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House of Lords

Wednesday, 16 May 2012.

3 pm

Prayers—read by the Lord Bishop of Wakefield.

Environment: Green Growth


3.06 pm

Asked By Baroness Worthington

To ask Her Majesty’s Government what assessment they have made of the recent Green Alliance report into the use of tax reliefs to promote sustainable, green growth.

The Commercial Secretary to the Treasury (Lord Sassoon): My Lords, the views of stakeholders, including the Green Alliance, are given serious consideration when formulating policy. The Government remain committed to increasing the proportion of revenue from environmental taxes. This needs to be balanced with ensuring predictability, stability and simplicity in the tax code. In Budget 2012 the Government further demonstrated their intention to meet their environmental commitments while reducing unnecessary administrative burdens.

Baroness Worthington: My Lords, I thank the Minister for his response. I imagine that, as a member of the “greenest Government ever”, the Minister will have warmly welcomed the Green Alliance’s recent report into using tax relief on savings products to bring about green growth. Will he comment specifically on the suggestion that those companies offering products that receive reduced tax relief should be required to adhere to the standards code, which is currently voluntary, and that there should be greater transparency in how they invest the money that is saved?

Lord Sassoon: I am grateful to the noble Baroness for confirming the green credentials of this Government. She raises an interesting point because, on the question of transparency, the Green Alliance report refers to all ISAs—so to a broader suite of savings products than merely green products. Any contribution to the debate about increasing transparency is to be welcomed. Other reports have been written recently about transparency around fees in particular, while this one is more about the transparency of the investments in the portfolio. I note that a number of green ISAs already on the market make a virtue out of the transparency that they offer. Generally this is an important debate but one in which the voluntary approach, backed up by the code that the noble Baroness refers to, is right.

Baroness Kramer: Would your Lordships agree that many individuals would like the opportunity to put their ISAs into sustainable investments? Is that not an argument for looking at the green investment bank as

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an opportunity? Are the Government considering opening up the possibility of investment into the green investment bank for institutions and individuals who could then use their ISAs in this way?

Lord Sassoon: First, it is important to recognise that there are at least 16 funds that I have been able to identify in the ISA space that are already green or ethical in their scope and branding. More generally, there have been lots of proposals for tailor-made ISAs, such as big society ISAs, small company ISAs, corporate bond ISAs, social investment ISAs and early intervention ISAs. There are a lot of worthy ideas around, all of which have their merits, but on the ISA brand we intend to keep it as simple and broad as it has always been. As for the green investment bank, as my noble friend knows, at the moment it has its initial capital for the next four years and is actively looking at its 21st project. In time it will be able to borrow, but not for the first four years.

Lord Davies of Oldham: My Lords, my noble friend Lady Worthington asked an extremely significant question—although she should note, in referring to this “greenest Government”, that irony is wasted upon them, particularly upon their Treasury Ministers. Why are the Government not investigating these matters with greater urgency? Why, for instance, is the relief on capital gains with regard to housing not tied to the energy efficiency of the house being sold? Why are the Government not pursuing strategies like that which would give reality to their somewhat disputed claim?

Lord Sassoon: My Lords, the private residence capital gains tax relief means that most people are not liable for capital gains tax on their main residences. If access to that relief were linked to energy efficiency improvements, not only would it override the broad policy aim of that relief—that people are encouraged to save for their house—but what about the large number of people who do not necessarily have the funds to be able to improve the efficiency of their homes? Is it really the position of the Opposition that capital gains tax relief on people’s main residences would be taken away if they were not able to afford efficiency improvements? That is certainly not the policy of this Government.

Lord Lawson of Blaby: My Lords, will my noble friend slightly contain his green enthusiasm? Is he aware that the Green Alliance’s headline for the paper to which the noble Baroness referred is “Save tax relief for low-carbon savings and investments”? It is arguing—it may be the view of the Opposition—that all reliefs for savings, investor start-up and business should be abolished except for those devoted to greenery, which should be increased. Will my noble friend confirm that that is not the policy of Her Majesty’s Government?

Lord Sassoon: My Lords, I can indeed confirm that that is not the policy of Her Majesty’s Government.

The Earl of Caithness: Would my noble friend also bear in mind, in response to the question asked by the noble Lord, Lord Davies, that what the noble Lord

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proposed about greenness and efficiency would hurt hardest those in the country who do not have cavity walls but have solid brick or stone houses and no access to mains gas? It would penalise those in the country. That again shows that the Labour Party is very anti those living in the countryside rather than those living in urban areas.

Lord Sassoon: Apart from the fact that taking away people’s capital gains tax relief by linking it to green efficiency is absolutely not on the agenda, the key point here is that the forthcoming Green Deal—a world-first policy proposal—will mean that many people will be able to make their homes warmer and more efficient. That is what really matters. Of course we want to see more efficient homes, but there are ways to do that, and the Government have a policy.



3.14 pm

Asked by Baroness Falkner of Margravine

To ask Her Majesty’s Government what is their assessment of political developments in the eurozone after recent changes of Governments.

