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House of Lords

Monday, 29 November 2010.

2.30 pm

Prayers-read by the Lord Bishop of Newcastle.

Palace of Westminster


2.36 pm

Asked by Lord Haskel

The Chairman of Committees (Lord Brabazon of Tara): My Lords, as your Lordships would expect with a building as old and heavily used as the Palace of Westminster, there are some very significant maintenance issues which require considerable investment. The Parliamentary Estates Directorate is in the process of formulating a 25-year strategy to address these challenges. The most pressing problem is that the mechanical and electrical systems are in a poor state of repair, which is why we have embarked on a five-year programme of "aggressive maintenance" to mitigate the most serious equipment failures. At the same time, investigative studies are taking place to scope the longer-term programme of works.

Lord Haskel: My Lords, I thank the noble Lord for that reply. Is he aware that on the odd occasion when I have seen him in conversation with worried-looking officials, it has normally been about the state of the building? As we spend an awful lot of time here, can he tell us what is the state of the walls, the foundations and, in particular, the roof?

The Chairman of Committees: My Lords, the walls and foundations are in reasonably good condition. If I look worried, it is largely because of the mechanical and electrical programme which I mentioned in my Answer; that is a serious programme. As for the roofs, noble Lords will be aware that the first phase of replacement of the cast iron roofs has taken place down at Speaker's Court end, and the scaffolding is now being removed. That is the first phase. We need to take stock of the results of that work before we move to the next phase, which will be the south return-down that end of the building. Unfortunately, the results of the work on the first phase have been more difficult than we had anticipated. We had anticipated that about 10 per cent of the roof tiles would be good; as it turns out, in some places, nearly half have had to be replaced.

Lord Trefgarne: My Lords, although what the noble Lord has described is no doubt essential, can he give us an indication of what it is all going to cost?

The Chairman of Committees: My Lords, I can give the House an indication of the cost of the first phase of this program for M&E, which is budgeted at £69 million to go to 2015. After that, it is anybody's guess.

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Viscount Montgomery of Alamein: Turning to a different aspect of the building, can the noble Lord tell us what is happening about the cellars, because they have historically-especially 400 years ago-been the source of trouble? Perhaps there may be some special interest there.

The Chairman of Committees: My Lords, I hope that the cellars will no longer be a source of trouble. Of course, it was not this building where that happened, it was its predecessor. The cellars are now crammed full of old pipes, wiring and, in particular, asbestos, of which there is a lot. All that is having to be dealt with.

Baroness Sharples: Will the noble Lord please comment on the heating system in the House?

The Chairman of Committees: My Lords, first, I am well aware that there have been problems with the heating in various parts of the building. I hope that your Lordships will agree that it is better today than it was last week-particularly in the Chamber. It is a major problem with an old building such as this that a lot of the hot air that we produce in this House leaks out through doors, and so on, being left open. We are conducting serious work on this. We have someone looking around the place to see where the main causes of trouble are.

Lord Berkeley: My Lords, can the noble Lord confirm that the roofs of the Chamber and the Royal Gallery were replaced about 10 years ago? I recall a committee on which I was sitting going up and being shown the new or refurbished tiles. They haven't gone wrong again, have they?

The Chairman of Committees: Certainly as far as the Chamber is concerned, the ceiling was replaced some years ago when one of the things fell down. I was in the Chamber when it happened and we had to move into the Royal Gallery for a shortish period. As for the roofs, I am not aware that the actual roof tiles were changed at that time.

Viscount Falkland: My Lords, can the Chairman of Committees give some comfort to our admirable curator's department which, because of the many valuable pictures in the Palace, is on a constant state of alert for water coming into the building? The water usually comes in at this time of year, normally as a result of bad repairs to the original structure, which was obviously of a much higher standard than the repairs.

The Chairman of Committees: I am aware that there have been problems particularly above the Royal Gallery, where the gutters, which are extremely difficult to get at to keep clean, have sometimes caused water to come in and go down the walls of the Royal Gallery and possibly damage the paintings there. It is something that we keep constantly under attention. We also employ birds of prey to deal with the other birds which make a mess.

Baroness McIntosh of Hudnall: My Lords, can the Chairman of Committees tell the House what will be the impact of the two Houses sitting during September on the necessary programme of works, given that the

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House authorities have historically been able to count on a long period to get some of these essential works done? In particular, can he say whether this is likely to have a detrimental effect on the costs?

The Chairman of Committees: My Lords, a September sitting does incur additional works expenditure because of the need to accelerate or delay individual projects. The extra costs involved will, of course, vary each summer depending on the proposed schedule of works. Last summer, we estimated that a September sitting in the House of Lords would have added approximately £1.3 million to the cost of shared and Lords-only projects. Those concerned were made aware of those figures.

Lord Stoddart of Swindon: In the light of the need for an uninterrupted run of work, particularly on engineering and electrical works, is it not unfortunate that the House has been called to sit in September 2011, which will of course interrupt that essential work?

The Chairman of Committees: My Lords, I rather think I just answered that very question for the noble Baroness. I do not think that I have any more to add to what I have just said.

International Aid


2.45 pm

Asked By Lord Sheikh

Baroness Verma: My Lords, I thank my noble friend for asking the Question. I know that he shares a great interest in overseas development. In 2009-10, 62 per cent of DfID's aid budget was spent through multilateral organisations. This includes funding at headquarters level and support for particular programmes and projects at country level. The Government are currently reviewing their bilateral and multilateral spending in order to maximise effectiveness and value for money. These reviews will determine the future shape of our aid budget in terms of how much funding we provide to different countries and international organisations.

Lord Sheikh: My Lords, I thank the Minister for that response. Is she satisfied that these multilateral bodies to which we contribute are assiduous in ensuring that we gain value for money as a result of the contribution made? What more can be done to guarantee that our foreign policy priorities are reflected in the distribution of funds through this mechanism?

Baroness Verma: My Lords, multilateral organisations have strong controls in place on financial accountability and transparency. The UK, as a shareholder, has helped to shape these controls and we work hard to monitor effectiveness of multilateral expenditure. The ongoing multilateral aid review is assessing the overall effectiveness of organisations. Each multilateral

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organisation has its own mandate designed to address a specific challenge. The review is also looking at the relevance of each organisation to the UK's objectives.

Baroness Kinnock of Holyhead: My Lords, does the Minister agree that the European Commission has made significant progress on aid effectiveness and transparency? Does she also agree that the budget support, which the Commission gives directly to developing countries, makes a huge difference to their ability to meet the MDGs and to provide predictability and long-term funding?

Baroness Verma: My Lords, I agree with much of what the noble Baroness has just said. Some 56 per cent of the world's ODA is provided through the EU and 43 per cent of the European Commission's overall budget goes to low-income countries. The EU also supports middle income countries, where 75 per cent of the world's poor live. The effectiveness of EU aid has increased steadily over the past 10 years. It is now faster, more flexible and more predictable. Over the past five years, EC aid has helped 9 million children to enrol in primary education and 31 million households to access better drinking water.

Lord Waddington: Does my noble friend agree that the EU's involvement in overseas aid is the worst possible example of EU empire building? Is it not quite absurd that we should hand over money to Brussels to be laundered there? A considerable sum is taken out for the payment of the bureaucrats and then what is left is handed over to the recipients. Would it not be far better if all the aid went direct from the donor countries to the people who need it?

Baroness Verma: My Lords, what my noble friend refers to is an agreement with the previous Government under the Lisbon treaty. We did not agree with that, but unfortunately it is now in place and we will need to make it work. We will need to make sure that controls are in place. However, spending through the EU has its own management systems-the Internal Audit Service, the European Court of Auditors and the independent European Anti-Fraud Office.

The Countess of Mar: My Lords, does the noble Baroness agree that in African countries and other third-world countries agriculture is the primary source of income for a vast majority of their populations? What proportion of DfID's spending goes directly on agricultural projects?

Baroness Verma: My Lords, the noble Countess is right. Some 75 per cent of the developing world's poor-2 billion people-live in rural areas. The majority depend on agriculture to provide jobs and incomes. Agriculture has a key role to play in helping to meet the millennium development goal of halving the proportion of people in the world suffering from extreme poverty and hunger. Further allocations to agricultural programmes in each country will be determined after the bilateral reviews.

Lord Tomlinson: May I invite the noble Baroness to turn again to the question asked by the noble Lord, Lord Waddington, and stand up and say quite clearly to him that he is wrong?

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Baroness Verma: My Lords, in my answer to my noble friend I think I answered what he asked.

Lord Lawson of Blaby: My Lords, does my noble friend recognise that although economic development is well intentioned the preponderance of academic studies have demonstrated that in fact it does more harm than good? Will the Government now reconsider allowing overseas development aid to increase substantially at a time when severe cuts are necessary in all other forms of public expenditure?

Baroness Verma: My Lords, I cannot agree with my noble friend. Development aid helps millions of people and even though we are going through difficult times ourselves, we will not save money on the backs of poor people.

Lord Lea of Crondall: My Lords-

Baroness Falkner of Margravine: My Lords-

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, the noble Lord, Lord Lea, can speak and then the noble Baroness.

Lord Lea of Crondall: My Lords, it is interesting to see the dinosaur tendency coming out on this. Does the Minister agree that multilateral aid in a typical African country is far more effective than seven or eight European countries giving different views on auditing and different views on public expenditure generally?

Baroness Verma: My Lords, we will deliver aid through multilateral agencies as well as through bilateral programmes. However, as the noble Lord is aware, we are going through reviews to make sure that the money spent is best directed towards achieving better outcomes.

Baroness Falkner of Margravine: May I help my noble friend by congratulating her on this Government's stance on international development? Are we going to continue to press for reform of the multilateral institutions, most notably the IMF and the World Bank, so that their recipients are the beneficiaries of better governance?

Baroness Verma: My Lords, my noble friend has raised a very good point. That is why we are determined that any money spent on aid, through both our bilateral and multilateral programmes, is reviewed and spent in the most effective way possible.

Legal Aid


2.53 pm

Asked By Lord Bach

The Minister of State, Ministry of Justice (Lord McNally): My Lords, on 15 November 2010 the Government published proposals for reform of legal aid, including social welfare law. We propose that legal

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aid be retained in the highest priority cases-in debt and housing when someone's home is at immediate risk, for homelessness, and in cases involving serious disrepair. We will retain legal aid in community care cases. Under these proposals legal aid would no longer be routinely available in other social welfare law matters.

Lord Bach: My Lords, I thank the noble Lord for his Answer. I accept that savings have to be made in the legal aid budget, but why, in the Green Paper, are the Government so ruthlessly targeting social welfare law, particularly during a recession? There is to be no legal aid for welfare benefit advice, none for education advice, none for employment advice, and precious little for housing and debt advice. Sixty-eight per cent of the legal help scheme is to be cut. Does the Minister not understand that appropriate legal advice, given early, can and does help solve multiple problems, changes lives, and prevents huge social costs later on? If the noble Lord's party were in opposition today, it would, and he knows it, oppose these proposals with all its might. Why will it not do the same today?

Lord McNally: My Lords, I think the noble Lord gives the clue to his question. As he said very honestly in his response to the original Statement a couple of weeks ago, when in government, the Opposition were planning cuts in legal aid. Whenever one makes cuts, one has to draw the line somewhere, and the Opposition are rightly leaping to the defence of people on the wrong side of that line. We have made a decision in terms of making savings in the legal aid budget and we have done so in a way that we believe targets help to the most vulnerable.

Lord Thomas of Gresford: My Lords, over the past year, more than 300 specialist citizens advice bureaux caseworkers have dealt with 40,000 welfare benefit cases, 60,000 debt cases, 9,000 housing cases and 3,000 employment cases. These specialist CAB caseworkers have been paid for using legal aid funding. Will this continue?

Lord McNally: No, my Lords, but what is clear is that the citizens advice bureaux provide advice. The problem that we faced-and the previous Administration faced it too-is that legal aid is being used to cover a wider range of advice and help which can be better funded and supported in other ways. My honourable friend Jonathan Djanogly is having meetings with representatives of Citizens Advice in the next week. We will be looking at ways of helping citizens advice bureaux and other non-legal providers of advice.

Lord Elystan-Morgan: My Lords, will the Minister face the stark reality of the situation; namely, that there is little point in citizens' fundamental rights being enshrined in statute if those rights cannot be upheld, where appropriate, in the courts of law? Does he recollect the studiedly sarcastic words of a High Court judge spoken 80 years ago? "The courts of this land are open to all, exactly the same as the Ritz hotel".

Lord McNally: Yes, I am familiar with the quotation. The problem is that, in the 60 years since legal aid was introduced, its scope has increased considerably. Like

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the previous Government, we were convinced that as a contribution to cutting government spending we had to find ways of reducing the legal aid bill. I do not pretend that these are easy decisions, but as I said before, the difference between being in opposition and being in government is that you have to take those decisions. We have done so.

Lord Beecham: My Lords, has an estimate been made of the increasing number of people who will be compelled to seek support from advice agencies, including citizens advice bureaux but many others as well, as the result of the withdrawal of legal aid and advice for such a wide range of significant topics? Will the noble Lord indicate whether any estimate has been made of the increased funding that will be required to support those agencies? Will the Government be making provision for that extra funding?

Lord McNally: My Lords, we estimate that the proposals on civil and family legal aid might affect between 460,000 and 512,000 people.

