 boys here-one for every letter of the alphabet except J. We'll take him". So I got in.

We had an amazing roll call every morning. It began with Adybaya, Baptista, Chinchialla and Dukszta, and ended gloriously with Xyrus, Yballa and Zabialski. I used to think that if I could get through life and remember the entire roll call, I would know that Alzheimer's had not yet reached me. After I had my stroke, I said this to my physician, who said, "No, old boy. You may remember all the other 25, but your trouble is when you cannot remember who the J was". So far, so good-but not for long, I am sure.

This was a remarkable gathering. We had some really fine brains in the class, but we were all under the control of a former Coldstream Guard padre called the Reverend Wynn, who was one of the great men of my life. He decided that he would have no nonsense with us at all. He was going to have a morning service or gathering. When we said, "Father, we have 17 nationalities and eight religions here, so we cannot possibly have a religious gathering in the morning", he said, "Of course you can. It does not matter which god you have-you are going to celebrate the glory of this world. Bring your god with you, whoever he is, and we will all celebrate the glory of the world together". And we did. We could not have any readings from the Bible, the Koran or anything else. He formed a committee of us to find suitable prose or a poem every day which would celebrate something of beauty in the world.

There were to be no hymns sung, so he decided-very unwisely, as it turned out-that we could all, in rotation, sing our national anthems, to which we could write our own words of a non-jingoistic nature. The honour went first to the three British boys. We decided to use

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"Pomp and Circumstance" and rewrite the words to, "Land of cut the call-up, how do we dodge this nonsense?". That did not get us any merit points. The situation completely fell to pieces when the two German Jewish refugee boys at the school decided to write their own version of "Deutschland Über Alles" and got their little bit of revenge on Germany in the process. They decided to devote the words to the most obscene account of Hermann Göring having sexual congress with a lady kangaroo, which ultimately proved fatal to him because it would not stop jumping. After that, the Reverend Wynn decided that there should be no more of that.

This extraordinary gathering of boys with huge talent had one great skill that united us. We had a lot of Eastern bloc boys among us with a huge capability at chess. We had one of the strongest chess teams that you could ever put into the field-even at the age of 11 or 12. After we got into the quarter finals of the London schools knock-out competition with a team of 12 year-olds in 1947, we asked the Reverend Wynn to issue a challenge invitation to Eton and Winchester. I do not know whether there are any Wykehamists or Etonians in this assembly, but if there are, I have to say, "Oh, what a bunch of wimps you were-you would not take the challenge". I hope that you have that to your eternal shame, gentlemen.

The gathering continued very successfully and nearly everyone in the class got into one of the better public schools. We had a wonderful time together. I am sorry that the noble Lord, Lord Giddens, is no longer present, because this is probably the antidote to his comments about multiculturalism. Oh, here he is. This is probably the noble Lord's nightmare of multiculturalism gone wrong, but it was in fact brilliant. Of the 17 nations from which we came, about half had been trying to exterminate the other half during the previous five or six years, yet everyone got on so well together because we were completely without the preconceptions instilled by too much political correctness and preconditioning as to what we ought to think of each other and how we ought to react. We were the biggest bunch of mutual support people ever gathered together in one place. Today I cannot see what the problem is with the interracial problems of immigration. We did it fine. We were young, we just got on well with each other, and that was a natural instinct. If we stop dictating to and preconditioning people, it works very well.

1.46 pm

Lord Clinton-Davis: My Lords, I thank the noble Baroness, Lady Valentine, for initiating this important debate.

My grandparents were immigrants, and I like to think that despite their extreme poverty they made a worthwhile input to our society-albeit in a very small way.

I speak as someone who was raised in Hackney, served on Hackney Council and was then MP for Hackney Central. I speak with some authority on immigration because so many of my constituents at that time were from all parts of the world. When I grew up in Hackney, there was scarcely a black or

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brown face. Today, that has dramatically changed. When I go back there, I can see that immigrants from all over the globe people the area. They are black, brown and white. All bring their own talents and experiences, and that is worth while.

Music, of course, has enormous diversity and has undoubtedly played an important part in the development of the area. That is true also of the proliferation, exchange and understanding of ideas and views which undoubtedly exist. There is, however, also a downside which, regrettably, is often distorted. Of course, extremist groups exist among immigrants and others. They engage in wild and divisive talk. Some have rightly suffered custodial sentences.

In general, however, poor areas such as Hackney have been richly rewarded by multiculturalism. Public transport-buses and railways-could not function without the input of the immigrant community and their progeny.