The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford): My Lords, the eurozone crisis is having a real impact on economic growth across the European continent as well as in Britain. Eurozone leaders have to do whatever is necessary to stand behind their currency and resolve the crisis. However, these decisions must be made in conjunction with the democratic wishes of people across the eurozone.

Baroness Falkner of Margravine: I thank my noble friend for that reply. Does he agree that conditions in several eurozone countries—huge rises in unemployment, particularly youth unemployment, and significant falls in living standards—are resulting in the rise of right-wing parties in particular, as seen in the most recent democratic elections, and putting democracy under strain? Will he tell the House whether the Prime Minister, when he next goes to the European Council, will support pro-growth measures, including additional funding for the European Investment Bank if necessary, so that European countries, as well as the UK, can get back on the right track?

Lord Howell of Guildford: My noble friend is quite right: youth unemployment is a blight and a very serious issue everywhere, not least in this country as well as throughout Europe and many economies in the Middle East. The problem is general. My noble friend raised two points. She mentioned the European Investment Bank and the possibility of expanding its activities. This is a possibility and may well be discussed. As a broader point, she posed the question of austerity versus growth, as though they were opposites. The reality is that this polarised choice is a complete myth.

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Unless we can control our budgets effectively and run them with fiscal discipline, there will be no growth. There will instead be still further inflation, undermining the very growth that we want to see. A balance must be struck. It is not a choice; it is a balance.

Lord Liddle: On this side of the House we welcome what the Minister said about being open to increased resources for the European Investment Bank. However, will he tell us whether the Government broadly agree with the growth agenda being pursued by the new French President, François Hollande? Does he draw from the spate of election results that we have seen the conclusion that austerity in the eurozone is reaching its limits? Given that growth in the eurozone was larger than ours in the past year, will he draw that lesson for economic policy at home?

Lord Howell of Guildford: Neither the noble Lord nor I know how the discussions between the new French President and the German Chancellor will work out. However, he has read the newspapers, as I have, and it is fairly clear that some aspects of both arguments will have to be taken into account. That will demonstrate the very point that I just made to my noble friend. The picture that has been painted of either austerity or growth is completely unrealistic. The reality is that there will have to be the discipline on which the German people and Government have led very strongly, and in which they believe for strong reasons connected to their history, combined with the necessity to erode youth unemployment and to create and restore confidence in investment. This is a balance that must be struck. We certainly hope that the leaders of France and Germany will, in their wisdom, strike the right balance and maybe convey to the people of Greece the necessity for this balance, from which there is no escape. There is no unrealistic choice between going one way or the other—you cannot.

Lord Forsyth of Drumlean: My Lords, given that we refused to join the euro because we believed it was an ill conceived project—

Lord Dubs: Gordon Brown!

Lord Forsyth of Drumlean: We, the British, refused to join the euro because it was an ill conceived project. Will my noble friend give an absolute assurance that not a cent of British taxpayers’ money will be spent on sorting out this shambles?

Lord Howell of Guildford: I can give an assurance that there is no intention of spending public money on precisely the eurozone problems that have to be sorted out by the eurozone Governments. Nevertheless, the world economy will be affected by the success or failure of these policies in Europe, and in supporting aspects of the world economy we are regular contributors to the IMF and have worldwide responsibilities. It may well be that we will contribute to maintaining those responsibilities.

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Lord Barnett: My Lords, is it true that the Prime Minister said recently that the Government are committed to finding £1 billion, which would be very helpful in restoring confidence of some kind in the eurozone? Can the Minister confirm that?

Lord Howell of Guildford: I am afraid that I have absolutely no idea about a statement of that kind. I do not know where the noble Lord read it. Perhaps I may find it later. If it was said by the Prime Minister, I am sure that it is true but I do not think that it was.

Lord Dykes: My Lords, I thank the Minister for once again showing HMG’s resolute determination to help the eurozone leaders in solving this crisis and for ignoring the flimflam from the anti-Europeans. But, without giving instructions of course, would he give some friendly advice to the British press to restrain and reduce their hysteria on this subject of the eurozone crisis at a time when the United States 16 trillion dollar irreducible debt system, which is facing national default yet again, is totally ignored by the British newspapers?

Lord Howell of Guildford: It is not for me to advise the media on their priorities but clearly the eurozone crisis could have considerable impact on all economies in the region and certainly on the United Kingdom. We are right to be concerned about it and the media are right to examine it and to bring home—through their experts and commentators, in addition to the expertise already in this House—that if there are further difficulties and the problems in the eurozone are not resolved, it will certainly hurt the British economy as well. That is inevitable.

Lord Grenfell: My Lords, as regards those who are pleading for not one single cent more of British money to be spent on sorting out the problems in the eurozone, will the Minister bear in mind what the consequences might be if a newly elected Greek Government after the next elections wish to tear up all the agreements made, which would almost certainly provoke an exit from the eurozone leading to extraordinary problems for Greece? But the most important point, which has not been much discussed, is whether we are prepared to consider seriously the impact of a failed state in the Balkans and the probability that this will provoke a resurgence of nationalism in the region. It is the Balkans that we need to think about and not just Greece.