The Earl of Listowel: My Lords, I welcome the early intervention fund set up by the coalition Government. Will the noble Lord consult his colleagues to see whether more can be done to intervene and assist families earlier so that fewer children are taken into local authority care? Does he agree that that would be an important way of saving money in this area of social welfare law?

Lord McNally: I will come to the second half of the earlier question, and I apologise for not answering it. This is precisely the thinking behind our proposals. Under what I will call the old regime of legal aid, far too many cases, particularly in the area of family law, were taken down the legal route. We believe that mediation and other forms of settlement would be far more effective. On the question of the not-for-profit organisations such as citizens advice bureaux and others that are going to be hit by the cut in legal aid, the Government are setting up a transition fund, the announcement of which will be made tomorrow. Affected bodies can apply to this fund. Moreover, as I have said, my honourable friend Jonathan Djanogly is having direct talks with representatives of Citizens Advice to see whether there are ways and means of helping them.

House of Lords: Elections


3 pm

Asked By Lord Grocott

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Lord Taylor of Holbeach: My Lords, I thank the noble Lord for his question and for his extended interest in this subject. A cross-party committee has been set up to produce a draft Bill for House of Lords reform. I understand that the cross-party committee is considering the relationship between the two Chambers and the conventions on which this relationship is based.

Lord Grocott: I am glad the noble Lord, Lord Taylor, has acknowledged that this secret committee, of which we know neither the agenda nor the minutes, is considering this matter. It would be nice if we could be told more about it. I would put it to him that the most crucial recommendation in the report of the Cunningham committee on conventions between the two Houses was this:

"Should any firm proposals come forward to change the composition of the House of Lords, the conventions between the Houses would have to be examined again".

Given that the committee had its report unanimously endorsed by both Houses of Parliament-a pretty rare occurrence-is it not the clear responsibility of the Government to reconvene the committee or establish a similar committee so that this crucial matter of the constitutional impact of an elected House of Lords on the relationship between the two Houses can be debated publicly? It is the very least the Government should provide.

Lord Taylor of Holbeach: We will indeed be debating this and the whole issue of House of Lords reform when we have the report of the committee. The noble Lord may recall that during his debate I answered a question from the noble Lord, Lord Brooke of Alverthorpe, on exactly this issue. I suggested then that he was putting the cart before the horse. We need to see the shape of House of Lords reform, as proposed by the draft Bill, before we are able to consider how the conventions would fit in to that new House. To try to anticipate the reports of the committee would be a great mistake.

Lord Maclennan of Rogart: My Lords, does my noble friend recollect that the Government to which the noble Lord, Lord Grocott, belonged produced a White Paper following the report of the Cunningham committee? It indicated that the relationship between the two Houses that the committee had described would be fit for purpose unless the functions of the new elected House of Lords were changed. Can he say whether "this secret committee", as referred to by the noble Lord, Lord Grocott, is considering functions as well as composition?

Lord Taylor of Holbeach: The functions of the House inevitably depend on its structure. It is a circular argument, is it not? I cannot imagine that the noble Baroness the Leader of the Opposition and my noble friends the Leader of the House and the Deputy Leader of the House would be sitting on this committee without engaging in the whole question of how this House functions and how its conventions would fit in with any reformed House. I can understand the impatience of the House to find out what this committee is producing but we need to have patience until early in the new year when the draft Bill comes before us.

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Lord Cunningham of Felling: My Lords, I suppose I should declare an interest as the person who had the honour to chair the committee. Does the Minister not understand that the committee made it clear-and it and both Houses were unanimous on this point-that, based on the evidence given by the Clerk of the Parliaments and the Clerk of the House of Commons among others, if there was an elected Chamber the conventions governing the relationships between the two Houses were bound to be called into question by those in the second Chamber who had a mandate equal to that of those in the superior Chamber at present?

Lord Taylor of Holbeach: I thank the noble Lord for his concise précis of a complex report; it is exactly the basis of my arguments in answer to the Question. Of course the conventions will depend on the shape of this House following an election. As I said in answer to the noble Lord, Lord Grocott, the issue of the relationship between the two Chambers and the conventions on which it is based are being considered by the Joint Committee.

Lord Waddington: Does my noble friend agree that there would be no point in creating a new Chamber which could claim democratic legitimacy and then saying that it should have fewer powers than the existing House?

Lord Taylor of Holbeach: Precisely, my Lords.

Lord Pannick: How can the conventions of the House be properly considered by the committee with no representation whatever on it from the Cross Benches?

Lord Taylor of Holbeach: This has been the subject of earlier questions and the noble Lord will know the answer: it is a cross-party committee and the Cross-Benchers are not constituted as a party. However, they add immeasurably to the value of the House and I am sure that all representatives of this House and the parties will be mindful of that fact.

Arrangement of Business


3.06 pm

Baroness Anelay of St Johns: My Lords, immediately after the Business of the House Motion, my noble friend Lord Sassoon will repeat a Statement on the Autumn Forecast. The Grand Committee on the Budget Responsibility and National Audit Bill will commence five minutes after the conclusion of the Statement.

Business of the House

Motion on Standing Orders

3.07 pm

Moved by Lord Strathclyde

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The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, in light of the extremely unusual amendment in the name of the noble Lord, Lord McKenzie of Luton, it may be helpful if I say a few words to set out the Government's position.

The Motion in my name seeks the agreement of the House to suspend Standing Order 46 on Tuesday 7 December to allow the remaining stages of the Savings Accounts and Health in Pregnancy Grant Bill to be taken formally immediately after Second Reading. This is necessary because Standing Order 46 prevents more than one stage of a Bill being taken in any one day. This is a perfectly standard Motion for a Bill that has been certified as a money Bill by Mr Speaker in another place.

The established practice of the House in respect of money Bills is to have a Second Reading debate and then to take the remaining stages formally. Why do we do this? Because the Parliament Act 1911 restricts the powers of the House of Lords in relation to money Bills. Under that Act this House has one calendar month to pass a money Bill without amendment. If it does not do so, the Bill is given Royal Assent without the agreement of this House. If this House passes amendments, the other place, quite properly, totally disregards them if it chooses to do so. This House does not normally go into Committee on a money Bill because there is no point and successive Governments have chosen not to waste the time of the House in this way.

With the agreement of the usual channels, the Government have set aside a whole day for the Second Reading debate next week. Ultimately, it does not matter whether the Motion of the noble Lord, Lord McKenzie is agreed to; it does not make any difference. We can amend the Bill, re-amend it or reject it outright, but it will become law anyway in exactly its current form. However-and this is the serious part-apparently, after 99 years of this House respecting both the spirit and the letter of the Parliament Act 1911, the Opposition feel that now is the time to change that. In nearly 100 years this House has never seen an opposition challenge to money Bill procedures under the Parliament Act. The House might forgive the noble Lord, Lord McKenzie of Luton, for inexperience in such matters if he were new to the Front Bench opposite, but until just seven months ago he was a Minister of the Crown. He and his colleagues know exactly how these things should work.

Only last week the House considered two money Bills. The Opposition did not see fit to challenge the certification of Mr Speaker on those Bills. The noble Lord even responded for the Opposition on one of them. There were no Motions on the Order Paper last week-those Bills were taken through their remaining stages formally, in the normal way, after a Second Reading, with the Opposition's agreement-so the established practice of dealing with money Bills was perfectly acceptable to the Opposition last week, but not, it seems, this week. Indeed, it is even worse than that. The way in which this House deals with money Bills was perfectly acceptable to the Opposition when they were in Government. Between 1997 and 2010, this House considered a total of 64 Bills that were

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certified as money Bills by Mr Speaker in the other place. Over 40 per cent of them were in the last Parliament alone. We disagreed with many of these Bills; we felt that the financial policies of the party opposite would lead the country to financial ruin, as it almost did, but how many of these Bills were taken through substantive stages after Second Reading, or were subject to a challenge from the then Opposition on grounds of process? None at all. It was not seen as this House's way of doing things, so why is it seen as the way for us to proceed now?

There is a feeling from this side of the House of, "Here we go again". The Opposition are clearly set on continuing their procedural mischief-making. A clear pattern has emerged. Back in June we had a Motion to refer the Local Government Bill to the Examiners, two weeks ago we had a similar Motion on the Parliamentary Voting System and Constituencies Bill, today we have an unprecedented Motion on a money Bill, and tomorrow yet another unprecedented procedural Motion is due to appear on the Order Paper.

A few weeks ago I asked from this Dispatch Box whether the party opposite wanted to be a serious party of opposition, or whether it wanted to see the kinds of procedural ploys, wheezes and games that we see again today. The answer is becoming increasingly clear-the party opposite would prefer to manufacture time-wasting debates than to get on with the important business of the Public Bodies Bill on today's Order Paper. They want to make this place like another place: a House that spends hour after hour on procedural debate. I have to tell the noble Lord that this vision for the House is not shared by the majority of noble Lords.

There is no issue, and there is no need to challenge the way in which this House deals with money Bills; this is nothing but an attempt at opportunism. I am sure that noble Lords will see it for what it is, and I beg to move.

Amendment to the Motion

Moved by Lord McKenzie of Luton

Lord McKenzie of Luton: My Lords, the purpose of the amendment is to enable your Lordships to have a proper Committee stage of the Savings Accounts and Health in Pregnancy Grant Bill rather than just the usual, truncated process with, in effect, only a Second Reading, as proposed by the noble Lord, Lord Strathclyde. Indeed, I thought that the latter part of the noble Lord's contribution was, frankly, unworthy. I had hoped that he would deal with the issue on the basis of the argument advanced. This is not a wheeze; it is not a ploy; it is not mischief making or opportunism. The

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amendment would require a timetable in which consideration of the Bill was concluded within one month of its introduction into your Lordships' House, which in effect means by the time that the Commons rises for Christmas.

The Bill has been certified as a money Bill by the Speaker of the House of Commons. The amendment seeks not to challenge that certification but to deal with the consequences of the Bill's being so designated. The noble Lord, Lord Strathclyde, said that we have not sought to do so in similar debates on recent Bills that have gone through your Lordships' House. Indeed we have not-as he outlined, I participated in such a debate just last week-but this is a different Bill. We are trying to achieve a Committee stage only for the Bill before us.

The noble Lord rightly cited the Parliament Act, but the Companion says:

"If a money bill, which has been passed by the Commons and sent up to the Lords at least one month before the end of a session, is not passed by the Lords without amendment within a month after it is sent to them, the bill shall, unless the Commons direct to the contrary, be presented for Royal Assent without the consent of the Lords. This does not debar the Lords from amending such bills provided they are passed within the month, but the Commons are not obliged to consider the amendments".

Why on earth the noble Lord seeks to pre-empt what we might do-whether the Bill might be amended if we had a Committee stage, and indeed what the Commons' reaction to that might be-is a little strange. We do not see the Committee process as having no point.

The Bill will do three things: it will stop any further government contributions to child trust funds; it will end the savings gateway; and it will abolish the health in pregnancy grant. It was somewhat surprising to us that a Bill of this nature was designated as a money Bill, particularly given that the setting up of each of these arrangements was by way of separate primary legislation that included all the usual stages in your Lordships' House. It was also a surprise to our colleagues in another place. A reading of their proceedings will illustrate their clear belief that there would be the opportunity to continue to advance the argument for some changes to the Bill at this end and, in so far as I can tell, the Minister, Mr Hoban, did not offer a contrary view.

The Bill's being certified as a money Bill denies this House the full opportunity to bring its knowledge and experience to bear on major matters of social policy concerning poverty, family and child welfare and the health of pregnant women. I do not propose to speak in detail to the range of issues that might be raised in Committee, but I will say that that particularly denies the opportunity to develop and amend how the Bill impacts on looked-after children. For example, the position of looked-after children has been the subject of ongoing discussion, initiated by Paul Goggins MP, about the hiatus between the abolition of child trust funds and the promised introduction of junior ISAs. That is very much work in progress. The discussion, involving the Minister, recognised that looked-after children have only the state or their corporate parent to make the equivalent of parental contributions to these savings vehicles.

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As we know, it is often the case that issues emerge during the consideration of legislation in another place. Amendments may be proposed, arguments advanced and rebuffed and then reconsidered and reformulated for consideration here. Knowing that there can be a second bite at the cherry-a chance for some reflection, challenge and consensus building-has proved an important element in improving legislation. We know that some stakeholders are particularly frustrated at knowing late in the day that the House of Commons was possibly their only chance to improve legislation. Noble Lords may have heard from Action for Children, Barnardo's, the Zacchaeus 2000 Trust, Gingerbread and the Family and Parenting Institute. We are seeking the opportunity for the Bill to have a proper Committee stage so that those matters that some consider to be unfinished business can be properly examined. The rules allow it; we know it must be done expeditiously in order not to fall foul of the one-month rule; and we would co-operate in the timely scheduling of the Bill's stages.

This matter raises a broader issue. As I have made clear, we do not seek to challenge today a certification of the Speaker, but we need to understand it and its possible future ramifications for our deliberations. We understand that this is a money Bill because, although the setting up of child trust funds, the savings gateway and the health in pregnancy grant were matters of policy, a parliamentary measure that only withdraws funding for them is a money Bill, notwithstanding the fact that removing funding involves prioritisation-and therefore policy changes-and will bring to an end these particular policy mechanisms. We fear that such designation paves the way for the Government to rely on the cloak of deficit reduction in a way that would deny your Lordships the opportunity fully to scrutinise swathes of policy, from the withdrawal of education maintenance allowance to changes to the benefits system. That would deny this House what it does best. This is a matter to reflect on both here and in another place.

