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I totally support the points that have been made on child trust funds. We also have had excellent briefing from Action for Children and Barnardo's about the special case that is needed for looked-after children. I do not want to repeat too much of what has been said, much of which I support. I was particularly taken by the point made by the noble Earl, Lord Listowel, about the 18 year-old threshold. If you make a will, however much or little you have to leave to your descendants, solicitors will always advise you to write in the age of 25 and not 18. They say that for very good reasons-and I hope that my own children are not listening to this. I am the mother of two middle-aged men, so it is a long time since they were 18 years old, but I would have been very nervous even for small sums of money to have been at their disposal at the age of 18, with them having total discretion as to what they spent it on. It is not that I am a bit of a killjoy of a mother.
There is a need to look, as I hope my noble friend will, at the case made for looked-after children and to take into account how any such money might be discharged. I hope that my noble friend will know that I am speaking in a very positive way about how money "will" be discharged. I feel that there is an imperative here today to make sure that that message goes from this House and that the case for the looked-after children is made.
When I was a Member of Parliament-I am sure that others in your Lordships' House will have shared this experience-I often had to intervene in the transition period for looked-after children when they came out of care and transferred into employment, education or sometimes absolutely nothing at all. It is a salutary experience to see not just the financial challenges that those young people face, but, if I have interpreted correctly a point made by the noble Baroness, Lady Armstrong of Hill Top, there is still an ongoing need for emotional and welfare support, over and above the finances. If we as a nation are to be in loco parentis-goodness knows, if those in this Chamber and in the Chamber in another place think about where the buck stops when decisions are made on just how that is delivered, surely the buck stops with us-we have to take this seriously.
Again I say to my noble friend that these are the sorts of issues that, if policy is changed in a Bill that comes through the Treasury, read across other government departments. I hope that he will not just take from this House the message about looked-after children to those with responsibility for local government finance, the Department of Health, the Department for Work and Pensions, and others, but that he will take it with enthusiasm to ensure that the message that has clearly gone from all sides of this House today is translated into something of which we can all be proud.
In January 2008, I had the great privilege to serve on the Health and Social Care Bill Public Bill Committee in another place, which led to the legislation that brought the health in pregnancy grant into being. When we came to the vote then, I opposed it and I support the Government's decision to abolish it for the following reason. There was a lot of confusion around this legislation. When the previous Government started to talk about the purpose of introducing this grant, it had a focus.
As a reminder, I should like to share with your Lordships information that we took in evidence on this Bill before we started Committee-something which I would commend to almost all Bill committees. We took evidence from Rosemary Dodds from the National Childbirth Trust. Her first question was about this one-off payment of £190. She said:
"The important thing is the intention of the payment. Originally, there was a lot of discussion about impact on birth weight and prematurity, but the intention of the payment has not been made clear. In order to answer the question about what the impact would be, we need to know the intention of the grant".
The Government's intentions right at the beginning were extremely noble. They wanted to have an impact on prematurity and low birth-weights, which many of us could have supported, but they then discovered that if you do not set a higher threshold you bring into grants people who subsequently either elect to have an abortion or who unfortunately have a miscarriage. The threshold was therefore set much higher, so high in fact that the impact of early nutrition-both before conception and in the very early months of pregnancy, which were deemed to be the critical time if you were to avoid low birth-weights and premature babies-went out of the window. The alternative suggestion-of well-being and a general fund to help mothers in pregnancy-was therefore substituted for the original intention. I hope that my noble friend-again, this is not a Treasury matter-will convey this issue to the Department of Health.
I support the Government's announcement of more health visitors, because clearly more health visitors on the ground could have an impact here. So, too, could more training in nutrition. Many years ago-a lifetime ago now-I trained as a home economist. I studied nutrition. Many people who are involved in the welfare and care of pregnant mothers, including some midwives, have very little real knowledge of nutrition; very few actually know the importance of the correlation between calcium and phosphorus in the early laying-down in pregnancy of healthy bones and teeth et cetera.
My noble friend is right to get rid of this fund, but I hope he will talk to the Department of Health about how we can help in other ways to mitigate the problem that we have in this country: the tragic problem for many individual people of low birth-weights and premature babies.
Lord McKenzie of Luton: My Lords, this has been a very powerful debate, with some excellent, if not brilliant, contributions, but I express again disappointment that the designation of this Bill as a money Bill precludes us a proper Committee stage. Indeed this issue has clearly exercised a number of speakers this afternoon.
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My noble friend Lord Griffiths raised an interesting point about whether this certification was pressed on the Speaker by the Government; it was a new point to me, but something which we ought to understand. Certification comes at the end of the House of Commons process, but that is not to say that somebody might be preparing the arguments for, and be privy to, the prospect of that certification in due course. I think that that is a specific issue that we need to understand in relation to this Bill. If nothing else comes from the debate we have had around this issue, I hope that it will bring a process of some greater clarity to when a money Bill is a money Bill and some greater clarity on the process and timing of that. Notwithstanding that, my noble friend Lady Hughes urged the Minister not to stand behind that certification and to bring forward legislation which clearly has strong support right around the House.
As we heard from the Minister, the Bill implements the second stage of cancelling government contributions to child trust funds, withdraws funding for the health in pregnancy grant and repeals the prospect of rolling out saving gateway accounts, which have been the subject of successful pilots. Each of these measures has resource implications, of course, but they have profound policy implications as well. But given the Government's focus on deficit reduction, any consideration of the Bill is inextricably linked to consideration of their approach to tackling the deficit, an approach we consider to be flawed.
We have heard the usual party line from the Minister about the deficit, but no objective analysis of our economic position. Over the past two years, the UK has faced the biggest economic challenge for generations as the global financial crisis hit our banks here and our export markets around the world. At the start of the crisis, the UK had the second lowest debt in the G7, below that which we inherited from the Conservative Government in 1997. Borrowing rose not because of our spending before 2007, but because tax receipts fell and spending was allowed to rise to provide extra support for the economy when it was at its weakest. The fiscal stimulus co-ordinated with the rest of the world, with only the Conservatives in the UK a lone voice in opposing it.