Lord Howell of Guildford: The noble Lord is right that there are serious political implications. He mentions the Balkans. One only needs to think of the problems facing Cyprus, for instance, and the whole south-eastern region of the Mediterranean. Further instabilities there on top of all the existing instabilities would certainly be against our interest. These things must be examined very carefully. But that is a different question from who steps forward with the financing for a problem which is strictly for the European countries to sort out and on which they are working now. But at the political level we fully recognise, as I am sure everyone does in this House, that serious political developments are ahead if the whole stability of the eurozone is not secured one way or another.

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Immigration: Controls at Airports


3.22 pm

Asked By Lord Dubs

To ask Her Majesty’s Government what steps they are taking to improve the efficiency and effectiveness of immigration controls at British airports.

The Minister of State, Home Office (Lord Henley): My Lords, the Government have announced several measures on these issues. National resources are being used flexibly to provide up to 80 additional staff at Heathrow every day. Mobile teams are deployable to assist with surges in passenger numbers and the skills and experience of staff are being maximised. Additionally, a border force is working with the airport operators and airlines to ensure that they receive accurate and timely information to enable resources to be deployed effectively.

Lord Dubs: My Lords, it does not seem to be working. At 10.30 pm one evening last week in Terminal 1, five immigration officers were dealing with British and EU people and two were dealing with people with other passports. The e-passport system was not working. Although it may have taken under half an hour for people like me to get through, the foreigners with other passports looked like they were waiting for hours and hours. Does the Minister agree that this is simply not acceptable and is a consequence of the Government’s cutbacks in staff?

Lord Henley: My Lords, I totally reject what the noble Lord says about cutbacks in staff affecting what is happening. It is not a question of numbers. The important thing is to make sure that we get the right people in the right places at the right time. Rostering, therefore, is done in line with the schedules as they vary between summer and winter. We then adjust them accordingly in line with information we receive, say, from BAA or the airlines about flight delays, weather and so on. We have also brought in this mobile force which we can move around a certain amount to make sure that the right people are there at the right time to deal with the numbers. Obviously, it will always be difficult but we want to continue to improve things and I believe that we are making progress. Perhaps I may remind the noble Lord that at the Home Affairs Select Committee meeting only yesterday, Andrew Lord, director of operations at British Airways, made it clear that it had seen great improvements in recent weeks.

Lord Dholakia: Will my noble friend confirm that the denial of visas at British posts abroad is not used as a means of controlling the administrative chaos at some of our airports? This morning, in the Commonwealth Parliamentary Association Room, the Commonwealth Parliamentary Association had a meeting with the Tanzanian parliamentary committee on privilege and ethics. None of them could attend because they were all denied a visa to enter the country.

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Lord Henley: My Lords, we are not using denial of visas to adjust these numbers, but obviously we want to deal with passport control as we can at the point of exit, where it is possible. That is one of the things that we do, and it is good to make things easier for visa control later on.

Baroness McIntosh of Hudnall: My Lords, the Minister referred in his Answer to people with skills and experience and referred in his subsequent answer to the right people in the right places. Will he explain to the House what skills and experience are required for somebody to become a member of the UK Border Agency, how they acquire those skills and where the UK Border Agency is recruiting from?

Lord Henley: My Lords, at the Dispatch Box, in answer to a question, I am not going to go through in detail the recruiting processes of UKBA and the border force. Obviously, they have to make sure that they get the right people who get the right training, and that they deal with things in the proper ways. At the same time, we also want to make sure that we use technology as best we can, as in the past we did with IRIS and in the future we will do that with e-gates. As a result, we hope that we will be able to improve the service for all those people and improve the security that we can offer to the country in dealing with these matters.

Lord Rogan: My Lords, will the Minister make representation to the Government of the Republic of Ireland and request that they also review and, if necessary, improve their border securities, ensuring that persons arriving in the Republic of Ireland and then crossing into the United Kingdom by the unmanned and thus unchecked land border are given suitable clearance?

Lord Henley: The noble Lord will be well aware that we have common border arrangements with the Republic of Ireland and that they will continue, as is quite convenient. But I shall certainly make sure that appropriate representations are made to the Government of the Republic of Ireland.

Lord Mawhinney: My Lords, recently a good friend of mine who has for many years been a prominent businessman and economist in the north-eastern part of the United States rang me to demand to know why he and his wife had been held for two and a half hours at Heathrow trying to get through border controls. What explanation or excuse would my noble friend wish that I had given him?

Lord Henley: My Lords, I cannot give an answer to my noble friend on an individual case. If he wishes to write to me, I will be more than happy to take a look at that case.

Baroness Afshar: My Lords, there are very simple answers to these problems, and we need better training for the immigration officers. I refer to the way in which they treated me when I came through and waved my passport at a British entrance. Because I was born in Iran, I was treated like a real terrorist. I kept on saying,

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“Look, it says ‘Baroness’ here”, and he said, “Oh, I thought that was your first name”. I really do think that they need better training.

Lord Henley: I am sure that the noble Baroness is right to point to the need for better training. I am sure that the border force and the border agency will take that on board. But it is more than that; there are other matters that we can deal with to improve service in this area.