For today, we simply ask to have the opportunity to have a proper Committee stage on a Bill that has significant social policy ramifications. If we cannot achieve even that, what hope is there for the future? Let me be clear that the amendment seeks not to challenge the Speaker's decision-the amendment accepts the decision-but to apply to the full, and without expanding, the restricted opportunities available to this House when dealing with a money Bill. The amendment does not seek to frustrate the timetable of the Government. If we do not pass this Bill by Christmas Recess, the Bill will go for Royal Assent anyway. The amendment would not undermine the thrust of the Government's deficit reduction plan, whatever our disagreement with that plan. This is about us-all parties and none-having a chance to input into important policy changes that will affect the lives of many young people and families. That is, after all, why we are here. I beg to move.

Baroness Hollis of Heigham: My Lords, I support my noble friend. I do not want to go over the ground that he has laid out on why, on this particular measure, he is not challenging the Speaker's ruling that this is a

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money Bill, even though I find it very difficult to understand why a policy established by primary legislation requiring expenditure could then be revoked under the description of a money Bill. I say this because almost every piece of social security legislation could in future fall under the remit of being labelled a money Bill and therefore not available for debate or scrutiny in this House.

Let me give two examples, in which I suggest that this House has more experience and more to offer on this debate than most other agendas, and probably more than the other place. We know, for example, that there is a question over whether the mobility component for people in long-term residential care will be removed. In previous debates my noble friend Lady Wilkins and the noble Baroness, Lady Campbell, spoke passionately about that. Such a move would remove money resulting from a policy established in primary legislation back in 1992, by the then Government, which we all supported. Under this precedent, that could be labelled a money Bill, and notwithstanding the expertise of this House in disability matters, about which this House feels very strongly indeed, we would not be permitted to debate it. It not just about this House and about Parliament-hundreds of thousands of disabled people would be affected as a result.

In another example, a week or two ago I led a debate on housing. There were half a dozen of us on these Benches, half a dozen from the Lib Dem Benches, who made very powerful speeches, half a dozen from the Cross Benches, and one person, the noble Lord, Lord Brooke, from the Conservative Benches. We analysed forensically the issues associated with changes in housing, and I welcome the fact that the Government appear to be listening to some of those concerns. In future, if this is a precedent, nearly all those issues that we debated would be, and could be, classified as a part of a money Bill and not available for this House to discuss, explore, revise and, if necessary, to ask the other place to think again about.

This is extraordinarily dangerous. There is hardly any piece of government policy that does not involve expenditure. This means that, in theory, almost every piece of policy could be regarded as a money Bill and this House would be denied scrutiny of it. I have given just two examples from social security but it could affect a lot of local government funding as well. I hope that your Lordships will today accept my noble friend's amendment; and that perhaps consultations could take place between the two Houses to make sure that the other House realises the seriousness of the precedent that could be set, and that we would be walking away from a major part of our responsibility to the public we seek to serve.

Lord Trefgarne: My Lords, I am not by any means the longest serving Member of your Lordships' House but I have been here for 48 years. This is the first time in all of those 48 years that I have heard a challenge to the Speaker's certification of a Bill as a money Bill. The amendment is quite inappropriate. It seeks to drive another coach and horses through our constitutional protections-so much a feature of the previous Government. The amendment should be quickly withdrawn.

29 Nov 2010 : Column 1275

The Earl of Listowel: As vice-chair of the Associate Parliamentary Group for Children and Young People In and Leaving Care, I find myself in sympathy with the noble Lord, Lord McKenzie of Luton. The interests of such children and young people need to be considered very carefully. I am concerned that so little time is being allowed to debate the impact of the Bill on these young people. I would grateful to learn from the Minister how it will affect the trust funds for children in care, established by the previous Government, and how the Minister plans to make up for any loss to young people leaving local authority care. Many of us have felt ashamed of our historic treatment of young people in local authority care. It is beyond any doubt that their interests have been overlooked. It was deeply gratifying to see the seriousness with which the previous Government took the welfare of this neglected group and it is encouraging to see the coalition sustaining this.

Ten years ago, only 1 per cent of young people in local authority care went to university. Recent research has highlighted that 8 to 9 per cent are now accessing higher education. That is still disappointing but it is a more than 800 per cent improvement on the past. The lesson is that many of these children can do far better in life than we have allowed. We need to be better at keeping their interests close to our hearts. Given their chaotic early experiences in their families, and often in care, it is vital to offer young people leaving care all the help we can as-we hope-they recover from this chaos and find direction for their lives. That is why the trust fund for children in care is so important to these young people. It helps some of them to make a fresh start and makes up in a small way for the fact that they are often left high and dry, without the support our own children would receive from us.

I support the noble Lord's amendment. I understand the Minister's predicament; there is no room for complacency about reducing the deficit. However, we have let these children down too often before by not placing their interests high enough in our priorities. I would welcome information from the Minister on what steps he and his colleagues may be considering to protect the interests of these children once this legislation is passed. A meeting to discuss this would be very welcome.

Baroness Butler-Sloss: My Lords, I have some difficulty in understanding the purpose of this amendment. I understand that the Leader of the House has told us that, regardless of what we do in this House, the other place has absolutely no need to take any account of us because this is a money Bill. If it were not a money Bill, I would have some sympathy with the noble Earl, Lord Listowel, and the speakers from the Labour Benches. However, since this is a money Bill, I cannot see what good we can do or why one day would not be sufficient to deal with all these matters. Everybody can-to use a colloquialism-sound off in one day totally effectively when we are dealing with a money Bill.

Lord Grenfell: My Lords, this is a very difficult situation. I am totally convinced that this is not a money Bill and it is disgraceful that it is being presented

29 Nov 2010 : Column 1276

as such. However, we are faced with a different problem: the certification by the Speaker that it is a money Bill. I fully agree with my noble friend Lady Hollis of Heigham who says that this would set an unfortunate precedent. I fully agree with those who say that this Bill deserves a proper examination in Committee. However, we are faced with a fact, which is that it has been certified as a money Bill.

We should be thinking about whether there is some way in which we can have a proper discussion-perhaps in a Joint Committee-on what a money Bill is, because that is the problem. It is open to abuse if one side says that this is a money Bill and the other side says it is not. We need to have a proper discussion of what a money Bill is and get it settled once and for all.

Lord Strathclyde: My Lords, it might be useful if I added a few thoughts from the Government Front Bench. I totally respect all of those who spoke in favour of the Bill and those who had problems on issues with the Bill. At some moments it sounded as if we had already started the Second Reading of the Bill rather than dealing with the Motion on the Order Paper. I have no detailed view on the different aspects of the Bill. The right time to deal with those would be on Second Reading.

The point in my introduction was made-if I may say so-far more ably by the noble and learned Baroness, Lady Butler-Sloss. It does not matter if we have this Committee stage. In the words of the noble Baroness, Lady Hollis of Heigham, we can explore, we can advise, we can amend, we can even reject, and we can ask the House of Commons to think again. The House of Commons is under no obligation whatever to deal with any of these issues. That is the nub of my argument. There is no point doing any of these things because it is a waste of our time. Let us spend our precious time on things that are useful and have an impact rather than on those that do not. I have very little further to add and in light of what I and others have said, I call upon the noble Lord, Lord McKenzie, to withdraw his amendment.

Lord Richard: My Lords, it is quite clear-to me at any rate-that there is a genuine issue here. One could argue whether the Speaker should or should not have certified it. The fact is that he did certify it and, therefore, certain consequences flow from that, which I accept. However, the danger as it is perceived, certainly by me, and, I suspect, by many on this side, is that that certification will become too gross, happen too often and be too restrictive as far as this House is concerned.

This issue is important in relation to this Bill. However, it is even more important in relation to a whole host of other Bills coming up. If one wishes to certify something as a money Bill, you can invariably find some excuse for doing so, as my noble friend Lady Hollis said. There is no point in the noble Lord shaking his head. He knows that as well as I do. So I ask him very simply: can he put his considerable weight behind an attempt to get some clarification on what is or is not a money Bill by negotiations or discussions between this House and the other place? Otherwise, we will have this issue coming up again and again, which would be extraordinarily unhealthy.

29 Nov 2010 : Column 1277

The Countess of Mar: My question has a bearing on what the noble Lord, Lord Richard, has just said. Does the Speaker in another place make a decision entirely on his own or with legal advice from the Clerks in the House of Commons?

Lord Elystan-Morgan: My question is very much along the same lines. It goes to the root of the question raised by the noble Baroness, Lady Hollis. Is she right when she says that the mere fact of a Bill involving public expenditure makes it possible for it to be certified as a money Bill? If that is so, then it is extremely serious and of massive constitutional relevance.

Is it then the case-I do not have the wording of the 1911 Act before me-that since 1911 it has been a matter of restraint not to certify possibly thousands of Bills that might have been money Bills but for good reason have not been so regarded? Am I right in thinking that although the 1911 Act very considerably curtails the effect of any amendment made by this House, there is not one word in it that suggests that we should not discuss a money Bill?

Lord Strathclyde: My Lords, that is precisely why the Government have allocated a whole day for discussion and debate on this Bill. There will be a very full Second Reading day on it, especially given this debate. It is right that this House's voice should be heard, but it cannot be heard more than the Parliament Act 1911 allows. This is so well precedented over the past 99 years that even I, who like history and historical anecdotage in the House of Lords, find this whole debate extraordinary.

The noble Countess, Lady Mar, and the noble Lord asked about the Speaker's role in all this. Parliament Acts are a long-standing part of the constitutional settlement of the United Kingdom. Under the Parliament Act 1911, Mr Speaker is under a statutory duty to certify a Bill a money Bill if, in his opinion, it contains provisions dealing with national taxation, public money, loans or their management. The important words there are "a statutory duty". It is not a choice; Mr Speaker has no discretion in the matter. That goes to answer the point of the noble Lord, Lord Richard, who gave the impression that somehow there was discretion in this matter, and that I could say to the Speaker, "On balance, old boy, could you certify rather fewer money Bills?". That is not the case. It is done on advice given by Mr Speaker's Clerks on the basis of a statutory provision. The decision to certify this Bill a money Bill is taken entirely by Mr Speaker in another place. We accept the consequences of that because of the 1911 Act and all the precedents that have been set over the past 100 years. In my opening speech, I talked about the 60-odd money Bills that have arisen in the past 13 years. The outrage on the part of noble Lords opposite is extraordinary given that, seven months ago, they were sitting on this side of the House but never once did they scratch their heads and say, "These money Bills are a bit odd. We really should repeal the 1911 Act".

Baroness Royall of Blaisdon: I do not dispute the fact that, when in government, we issued a number of Bills that were money Bills; I think the noble Lord said

29 Nov 2010 : Column 1278

that there were 30. However, the difference is that we knew that a Bill had been certified a money Bill before it ended its legislative process in the House of Commons. Can the noble Lord tell me the last occasion on which a Bill was certified a money Bill at the very end of its legislative process in the House of Commons? That is a big distinction, as the House of Commons understood that this Bill would go through all its legislative process in this Chamber.

Lord Strathclyde: My Lords, I am very happy to answer questions on this from other noble Lords as well, if they so wish. However, I find it very difficult to help the noble Baroness the Leader of the Opposition on this matter. It is as if noble Lords assume that I had greater knowledge than I have of what decisions were being taken in another place on the certification of money Bills, or when the decision was taken. My understanding is that it is a decision not of the Government but of Mr Speaker, taken on advice from his Clerks. I dare say that the stage at which he makes that decision is up to the internal procedures of another place. The point about this House is that we have to deal with the effects of the decision that has been taken in another place. We have no discretion in the matter. If it is certified a money Bill, a money Bill it is. If it is a money Bill, whatever we do to it matters not a jot because another place can ignore that comprehensively.

Baroness Hollis of Heigham: Will the noble Lord ensure, not just as leader of the government party, but as Leader of the whole House, that future legislation, such as social security legislation, will not come up here with the imprimatur that means that we cannot discuss disability issues and the like?

Lord Strathclyde: My Lords, it is very hard to answer that question as Leader of the whole House without looking back in the mists of time at the reasons for the 1911 Act. The reason we have had the privilege of dealing with monetary and taxation legislation is in the history of 100 years ago. With the best will in the world, I have no intention of reopening that any more than any of my predecessors have done over the last 99 years.

Lord Lea of Crondall: Why was the climate change Bill not a money Bill?

Lord Strathclyde: My Lords, I suppose it was because Mr Speaker was not advised by his Clerks that it was a money Bill. If it had been a money Bill, we would have disposed of it rather more quickly than we did.

Lord McKenzie of Luton: My Lords, this debate has been interesting, but mostly not about the substance of the amendment that was moved. Most noble Lords, I think, were exercised about the definition of a money Bill. I made clear when I moved my amendment that, except for the purposes of the amendment, it has been certified a money Bill, and I do not seek to challenge that, as the noble Lord, Lord Trefgarne, suggested.

On the definition of a money Bill, the preamble to the bit about taxation et cetera talks about measures that contain "only provisions dealing with" certain issues. One of the points that arise from this particular

29 Nov 2010 : Column 1279

example is whether the ability to corral a few things that are only about taxation, and not to have them as you might naturally otherwise have them-as part of a broader Bill-opens up the possibility of getting more money Bills certified than would otherwise be the case. However, I agree with the range of speakers-the noble Lords, Lord Richard, Lord Grenfell and Lord Elystan-Morgan, and the noble Baroness, Lady Hollis-who say that it would be good to have some sort of process to try and better understand when a money Bill is a money Bill and what the rules are that apply to that.