The consequences of that-an increasing deficit and an increase in public sector debt-would have to be dealt with by any Government and tough choices would be necessary, but we consider that the coalition Government have made the wrong choices. We reject the Osborne prescription which says the faster, the harder and the earlier you cut, the better for our economy. Indeed, is that not the advice that Ireland was given? We argue for an approach that would bring the deficit down, but in a balanced way that gives the
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So there is an alternative approach, and there are different choices about how the fiscal consolidation should be borne. But by locking into an imprudent consolidation plan, the Government have restricted policy choices and made a joke of the Chancellor's declaration that he will not balance the budget off the backs of the poor. That is precisely what is happening in this Bill. There are consequences that arise from the deficit reduction plan, as my noble friend Lady Hughes pointed out.
The noble Lord, Lord Northbourne, rightly challenged us not to accept that poor outcomes for some children do not matter. Of course, it is the pattern of what has gone before. We know that the combined effects of the June emergency Budget and the comprehensive spending review are deeply regressive, and what is fair about measures that have cut almost £7 billion from direct support for children and where women are hit twice as hard as men by changes to tax credits and benefits? My noble friend Lady Armstrong pressed on this, although I think it is right to say that the Conservatives were not originally in support of our action on Northern Rock.
My noble friend Lady Thornton made it clear that there can be little doubt that child trust funds have been a success in terms of encouraging people to save. Evidence submitted in another place showed that there was a 72 per cent take-up of the scheme by parents, with obviously all children being enrolled after 12 months. Some 31 per cent of accounts were being topped up, rather than the 24 per cent suggested. This was across the board, although regularity and amounts varied. Evidence provided in another place variously described child trust funds as the,
It is like auto-enrolment for pensions, as my noble friend Lady Drake argued. Depending on the rates of return, it was suggested that accounts could accumulate to as much as £9,000 or £10,000 by the age of 18.
There are obvious benefits of the child trust fund in helping to develop and reinforce a savings culture, encouraging asset accumulation, seeing the benefits of young people having a tangible stake in society, having to make choices, hopefully responsible choices, about resources, and becoming more financially literate. These are opportunities that many young people from better off families have at the moment. Child trust funds opened up these prospects for children from poorer families, and they are now to be denied.
There are a number of options the Government could pursue to retain the prospect of some of the benefits of the child trust funds-certainly the prospect of concentrating the saving instrument on the poorest one-third of families, those on DLA and looked-after
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We acknowledge, though, that the national financial advice service, with its limitations, as my noble friend pointed out, and the annual financial health check will help build financial literacy and is to be welcomed. We are told that this service is to be rolled-out next spring. Given its proximity, perhaps the Minister will tell us a little more about its scope and reach and the nature of the levy on the financial services sector, which is to provide the financing.
It has been announced-we heard it again today from the Minister-that the Government are to introduce a junior ISA, but that some of the detail is still unknown, as, indeed, is its final timing. Clearly such a savings product would not benefit from a government initial or interim contribution but would obtain the benefit of a tax-free build up and would be, presumably, tax free on exit. The benefit of the tax-free build up would, presumably, effectively accrue to contributors, whose income would be sheltered. In comparison to the child trust fund, this would be less advantageous to those families on the lowest income, who are not wholly within the charge for tax, and who would miss out on the extra government contribution-the poor missing out again, with higher rate taxpayers benefiting most. So much for Conservative and Lib Dem values.
Evidence given to the Public Bill Committee in another place suggested that providers of child trust funds would need time to get their systems, including distribution systems, in place for the new product-unless, that is, the junior ISA is the CTF without the government contribution. Given this seemingly inevitable gap between the proposed demise of the child trust funds and the introduction of junior ISAs, could there not be some process to bridge the gap by extending the child trust funds or backdating junior ISA arrangements? What attention are the Government giving to the practical implications of introducing a new product? What reassurance can be given to those who, according to Save Child Savings, have invested millions of pounds in the systems, infrastructure and marketing required to ensure consumers have access to a vibrant competitor provider community? What assessment has been undertaken concerning the likely take up of junior ISAs-the cost does not appear in the Red Book, so far as I can tell-and the distributional affect of the benefits?
Nearly every noble Lord who has spoken has focused on the issue of looked-after children, including my noble friends Lady Thornton, Lady Armstrong, Lady Blood and Lord Griffiths of Burry Port; the noble Baronesses, Lady Howe, Lady Noakes and Lady Ritchie; and the noble Earl, Lord Listowel, who has always strongly supported the cause of looked-after children. It has been rightly the subject of debate both today and in another place, but we should acknowledge that, despite progress, we do not have a strong record on providing good outcomes for looked-after children, who enter adult life poorly provided for.
As Barnardo's and Action for Children state, the transition from care to independence is a critical period for young people and having adequate financial support is a key factor if they are to succeed as they enter adulthood. Child trust funds would have been one way of helping to rectify the problem. The proposed replacement by a junior ISA, which is presumably predicated on parental contributions, does not help without special arrangements.
The budgets of local authorities, who are the corporate parents of looked-after children, have been particularly savaged by the CSR, as my noble friend Lady Armstrong explained. We are aware of the discussions that have taken place with Mark Hoban, Paul Goggins MP, Barnardo's and Action for Children, and warm words have, indeed, been spoken. What specific proposal is coming forward from the Government? We cannot pass an amendment today, but we hope in the circumstances that the Government can give us the clearest commitment, on the record, to bring forward legislation on this matter.
The Bill before us repeals the primary legislation for the savings gateway, which was to be a tax-free cash saving account available to people in receipt of qualifying social security or tax credit awards. The purpose of this was clear: to promote a saving habit among those of working age on low incomes by way of a government contribution for each pound saved. It was acknowledged by the Minister that the evidence from the pilot studies showed that matching was a popular and easily understood incentive to save. Given that the first accounts were due to be opened in July this year and that the government contribution were to come after two years, no cost would have arisen until 2012-13. It cannot be argued that this was not a targeted programme. Its scrapping will only disadvantage the poor. Why repeal the primary legislation? If the Government insist that the gateway is unaffordable but they recognise its merit, why not defer for a period? The noble Baroness, Lady Noakes, hinted at support for some arrangement to incentivise saving for low-income families.