Baroness Smith of Basildon: My Lords, does the noble Lord find it humiliating that the queues at Heathrow are the butt of Twitter messages and jokes around the world? Does he accept the strong criticism from the Chief Inspector of Borders and Immigration that the problems at Heathrow are caused by massive cuts of 15% of the staff, at the same time as massive organisational changes and a massive lack of good management; or, does he agree with the Immigration Minister in the other place, Damian Green, who says that since May 2010 there has been the wrong kind of wind?

Lord Henley: My Lords, the noble Baroness is very selective in what she says about my honourable friend’s evidence to the Home Affairs Select Committee yesterday. That is not surprising. I say yet again that all we get from the Opposition is that this is due to a reduction in numbers of staff. It is nothing to do with reductions in numbers of staff.

Noble Lords: Oh!

Lord Henley: It is a matter of getting the right staff into the right place, getting rid of some of the union restrictions that are in place within the border force and making sure that we get rostering under control. We can get these things moving far better, and we will.

Immigration: Detention of Children at Heathrow


3.30 pm

Asked By Lord Avebury

To ask Her Majesty’s Government what is their response to the Report of the Independent Monitoring Board on the non-residential short term holding facilities at London Heathrow Airport for the year February 2011 to January 2012 on the “degrading and disgraceful” conditions in which children are being detained at Heathrow.

The Minister of State, Home Office (Lord Henley): My Lords, we take very seriously the findings of the Independent Monitoring Board and are working with our partners, including BAA, to address them. We will respond to the report fully in due course.

Lord Avebury: My Lords, does my noble kinsman agree that keeping a child in these disgraceful conditions, in one case for 31 hours and 50 minutes, is inconsistent with the coalition’s commitment to end the detention

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of children and possibly with our obligations under the UN Convention on the Rights of the Child? Will my noble kinsman therefore consider appointing a joint inquiry by the chief inspector of the UKBA and the Children’s Commissioner into the conditions and length of detention at all the United Kingdom ports of entry by sea or by air?

Lord Henley: My Lords, I remind my noble kinsman that the holding rooms we are talking about are designed to hold people for relatively short amounts of time—a few hours in the main and up to 24 hours in extreme circumstances. We accept some of the criticisms that we have received from the Independent Monitoring Board and we hope that where it looks as though people, particularly with children, are going to be held for a long time, the relevant staff will make use of other available facilities, such as Tinsley House. However, I think that even my noble kinsman, and most Members of the House, would accept that where we are dealing with people who are going to be returned to another country, they have to be kept somewhere relatively secure, whether or not they have children with them, to make sure that they can be sent back, as appropriate, after their decision has been dealt with.

Baroness Massey of Darwen: My Lords, does the Minister agree that we are talking here about children who are defenceless and need support? Does he further agree that the conditions in which they are being kept must be very stressful and distressing for them? What support are those children receiving to help them overcome the stress that they have suffered?

Lord Henley: My Lords, the IMB’s report makes it clear that it thinks the officials dealing with these matters are doing so in a professional manner. What it was complaining about was the actual facilities in which these people were kept for up to 24 hours at the maximum. If people with children are going to be kept longer, at Heathrow there are other facilities such as Tinsley House that can be used and where those children can be sent with their parents. The idea that the children should be sent off somewhere else, therefore bringing in social services, would create even greater problems and trauma for the children. It is far better that they should stay with their parents for what we hope will be a relatively short amount of time while a decision is being made on whether they can stay in the country or not; and, after that, while they wait for a plane to take them back to where they came from.

Baroness Sherlock: My Lords, will the Minister clarify the Government’s position as regards the board’s report? The BBC website said that the UK Border Agency had reported that it had raised the issue with BAA on numerous occasions in the past and would continue to do so. However, the BBC website says that a BAA spokeswoman said that BAA was,

“somewhat surprised by UK Border Force's response, since we have had many meetings with them recently and it has not been raised”.

Who is correct?

Lord Henley: All I know is that the UK Border Agency and BAA have had considerable discussions about these matters over the years. Obviously I cannot

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give evidence about the precise detail of those discussions, but we know that they are aware of the problems because we have also discussed the matter with BAA. The important point to remember is that we will do what we can to improve things. We have only just received this report, which came in two days ago. We will be responding to it within the appropriate period of six weeks. We know that things are not entirely satisfactory but we are talking about holding people only in the very short term while a decision is made. We hope that that will not be longer than 24 hours. If it is, as I made clear, we have other facilities, such as Tinsley House, available.

Lord Foulkes of Cumnock: This matter was raised during the time of the Labour Government and the Liberal Democrats attacked us, understandably, about the detention of young children. They promised that once the coalition took over, the detention of children would be ended immediately. Now, two years later, children are still being detained. This is yet another promise—one put forward particularly by the Liberal Democrats—that has been reneged on.

Lord Henley: Dare I say that the noble Lord makes a very silly point, and not for the first time, as my noble friend the Deputy Leader says? We are talking about getting rid of detention. We are not talking about detaining children; we are talking about detaining people for as little as 24 hours in this facility.

Lord Foulkes of Cumnock: You are still detaining children.