The same is true of education, the National Health Service, law and so many aspects of our society. Still, however, there are too many barriers-some thoughtlessly erected, perhaps unwillingly-but many have the support of some of the community, which is a matter of regret. There are some unhappy examples but one could say the same of our entire society. In the main, there is no doubt that areas, such as Hackney, have been enriched enormously. That has spilled over to the wider community. I speak with some knowledge of the subject as many of my clients were from immigrant communities. Many were worth while-not all, but many of them-and I am very proud to have represented so many of them. I hope that that will remain so for a very long time. Any threats, such as we have witnessed already, must be attacked and resisted. I am very proud of my background; I was proud to be in the Commons and I am proud to be here. When I think of what has happened it is remarkable, is it not?

1.52 pm

Viscount Falkland: My Lords, I, too, am grateful to the noble Baroness for introducing this riveting debate. I apologise for arriving a couple of moments late for her introductory remarks. I was keeping an eye on the screens while talking to a young Muslim human rights lawyer who was telling me about things to do with immigration which are for another day. They were mainly to do with connections between Muslim immigration and terrorism and the reasons why we are where we are today.

Rather than addressing the economic or cultural issues, I shall take noble Lords back. I now find that I am at that difficult moment of being above the average age of Members of your Lordships' House, so can be forgiven for going back in time. When I first came to your Lordships' House, my maiden speech was on a subject that I knew something about-third world Africa. As a result I got into a number of debates on subjects allied to that and made great friends with Lord Pitt of Hampstead. He and I sat on the other side of the Chamber together and he introduced me to a lot of very interesting reading about the development of the Caribbean, its economy, the slave trade, and so on. At an early stage in our relationship he said that

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the greatest mishap for immigration and the Afro-Caribbean community here was the decision to go down the path of multiculturalism. He pointed out that it resulted in the ghettoisation of his community. As the younger generation succeeded their parents, the limitations placed on young Afro-Caribbean men, in particular, was a great shame. We all know about that. It was a black spot in our immigration history and policy.

However, it has not been all bad; we have generally opened our doors to those who have come here for various reasons, such as fleeing persecution, natural disasters, and so on. The noble Baroness mentioned the Huguenots. They were more of a problem for the French who created a problem themselves by getting rid of the Huguenots. They were the motor of manufacturing and innovation and their ability to create wealth in France was lost when the Huguenots were dismissed and came here with a great deal of expertise. They contributed enormously to our society. They were mostly educated, of course, and did not have some of the problems that we face today with people coming from agricultural communities. The Huguenot population was enormously influential in the textile industry and, curiously enough, also in the Army. A lot of people seem to forget that the most successful soldier in the 18th century was Field Marshal Ligonier who I do not think ever lost a battle.

Immigrants have played a very important part in our lives. They have invigorated us, as has been said by other noble Lords, and still do, but we have missed many opportunities. Going back to the Afro-Caribbean community, a lot of young men on the streets are pessimistic about their future and take the wrong path. However, there are many, particularly in the arts, in the world of music and dance, who make a great impact on our community. Short-termism in immigration policy, which continues to this day, has been wasteful.

I was reminded again of the immigration of those who escaped persecution when the sculptured head of the Queen by Oscar Nemon was unveiled in the Royal Gallery. He came here as an immigrant from Brussels. He was an infant prodigy in sculpture and the arts and got early warning that Belgium would be overrun by the Nazis. He dropped a successful career and came here. After the war he sculpted most of the important members of British society at the time. He became a British citizen and created a family. All his original family, bar one sister, were eliminated in the Holocaust. He married a British wife and created an English family. His impact on the arts in the post-war period is immense. One could give many other examples.

I was impressed by the speech of the noble Lord, Lord Taylor of Warwick. The remarks of Lord Pitt of Hampstead about the obstacles to the Afro-Caribbean community were expressed in his speech. Immigrants from the West Indies came here to do jobs that nobody else wanted to do.

Governments now must take a long-term, strategic view on immigration. It is no good making it bureaucracy-led. The points system which has been described is so damaging that it needs to be reviewed by people who are committed to thinking about the issue in the long term so that we have a sensible policy, not only in terms of admitting people who are needed for their skills to create wealth but for the way in which

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we deal with those who come here because of persecution and other reasons. It is no good having a piecemeal system that requires constant adjustment.

1.59 pm

Baroness Coussins: My Lords, I, too, am grateful to my noble friend Lady Valentine for initiating this debate in which I want to raise one relatively small and specific issue about the way in which the immigration rules inhibit cultural and economic benefits to this country. I refer to exchanges that are designed to last a full academic year between school students in state-maintained secondary schools and their opposite numbers in non-EU countries.