There is another dimension to this. How does the Minister respond to the submission from the Runnymede Trust that the withdrawal of the savings gateway would disadvantage BME communities in particular, who tend to have lower levels of savings? What detailed assessment of the equality implications of the proposals has been undertaken? I noted that the noble Lord, Lord Northbourne, expressed incredulity at the Government's claim that the Bill has little impact on equality.
My noble friend Lady Thornton spoke of the health in pregnancy grant with knowledge and passion, as did others. The evidence presented to the Public Bill Committee in another place set out the benefits of the grant and its potential to improve a mother's diet during pregnancy, as well as providing the wherewithal to help with necessary purchases of equipment. Indeed, the evidence described how the onset of motherhood is a defining moment in a parent's life but how it can also be a step towards poverty. It is a time when the support of services and financial means should be sustained and not withdrawn.
There may be issues about the timing of the grant, and whether earlier payments would be more appropriate,
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As was pointed out, it is not just universal but means-tested benefits which are being attacked. The Sure Start maternity grant for other than the first child is to go. Yesterday's announcement that Social Fund budgeting loans will be available to help families to buy maternity items will be of little comfort. What additional resources are being made available to the Social Fund for this?
Our opposition to the Bill is on two levels. It is set in the concrete of a deficit reduction approach which drives conflicts with stated government policy around fairness, social mobility and better outcomes for children. Even within the practical confines of these constraints, it fails to take opportunities to retain and build on that which the Government have acknowledged to be worth while. All in all, it is another measure which will hit the poor the most.
Lord Sassoon: My Lords, we have had an interesting debate. I am grateful to all noble Lords who have contributed to it. We have covered a range of topics. I shall start with one or two of the wider points raised and then move on to some of the important questions of detail in the Bill.
I start where I started in opening this debate; that is, by saying that this action is necessary. We have had to make some tough choices. I am grateful to my noble friend Lady Noakes for pointing that out and to my noble friend Lord Newby who pointed out that the Opposition had come forward with no alternative policies for cutting the deficit. I had rather hoped from the build-up from the noble Baroness, Lady Hughes of Stretford, that we would get some ideas, but there was nothing. We then had a very long build-up and an economic essay on the story of the previous Government seen from one perspective-that of the noble Lord, Lord McKenzie of Luton. Even though he and I would disagree about the path that got us to the present predicament, he seemed to acknowledge the need for dealing with the economic situation. I hoped that we would get some alternative ideas, but sadly not. Of the other speeches that touched on this point, the speech of the noble Earl, Lord Listowel, put the context of this Bill in a sensitive and well considered way. I did not get any of that from the Opposition Benches. We need to acknowledge that the deficit has to be reduced and that that requires difficult choices.
I stress again that in the overall process of deficit reduction we are, as a Government, prioritising groups that need the most support. Disadvantaged children will benefit from our pupil premium and in the spending review we made sure that there will be no measurable impact on child poverty in the next two years. At the other end of income and wealth distribution, we are making sure that everybody makes a fair contribution. Those on the highest incomes will contribute more towards the entire fiscal consolidation. We are making
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Before I turn to some specific points on the Bill, I should say something about the question of the money Bill status of this Bill. I was somewhat surprised not by the relatively measured terms in which the noble Lord, Lord McKenzie, talked about this, but by one or two of his colleagues who surprised me very much, particularly former Ministers both here and in another place. They probably know the processes for money Bills: they would certainly know them better than I do. First of all, it is a certification of the Speaker that cannot be challenged. Even if football managers are getting into the habit of questioning the judgments of referees, which is not entirely a desirable thing, there are limits. I am not sure that it is appropriate for noble Lords to challenge the judgment of Mr Speaker. He is under a statutory duty to certify a Bill as a money Bill if in his view it falls within Section 1 of the Parliament Act 1911. In answer to these extraordinary suggestions that he might have been given advice or been leant on-I do not know what the suggestion is-by the Government, he takes advice from the Clerks in another place and not from the Government. The Government do not offer him any advice.
In respect of mischievous suggestions that somehow the process was different on this Bill from previous money Bills, all of the previous money Bills were certified at the end of their Commons stages. Certification cannot happen until the Bill has completed all of its stages in another place.
Baroness Hollis of Heigham: To go back to the process on the money Bill, chapter 33 of Erskine May does not refer to the Clerks but says that the Speaker should call on the advice of at least two chairmen from the panel of committee chairmen in the House of Commons, and that on their advice also he should respond. There is no reference to the Clerks in Erskine May. Was that procedure followed in this case?
Lord Sassoon: I can give noble Lords my understanding of what the procedure is, but I certainly cannot and would not presume in any way to go into what process Mr Speaker went through. That is a matter entirely for Mr Speaker and not a matter for us in this House to question.
Lord Elystan-Morgan: I speak with all the neutrality that one can from these Benches. Is not the situation that there is a very substantial grey area? Section 1 of the 1911 Act gives many possibilities so that, if a rigid application of that provision had been applied since 1911, hundreds of Bills could have been called money Bills that were not called money Bills. There is a very substantial area of dispute, which will remain unless and until there is some curtailment of that discretion vested in those who advise the Speaker of the House of Commons.
Lord Sassoon: My Lords, I do not think that we should stray into a constitutional debate this afternoon. The point that I wanted to make was that this Bill was certified by Mr Speaker and that it was not a certification that we should be challenging. As far as I am aware, the Bill was dealt with in another place exactly as other money Bills have been, and the suggestion that there has been some improper behaviour by the Government on this matter, or that somehow there was something different-
Lord Reid of Cardowan: I do not think that anyone is suggesting that there has been improper conduct. We did not stray into this territory-the Minister led us there by describing in some detail the process. If he is now saying that he does not know what the process was, will he indicate to us whether his original statement was accurate or an assumption on his part?