The noble Lord, Lord Strathclyde, said that this is all a waste of time and that it is pointless, but if he read the 2007 version of the Companion, he would see that paragraph 7.189, on money Bills, says:

"On a few occasions minor amendments have been made by the Lords to such bills and have been accepted by the Commons".

This presumption that it is all a waste of time, that nothing could ever happen that could change the Bill, is simply not the case. Even if it were, if it was felt that matters should be pressed on the Government in relation to a Bill, why should we not avail ourselves of the opportunity to do so? I stress that my amendment does not seek to change the rules at all or to say that the House of Commons Speaker was wrong in certifying it as a money Bill; it merely seeks to take advantage of what the Companion enables us to do as a House.

The noble and learned Baroness, Lady Butler-Sloss, said that she did not understand if this did not lead anywhere. In any event-this is the point made by the noble Lord, Lord Strathclyde, as well-we will have a full day on a Second Reading debate. However, there is a difference between a debate on the Bill at Second Reading and in Committee, as all noble Lords know. The Committee stage is an iterative process, a chance to press the Minister in detail on a range of points. A one-day Second Reading does not provide the same facility. It provides an opportunity for some broad debate but not for the detailed scrutiny that we believe this Bill requires.

As ever, my noble friend Lady Hollis got it absolutely right; if we do not take this opportunity to try to secure at least a Committee stage on this money Bill, what hope is there for dealing with a raft of very profound provisions coming down the track that the Government would corral in such a way that the Speaker would designate them money Bills?

I believe that the Deputy Chief Whip wishes to speak.

Lord Shutt of Greetland: My Lords, we have a medical emergency in one of the Division Lobbies. I beg to move that the House do now adjourn for 10 minutes.

3.45 pm

Sitting suspended.

3.53 pm

Lord McKenzie of Luton: My Lords, in the circumstances, it is time to bring this to a close. I do so by reiterating that my amendment is not about challenging

29 Nov 2010 : Column 1280

the decision of the Speaker-it accepts it. It simply seeks to take the full range of opportunities, in so far as they exist, to scrutinise this Bill, given that it is and has been designated a money Bill. It does not frustrate the Government's timetable because, if we do not get it through within a month of arrival in your Lordships' House, it goes for Royal Assent in any event.

Given the substance of the Bill, this is a very small ask of your Lordships' House, and I believe we ought to take this opportunity to have a full Committee stage on this Bill. Given the debate, I beg leave to test the opinion of the House.

3.54 pm

Division on Lord McKenzie of Luton's amendment to the Motion.

Contents 169; Not-Contents 202.

Lord McKenzie of Luton's amendment to the Motion disagreed.

Division No. 1


Adams of Craigielea, B.
Adebowale, L.
Ahmed, L.
Anderson of Swansea, L.
Andrews, B.
Armstrong of Hill Top, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L. [Teller]
Beecham, L.
Berkeley, L.
Billingham, B.
Bilston, L.
Blood, B.
Boateng, L.
Boothroyd, B.
Borrie, L.
Bragg, L.
Brennan, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Brooks of Tremorfa, L.
Browne of Ladyton, L.
Campbell-Savours, L.
Carter of Coles, L.
Christopher, L.
Clancarty, E.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Corbett of Castle Vale, L.
Crawley, B.
Cunningham of Felling, L.
Davies of Coity, L.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Dixon, L.
Donaghy, B.
Drake, B.
Dubs, L.
Eatwell, L.
Elystan-Morgan, L.
Erroll, E.
Evans of Watford, L.
Falconer of Thoroton, L.
Falkender, B.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Finlay of Llandaff, B.
Ford, B.
Foulkes of Cumnock, L.
Gale, B.
Gavron, L.
Giddens, L.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grantchester, L.
Griffiths of Burry Port, L.
Grocott, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Hayter of Kentish Town, B.
Healy of Primrose Hill, B.
Henig, B.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St Davids, B.
Hoyle, L.
Hughes of Stretford, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones of Whitchurch, B.
Jordan, L.
Judd, L.
Kennedy of Southwark, L.

29 Nov 2010 : Column 1281

King of West Bromwich, L.
Kingsmill, B.
Kinnock, L.
Kinnock of Holyhead, B.
Kirkhill, L.
Knight of Weymouth, L.
Layard, L.
Lea of Crondall, L.
Liddell of Coatdyke, B.
Liddle, L.
Lipsey, L.
Listowel, E.
Low of Dalston, L.
McAvoy, L.
McConnell of Glenscorrodale, L.
McDonagh, B.
Macdonald of Tradeston, L.
McFall of Alcluith, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
McKenzie of Luton, L.
Masham of Ilton, B.
Massey of Darwen, B.
Mawson, L.
Maxton, L.
Meacher, B.
Morgan, L.
Morgan of Huyton, B.
Morris of Handsworth, L.
Morris of Yardley, B.
Moser, L.
Myners, L.
Nye, B.
Parekh, L.
Patel of Blackburn, L.
Patel of Bradford, L.
Pendry, L.
Peston, L.
Pitkeathley, B.
Plant of Highfield, L.
Prosser, B.
Quin, B.
Ramsay of Cartvale, B.
Rea, L.
Reid of Cardowan, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Scotland of Asthal, B.
Scott of Foscote, L.
Sherlock, B.
Simon, V.
Smith of Basildon, B.
Smith of Leigh, L.
Soley, L.
Stevenson of Balmacara, L.
Stone of Blackheath, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Taylor of Bolton, B.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Touhig, L.
Triesman, L.
Tunnicliffe, L. [Teller]
Turnbull, L.
Wall of New Barnet, B.
Warner, L.
Wedderburn of Charlton, L.
West of Spithead, L.
Wheeler, B.
Whitaker, B.
Wilkins, B.
Williams of Elvel, L.
Wills, L.
Woolmer of Leeds, L.
Young of Norwood Green, L.


Addington, L.
Alderdice, L.
Allan of Hallam, L.
Allenby of Megiddo, V.
Anelay of St Johns, B. [Teller]
Astor of Hever, L.
Attlee, E.
Avebury, L.
Ballyedmond, L.
Barker, B.
Bates, L.
Bell, L.
Benjamin, B.
Black of Brentwood, L.
Blackwell, L.
Bonham-Carter of Yarnbury, B.
Boswell of Aynho, L.
Bottomley of Nettlestone, B.
Bradshaw, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Browning, B.
Burnett, L.
Buscombe, B.
Butler-Sloss, B.
Cameron of Dillington, L.
Campbell of Alloway, L.
Carrington, L.
Cathcart, E.
Cavendish of Furness, L.
Chadlington, L.
Chorley, L.
Clement-Jones, L.
Cobbold, L.
Colwyn, L.
Cope of Berkeley, L.
Courtown, E.
Craig of Radley, L.
Craigavon, V.
Crickhowell, L.
Cumberlege, B.
De Mauley, L.
Deben, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dundee, E.
Eaton, B.
Eccles, V.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Falkland, V.
Falkner of Margravine, B.
Faulks, L.
Fearn, L.
Fellowes, L.
Fookes, B.

29 Nov 2010 : Column 1282

Fowler, L.
Freud, L.
Garden of Frognal, B.
Gardiner of Kimble, L.
Gardner of Parkes, B.
Geddes, L.
Glasgow, E.
Glentoran, L.
Goodhart, L.
Goodlad, L.
Grey-Thompson, B.
Griffiths of Fforestfach, L.
Hamilton of Epsom, L.
Hamwee, B.
Hanham, B.
Harries of Pentregarth, L.
Henley, L.
Higgins, L.
Hill of Oareford, L.
Hodgson of Astley Abbotts, L.
Hooper, B.
Howard of Rising, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hunt of Wirral, L.
Hurd of Westwell, L.
Hussein-Ece, B.
James of Blackheath, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Jopling, L.
Kakkar, L.
Kimball, L.
King of Bridgwater, L.
Knight of Collingtree, B.
Laming, L.
Lamont of Lerwick, L.
Lawson of Blaby, L.
Lee of Trafford, L.
Lindsay, E.
Liverpool, E.
Lloyd of Berwick, L.
Lucas, L.
Luke, L.
McColl of Dulwich, L.
Macdonald of River Glaven, L.
Macfarlane of Bearsden, L.
MacGregor of Pulham Market, L.
Maclennan of Rogart, L.
McNally, L.
Maples, L.
Mar, C.
Mar and Kellie, E.
Marland, L.
Mawhinney, L.
Mayhew of Twysden, L.
Methuen, L.
Miller of Hendon, B.
Montgomery of Alamein, V.
Moore of Lower Marsh, L.
Moran, L.
Morris of Bolton, B.
Naseby, L.
Neuberger, B.
Neville-Jones, B.
Newby, L.
Newlove, B.
Newton of Braintree, L.
Noakes, B.
Northover, B.
Oakeshott of Seagrove Bay, L.
O'Cathain, B.
O'Neill of Bengarve, B.
Pannick, L.
Parminter, B.
Patten, L.
Phillips of Sudbury, L.
Plumb, L.
Popat, L.
Ramsbotham, L.
Reay, L.
Redesdale, L.
Rees of Ludlow, L.
Rees-Mogg, L.
Rennard, L.
Ritchie of Brompton, B.
Roberts of Conwy, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Rotherwick, L.
Rowe-Beddoe, L.
Ryder of Wensum, L.
St John of Fawsley, L.
Sassoon, L.
Scott of Needham Market, B.
Seccombe, B.
Selborne, E.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheikh, L.
Shephard of Northwold, B.
Shutt of Greetland, L. [Teller]
Skelmersdale, L.
Slim, V.
Spicer, L.
Stedman-Scott, B.
Stevens of Ludgate, L.
Stewartby, L.
Strathclyde, L.
Swinfen, L.
Taverne, L.
Taylor of Holbeach, L.
Tenby, V.
Teverson, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
Trefgarne, L.
Trumpington, B.
Tyler, L.
Ullswater, V.
Verma, B.
Waddington, L.
Wakeham, L.
Walker of Aldringham, L.
Wallace of Saltaire, L.
Walmsley, B.
Walpole, L.
Warnock, B.
Warsi, B.
Wei, L.
Wilcox, B.
Williamson of Horton, L.
Willis of Knaresborough, L.
Wilson of Tillyorn, L.
Younger of Leckie, V.

Motion agreed.

29 Nov 2010 : Column 1283

Autumn Forecast


4.11 pm

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, with the leave of the House, I should like to repeat a Statement made by my right honourable friend the Chancellor of the Exchequer in another place. The Statement is as follows.

"I would like to make a Statement regarding the Office for Budget Responsibility's first autumn forecast. I will also inform the House about further measures that the Government are taking to support economic growth, including the new growth review launched today and a far-reaching programme of reforms to our corporate tax system. Following yesterday's announcement by European Finance Ministers, I would also like to take the first opportunity to update the House about the Irish situation and the UK's involvement.

First, on the OBR's autumn forecast-copies of which were made available in the Vote Office earlier today-we should take a moment to recognise the significance of this occasion and the practical demonstration of this Government's commitment to transparency and independent forecasting. Today is the first time that Members of this House will engage in debate about an autumn forecast that has been produced by the independent Office for Budget Responsibility-rather than conjured up by the Chancellor of the Exchequer-and made available to read two hours before the Statement. This is also the first forecast by the new independent chair of the OBR, Robert Chote, with the other members of the Budget Responsibility Committee, Stephen Nickell and Graham Parker, whose appointments were approved by all Treasury Select Committee members from both sides of this House. The country can have full confidence in the independence of these members.

The OBR report published today includes some 150 pages of information-an unprecedented level of detail and transparency-much of which is of the kind that was available to previous Governments but never published. I would like to thank the Budget Responsibility Committee and the staff of the OBR for their hard work in putting together this autumn forecast. I hope that we will now entrench this major improvement in the making of fiscal policy by passing the legislation currently before Parliament. While today's figures are, of course, independent, they are still just forecasts and we must treat them with the degree of caution with which one should treat any forecast. Indeed, the OBR is explicit about that. The report illustrates the uncertainty surrounding any economic forecasts with the use of fan charts rather than claiming the infallible certainty that my predecessors asserted when they provided their forecasts. Indeed, the only thing that was infallible and certain was that those political forecasts were wrong.

With that caution in mind, let me turn to the forecast. After the deepest recession since the war, the greatest budget deficit in our peacetime history and the biggest banking crisis of our lifetime, recovery was always going to be more challenging than after previous recessions, but the message from the Office for Budget

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Responsibility is that Britain's economic recovery is on track. The economy is growing; more jobs are being created; and the deficit is falling. The OBR's central forecast is for sustainable growth of more than 2 per cent for each of the next five years, with employment rising in each and every year. At a time when markets are gripped by fears about government finances across Europe, today we see that the Government were absolutely right to take the decisive action to take Britain out of the financial danger zone. Britain is on course both to grow the economy and to balance the books-something that some people repeatedly said would not happen.

Let me take the House through the detail of the forecast. The forecasts for the economy are broadly in line with those produced for the June Budget, despite the more challenging international conditions. I would also like to point out that they are very similar to the European Commission forecast for the UK, which is also published today. They forecast that Britain will grow faster over the next two years than Germany, France, Japan and the United States of America as well as faster than the average for the eurozone and the EU. The OBR forecasts real GDP growth of 1.8 per cent this year, 2.1 per cent next year, 2.6 per cent in 2012, 2.9 per cent the year after that, 2.8 per cent in 2014 and 2.7 per cent in 2015.