Lord Henley: Is the noble Lord suggesting that they should be removed from their parents and sent somewhere else? That strikes me as even worse. This is complete nonsense. We think that the children should stay with their parents for that short time in the holding facility. If they cannot go there, they go to Tinsley House—a place that we have all accepted as being perfectly acceptable for children and their families to go to.

Baroness Hamwee: My Lords, I have a question. This Baroness—who has also been thought to have the first name Berenice—visited Cedars, a new facility near Gatwick. I was very impressed by the good work being done there by the border agency and Barnardo’s. Will the Government learn from that in dealing with families and children—some of them unaccompanied children—and deciding on the best way to respond to what everyone must acknowledge is a very difficult situation?

Lord Henley: My Lords, of course we will learn from what we have done at Cedars at Gatwick and we will do what we can. I am very grateful to my noble friend for mentioning that. Because of where these very short-term holding facilities are located within the airports, it is very difficult to think of design solutions. However, if anyone is going to be kept longer than that very short period of time, we obviously have to look at other facilities.

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Marriage (Approved Organisations) Bill [HL]

First Reading

3.37 pm

A Bill to make provision for amending the law on marriage to permit the Registrar General to permit certain charitable organisations to solemnise marriages.

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

Interception of Communications (Admissibility of Evidence) Bill [HL]

First Reading

3.38 pm

A Bill to make provision for permitting the introduction of intercept evidence in certain criminal proceedings and for connected purposes.

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

Caravan Sites Bill [HL]

First Reading

3.38 pm

A Bill to make provision for securing the establishment of caravan sites by local authorities in England for the use of Gypsies and Travellers.

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

Contaminated Blood (Support for Infected and Bereaved Persons) Bill [HL]

First Reading

3.39 pm

A Bill to make provision for establishing a committee to advise on haemophilia; to make provision in relation to blood donations; to establish a scheme for NHS compensation cards for people who have been treated with and infected by contaminated blood or blood products; to make provision for the financial compensation of people treated with and infected by contaminated blood and blood products and their widows, dependants and carers; to establish a review of the support available for people who have been treated with and infected by contaminated blood or blood products; and for connected purposes.

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

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Business of the House

Timing of Debates

3.40 pm

Moved By Lord Strathclyde

That the one-hour time limit shall apply to the Questions for Short Debate set down for Tuesday 29 May.

Motion agreed.

Deputy Chairmen of Committees

Administration and Works


Consolidation etc. Bills


Delegated Powers and Regulatory Reform

Economic Affairs

Human Rights

Hybrid Instruments



National Security Strategy

Parliamentary Office of Science and Technology (POST)

Privileges and Conduct

Procedure of the House

Science and Technology

Secondary Legislation Scrutiny

Standing Orders (Private Bills)

Statutory Instruments

16 May 2012 : Column 391

Works of Art

Membership Motions

3.40 pm

Moved By The Chairman of Committees

Deputy Chairmen of Committees

That, as proposed by the Committee of Selection, the following members be appointed as the panel of members to act as Deputy Chairmen of Committees for this session:

B Andrews, B Anelay of St Johns, L Bassam of Brighton, L Bichard, L Brougham and Vaux, L Colwyn, L Faulkner of Worcester, B Fookes, L Geddes, B Gibson of Market Rasen, B Harris of Richmond, L Haskel, B Hooper, B McIntosh of Hudnall, B Morris of Bolton, B Pitkeathley, V Simon, L Skelmersdale, V Ullswater.

Administration and Works

That a Select Committee be appointed to consider administrative services, accommodation and works, including works relating to security, within the strategic framework and financial limits approved by the House Committee;

That, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

B Anelay of St Johns, L Bassam of Brighton , L Brougham and Vaux, L Cameron of Dillington, Bp Exeter, L Faulkner of Worcester, L Laming, B McIntosh of Hudnall , L Mancroft, L Newby, L Roper, L Rowe-Beddoe;

That the Committee have power to send for persons, papers and records;

That the Committee have leave to report from time to time.


That a Select Committee be appointed to consider the media and the creative industries and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:

B Bakewell, L Bragg, L Clement-Jones, B Deech, L Dubs, B Fookes, L Gordon of Strathblane, L Inglewood (Chairman), Bp Norwich, L Razzall, L St John of Bletso, E Selborne, L Skelmersdale;

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

That the Committee have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

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That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Consolidation etc. Bills

In accordance with Standing Order 51, that, as proposed by the Committee of Selection, the following Lords be appointed to join with a Committee of the Commons as the Joint Committee on Consolidation etc. Bills:

L Campbell of Alloway, L Carswell (Chairman), L Christopher, E Dundee, L Eames, L Janner of Braunstone, B Mallalieu, L Methuen, L Razzall, L Swinfen, L Tombs;

That the Committee have power to send for persons, papers and records.