Lord Sassoon: My Lords, as I said before, I have given a description of the process and indicated that there was no question that the Government in any way behaved in some out of the ordinary way with this Bill, as has been hinted at. I really think that-
Lord Griffiths of Burry Port: As it was probably my suggestion that has led to this response, I should like to speak just for a moment. I was given very clear advice from those who prepared a briefing paper, which many of us read-I heard it being quoted all round the House-that it was done at the request of the Government. I am not hinting that improper stuff has happened; I was merely asking whether that was true.
Lord Sassoon: My Lords, I am grateful to the noble Lord. He is right to say that some of these points were raised by him, which is why I thought it was right to address them. This is an important point. I can confirm what he asked me to confirm, but I think that I should move on to address some of the many other points that were made on this money Bill.
The point that attracted the most interventions-and it is an important point-was on junior ISAs for looked-after children. That point was raised at the opening of the debate by the noble Baroness, Lady Thornton, who reminded us that proposals were raised in another place in that area, and a number of my noble friends and the noble Earl have touched on the point. I start by reiterating what my honourable friend the Financial Secretary said in another place-that we would need to think about this carefully and that we will think about it carefully. He has had conversations and we need to recognise the limitation of resources that are available. There is certainly no unallocated funding in the Department for Education budget that could be used for it, but we are considering the issue. My honourable friend is going to work with the Minister for Children. He made it clear that if we wanted to do something in this area, it would be possible to do it outside the scope of this Bill-a point which I think was touched on by the noble Baroness, Lady Howe of Idlicote. It does not require the Bill to be in place. I think that the noble Lord, Lord Griffiths, also touched on that point.
I assure my noble friend Lady Browning that I do indeed talk to my colleagues. I was talking to the Financial Secretary only this morning and I shall relay these messages back in. Yes, the Treasury is a siloed place. My proposal that Ministers in the Treasury should all sit in an open-plan office has not yet found favour but my noble friend encourages me onward in that objective. The noble Earl also made a practical suggestion on whether an additional meeting involving noble Lords would be helpful. As I have said, my honourable friend the Financial Secretary is having meetings. I am not sure which additional meetings would be helpful but I certainly accept his offer.
The Earl of Listowel: If it might help the Minister, it might be particularly useful to meet the Minister to discuss this with his honourable friend and with Mr Tim Loughton early in the new year. That might be welcomed by your Lordships-as I look around the House, perhaps not-but that was certainly the sort of thing that I had in mind.
Lord Sassoon: I will relay the message back and discuss it with the Financial Secretary. There were also questions on the capacity of local authorities. My noble friend Lady Ritchie of Brompton gave the most considered view from a local authority perspective, as she should. She talked about local authorities being under pressure. Certainly, I did not hear her say that it would be impossible for local authorities to find funding in these areas, but of course they have to make difficult choices-ones which, going forward, will not be constrained by so much ring-fencing in their budgets, as has been recognised.
Lord McKenzie of Luton: If it is the Government's proposition that local authorities should pick up the obligation to support junior ISAs for looked-after children, given that the Government have signed up to the principle that they would keep local authorities whole for new burdens, will the Minister give a commitment that if that is the way that it goes, the Government will provide that extra funding?
Lord Sassoon: My Lords, I cannot promise today that all looked-after children will have a junior ISA opened for them and I certainly cannot provide any assurance about government funding. I have said that my honourable friend is looking into all this and, if and when there are proposals, the Government will indeed come forward with them.
I turn to some other important points on child trust funds and their effects on savings. A number of points were made by the noble Baroness, Lady Drake, and the noble Lord, Lord McKenzie of Luton. Have child trust funds had a positive effect on savings? There is currently no robust evidence about whether the child trust fund has increased savings for children. While some parents are using child trust funds, not all are. I have it that 22 per cent of child trust funds received contributions in 2009-10, marginally down on the 24 per cent in the previous year. In any case, we do not yet know whether any of that saving is additional or would have happened anyway. For lower-income families, only 12 per cent of CTF accounts received contributions.
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Several noble Lords, including the noble Baroness, Lady Thornton, and the noble Lord, Lord McKenzie, raised the question of the gap before the introduction of junior ISAs. I must go back to the need for us to move quickly to tackle the budget deficit. I realise that this will leave a gap before the junior ISAs are available. However, we are working hard with the industry and other stakeholders to make sure that the gap is as short as possible. We intend to publish draft secondary legislation, setting out full details of the new accounts, in the spring and for them to be up and running in the second half of 2011. We will ensure that eligibility for the new account is backdated to ensure that no child born after the end of the CTF will miss out on the chance of having one of these accounts.
Concerns were raised by the noble Baroness, Lady Hollis of Heigham, and others about the suitability of junior ISAs for children from families on lower incomes, and whether they would benefit only the rich. I certainly do not believe that this will be the case. These accounts are not just about offering people a tax-free option for children's savings; they will also offer a clear and simple way of saving for children and of ensuring that the money is locked up until the child reaches adulthood. This will prove attractive to many families on lower incomes. Of course, saving issues are difficult for us all, particularly those on lower incomes, but I remind the noble Baroness and the noble Baroness, Lady Drake, that already more than 12 million people with incomes below £20,000 have an ISA. It is penetrating lower-income groups.
I am grateful to the noble Lord, Lord McKenzie of Luton, for drawing attention to the annual financial health check. That was also welcomed by the noble Baroness, Lady Drake. There are questions about advice turning into action but we should start somewhere. I am grateful to noble Lords for drawing attention to that important initiative.
On the question of the Bill's equality impacts, an initial assessment of these was published on 15 September, when the Bill was introduced. Although we do not say that there are no impacts, the impact assessment shows that those that have been identified are proportionate, given the need to reduce the UK's budget deficit.