Growth this year is now expected to be considerably higher than was forecast in June. In the OBR's judgment, some of this improvement is likely to be permanent and some of it a temporary impact of stock building. As a result, the OBR forecasts that the rate of growth next year will be 0.2 percentage points below the forecast that the OBR made in June. The OBR also predicts above-trend growth for the four years after that. The level of GDP, or the overall size of our economy, is forecast to be around half a percentage point higher next year than was forecast in June and, indeed, higher throughout the whole forecast period.

Some have made predictions of a so-called 'double-dip' recession. While the OBR points out that,

its central view is that there will be no double-dip recession. Its forecast is for growth next year of more than 2 per cent, and it expects that the slowest quarter of growth, in the first quarter of next year, will be 0.3 per cent, rising back up to 0.7 per cent by the last quarter of next year. The OBR also forecasts that CPI inflation will fall from 3.2 per cent in 2010 to 1.9 per cent in 2012, once the short-term effects of the VAT rise and other temporary factors fall away.

Crucially, the OBR forecasts a gradual rebalancing of the economy as we move away from an economy built on debt to an economy where we invest and export-again, something that some people said would not happen. The OBR expects more demand to come from business investment, which is set to grow by more than 8 per cent for each of the next four years, as well as from exports, which are expected to grow on average by more than 6 per cent per year. This new model of sustainable economic growth will rebalance the economy towards investment and exports and away from an unhealthy dependence on private debt and public deficits. We will thus bring to an end the

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unsustainable situation that saw families save less and less year after year so that they ended up, in the words of the OBR report today,

The OBR has also published today a full forecast for the labour market-something that, I point out, previous Chancellors chose not to publish. Employment is forecast to grow in every year of this Parliament. Total employment is expected to rise from 29.0 million to 30.1 million-that is more than 1 million additional new jobs. On unemployment, thanks to faster than expected growth in the economy, the OBR now expects the rate to be slightly lower this year, at 7.9 per cent instead of 8.1 per cent. Its forecast for the unemployment rate for next year is unchanged from the June Budget, at 8 per cent. For future years, the OBR predicts a gradual decrease in unemployment, with the rate falling every year. By the end of the Parliament, the OBR forecasts that unemployment will fall to just above 6 per cent-that is about half a million fewer unemployed people than at the beginning of this Parliament.

The trend in the claimant count is similar to that for the internationally recognised Labour Force Survey measure of unemployment, but the level is expected to be higher. The OBR explains that this revision is mainly due to a change in the way that flows from employment and support allowance on to jobseeker's allowance as a result of the new work capability assessment are modelled. In other words, more people are assumed to be flowing off ESA and on to JSA. This is a key part of our reforms to create a welfare system that encourages people to seek work and to reduce costs for the taxpayer-in short, we will stop hiding people who can work in the incapacity statistics. Crucially, in each year fewer people are expected to be on both those out-of-work benefits combined than in the June forecast.

I can also tell the House that, following the spending review, the OBR has now recalculated its estimate of the reduction in headcount in the public sector. In June, the OBR forecast a reduction in headcount of 490,000 over the next four years. In its latest forecast, the estimate has come down to 330,000, which is a reduction of 160,000. The bulk of the revision results from the action that we have taken to cut welfare bills rather than to cut public services. Our difficult choices on child benefit, housing benefit and other benefits-each of which were opposed by the party opposite-mean fewer posts will be lost across the public sector. Those headcount reductions that still need to take place will happen over four years, not overnight. The OBR also forecasts that private sector job creation will far outweigh the reduction in public sector employment. As the report says,

"A period of rising total employment alongside falling general government employment is in line with employment trends during the 1990s when total employment increased by 1.3 million over six years while general government employment fell by around half a million".

However, the most important point is that the lesson of what is happening all around us in Europe is that, unless we deal decisively with the record budget deficit, many thousands more jobs will be at risk in both the private sector and the public sector. Let me summarise the forecast for the public finances, which

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shows that Britain is decisively dealing with its debts. Borrowing this year is expected to be £1 billion less than we forecast in June. The OBR forecasts that public sector net borrowing will fall from £148.5 billion this year to just £18 billion in 2015-16. Government debt as a share of GDP is projected to peak just below 70 per cent in 2013-14 and then fall to 67 per cent by 2015-16. The debt ratio is now expected to peak at a lower point compared to June-at just below 70 per cent instead of just above it.

On the OBR's central forecast, we will meet our fiscal mandate to eliminate the structural current budget deficit one year early, in 2014-15. The same is true for our target to get debt falling as a percentage of GDP. Indeed, to use the OBR's own words,

"The Government has a slightly wider margin for error in meeting the mandate than appeared likely in June".

For the first time, the OBR has also tested the resilience of the fiscal mandate to two alternative scenarios for the economy that critics have put forward. In both cases the mandate is met. It is clear that our decisive actions have proved to the world that Britain can live within her means. This Government have taken Britain out of the financial danger zone and set our economy on the path to recovery. That is the judgment of not only the OBR but the IMF, the OECD, the European Commission, the Bank of England and all the major business organisations in this country.

Already our efforts are paying off. Today's forecast shows that the cost of servicing the Government's debt has come down. Compared to the June forecast, the OBR predicts that we will save £19 billion in interest payments between now and the end of the forecast period. That is £19 billion that will no longer be paid by British taxpayers to private bondholders and foreign Governments. That is £19 billion that would have been wasted and will be saved instead.

This is an uncertain world, but the British recovery is on track. Employment is growing; 1 million more jobs are being created; and the deficit is set to fall. The plan is working, so we will stick to the course. This is the only way to help confidence to flourish and growth to return. I urge those who, when they see what is happening to our neighbours, seriously suggest that I should abandon the decisive plan that we are following and borrow more and spend more, to think again. What they propose would be disastrous for the British economy. It would put us back in the international firing line from which we have worked so hard to escape. It would mean higher deficits and jobs lost. We should reject that path.

Stability is a necessary pre-condition for growth, but it is not enough. Our economy's competitiveness has been in decline for more than a decade and that has undermined its ability to create jobs and grow. That is why we have already announced: four annual reductions in corporation tax; axing the jobs tax; cutting the small companies rate; expanding the loans scheme; simplifying health and safety laws; investing in science and apprenticeships; and promoting exports through trade missions.

Let me set out some of the other things that my right honourable friend the Business Secretary and I are announcing today to support growth and a rebalancing

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of our economy. At the Budget, I set out a plan to reduce the main rate of corporation tax to 24 per cent-its lowest ever rate-to demonstrate our commitment to tax competitiveness. I can now tell the House that the most significant programme of corporate tax reforms for a generation are today being published for consultation with the business community. We propose to make the UK an even more attractive location for international business and investment by reforming our outdated and complex rules for controlled foreign companies. We have seen a steady stream of companies that have left the UK in recent years. This Government, unlike the previous Government, are not content to sit by and watch our competitiveness leach away and our corporate tax base being undermined.

Another tax issue of crucial importance to our corporate sector is the tax treatment of income from intellectual property. For a long time, we have argued that we should increase the incentives to innovate and to develop new products in this country. To encourage high-tech businesses to invest in the UK and to create high-value jobs here, we can confirm that we will introduce from April 2013 a lower 10 per cent corporate tax rate on profits from newly commercialised patents.

We have been consulting with the business community, and I can tell the House that, as a result of that measure, GlaxoSmithKline will today announce: a new £500 million investment programme in the UK to manufacture a newly developed respiratory device at Ware in Hertfordshire; the launch of a new £50 million venture capital fund to invest in healthcare research; the construction of a new facility at the University of Nottingham to develop "green chemistry" technology; and the building of Glaxo's next biopharmaceutical plant in this country, with sites in Northern England and Scotland being considered. In total, GlaxoSmithKline estimates that 1,000 new jobs will be created in the UK over the lifetime of those projects.

Today, we also launch a cross-government growth review. This will be a determined, forensic examination of how every part of Government can do more to remove barriers to growth and support new growth opportunities. Too often the natural inclination of Governments is in the opposite direction: creating new regulations; putting up new barriers; and making life more difficult for entrepreneurs and innovators. We are starting to turn the super-tanker around. Together with the Business Department, the Treasury will lead an intensive programme of work that will involve all parts of Government and use evidence provided by the business community and that will report by next year's Budget. We will identify cross-cutting reform priorities that can benefit the whole economy. Specific priority will be given to: improvements to the planning system and employment law; more support for exporters and inward investors; and reforms to the competition regime. At the same time, we will begin a new sector-by-sector focus on removing barriers to growth and opening up new opportunities. Some of the resulting changes will be substantive on their own; others will in very specific ways help particular industries. Some may be controversial if they confront vested interests. However, brick by brick, we will remove the barriers that are holding Britain back.

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Finally, Mr Speaker, I would like to update the House on the international assistance package for Ireland. I attended the Europeans meetings in Brussels yesterday. We agreed a three-year package for Ireland worth €85 billion, which,

Of that, €35 billion will be used to support Ireland's banking sector, with €10 billion going towards immediate bank recapitalisation, and €50 billion will be used for sovereign debt support. Ireland will contribute €17.5 billion towards the total package and the remaining €67.5 billion will be split, with one third coming from the IMF, one third from the European financial stability mechanism and one third from bilateral loans and the eurozone facility. The terms of the IMF loan will be determined over the coming weeks.

In principle, our bilateral loan is for £3.25 billion and we will expect the loan to be denominated in sterling. The rate of interest on the loan will be similar to the rates levied by the IMF and the eurozone. This loan to Ireland is in Britain's national interest. It will help one of our closest economic partners manage through these difficult conditions. I should also tell the House that the eurozone Finance Ministers-without me present-discussed a permanent financial stability facility. I have made it clear in the subsequent ECOFIN meeting that the UK will not be part of that. The president of the euro group made it clear that the UK will not be part of the permanent bail-out mechanism and that the European financial stability mechanism, agreed under the previous Government in May and of which we are part, will cease to exist when that permanent eurozone mechanism is put in place.

Mr Speaker, when we came into office, Britain was in the financial danger zone. Our economy was unstable, our public finances out of control and our country on the international watch-list to avoid. We took decisive action. Now the independent Office for Budget Responsibility has confirmed that the British recovery is on track, our public finances are under control, a million jobs are set to be created and our economy is rebalancing. Today we take further measures to secure growth and create prosperity. We do so based on the foundation of stability that we have now secured. Britain is on the mend. I commend this Statement to the House."

4.32 pm

Lord Eatwell: My Lords, I am grateful to the noble Lord for repeating the Statement made by the Chancellor of the Exchequer in another place. I agree entirely with him that there is a refreshingly independent tone to the OBR report. However, the Chancellor's Statement is old-fashioned spin and I shall try to untwist it a little.

The Autumn Statement embodies a wide range of forecasts on aspects of the UK economy, on fiscal performance and on sustainability-a matter to which I will return later. However, as the Statement makes clear, once we attempt to forecast performance beyond two or three years, considerable uncertainty intrudes. For example, while the OBR suggests that there is a 50 per cent probability of the growth rate in 2014

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being 2.8 per cent-the figure that the noble Lord quoted with certainty-it is also noted that there is a 10 per cent probability of growth being zero in that year and a 20 per cent probability of growth being zero or less.

This might be regarded as a little worrying, but it is, after all, four years on. Far more worrying is the fact that the OBR finds that there is a 20 per cent probability of growth being zero or less next year. So, to be reasonably safe, leaving aside these longer-term forecasts, let us focus on the current year and next year. Or, to put the matter in political terms, the year of Labour policies and the year of coalition policies, for the obvious reason that coalition policies can have had no significant effect on 2010, but will certainly start to have an effect on 2011.

So what does the OBR say about 2010, the year of Labour policies? Two factors stand out. First, in every forecast made by the OBR since the pre-Budget forecast of early June, the outturn in the economy has been significantly better than was forecast by my right honourable friend Alistair Darling in his March Budget. Growth has been steadily revised upwards and the deficit downwards-down now by a full one percentage point of GDP. These OBR results give the lie to the Minister's persistent mantra that the situation that the Government found on taking office was worse than expected. In fact, month after month it has been consistently better than was expected in March. Let us hear no more of that fiction, and let us hear no more sneering from the Chancellor about my right honourable friend's political forecasts. As the OBR itself made clear in its press release in June, Mr Darling was in fact overly cautious, a truth that has been borne out by subsequent data.

Now let us turn to what the OBR has to say about coalition policies. In June the OBR forecast what the impact would have been if we had just left Labour's Budget in place for the next five years. Today we have the OBR forecast for the impact of coalition policies, and what do we find? In 2011, growth is down. In 2012, growth is down. By 2014, the coalition has at last caught up with the Labour growth rates-but then, four years hence, who knows what extra follies it will have committed?

Before turning to some wider economic issues in the Autumn Statement, I want to ask the Minister a couple of more technical points about the document. First, in paragraph 3.5 on page 27, and indeed elsewhere, the OBR makes it clear that the fan charts that the Minister referred to, which express the probability of particular outcomes, do,

Why not? Why are we presented, in this long and important document, with an assessment of risks to the economy that the OBR does not actually believe? Is the hidden assessment of downside risk greater than that set out in the Autumn Statement? Surely we have a right to know.