One such scheme is the Rotary Youth Exchange, which has been recognised internationally as one of, if not the, best student exchange programmes in the world. Before 2009, when the tier-based immigration rules were introduced, about 60 school students a year were able to do an exchange as part of this programme. Typically, they are in year 12, or the lower sixth, but now only those wanting to exchange with a student from an EU country are able to participate, because the immigration rules disallow the non-EU school student from coming to the UK for a full academic year. Before 2009, there had been an exemption for exchange students in schools, enabling a 12-month visa to be issued, but this concession has been withdrawn.

It is worth spelling out what the advantages of exchange programmes are, not only for the young people from abroad who come and experience British school life for a year, but for our teenagers, who gain enormously from their leg of the exchange and the opportunity to understand and appreciate other cultures, to learn another language and to live in a host family, while having their safety and welfare overseen by the Rotary.

The Foreign Secretary, in a speech earlier this year, warned that Britain's place in the world would inevitably decline if it did not embrace an agile and energetic foreign policy that cultivated ties beyond the narrow circle of western powers. What better way of cultivating ties than through young people, particularly if they are guided and assisted on their journey by such a prestigious and well established organisation as Rotary International? The educational and cultural benefits to those young individuals today will turn into competitive and economic benefits to the UK as a whole as they grow up, enter the labour market and drive international business and national reputation.

Three out of the four countries mentioned by the Foreign Secretary-India, Brazil and Turkey-are eager to participate in the Rotary Youth Exchange. The programme is also strong in Taiwan, where UK students can learn the main language and culture of China, the fourth country mentioned by the Foreign Secretary, yet the school students from those countries are precisely the ones who are no longer able to come to the UK to spend an academic year in a state school as an exchange student. Consequently, our school students are denied the opportunity to do likewise.

The Government argue that six months should be the limit on school exchanges, and that is the extent to which tier 4 of the points-based system will go. It is

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argued that, beyond six months, it counts as replacement education for non-EU nationals, which should not be provided at the taxpayer's expense, but that is somewhat illogical, given that exactly the same costs are incurred for EU children on the same scheme. Furthermore, given that, by definition, the scheme is reciprocal, for each foreign student here one from the UK is placed abroad. In any case, there is a strong argument for saying that both the short-term and long-term benefits significantly outweigh the immediate costs, in a global environment where intercultural understanding and co-operation, particularly at a personal level, are so vital in fostering better relationships.

Given that before 2009 there was no problem or issue with granting 12-month visas to non-EU school students coming in on exchanges, I ask the Minister to accept that the current situation is in fact an unintended and unforeseen consequence of the points-based system. It seems to me that the Department for Education's argument about six months being adequate is something of a post hoc rationalisation of a situation that it was not expecting and certainly had not been responsible for creating. Will the Minister be good enough to undertake to correct that anomaly and amend the relevant immigration rule, and perhaps consider granting highly trusted status to the Rotary organisation, so that children aged under 18 from schools in non-EU countries are once again able to participate in the full academic year youth exchange with state schools in the UK?

2.04 pm

Lord Turnberg: My Lords, I, too, thank the noble Baroness, Lady Valentine, for introducing this debate in such an eloquent way. I shall focus on the impact of the immigration cap on scientific research. Here, I can only re-emphasise many of the comments of the noble Baroness, Lady Manningham-Buller.

Yesterday, the Chancellor emphasised his commitment to the science base and to spending on medical research, but the Government's current policy on immigration seems designed to run in exactly the opposite direction. If you want an example of globalisation, you do not need to look at the banking or financial world; you should look at the scientific world. Science is the most international of activities and it knows no boundaries-or at least it did not until we put up these barriers to free flow of the scarce talent that makes up the scientific community. Although we are in a competitive market, we are also extremely fortunate in the UK, because the high quality of our research can attract the best. Three recent Nobel prizes speaks volumes and, as a loyal Mancunian, I am delighted with the success of our two physicists in Manchester. However, both of those physicists came from Russia, and it is quite likely that at least one of them might have been prevented from coming here because he could not have fulfilled the criteria now needed to gain access.

I must step back a moment to expose my bias and interest as scientific adviser to the Association of Medical Research Charities and as a trustee of a number of medical research charities, but you do not have to be as biased as me to recognise the value of research both to society and to the economy of the

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country. Your Lordships will remember the calculation a year or so ago showing that we get a return of 37 per cent a year on every pound that we invest in medical research. A recent publication from an impeccable source, Haskel and Wallis-you cannot get more impeccable than the son of the noble Lord, Lord Haskel-showed that if research funding decreased by £1 million a year, GDP would fall by £10 million.

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