I should say a little about the health in pregnancy grant, which the noble Lord, Lord Northbourne, raised first. I assure him that we have another scheme, the Healthy Start scheme, which targets and supports pregnant women on lower incomes, providing vouchers for fruit, vegetables and milk from the 10th week of pregnancy. This very much goes to the heart of the point that my noble friend Lady Browning made from an expert perspective. It did not look as though the health in pregnancy grant was achieving its original target of reducing the incidence of low birth weights. The Healthy Start scheme is much better targeted towards that.
Lord Sassoon: My Lords, it comes back to where we need the scarce resources available to be targeted. In answer to the questions that were raised about the underlying purpose of the pregnancy grant-namely, to deal with the problem of underweight children and nutrition-the Healthy Start scheme is far better targeted to that end.
I am conscious of the time. In my final minute I come back to the wider point of the Bill. Without the changes that we are making, we would have had to spend more than £3 billion in the four years of the spending review period on the child trust fund, the saving gateway and the health in pregnancy grant. That would simply have been unaffordable. The Opposition have not come up with any ideas of how we could have made alternative cuts.
Lord McKenzie of Luton: My Lords, if the noble Lord is tempting me, I have a whole string of things that I could raise, but does he think that we might do without the £2 billion to £3 billion that we are spending on an unnecessary, unproven and top-down reorganisation of the NHS?
Lord Sassoon: My Lords, out of this Bill we are saving £3 billion of spending which we believe could be better targeted. We therefore believe that that is actually concentrating our scarce resources on disadvantaged children and child poverty-that is where the resources should go-as well as enhancing growth in our economy through spending on infrastructure, low-carbon investments and science.
I realise that the measures in the Bill are disappointing to some noble Lords. I believe that they are necessary. Notwithstanding the fact that this is a money Bill, we have had a good debate. Some follow-up points in one important area have been made from all sides of the House. I believe that the Bill is necessary and I ask the House to give it a Second Reading.
Baroness Northover: My Lords, at its meeting yesterday the Procedure Committee discussed the conduct of Oral Statements, during which it was suggested that it might be helpful to remind the House of the relevant guidance in the Companion to the Standing Orders. I therefore remind the House of that guidance. It states:
The 20 minutes for Back-Bench questions and answers should therefore take the form of brief comments and questions. Brief interventions from Back-Bench Members will of course allow more Members to participate in the discussion overall.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, with the leave of the House, I will now repeat a Statement made in another place by my right honourable friend the Lord Chancellor and Secretary of State for Justice. The Statement is as follows.
"On 12 May, we said in our programme for Government that we would conduct a full assessment of rehabilitation and sentencing policy to pave the way for a radical reform to the criminal justice system. I have laid before Parliament the Green Paper entitled Breaking the Cycle: Effective Punishment, Rehabilitation and Sentencing of Offenders. This sets out our initial conclusions from this work on which we will be consulting widely over the next 12 weeks.
Despite record spending we are not delivering what really matters. Society has a right to expect the criminal justice system to protect it. Prison will always be the right place for serious and dangerous offenders. Criminals should be properly punished. Prisons should be places of hard work and industry, and community sentences must be credible and robust. Criminals must also be reformed so that when they finish their sentence they do not simply return to their life of crime, creating more misery for victims. The criminal justice system falls short of what is required. Around half of offenders released from prison reoffend within a year. Reoffending rates for young offenders sentenced to custodial or community sentences are even worse. It is not acceptable that three-quarters of offenders sentenced to youth custody reoffend within a year. If we do not stop offending by young people, these young offenders of today will become the prolific career criminals of tomorrow.
We cannot let this continue. Solving these problems requires a radically different approach. Criminals must face robust and demanding punishments. This means making them work hard, both in prison and in the community. More prisoners will face the tough discipline of regular working hours. This has been lacking in prison regimes for too long. Community sentences will be more credible, with more demanding work and greater use of tough curfew requirements. There will be greater reparation to victims through increased use of restorative justice and by implementing the Prisoners' Earnings Act. We will bring forward other changes to make sure that more offenders directly compensate the victims of crime.
However, we will take a new approach to the reform of offenders. I regard prison, first and foremost, as a place of punishment where people lose their liberty as reparation for what they have done. On top of that, prison cannot continue to be simply an expensive way of giving communities a break. We must give higher priority to getting more prisoners to go straight on release. Offenders will face a tough and co-ordinated response from the police, probation and other services. It will mean that they must either address the problems that fuel their criminal activity or be caught and punished. It will mean taking action to get offenders off drugs. It will mean reducing the abuse of alcohol.
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We will be bringing forward a revolutionary shift in the way rehabilitation is financed and delivered. We will begin by commissioning a range of providers to administer at least six new projects over the next two years. They will be paid for the results they achieve. I intend to apply the principles of that approach across the whole system by the end of this Parliament. We will also test this payment-by-results approach with young offenders and devolve more responsibility for preventing and tackling youth offending to local communities. We will introduce more competition across offender management services to drive up standards and deliver value for money for the taxpayer. We will increase discretion for public sector providers and front-line professionals.
The sentencing framework must provide courts with a range of options to punish and rehabilitate criminals and keep the public safe. The sentencing framework has developed in an ad hoc fashion with more than 20 Acts of Parliament changing sentencing in the last 10 years. This has left it overly complex, difficult to interpret and administer, and hard for the public to understand. We need to make better use of prison and community sentences to punish offenders and improve public safety, while ensuring that sentencing supports our aims of improved rehabilitation and increased reparation to victims and society. We will simplify the sentencing framework in order to make it more comprehensible to the public and to enhance judicial independence. We will reform community orders to give providers more discretion. We will encourage greater use of financial penalties and improve their collection.
We will bring forward reforms to the indeterminate sentence of imprisonment for public protection-the IPP. This sentence has been much more widely used than was intended since its introduction in the Criminal Justice Act 2003. Indeed, the last Government had already changed it since its introduction. We will reserve IPP sentences for the most serious offenders and focus indefinite punishment on those who most clearly pose a very serious risk of future harm. Of course, prisoners who in future do not receive an IPP sentence will instead receive long determinate sentences. This will enable us to restore clarity in sentencing, plan rehabilitation and target punishment more effectively to protect the public.