That a Select Committee be appointed to examine the constitutional implications of all public bills coming before the House; and to keep under review the operation of the constitution;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Crickhowell, B Falkner of Margravine, L Goldsmith, L Hart of Chilton, L Irvine of Lairg, B Jay of Paddington (Chairman), L Lexden, L Macdonald of River Glaven, L Pannick, L Powell of Bayswater, L Renton of Mount Harry, L Shaw of Northstead;

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

That the Committee have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Delegated Powers and Regulatory Reform

That a Select Committee be appointed to:

(i) report whether the provisions of any bill inappropriately delegate legislative power, or whether they subject the exercise of legislative power to an inappropriate degree of parliamentary scrutiny;

(ii) report on documents and draft orders laid before Parliament under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006;

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(iii) report on documents and draft orders laid before Parliament under or by virtue of section 7(2) of the Localism Act 2011 or under or by virtue of section 5E(2) of the Fire and Rescue Services Act 2004; and

(iv) perform, in respect of draft orders referred to in paragraphs (ii) and (iii) above, and in respect of subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001, the functions performed in respect of other instruments and draft instruments by the Joint Committee on Statutory Instruments;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

B Andrews, L Blackwell, L Butler of Brockwell, L Carlile of Berriew, B Gardner of Parkes, L Haskel, L Mayhew of Twysden, B O’Loan, L Soley, B Thomas of Winchester (Chairman);

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Economic Affairs

That a Select Committee be appointed to consider economic affairs and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Currie of Marylebone, L Forsyth of Drumlean, L Hollick, B Kingsmill, L Lawson of Blaby, L Levene of Portsoken, L Lipsey, L McFall of Alcluith, L MacGregor of Pulham Market (Chairman), L Rowe-Beddoe, L Shipley, L Smith of Clifton, L Tugendhat;

That the Committee have power to appoint a sub-committee and to refer to it any of the matters within the Committee’s terms of reference; that the Committee have power to appoint the Chairman of the sub-committee;

That the Committee have power to co-opt any member to serve on the sub-committee;

That the Committee and its sub-committee have power to send for persons, papers and records;

That the Committee and its sub-committee have power to appoint specialist advisers;

That the Committee and its sub-committee have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;

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That the evidence taken by the Committee or its sub-committee shall, if the Committee so wishes, be published.

Human Rights

That a Select Committee of six members be appointed to join with a Committee appointed by the Commons as the Joint Committee on Human Rights:

To consider:

(a) matters relating to human rights in the United Kingdom (but excluding consideration of individual cases);

(b) proposals for remedial orders, draft remedial orders and remedial orders made under section 10 of and laid under Schedule 2 to the Human Rights Act 1998; and

(c) in respect of draft remedial orders and remedial orders, whether the special attention of the House should be drawn to them on any of the grounds specified in Standing Order 73 (Joint Committee on Statutory Instruments);

To report to the House:

(a) in relation to any document containing proposals laid before the House under paragraph 3 of the said Schedule 2, its recommendation whether a draft order in the same terms as the proposals should be laid before the House; or

(b) in relation to any draft order laid under paragraph 2 of the said Schedule 2, its recommendation whether the draft Order should be approved;

and to have power to report to the House on any matter arising from its consideration of the said proposals or draft orders; and

To report to the House in respect of any original order laid under paragraph 4 of the said Schedule 2, its recommendation whether:

(a) the order should be approved in the form in which it was originally laid before Parliament; or

(b) the order should be replaced by a new order modifying the provisions of the original order; or

(c) the order should not be approved;

and to have power to report to the House on any matter arising from its consideration of the said order or any replacement order;

That the following members be appointed to the Committee:

B Berridge, B Campbell of Surbiton, L Faulks, B Kennedy of The Shaws, L Lester of Herne Hill, B Lister of Burtersett;

That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;

That the quorum of the Committee shall be two;

That the Committee have power to send for persons, papers and records;

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That the Committee have power to appoint specialist advisers;

That the Committee have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Hybrid Instruments

That a Select Committee be appointed to consider hybrid instruments and that, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

L Addington, L Campbell of Alloway, L Grantchester, L Harrison, L Luke, L Quirk, L Swinfen;

That the Committee have power to send for persons, papers and records.


That a Select Committee be appointed to consider information and communications services, including the Library and the Parliamentary Archives, within the strategic framework and financial limits approved by the House Committee;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Aberdare, L Black of Brentwood, L Feldman, L Haskel, L Kirkwood of Kirkhope (Chairman), E Lytton, B Massey of Darwen, L Maxton, B Pitkeathley, L Rennard, L St John of Bletso, L Selsdon, B Stedman-Scott;

That the Committee have power to send for persons, papers and records;

That the Committee have leave to report from time to time.


That a Select Committee be appointed to advise the House on the resources required for select committee work and to allocate resources between select committees; to review the select committee work of the House; to consider requests for ad hoc committees and report to the House with recommendations; to ensure effective co-ordination between the two Houses; and to consider the availability of members to serve on committees;

That, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

L Alderdice, B Browning, L Campbell-Savours, B Corston, L Fellowes, L Laming , L McNally, B Royall of Blaisdon, L Strathclyde, V Ullswater;

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

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That the Committee have leave to report from time to time.