Secondly, the OBR notes in paragraph 4.124 on page 119 that the estimates of the Government's fiscal position do not include the likely impact of the sale of shares in the Royal Bank of Scotland and Lloyds Banking Group. Why not? Surely, given the enthusiasm

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with which the OBR has graphed analyses of uncertainty, some probability could be assigned to a central estimate of receipts from such sales. Perhaps the Minister will give us his estimate of such receipts and the impact on the overall deficit programme.

Thirdly, and most importantly, since it is an important part of the mandate of the OBR, is its consideration of long-term fiscal sustainability. In this consideration, starting at paragraph 5.27 on page 140, the OBR concludes that government policies imply a long-term budget surplus year after year of 2.1 per cent of GDP. This simply cannot be right. If the balance of payments is roughly zero or, as over the past decade, shows a deficit of about 1 per cent of GDP, then a long-term budget surplus of 2.1 per cent means that private sector debt is being accumulated at over 3 per cent of GDP a year-just the sort of private sector debt accumulation that brought about the recent crisis. Is this what the Government define as sustainability? This is truly an economy built on debt.

I am particularly worried about that point, as it echoes the Government's fundamental misunderstanding of what has happened to fiscal balances over the past three years. That should be corrected by the OBR analysis in box 3.3, which shows that the fiscal deficit growth was directly linked to a sharp increase in savings in the corporate and household sectors. If government spending had not offset that increase in savings, the fall in output would have been truly calamitous.

A key element in the estimates in the Autumn Statement is the Government's shift of spending cuts, as the Minister noted, from departmental spending to the welfare budget; this is clearly spelt out in table 4.16. Does the Minister agree that there is to be a cumulative reduction in DWP benefit payments of £9.1 billion over the next five years and a reduction in child benefit of a cumulative £7.9 billion over the next five years? This Government are attempting to balance the budget by squeezing the poor and by squeezing children.

We will await with interest the Government's review of corporation tax. If I may be given the indulgence of making a forecast, the Government will find it far more difficult to simplify rules on controlled foreign companies than they might expect. But when do the Government expect the results of the review to be announced?

We on this side are delighted that the Government have announced a cross-cutting government growth review-about time too. Perhaps it will involve somewhat smaller cuts in investment-in public investment-than the Government currently plan. But what has actually been announced today? The only substantial announcement in this document is the investment programme by GlaxoSmithKline, which everybody welcomes. Everything else consists of rhetorical promises. When will we have a concrete growth strategy to replace this wishful thinking? When will the Government publish their long-awaited growth White Paper?

We on this side of the House welcome the financial assistance to the Republic of Ireland. It is certainly late; let us hope that it is sufficient. I was, however, a little puzzled by when the Chancellor said:

"In principle our bilateral loan is for £3.25 billion..."

What does "in principle" mean in this context?

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What is made clear by this Autumn Statement is that there is as yet no sign whatever that the Government's gamble of cutting living standards for the next three years is going to pay off. The policies that underpinned a solid recovery this year are being put into reverse. It is the poor who are paying the price.

4.42 pm

Lord Sassoon: My Lords, it is always depressing to come back to face the noble Lord, Lord Eatwell, with his perpetual attempts to talk down the prospects of the economy. We have always said that the recovery is going to be gradual. It is on track. The recovery and the economy are borne down because they have to bear the legacy of the unbalanced growth and the excessive debt that was left behind by the previous Government. The noble Lord does not look forward; he is not grateful for the fact that the OBR has confirmed in its independent forecast that we have a pattern of rising employment in each year of the forecast. Instead, he continually wants to chip away at techie points around the way that the forecast has been produced. The transparency and the information have been vastly increased-and he chips away at it. Well, fine.

I am grateful that the noble Lord welcomes, as we all do, the £500 million new investment announced today, and I am sure that there will be a lot more to come. I was up in the north-west of England on Friday talking to a great sweep of businesses from some of the largest multinationals, like Siemens, through to very regional businesses like the Blackpool leisure centre, to family businesses such as the business that puts together Chevron motor cars. I do not recognise the picture that the noble Lord paints. These businesses are looking to the future. They recognise that there is a lot of rebalancing of the economy to do, but they are producing world-class science; the Daresbury science and innovation centre is one of the world's great leaders. It was thanks to the foresight of the noble Lord, Lord Sainsbury, under the previous Government, that that project got going. The current Government have just announced a public-private partnership to take forward that project for the next 20 years, creating, on that one science park alone, 6,000 jobs. This is the view of Britain that I see when I get out and about, and which seems to be in no way reflected in the technical analysis of the noble Lord and some of his friends opposite.

The noble Lord talks about the fan charts. Well, we have not had the fan charts before; we now have them. He can do the analysis; he can see that the OBR has produced upside and downside scenarios. As I have said, the different scenarios that were suggested to the OBR-not its own scenarios-show that under them the fiscal mandate will be met. Yes, we have taken radical steps on welfare reform. Yes, it is correct that, by doing what we did to take more people out of welfare, we have been able to protect many more front-line public service jobs. That welfare reform is not about anything other than protecting the poor and getting a fair deal for this country. We must have a welfare system in which families who choose to go out to work are able to earn and retain more than families

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who choose to live on benefits. We must have a system in which housing benefit is designed so that families who go out to work are not penalised in their housing choices, compared to families who are not working.

The noble Lord talked about cuts in investment. As he may remember, when we discussed the spending review only a few weeks ago, we increased the amount of money going into public sector investment in economically enhancing infrastructure by more than £2 billion a year through the spending review period, compared to what was in the Budget and what we inherited from the previous Government. I am grateful for the work of the OBR in producing this forecast. It confirms that the judgments that my right honourable friend the Chancellor made are absolutely right. In the 2011 Budget we will update on our progress.

4.46 pm

Lord Higgins: My Lords, can my noble friend confirm the rather surprising and welcome news that, despite all the cuts in public expenditure and the tax increases, growth is none the less expected to continue in the coming years, and that, similarly, unemployment is expected to fall? Having said that, I raise the position with regard to Ireland. Many people in this House believed that it was right to make Ireland a special case, but can we be sure that it is a special case and we will not find ourselves bailing out other eurozone countries to prevent their defaulting? Is it not the case that the Irish, having been bailed out, would be better able to achieve economic growth in the future if they were no longer in the euro? The reality is that the euro was designed to prevent members leaving by eliminating their own currencies. However, we need to provide some form of escape route for those countries-not only Ireland but the others on the periphery-that continue to suffer because they have an inappropriate exchange rate. Perhaps some form of alternative currency, to be used when a country wishes to withdraw, ought to be provided.

Lord Sassoon: I am grateful to my noble friend for pointing out that growth is expected by the OBR to continue to be above 2 per cent in every year of the forecast from next year onwards. I am happy to confirm this. Indeed, the OBR forecasts that employment will rise and unemployment will fall throughout the period.

In respect of Ireland and the eurozone, I can confirm that the UK will not be part of the permanent bail-out mechanism that the eurozone will put in place. Having said that, I do not wish to speculate about the future of the eurozone, which is very important to the UK. Europe accounts for 40 per cent of our trade and it is in the interests of this country to do what it can to support the stability of the eurozone. That does not mean that, with the exception of Ireland and its particular circumstances, we will directly support any bail-out operation.

Lord Soley: The noble Lord might consider recommending to the Chancellor of the Exchequer that this Statement be submitted for the Booker Prize for creative literature. It really is rather strange. In repeating the Statement, the Minister said that some people said that these growth figures would not happen.

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That is not true. They said that they would happen as long as we did not cut too deeply or too fast. That is what the previous Government said. The growth figures in the first seven months of this Government are down to the previous Government's policies and the general policies within industry. The Minister might care to remember-as I pointed out a number of times when I was sat on that side of the House-that British manufacturing output was growing and that we were the sixth largest manufacturing country in the world. At the same time, French manufacturing was in decline. At the same time, President Sarkozy has expressed concern that the French might have trouble with their triple A rating.

It is also not true to say that this is the largest deficit in peacetime history. Simply typing "history of the national debt" into any search engine, or going to the library, will tell him that national debt in peacetime, as a percentage of GDP, was significantly higher through most of the 19th century-it was the way we financed the Empire-and much of the 20th century. Indeed, it was only the previous Labour Government who paid off the final debt from the Napoleonic wars and the Second World War. Can the Minister now tell us why he thinks that cutting faster and deeper in the coming year will help when we are already recovering? In a year's time he will not be able to carry on the political, or party propaganda, line that somehow or other in seven months the Government have turned it round. They have not. That was already happening. What matters is the next 12 months.

Lord Sassoon: My Lords, earlier on I thought I heard the noble Lord, Lord Eatwell, describe 2010 as the year of Labour policies, but he said it so sotto voce that I left it there. The noble Lord, Lord Soley, now talks about the strength of the economy this year as being down to the previous Government's policies. I remind noble Lords of what the OBR says about the reason why growth is now forecast by it to be much stronger in 2010 than had been previously forecast. It is principally down to the confidence of industry in restocking. That position has changed in its forecasts since June. I wonder where that confidence comes from. It comes from the fact that we came in in May and took immediate and decisive action to get the economy under control, which has resulted in British business restocking because it knows that sustained growth is coming. Let us stop going on about this and celebrate the fact that the growth is there and that industry has the confidence to understand precisely that.

Lord Newby: My Lords, can the Minister confirm that, at the end of this period, with job losses in the public sector being 160,000 fewer than was predicted earlier on in the year, there will in fact be over 350,000 more people working in the public sector than when the Labour Government came into office in 1997? Can he also give an estimate of how much less the reduction in private sector employment will be as a result of this revised forecast over the forecast in June?

Lord Sassoon: I am very grateful to my noble friend. I can confirm the figures that he quoted. The relevance is that, for all the rebalancing of the economy that we

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are doing and the very significant rebalancing of the welfare system, the shift of jobs out of the public sector is now very significantly below what was achieved even within the past 20 years in the early 1990s. Therefore, we should have confidence in the productive capability of the private sector to absorb that number of jobs many times over. I can only stand by the figures for the net increase of employment that are set out by the OBR in its tables.

Lord Turnbull: Can the Minister explain how the results of the main findings of this report were extensively reported in the press over the weekend and indeed this morning? It says on page two that the Treasury was given the final version 24 hours in advance. It leaves the rather worrying conclusion that perhaps that process, which was brought about by the creation of the Statistics Commission, has not proved as watertight as we might have hoped.

Lord Sassoon: I, indeed, read some of the newspapers over the weekend with interest, but the forecasts have been handed over exactly in the way that the OBR suggested. My reading of the press was that they were making educated guesses because the forecasts of the OBR in respect of this year and next year have moved much in line with market forecasts. The press are always bound to speculate in contexts such as this one. Indeed, that is what they were doing.

Lord Campbell-Savours: My Lords, what did the noble Lord mean when he said "in principle" in regard to the question of the noble Lord, Lord Eatwell, which he did not answer?

Lord Sassoon: My Lords, forgive me but which of the questions of the noble Lord, Lord Eatwell, are we talking about?

Lord Eatwell: It was the point about assistance to Ireland-I believe that the relevant figure is £3.25 billion-being preceded by the words "in principle"; that it would be that sum in principle.

Lord Sassoon: My Lords, forgive me, I should have pointed out that the details of the package are still subject to final negotiation. I guess that the lawyers have to trawl over the press release, as it were, and my right honourable friend's statement that the loan is not the loan until it is absolutely bolted down in the formal documentation. The terms of the loan are still subject to final negotiation alongside the IMF and eurozone packages.

Lord Naseby: Is my noble friend aware that listening to the noble Lord, Lord Eatwell, reminds me of Cambridge in November-rather dour and foggy with not much light being shown on the country's economic situation? Is it not a fact that, since the general election, the United Kingdom's long-term interest rates have been falling every month and that prior to that period they were going up every month?

Lord Sassoon: I am grateful to my noble friend for pointing out the changed direction of travel since the new Government came in. I do not want to wade into a Cambridge argument. As a mere Oxford man,

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I always found my economics professors rather more cheery in their outlook, but perhaps my memory is clouded.

Lord Deben: Will my noble friend not allow the noble Lord, Lord Eatwell, to get away with the idea that this year is Labour's year? The fundamental change is that we have confidence; under them, we would not have had confidence. We would not have been able to pay our bills and we would have found ourselves in much the same position as Ireland.

Lord Sassoon: I am very grateful to my noble friend; his analysis is absolutely right.

Lord Myners: My Lords, I welcome the establishment of the Office for Budget Responsibility and the independent committee. That is a significant step forward and one on which the noble Lord and the Government should be congratulated. However, we can see a contrast between a thoughtful, objective, fact-based analysis from the committee of the OBR and the spin that was placed on it by the Chancellor of the Exchequer. That is a very good and valid reason why the OBR should be invited to ensure that its own conclusions are presented to Parliament in an accurate, unbiased and objective way rather than as we have seen today.

It is disappointing to see that, even at the end of the five-year period, the output gap will still remain substantial-that is, we will still have significant unused capacity in the economy. Will the noble Lord confirm that the noble Lord, Lord Eatwell, is correct in his analysis that an improvement in the balance of payments and a decline in public sector borrowing will inevitably be associated with a significant increase in private sector debt? Is that an assumption which the Government accept and support? Can the noble Lord tell us whether the rate of interest paid by Ireland will be higher or lower than that assumed to be paid by the Government of Iceland?