Let me assure the House that public safety remains our first priority. We will continue to ensure that serious and dangerous offenders are managed effectively and that their risk is reduced through appropriate use of prison and through multiagency public protection arrangements. Let me also assure the House that we will also ensure effective responses to knife crime. Knife crime is wholly unacceptable. It causes misery for victims and is often connected to the kind of gang violence that can wreck whole communities. The government position is clear. Any adult who commits a crime using a knife can expect to be sent to prison, and serious offenders can expect a long sentence. For juveniles, imprisonment is always available and will also be appropriate for serious offenders.
The Green Paper is an important change of direction in penal policy which will put more emphasis on reducing reoffending without reducing the punishment of offenders. By reforming criminals and turning them away from a life of crime, we will break the cycle. This will mean fewer crimes, fewer victims and safer communities. The Government will make a further Statement to the House when they publish their response to the consultation. In the mean time, I commend this Statement to the House".
We do not disagree with that. It is a reasonable vision for sentencing policy, entirely in keeping with the emphasis on punishment and reform that we followed in government, which helped to cut crime by 43 per cent between 1997 and 2010, in times both of growth and recession. We were the only Administration since the Second World War who could boast such an enviable record. I will first ask the Minister to confirm that the crime rate significantly declined under the Labour Administration.
On the core principles we are in agreement. Where the Government propose sensible measures to punish and reform offenders, we will support them. However, the Statement that we have just heard gives rise to a number of questions and concerns. The Minister is probably quietly pleased that the entirety of the Conservative Party's manifesto on law and order at the last election has been abandoned. Some of the people who were persuaded to vote Conservative on that basis may be less pleased. Perhaps manifesto commitments do not matter much when the noble Lord's party is prepared to tear up personal pledges. Both on knife crime and increasing prison capacity, the Conservatives have dumped their previous policies.
Like so many heavily trailed announcements in the past six months, the sentencing review could be a wasted opportunity. Sentencing policy should be about dealing with offenders in the right way, in order to protect the public and, in particular, the victims of crime. However, this review has been about trying to reduce the prison population in order to cut costs. The Lord Chancellor outlined his principal aim in the comprehensive spending review, which was to reduce the total daily prison population by 3,000 by 2014. It is about 85,000 today, so that would mean it would be 82,000 in four years' time. However, in practice, because many people serve less than a year in prison, meeting the target would mean sending 10,000 fewer offenders to jail each year than we do now. Unfortunately, this is what the sentencing review is all about: not protecting the public or victims, but saving money. Will the Minister confirm that his department will publish the detailed assumptions that his officials and the Home Office have made about crime trends to justify the target of 82,000?
We do not subscribe to the view that there is a direct link between prison and crime, but we do not share the Government's view that there is no link at all. Of
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We accept, of course, that prison is not always the best place for offenders and that community sentences can be a better alternative in cutting reoffending. Does the Minister accept that, as a result of changes that we introduced following the Corston report, the number of women in custody has gone down? Furthermore, does he accept that reoffending rates for women, young men and first-time offenders have gone down too in recent years?
Of course, further action on drug addiction is clearly to be welcomed, and I do welcome it. The steps outlined to deal more effectively with offenders with mental health problems are also to be welcomed. That is one of our society's most pressing issues and it is a vindication of the decision to set up and begin to implement the important Bradley review. However, what assurances can the Minister give the House that those with mental health problems who are liable to commit offences-particularly violent offences-will be treated in secure establishments?
In our view, the Justice Secretary's eagerness to please the Treasury by cutting the Ministry of Justice's budget by 23 per cent is going to make it both difficult and risky to turn these fine aspirations into reality. In particular, I ask the Minister to explain to the House what assessments are being made of the likelihood that prisoners on indeterminate sentences, whom the Justice Secretary wants to release, will no longer be a risk to the public. What procedures will be put in place to monitor such people in the community? We would also like the Minister to confirm whether it is intended to relax the rules on the recall of offenders. If that is the intention, I ask why, and how will he ensure that it will not result in higher rates of reoffending?
Our probation service does a good job. Cutting the service so deeply, as the Government intend to do, seems like a massive gamble. Why are the Government doing this if they truly believe in rehabilitation? Every time the Justice Secretary is asked about resources, he falls back on the payment-by-results model being piloted in Peterborough and started by the previous Government in March this year. It is an interesting model, which we agree should be expanded.
Finally, the Justice Secretary was recently asked on "Newsnight" how he would judge the success of his penal policy. His first response was that he "hadn't the first idea". That really is not good enough. Let us offer him a better idea for judging the success of his policy:
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Lord McNally: My Lords, I thank the noble Lord, Lord Bach, for his questions and for his response. I hope that we can address this Green Paper in the way in which it has been presented to the country: as a really good, constructive, national debate about our criminal justice system. Therefore, I do not deny that many reforms were carried through by the previous Government that we have learnt from and which we shall try to develop. I am not really worried about the little bit of party politics on manifesto commitments. I know they play that game much more at the other end. This is a real attempt, in the six months in which we have been in office, to look at prison numbers. We need to look at the fact that they have doubled over the past 15 years.
Central to this paper is reoffending. More than half the people going through the system reoffend-75 per cent of young people reoffend-which makes us think that it is worth taking a serious look at what has been termed a rehabilitation revolution. In looking at offending and reoffending, it does not take rocket science to work out that issues come up time and time again. When I went to a secure training centre at Medway, one of the guys who showed me around said that one of the tragedies is that most of these boys have had only passing contact with education throughout their lives. We all know the evidence of illiteracy, innumeracy, homelessness, drug addiction, alcohol dependency, long-term unemployment and social disruption at home. They are all there and we are looking to see whether we can make dents into that.