National Security Strategy

That, as proposed by the Committee of Selection, the following Lords be appointed to join with a Committee of the Commons as the Joint Committee on the National Security Strategy, to consider the National Security Strategy:

L Fellowes, L Foulkes of Cumnock, L Harris of Haringey, L Lee of Trafford, B Manningham-Buller, B Neville-Jones, B Ramsay of Cartvale, L Sterling of Plaistow, B Taylor of Bolton, L Waldegrave of North Hill;

That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;

That the Committee have power to send for persons, papers and records;

That the Committee have power to adjourn from place to place in the United Kingdom;

That the Committee have leave to report from time to time;

That the reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee in the last session of Parliament be referred to the Committee;

That the Committee have power to appoint specialist advisers;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Parliamentary Office of Science and Technology (POST)

That, as proposed by the Committee of Selection, the following Lords be appointed to the Board of the Parliamentary Office of Science and Technology (POST):

L Haskel, L Krebs, L Oxburgh, L Winston.

Privileges and Conduct

That a Select Committee be appointed and that, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

B Anelay of St Johns, L Bassam of Brighton, L Brooke of Sutton Mandeville, L Eames, L Howe of Aberavon, L Irvine of Lairg, L Laming, L Mackay of Clashfern, L McNally, B Manningham-Buller, L Newby, B Royall of Blaisdon, B Scotland of Asthal, L Scott of Foscote, L Strathclyde;

That the Committee have power to appoint sub-committees and that the Committee have power to appoint the Chairmen of sub-committees;

That the Committee have power to co-opt any member to serve on a sub-committee;

That the Committee have power to send for persons, papers and records;

That in any claim of peerage, the Committee shall sit with three holders of high judicial office, who shall have the same speaking and voting rights as members of the Committee.

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Procedure of the House

That a Select Committee on Procedure of the House be appointed and that, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

B Anelay of St Johns, L Bassam of Brighton, L Blencathra, L Butler of Brockwell, L Campbell-Savours, B D’Souza, B Gould of Potternewton, L Laming, L McNally, L Newby, L Patel, B Royall of Blaisdon, L Strathclyde, B Thomas of Winchester, L Tyler, V Ullswater, L Wakeham, B Wall of New Barnet;

That the following members be appointed as alternate members:

V Craigavon, L Filkin, B Hamwee, V Montgomery of Alamein, L True;

That the Committee have power to appoint sub-committees and that the Committee have power to appoint the Chairmen of sub-committees;

That the Committee have power to send for persons, papers and records;

That the Committee have leave to report from time to time.

Science and Technology

That a Select Committee be appointed to consider science and technology and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Broers, L Cunningham of Felling, L Dixon-Smith, B Hilton of Eggardon, L Krebs (Chairman), L O’Neill of Clackmannan, L Patel, B Perry of Southwark, L Rees of Ludlow, E Selborne, B Sharp of Guildford, L Wade of Chorlton, L Willis of Knaresborough, L Winston;

That the Committee have power to appoint sub-committees and that the Committee have power to appoint the Chairmen of sub-committees;

That the Committee have power to co-opt any member to serve on the Committee or a sub-committee;

That the Committee and its sub-committees have power to send for persons, papers and records;

That the Committee and its sub-committees have power to appoint specialist advisers;

That the Committee and its sub-committees have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee or its sub-committees in the last session of Parliament be referred to the Committee or its sub-committees;

That the evidence taken by the Committee or its sub-committees shall, if the Committee so wishes, be published.

Secondary Legislation Scrutiny

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That a Select Committee be appointed to scrutinise secondary legislation.

(1) The Committee shall, with the exception of those instruments in paragraphs (3) and (4), scrutinise—

(a) every instrument (whether or not a statutory instrument), or draft of an instrument, which is laid before each House of Parliament and upon which proceedings may be, or might have been, taken in either House of Parliament under an Act of Parliament;

(b) every proposal which is in the form of a draft of such an instrument and is laid before each House of Parliament under an Act of Parliament,

with a view to determining whether or not the special attention of the House should be drawn to it on any of the grounds specified in paragraph (2).

(2) The grounds on which an instrument, draft or proposal may be drawn to the special attention of the House are—

(a) that it is politically or legally important or gives rise to issues of public policy likely to be of interest to the House;

(b) that it may be inappropriate in view of changed circumstances since the enactment of the parent Act;

(c) that it may inappropriately implement European Union legislation;

(d) that it may imperfectly achieve its policy objectives.

(3) The exceptions are—

(a) remedial orders, and draft remedial orders, under section 10 of the Human Rights Act 1998;

(b) draft orders under sections 14 and 18 of the Legislative and Regulatory Reform Act 2006, and subordinate provisions orders made or proposed to be made under the Regulatory Reform Act 2001;

(c) Measures under the Church of England Assembly (Powers) Act 1919 and instruments made, and drafts of instruments to be made, under them.

(4) The Committee shall report on draft orders and documents laid before Parliament under section 11(1) of the Public Bodies Act 2011 in accordance with the procedures set out in sections 11(5) and (6). The Committee may also consider and report on any material changes in a draft order laid under section 11(8) of the Act.

(5) The Committee shall also consider such other general matters relating to the effective scrutiny of secondary legislation and arising from the performance of its functions under paragraphs (1) to (4) as the Committee considers appropriate, except matters within the orders of reference of the Joint Committee on Statutory Instruments.