Lord Sassoon: My Lords, it is always good to have the noble Lord, Lord Myners, present. I do not suppose that his Government ever applied any spin to any numbers. He shakes his head. Oh, well. All our memories are failing. Seriously, the difference this time is that we have a much greater, more transparent analysis of the numbers-over 150 pages of numbers. I am grateful to him for welcoming the formation of the Office for Budget Responsibility, and I hope he will be with me, giving it a fair wind in Committee on the Bill shortly.

There is a serious point here. Not only are there 150 pages of analysis and a lot more detail than was ever given before, and not only has that been available a couple of hours before my right honourable friend's Statement, but we will be able to pick over it in the next few weeks. The OBR itself will come to the Treasury Select Committee and answer questions there and all sorts of other questions in different fora.

As to his specific question on the output gap, yes the numbers show that it will be 0.9 per cent in 2015, down from 3.3 or 3.4 per cent as it is now and from 4.2 per cent as it got to in 2009. As to the levels of private sector debt, I do not accept the numbers given by the noble Lord, Lord Eatwell; I accept the numbers

29 Nov 2010 : Column 1296

that are in the OBR's document. There will be a total leverage in the economy that is very far down on the over-leverage with which the previous Government left us.

Lord Hamilton of Epsom: Does my noble friend the Minister accept that one of the critical things that it was important for the coalition Government to do was to reassure the financial markets that we had a handle on the whole question of the deficit which we had inherited? That is one of the reasons-my noble friend mentioned this-why interest rates have come down since the coalition Government took over and since the new Budget was announced, and one of the reasons why the interest burden is going to be much less over the coming years.

However, is it not rather depressing that the noble Lord, Lord Eatwell, still goes on about the possibility of a double-dip recession when it is quite clear from these forecasts that the chances of that are almost nil?

Lord Sassoon: I am very grateful to my noble friend. I absolutely share his view both on the depressing scenarios that the Opposition choose to paint and on the overall scenario for solid growth which the OBR confirms.

As to the judgment of the financial markets, I have looked at this morning's numbers, and the UK spread over the German 10-year Bund has gone down from 96 basis points at the date of the general election to 60 basis points today, which is a very significant measure of confidence by the international markets in our consolidation plan.

Lord Ryder of Wensum: My Lords, in welcoming the Statement, I declare an interest as the chairman of the Institute of Cancer Research. Is my noble friend aware that, in exports, the pharmaceutical sector is by far the most successful sector in this country? It contributes between £3 billion and £4 billion a year in surplus to our balance of trade. If, as seems likely, the Government's new immigration policy prevents the pharmaceutical industry and research organisations such as my own from attracting the brightest and the best to this country under tier 1 and tier 2, will the Minister give me a clear undertaking, in the interests of the economic growth to which he referred, that the Chancellor of the Exchequer will have a quiet word with the Home Secretary to persuade her to change her policy as it stands at present?

Lord Sassoon: I am grateful to my noble friend for pointing out the huge success of the pharmaceutical and biopharmaceutical industry in this country. That is why it is so welcome to have the news today that GlaxoSmithKline is putting further facilities into this country that will only enhance the position of the United Kingdom in that critically growing sector of the economy. I am sure that the pharmaceutical companies fully recognise that, in the announcement made last week by my right honourable friend the Home Secretary, intra-company transfers of employees were taken out of the immigration cap. That means that skilled employees of multinational companies can be brought freely into this country, and for those earning more than £40,000 there will be no time limit on the length of time they

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remain in this country. My right honourable friend is very aware of, and has recognised, the importance of skilled industrialists and others being able to get employment in our growing industries.

Lord Brooke of Sutton Mandeville: My Lords, while enjoying the historical intervention of the noble Lord, Lord Soley, does my noble friend recall the remark of the Leader of the House in the wind-up to the Queen's Speech debate of 1951 when he said that all incoming Governments find skeletons in the closet, but his Government had found them swinging from the chandeliers? Secondly, does he recall the conduct of Mr Butler's economic policy between 1951 and 1955? Finally, does he remember that at the 1955 general election the Conservatives tripled their majority?

Lord Sassoon: Well, I have now been reminded. I was not quite around at the time, but I am very grateful to my noble friend for reminding us of these important lessons of history.

Lord Liddle: My Lords, does the noble Lord agree that, while any progress in rebalancing the economy is welcome, and while it is heartening to hear that the forecast for public sector job losses is lower than it was, this is contradicted by the Local Government Association, which forecasts an increase in job losses as a result of the impact of the spending round on local government? Does he not also accept that many of us on this side of the House are worried about these job losses-about their impact on regions that are heavily dependent on the public sector and about their impact on young people? Already, there are worrying signs of a rise in unemployment and inactivity among the young. Is it not disappointing that the Statement does not contain any policies that are likely to address these problems?

Lord Sassoon: My Lords, I would rather stick by the forecast of the independent Office for Budget Responsibility than the forecasts of others. It is the OBR forecast that is important and central today. Of course it is regrettable that any number of public sector workers-or indeed people in any other part of the economy-will lose their jobs. However, because of the numbers-much reduced in the latest forecasts-of public sector workers who will lose their jobs, not overnight but over the next four or five years, interventions that we have already announced, such as the £1.4 billion regional growth fund, are so important. We have targeted support very much at the regions to make sure that the transition between employment in the slightly shrinking public sector and employment in the strongly growing private sector is as smooth as possible.

Public Bodies Bill [HL]

Main Bill Page
Copy of the Bill
Explanatory Notes
6th Report Delegated Powers Committee
5th Report Delegated Powers Committee

Committee (2nd Day)

5.09 pm

Clause 1 : Power to abolish

Amendment 5 not moved.

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Amendment 6

Moved by Lord Greaves

6: Clause 1, page 1, line 3, at beginning insert "Subject to the provisions of section (Duty to promote sustainable development),"

Lord Greaves: My Lords, I am glad that I was here in good time. I will speak also to Amendment 103 in the same group. These amendments would require persons and bodies exercising functions transferred to them under this Bill to act according to the principles of sustainable development.

I am aware that the coalition Government have ambitious plans to be the greenest Government ever. The coalition agreement itself has specific commitments to tackling climate change, protecting wildlife and a series of environ1mental objectives alongside the objectives of economic prosperity and fairness in social policy-all the components of sustainable development. The Minister and I had many happy discussions on sustainable development in the previous Parliament, when we occupied different roles.

In July this year, the Secretary of State for Defra, Caroline Spelman, said:

"This Government are committed to sustainable development and to becoming the greenest Government ever, promoting economic development, environmental protection and an improving quality of life for everyone in the UK".-[Official Report, 22/7/10; col. WS 83.]

I want to write this into this Bill.

Many of the bodies listed in this Bill have a range of generic and specific duties or policy commitments that are there to safeguard the general public interest. The risk across a range of such duties and commitments is that these safeguards will be removed as functions are transferred to a range of companies, community interest companies, charities, other unincorporated organisations or persons, even indeed to government departments. The purpose of this amendment is to safeguard the public interest in one respect-sustainable development.

The danger is that this Bill, and its operation, will result in this and other safeguards being written out or restricted by the constitution or viewpoint of the body or person that is taking over the functions. It is easy to think of a lot of examples. Somewhere functions may be transferred to perfectly good organisations with perfectly desirable objectives. For example, should the management of Natural England's national nature reserves, or some of them, be outsourced to other conservation bodies, it is entirely foreseeable that future management arrangements might consider not other environmental outcomes but merely the contribution that national nature reserves might make to the very narrow area of nature conservation. It is appropriate, however, that other outcomes ought to include those which Natural England would consider at the moment, such as the contribution reserves could make to local economies and social outcomes-for example, enhancing the health of local people through increased provision of health walks, which may well contribute to better physical and mental health among the people taking part.

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The point is that, at the moment, a large number of these organisations have it written into their objectives and their purpose that they have a wider objective and purpose than simply the very narrow one associated with the particular facilities or services being provided.

There have been many attempts over the years to provide the best legal framework for sustainable development and protecting the environment. Over 100 different duties have been established in law, many of them for the bodies and offices listed in this Bill. The purpose of this amendment is to make sure that, if services, facilities and functions of these organisations are transferred to other people or to other bodies, these essential purposes and safeguards remain. I beg to move.

Lord Maclennan of Rogart: I support my noble friend and the amendment. Undoubtedly, it may be regarded as not belonging in a skeleton Bill but it provides a safeguard to ensure that the Government's intentions are made good. It is not an additional, unnecessary decoration on the Christmas tree.

In Schedule 1, there are a number of bodies which can significantly affect the environment: the Commission for Rural Communities, the Environment Protection Advisory Committees, the regional and local fisheries advisory committees and the various regional development agencies. In Schedule 3, there are the internal drainage boards and the Joint Nature Conservation Committee. In Schedule 4, there is the Marine Management Organisation. In Schedule 5, there are the internal drainage boards. I select those merely at random; there are many more. For the avoidance of doubt, it would be a safeguard to include the amendment.

5.15 pm

Lord Hunt of Kings Heath: My Lords, the noble Lord, Lord Greaves, is right to remind us of our previous debates on sustainability and climate change. I recall the days when the noble Lord, Lord Taylor, was standing here and urging the Government to do better. He now has an opportunity to show that he is consistent in taking this message into government.

The noble Lord, Lord Greaves, has pinpointed a potential weakness in the construct of the Bill. Noble Lords will know that the Bill allows a Minister by order under Clause 1 to transfer a function that is being abolished to an eligible person. The definition of eligible person includes in Clause 1(3)(a) to (e) companies limited by guarantee, community interest companies or a body of trustees or other unincorporated body of persons. Subsequent clauses extend the ability of Ministers to transfer functions of bodies listed in Schedules 2 to 7.

It would be helpful to know the criteria under which functions of public bodies might be transferred-in particular, to companies or unincorporated bodies of people. So little information is available. The impact assessment is distinguished by its inability to give any figures whatsoever for the financing consequences of the Bill. In particular, the Bill and the Explanatory Notes are silent about how desirable government policies will be transferred when those functions are transferred

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to companies or to unincorporated bodies of people. Sustainable development is a very good illustration of the point. We are told that the current Government are taking forward desirable policies on sustainability. Those policies relate not just to central Government but to local government and to other public bodies. Many of the organisations listed in Schedules 1 to 7 would be expected to enact the general principles of government policy on sustainability.

If those functions are now to be transferred outside the public domain into companies or into unincorporated groups of individuals, the question arises: how do we ensure that sustainability issues will be carried forward? How will that be monitored, or are the Government saying that, once a function has been transferred outwith the public sector, they are washing their hands of it and there is no guarantee that sustainability issues will be carried forward? That is an important debate.

Lord Taylor of Holbeach: I am very grateful to my noble friend Lord Greaves for bringing forward this amendment. As the noble Lord, Lord Hunt of Kings Heath, made clear, I am well rehearsed on the arguments for sustainability and I would like to think that the Government too share the conviction that sustainability lies at the core of good governance within government.

This amendment seeks to add a further requirement that when functions are transferred from one body to another, the duty to promote sustainable development transfers along with the function, whether or not the duty is set out in statute. I am happy to confirm to my noble friend Lord Greaves that the Government absolutely share his desire to make sustainable development a key part of public life and a consideration that runs through everything we do.

Lord Foulkes of Cumnock: If it runs through everything that the coalition Government are doing, how does the noble Lord reconcile with that the selling off of parts of national parks? We are going to come to it under Amendment 74 from the noble Lord, Lord Greaves. Surely that contradicts everything that the Minister has just been saying.

Lord Taylor of Holbeach: I think the noble Lord is anticipating government policy incorrectly. There is no question of us selling off the national parks-the noble Lord must allow me to correct him. We will debate national parks because they feature in the schedules to the Bill. It will give an opportunity for my noble friend Lord Henley-who is the Minister within the department-to explain in full the Government's proposal in this respect. The statement that the Government are proposing to sell off national parks, or part of the national parks, is incorrect.

Lord Foulkes of Cumnock: I am grateful if that is correct but the Minister may have seen a report on "Countryfile" on BBC television yesterday in which it was absolutely clear that land within national parks is already being sold off. How does he reconcile that with what he has just said, the sustainability argument and the concern that the coalition professes?

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Lord Taylor of Holbeach: I think I have answered the question as best as I can. I cannot refer to a television programme which I have not seen, so it would be best if I were allowed to move on by stating the general principle that underlines our approach to this amendment. I consider it to be useful because it does indeed give us the opportunity to debate the issue of sustainability within the context of this Bill. No doubt it will arise when we come to further issues and parts of the schedules.

Where we differ from the amendment is how we go about achieving this important objective. We believe this amendment would go further and potentially add unnecessary bureaucratic hoops through which some public bodies will have to jump. It is a general and not a specific requirement to those bodies which already have a sustainability requirement. We do not want public bodies to get distracted by having constantly to prove to us that they are delivering sustainable development. We expect it of them. We do not necessarily expect them to be saying that they are doing it all the time. We want them to get on with delivering their core functions in a sustainable way.

The noble Lord, Lord Hunt, asked specifically about when private companies are involved in delivering a service that is currently undertaken by a public body. It is up to the relevant Minister in charge to determine how much they will be held to account, for example by attaching conditions to the contract or funding agreement. It is then for that Minister to account to Parliament and the public for such decisions. This reform programme is about making public bodies more accountable and more efficient.