I know that the Lord Chancellor and Secretary of State for Justice is sometimes unorthodox in his replies, but I look around at some of those who have experience of trying to run the system and anyone who bets the House on the success of any strategy is reckless indeed. We are bringing forward for public debate and public consultation an invitation for people to look at the central issue of reoffending, which goes right through the system, and to address it in a way that maintains and increases public confidence. I entirely accept that the crime rate fell during the Labour Government. We have not denied-and it is made out in the paper-that prison works in certain circumstances, but the reoffending rate also suggests that in other circumstances it does not. We are not trying to deny the experience of the past 15 years, but we are trying to learn from some of the downsides as well as the upsides.
Equally, I pay tribute to the work of two landmark reports produced during the previous Administration by the noble Baroness, Lady Corston, and the noble Lord, Lord Bradley. Certainly the advice in the report by the noble Lord, Lord Bradley, will be very much reflected in the Statement on drugs and drug treatment that I expect to be made imminently, as will the report by the noble Baroness, Lady Corston, on the treatment of women offenders. Throughout the Green Paper, I think you will find a genuine attempt to reflect some
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The noble Lord asked whether I would publish assumptions. Our initial assumptions have been published in the impact assessment accompanying the Green Paper. As the policy proposals are firmed up following consultation, we will update and publish those impact assessments. He also asked for assurances that offenders with particular mental health problems will be treated in secure settings. Our proposals offer liaison and diversion schemes that will assess offenders for mental illness as well as their risk to the public. We will make sure that any treatment is in suitably secure settings. One of the good things that we are carrying through in trying to deal with the report by the noble Lord, Lord Bradley, is close liaison with the Department of Health in taking forward that policy. There will be no mass releases of the 6,000-plus people now held on IPPs. Any decisions about release will be taken on a close assessment of the existing danger to the community and very close management of those released.
The noble Lord also mentioned the Probation Service. Some of what we are doing will be a challenge to it, but I hope that the flexibility will also give it an opportunity to exercise its own judgment and to participate in the wider scheme. It is certainly true that my right honourable friend puts a great deal of emphasis on payments by results, as the noble Lord, Lord Bach, indicated. That was piloted in Peterborough, and we are now going to pilot it further. I do not think we should rubbish it in advance. It could be a very interesting way of making sure that rehabilitation is expanded in the way in which the Government hope. There is an opportunity for the Probation Service to improve its performance and to participate in a wider-and, we hope, very interesting- approach to rehabilitation, with an opportunity to work on a genuine multi-agency basis to address these problems.
Lord Thomas of Gresford: My Lords, from these Benches, I welcome wholeheartedly the change in emphasis from warehousing prisoners to rehabilitation. I am grateful to my noble friend for putting forward these proposals in the way that he has. I am disappointed that the indeterminate sentence is not to be abolished completely, but I am encouraged by seeing that it is to be restricted. It has been used far too greatly without the proper resources behind it to enable the 6,000 people currently held on these sentences to earn their release.
There is one matter that I shall raise with the Minister to have his response. Has he considered veterans' courts? They have been set up in the United States for a period of two years to deal with the specific problems of those who have served their country but have found themselves in prison because of the experiences that they have undergone. Proportionately fewer veterans go to prison, but of those a greater proportion are in prison for sex and violence offences. Their needs must be addressed in a special way, as they have been in the United States. Perhaps I may commend to my noble friend the report of the Howard League,
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Lord McNally: My Lords, I take on board what my noble friend said about IPP. It is true that there has been an increasing focus and an increasing public concern about the number of our veterans who seem to end up in our criminal justice system. I have not looked at the American example to which he referred, but that is exactly the kind of constructive suggestion that we hope this Green Paper will bring forward. My department is in contact with the Ministry of Defence and the Royal British Legion about these issues. I hope that we can take forward measures to help veterans who find themselves on the wrong side of the law or in prison. The Royal British Legion already has a system of visiting, advising and counselling for veterans who find themselves in this situation. We have got to give this priority and I assure my noble friend that we will.
Lord Reid of Cardowan: My Lords, I declare two interests; first, my interest as registered in security matters; and, secondly, as Home Secretary, having introduced a number of measures to try to bring diversity to probation services and the treatment of prisoners, where the opposite Benches voted against my proposals. So I welcome elements of what has been suggested today.
Perhaps I may also suggest to the Minister that the premise on which the new direction is based is flawed in two essential areas. The first is the assumption that the increase in prison numbers, which has doubled, and the reduction in crime, which has almost halved, is merely a chronological coincidence. It is not. It is a causal relationship between the two. Secondly, prison is not just about punishment, rehabilitation or reform. It is also about the protection of society.
Let me make a prediction, without judging how these consultations will end. If they end on the premise on which they started-perhaps thousands fewer police on the streets; 10,000 more felons not sent to prison; potential softer sentencing on community sentences, which will be optional; and the dropping of more serious sentences for knife crime-tragically, I believe that we will see a proportionate increase in crime over the next few years. I predict that will be the case rather than what I am sure the Government and everyone in the House are seeking, which is a continued reduction in crime, following on from the past 15 years.
Lord McNally: I acknowledge the experience of the noble Lord in these areas, but his little catalogue at the end was just the kind of fear and alarm about these issues that we have heard. We have to ask whether if what he said is so, perhaps we should double the prison numbers again. I think that I have mentioned previously in the House that I once went to a talk given by Ronald Reagan's former prison adviser, which I think was at about the same time as the noble Lord was Home Secretary. He estimated that the proper size of Britain's prison population should be about 170,000, because that would, as the noble Lord suggests, get all the offenders out of harm's way. But it does not seem to remove public concern about crime. It does not
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To listen to some, one would think that next Friday, Ken Clarke is going to throw open the gates of the prison and usher out the first 3,000 who want to leave. If anyone reads the Green Paper, they will see a measured response that does not ignore the fact that there will be other things that will come into play quite often. As the noble Lord and others with experience know, addressing this is often like trying to solve a Rubik's Cube; when you get one bit of it right, you look round the other side to see that that has gone wrong. Within the paper there are some innovative, and, I hope, optimistic views of the way we can approach this situation which may make some of the noble Lord's pessimistic predictions wrong. As always, we will have to wait and see.