Lord Hunt of Kings Heath: Does the noble Lord agree that one of the problems with this Bill is that potentially all the functions listed in Schedules 1 to 7 could actually be transferred to a company or a body of trustees or other incorporated body of persons? This is our problem with debating this Bill. The powers that it gives to Ministers are so draconian that all of these functions could find themselves in the private sector in one way or another.

The Minister is saying that we should not worry because it will be up to each Minister to decide whether in any contractual situation they may or may not put something in about sustainability. But does he accept that our problem is that that gives far too much control to Ministers and that parliamentary oversight is very limited?

Lord Taylor of Holbeach: On the contrary: Ministers are accountable to Parliament. If Ministers do not perform how Parliament expects, it is up to Parliament to make that clear. I have no difficulty with this. It is about making Ministers accountable for the conduct of the public sector. We want to mainstream sustainable development so that it is not a bolt-on option, but integral to everything that public bodies do. But we are committed to doing it on a non-statutory basis. For that reason, I ask my noble friend to withdraw his amendment.

Lord Maclennan of Rogart: The Minister gave the impression that it might involve new bodies in a continuing dialogue with Ministers about sustainable development.

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But he will have observed that Amendment 103 makes it clear that the transfer of public functions will go to bodies and,

only where it is appropriate. That would seem to allow the avoidance of the kind of tiresome debate that he has adumbrated in the early part of his remarks. This would be just a safeguard, a safety net. From that point of view, it could be a helpful addition to the Bill.

Lord Taylor of Holbeach: My Lords, ultimately, there is no greater safeguard than the will of Parliament, as expressed through the accountability of Ministers at the Dispatch Box, on all issues. I understand exactly what noble Lords are saying from all sides of the House, but for a Government committed to building sustainability into all their activities, there is no need to make it explicit. It is implicit in all that this Government are doing.

Lord Greaves: My Lords, I am grateful for some of the assurances that the Minister has given. But the debate which has taken place on this amendment-I thank everyone who has taken part-comes to the core of a major flaw in the Bill, as the noble Lord, Lord Hunt, suggested. Sustainable development is just one example of the safeguards written in countless reams of legislation relating to the bodies listed in the schedules to this Bill.

The Minister said that I am trying to make one further requirement: I am tempted to say that I am trying to make a requirement. As the Bill is set out, there are few clear legislative requirements for when functions are transferred from existing bodies to other bodies, whether they are existing bodies being closed down or they are just being run down and having some of their functions transferred.

There was a slight diversion in the discussion about national parks. Indeed, national parks are one of the important areas to be included in our discussions about the particular bodies affected by this Bill. I do not want to pre-empt that debate, except to say that it is very good that the Defra Minister, my noble friend Lord Henley, will take part in that debate. Finding out exactly what the Government intend for national parks will be a crucial part of the scrutiny of this Bill. I thank the Government and my noble friend Lord Henley for that. No doubt my noble friend Lord Taylor is rather pleased that the noble Lord, Lord Henley, will be taking part in it. There is no doubt that national parks authorities are in the process of selling off or leasing out property for other people to manage. I raise the issue of the Losehill educational centre in the Peak District near Castleton. The national parks authority is considering proposals by people who are willing to buy it and take it over. So there is a certain amount of selling-off going on as a result of reduced budgets and there is a great deal of concern and alarm over Losehill, but that is a diversion from this debate.

The Minister said, "It is about making public bodies more accountable and more efficient". I am sorry the previous group of amendments was not moved because accountability is crucial here. If functions are being moved to the private sector in some cases-

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5.30 pm

Lord Hunt of Kings Heath: My Lords, perhaps I may reassure the noble Lord that we have found a better place to bring it back so we will have an opportunity to debate it later in Committee.

Lord Greaves: My Lords, that is one assurance I can well believe.

This amendment is about keeping some of the safeguards which exist in legislative form in relation to some of the bodies listed. There are many more safeguards of different sorts which are in legislative form at the moment. One of the real concerns over this Bill is the process by which Parliament will be able to scrutinise and the Government will be accountable to Parliament in the discussion of whether these safeguards are going to remain. Ministers are indeed accountable to Parliament, but ministerial accountability to Parliament at the Dispatch Box, when we can ask questions and raise debates and so on, is rather different from legislation written down in the statutes of the land, in the law of England, which can, if necessary, be challenged in court. It is a different sort of accountability if people are responsible to the courts of the land for following the laws which have been set down by Parliament. It is in many ways a much more robust form of accountability and we are concerned that it is going to go if, as the Minister says, the Government prefer that all this is done on a non-statutory basis. The ministerial orders which will be responsible for making a lot of the changes proposed to the organisations set out in the schedules are in themselves legislation. To suggest that a lot of it will be non-statutory suggests that those orders will not contain these safeguards, and that, too, is a major concern.

These are important issues which go beyond the particular issue of sustainable development and I am sure they will come up again and again as we continue to debate this Bill. For the moment, I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Amendment 7 not moved.

Amendment 7A

Moved by Baroness Henig

7A: Clause 1, page 1, line 4, leave out subsection (2) and insert-

"(2) A Minister may, subject to section 8, by order transfer all functions, powers and duties of an office or body specified in Schedule 1 to either-

(a) any Minister, the Scottish Ministers, the Northern Ireland Department or the Welsh Ministers, or

(b) an eligible person."

Baroness Henig: This is a probing amendment arising from the fact that Schedule 1 includes a collection of very different bodies in terms of the Government's intentions as to their functions, powers and duties. It is a very miscellaneous group and I think we can discern four or five categories. For example, there are some bodies that are for straight abolition, and British Shipbuilders would fall into that category. There is

29 Nov 2010 : Column 1304

then a second category where the powers, functions and duties will revert back to Ministers or to departmental civil servants. Then there is a third category where the powers, functions and duties are being transferred in whole or in part to another public body. And there is yet a further category where powers, functions and duties are being transferred in whole or in part to a private body, for example Consumer Focus to Citizens Advice. Then there are some like the Security Industry Authority-I declare an interest as chairman of that body-where the powers, functions and duties are going eventually, via phased transition, to a private body but with a residual public function.

When my noble friend Lord Whitty and I were looking to try to devise an amendment, we could not allocate these different bodies to the different categories without naming each one of them, which we found impossible to do. That is why, as I say, this is a probing amendment. Does the Minster recognise that there are different consequences, not least for Parliament, of the different intentions for bodies in Schedule 1? I am asking for these to be spelt out in the Bill because they materially affect what is going to happen to these different bodies.

On Amendment 11, my noble friend Lord Whitty was looking to delete "other incorporated body" as an eligible body to transfer into on the grounds that he found it too wide and too unaccountable in terms of its range. So the gist of these amendments is to try to get some coherence and recognise that different bodies should be dealt with in different ways. I beg to move.

Lord Hunt of Kings Heath: My Lords, I support my noble friend in her amendments. As we have already briefly debated, Clause 1(3) is very important because it specifies which bodies and functions can be transferred from the bodies listed in the schedules. My noble friend is, first, seeking clarity and then, importantly, asking the Government questions, particularly about their ability to transfer functions to an unincorporated body of persons.

I find it surprising that the noble Lord is proposing to give himself power to give such functions to a group of unincorporated persons. It would be helpful if he could explain under what circumstances this could happen and what safeguards would be in place. In a sense we are following on from our previous debate. Will the accounts of such organisations come under the auspices of the Comptroller and Auditor-General? Will freedom of information or data protection legislation apply to the same extent as when functions are delivered in the public sector? Potentially all the functions carried out by all the bodies listed in these schedules could be transferred to such bodies. My own view and that of the Opposition is that those powers are far too open-ended. The noble Lord has said that in the end accountability is to Parliament, and that is so. However, the problem we have, as the noble Lord, Lord Greaves, has spotted, is that it is likely that even when we have orders, they will in themselves give considerable discretion to Ministers in their dealings with the functions that are encompassed by the bodies listed in the Bill.

When it comes to the orders, we have another problem. We have the Cunningham committee's report on conventions. We debated that in Question Time

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this afternoon. But the noble Lord, Lord Taylor, will know that the conclusion of the Cunningham convention in relation to this House seeking to defeat secondary legislation is now disputed by the noble Lord, Lord Strathclyde, the Leader of the House, in correspondence between himself and the Merits Select Committee which has been published in the past few weeks. So we are not even sure at this stage whether the Government even accept that it is the right of this House to vote to seek to defeat the Government on secondary legislation.

Behind the amendment moved by my noble friend lies a real concern about the draconian powers being given to Ministers and a doubt whether the kind of parliamentary scrutiny currently envisaged in this Bill is sufficient to ensure proper discharge of ministerial accountability to Parliament.

Lord Pannick: My Lords, I should like to add a question to the series of questions put by the noble Lord, Lord Hunt of Kings Heath, and give my support for the amendment tabled by the noble Baroness, Lady Henig. Is it the Minister's understanding that if these functions are transferred to a company limited by guarantee, for example, judicial review in the courts would apply to the exercise of those functions by such a body, and would the Human Rights Act apply where appropriate to the content of any decision taken by such a body? This is of obvious importance because if the answer is no to either of those matters, the very important safeguards that exist when the functions are exercised by public bodies would be lost.

Lord Blackwell: My Lords, since this is the first time that I have participated in Committee on the Bill, perhaps I should declare my interest as a board member of Ofcom. I have to admit that I am puzzled by these amendments. The purpose of the Bill is to enable the Government to bring forward over time specific and detailed proposals on each of these bodies and to put those proposals in front of Parliament. A huge prize can be won by enabling this process to be conducted as quickly and effectively as possible. If we try to box the Government in by defining all the proposals up front and limiting the scope of what the answers might be, we complicate the process in a way that will make it impossible for the Government to bring forward those proposals one by one and to have the debate around them that each will require. These amendments are self-defeating because, in trying to put the cart before the horse by asking the Government to specify what they want to do before bringing forward the detailed proposals, they would limit the Government's scope for action.

Lord Berkeley: My Lords, I found the intervention by the noble Lord opposite quite interesting because I do not think that Ofcom is on any of these long lists. However, a similar regulator, the Office of Rail Regulation, is on a list, and I shall speak to that in a later amendment. I am sorry; Ofcom is on the list set out in Schedule 7. Given the amount of legislative time it has taken over the years to set up these organisations, it seems a bit odd for the noble Lord to suggest that it is all right for them to be abolished, changed or whatever by secondary legislation without any debate.

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Lord Blackwell: I want to make it clear to the noble Lord that I am speaking in a private capacity and not representing any body.

5.45 pm

Lord Taylor of Holbeach: My Lords, I thank the noble Baroness, Lady Henig, for moving her amendment, which also stands in the name of the noble Lord, Lord Whitty. It and the amendments grouped with it raise interesting aspects of the Bill and I am grateful for the debate that has taken place. They concern the definition of an eligible person in Clause 1, and the ability of Ministers to transfer functions to persons so defined. Perhaps I can best help by saying that when we come to the debates about the different bodies, I will debate in some detail their functions and where they are going, as well as the nature of the changes that will be involved. I am sure that we will have every opportunity to do this.

Amendment 7A would remove Clause 1(2) and replace it with a new subsection that allowed for the transfer of functions to a Minister in the UK Government or the devolved Administrations, or to an eligible person. Amendment 9 would remove subsection (3)(a), thereby removing Ministers from the list of eligible persons under subsection (3). However, Ministers would still be covered by the proposed amended definition in subsection 3(b) of,

So, taken together, these amendments would have no real substantive effect on the Bill.

Amendment 11 would remove unincorporated bodies, other than bodies of trustees, from the list of eligible persons under subsection (3). This amendment would prevent the transfer of functions to a variety of organisations, such as unincorporated partnerships. Perhaps I may illustrate this in a way that might particularly interest the noble Lord, Lord Liddle. I refer to the transfer of the regional development agencies to the local enterprise partnership structure, and the way in which that might function. The impact of Amendment 7A would be far wider because it would remove the option for Ministers to transfer any public function to an unincorporated body regardless of the nature and scope of the policy intent. I do not believe that this is a desirable outcome because it would risk ruling out a range of innovative approaches to the delivery of public functions. Our specific intention for the transfer of functions from RDAs is that local enterprise partnerships should be free to adopt the arrangements that suit them best as part of our move towards more locally driven, targeted approaches to growth.

I know that we will have an opportunity to talk about this in detail as a policy when we come to the debates on those bodies, but the amendment would remove the option to form an unincorporated partnership, and would go further by limiting options for public bodies reform in general. So, from that point of view, we resist the amendment because it goes to the heart of some of the changes that we are proposing.

Finally, Amendment 16A seeks to require that when a Minister lays an order under the powers in the Bill, the order names the eligible person to which any

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transferred functions are to be transferred. We do not believe that it is necessary to include such a provision in the Bill as the orders and the accompanying explanatory material, which has already been the subject of various amendments in Committee, would give this information as a matter of course. Indeed, the provision of such information would be covered by the proposed requirement to provide, as part of the explanatory material, the reasoning for the order.

Lord Rowlands: I apologise for interrupting the Minister. I wonder whether it might help the Committee if the Government could publish very soon some of these orders in draft form. There are precedents for doing such a thing, and at least we would know and understand a bit more the nature of the orders themselves.

Lord Taylor of Holbeach: The noble Lord, Lord Rowlands, has made an interesting suggestion. I think that by the time we have gone through a number of debates on individual bodies, noble Lords may well have quite a substantial idea of the pattern that the orders may well form. I hope to be able to provide noble Lords with the background to a lot of the changes that are anticipated by this legislation.

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