Lord Elystan-Morgan: My Lords, I congratulate the Minister on a reappraisal of what might be termed the classic Conservative attitude towards penal policy over the past decades. I exculpate completely, of course, the noble Lord and his party in respect of that, but that is another matter.
On the question of indeterminate public protection sentences, does the noble Lord recollect that when the 2003 Act was passed, it was estimated by Ministers that the prison population would increase by 900 in respect of that piece of legislation? By this year it had increased, as the noble Lord has already said, by 6,000. The most tragic aspect of that is that 2,500 of those are persons who have already served more than the recommended period of imprisonment that was mentioned by the sentencing judge. That is a denial of justice. It is a totally impossible and unacceptable situation. What are the Government going to do about that? Are they going to increase the size of the Parole Board, which is the sieve through which these cases must pass? Are they going to relax the rules? Or are they going to act in some other way? Those, I respectfully suggest, are indeed fundamental questions that the Government have to answer at this stage if this issue is to have any credibility. As I say, I congratulate the Government on doing the right thing, but for all the wrong reasons.
Lord McNally: I am sorry there was that sting in the tail from the noble Lord. I have to remind him that what he termed a classic Conservative approach to penal policy over the past 20 years was being carried out for at least 13 of them by the party opposite. I notice the noble Lord, Lord Reid, nodding vigorously. Yes, it is a change of approach; it is an attempt to see if some new measures, new thinking, and new ideas can come.
On the noble Lord's point about IPP, he has put his finger on exactly why we want to consider the measures. As he said, when it was introduced it was going to apply to a very limited number of prisoners. His figures are quite right because we now have more than
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The Lord Bishop of Lichfield: I thank the Minister for the Statement and his helpful answers to the questions put to him so far. We on these Benches broadly welcome the Statement and the proposals set out in the Green Paper. The Christian churches are bound by our belief in the possibility of redemption, so we welcome a renewed commitment to rehabilitation, which is one of the marks of a decent society. I want to salute the work of chaplains and their colleagues, most particularly initiatives such as Alpha for Prisons and so on. I acknowledge too all the volunteers who work in prisons. We see genuine conversions and changes of life in what are sometimes the most unpropitious of circumstances. However, prisons that are overcrowded and filled with people who ought to be elsewhere to be treated for mental health and addiction problems are limited in what they can achieve. It is to be hoped that the diversion of offenders with severe mental illness into suitable treatment will be pursued vigorously, as was recommended in the report of the noble Lord, Lord Bradley, which has already been mentioned.
I also welcome the use of community sentences where appropriate, and the recognition that such sentences must carry the confidence of the judiciary and the police. There is obviously a need both for well designed programmes and for publicity aimed at local communities about what they involve. I applaud the commitment to promote co-ordinated support for the resettlement of offenders in society, which leads to my main question at this point. If this is to succeed, it will require adequate funding arrangements and appropriate performance indicators. It is a standing joke in my part of the world that one of the growth industries in Staffordshire is that of providing new accommodation for young offenders. Nevertheless, we have in my own diocese the wonderful North Staffordshire Community Chaplaincy, which provides housing and other services for ex-offenders. It has an excellent record. I am told that the reoffending rate is only 10 to 12 per cent, even though the most vulnerable and likely to reoffend prisoners are chosen. I hope that the Minister will be willing to look again at the funding for these schemes because we have been told that there is no money for this kind of investment.
Lord McNally: I pay tribute to the chaplaincy service of all faiths in our prisons as well as to those who take on volunteering and mentoring work. It is often the faith-based organisations that help so much in our prisons.
On the challenge of resettlement, resources are in short supply. The payment by results initiative may be one way of providing them. I reaffirm what the right reverend Prelate said. In the six months that I have been in this job, I have been impressed by the fact that where there are interventions the reoffending rate falls. So there is an immediate come-back and pay-back if we can get such schemes working.
Lord Mayhew of Twysden: My Lords, I apologise to the right reverend Prelate and to the House for being a little previous. Does not equipping prisoners to live a useful life when they are released remain the overriding objective at the head and forefront of the prison rules? If it be the case that today nearly 50 per cent of people who are in prison reoffend within one year of their being released, is it not disappointing to hear asserted-as it was by the noble Lord, Lord Bach-that this review is only about saving money?
Lord McNally: Once we move from the parliamentary knockabout stage to a proper examination of this issue, we will try to identify schemes that have the real impact to which my noble and learned friend has just referred. As I said at the beginning, illiteracy, homelessness and lack of a job are common factors. Another common factor, which fills me with shame, is that 24 per cent, I think, of offenders have been in our care at some stage or another. If we can address that basic lack of skills, we can also tackle the reoffending rate.
Lord Warner: The Minister has not so far mentioned youth justice so perhaps I may ask him some questions about that issue. I welcome much in the Statement about rehabilitation and reoffending, but is he aware that many of the issues of concern expressed in the Green Paper-such as young people's first entry into the criminal justice system, restorative justice, reducing custody, improving the rates of reoffending when they have been sentenced and giving the courts more options on sentences-have been pioneered by the Youth Justice Board and the changes in the Crime and Disorder Act? Can the Minister explain why the Government want to abolish a body that has done the very kind of things that are in the Green Paper?
Lord McNally: My Lords, I pay genuine tribute to the noble Lord, Lord Warner, as the chairman of the Youth Justice Board, and, as I have done before at the Dispatch Box, I put on record my admiration for its work. The decision to bring it in-house within the MoJ and to include it in the list of arm's-length bodies to be abolished is a matter that is still before the House, but we of course hope that it will accept our recommendation. The general feeling is that the YJB had been a successful operation over the past 10 years. There were some criticisms of it here and there but, on the whole, it had been a success. However, that success now allows us to move to a stage where youth justice is much more a local and community responsibility undertaken by the successful operation of youth offending teams. I hope the noble Lord, Lord Warner, does not see the decision to abolish the YJB as a condemnation of it; it was a stage in the progression to what we hope will be a successful youth justice operation.
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