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

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L Bichard, L Eames, B Eaton, L Goodlad (Chairman), B Hamwee, L Hart of Chilton, L Methuen, B Morris of Yardley, L Norton of Louth, L Plant of Highfield, L Scott of Foscote;

That the Committee have power to send for persons, papers and records;

That the Committee have power to appoint specialist advisers;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee shall, if the Committee so wishes, be published.

Standing Orders (Private Bills)

That a Select Committee on the Standing Orders relating to private bills be appointed and that, as proposed by the Committee of Selection, the following members together with the Chairman of Committees be appointed to the Committee:

L Geddes, B Gould of Potternewton, L Luke, L Naseby, L Palmer, V Simon, B Thomas of Walliswood;

That the Committee have power to send for persons, papers and records.

Statutory Instruments

In accordance with Standing Order 73 and the resolution of the House of 16 December 1997, that, as proposed by the Committee of Selection, the following members be appointed to join with a Committee of the Commons as the Joint Committee on Statutory Instruments:

L Clinton-Davis, L Geddes, L Kennedy of Southwark, E Mar and Kellie, L Rees-Mogg, L Selkirk of Douglas, B Stern;

That the Committee have power to send for persons, papers and records.

Works of Art

That a Select Committee be appointed to administer the House of Lords Works of Art Collection Fund; and to consider matters relating to works of art and the artistic heritage in the House of Lords, within the strategic framework and financial limits approved by the House Committee;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Cormack, L Crathorne, L Harries of Pentregarth, B Howells of St Davids, L Luke (Chairman), B Maddock, L Myners, B Rendell of Babergh, L Roberts of Llandudno, E Shrewsbury, L Stevenson of Coddenham, B Valentine;

That the Committee have power to send for persons, papers and records;

That the Committee have leave to report from time to time.

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The Chairman of Committees (Lord Sewel): My Lords, I beg to move the first 20 Motions standing in my name on the Order Paper. I shall move the Motion relating to the European Union Committee separately.

Motions agreed.

European Union

Membership Motion

3.40 pm

Moved by The Chairman of Committees

European Union

That a Select Committee be appointed:

(1) To consider European Union documents deposited in the House by a Minister, and other matters relating to the European Union;

The expression “European Union document” includes in particular:

(a) a document submitted by an institution of the European Union to another institution and put by either into the public domain;

(b) a draft legislative act or a proposal for amendment of such an act; and

(c) a draft decision relating to the Common Foreign and Security Policy of the European Union under Title V of the Treaty on European Union;

The Committee may waive the requirement to deposit a document, or class of documents, by agreement with the European Scrutiny Committee of the House of Commons;

(2) To assist the House in relation to the procedure for the submission of Reasoned Opinions under Article 5 of the Treaty on European Union and the Protocol on the application of the principles of subsidiarity and proportionality;

(3) To represent the House as appropriate in interparliamentary co-operation within the European Union;

That, as proposed by the Committee of Selection, the following members be appointed to the Committee:

L Boswell of Aynho (Chairman), L Bowness, L Cameron of Dillington, L Carter of Coles, L Dear, B Eccles of Moulton, L Foulkes of Cumnock, L Hannay of Chiswick, L Harrison, L Maclennan of Rogart, L Marlesford, B O’Cathain, L Richard, E Sandwich, B Scott of Needham Market, L Teverson, L Tomlinson, L Trimble, B Young of Hornsey;

That the Committee have power to appoint sub-committees and to refer to them any matters within its terms of reference; that the Committee have power to appoint the Chairmen of sub-committees, but that the sub-committees have power to appoint their own Chairmen for the purpose of particular inquiries; that the quorum of each sub-committee be two;

That the Committee have power to co-opt any member to serve on a sub-committee;

That the Committee and its sub-committees have power to send for persons, papers and records;

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That the Committee have power to appoint specialist advisers;

That the Committee and its sub-committees have power to adjourn from place to place;

That the Committee have leave to report from time to time;

That the Reports of the Committee shall be printed, regardless of any adjournment of the House;

That the evidence taken by the Committee or its sub-committees in the last session of Parliament be referred to the Committee or its sub-committees;

That the evidence taken by the Committee or its sub-committees shall, if the Committee so wishes, be published.

The Chairman of Committees (Lord Sewel): I beg to move the final Motion, standing in my name on the Order Paper, to appoint the European Union Committee.

Amendment to the Motion

Moved by Lord Pearson of Rannoch

As an amendment to the above Motion, after paragraph (3), insert:

“(4) To make an annual report to the House for debate on the effect of its work on the European Union’s legislative proposals and legislation.”

Lord Pearson of Rannoch: My Lords, several times over recent years I have intervened at this juncture in our appointments procedure to complain about the composition and effectiveness of your Lordships’ Select Committee on the European Union. I have also suggested that the number of its sub-committees should be reduced and their energies redistributed to other committees of your Lordships’ House and future ad hoc committees. I remind noble Lords that the appointment of our Select Committees is a matter for the whole House and not just for the usual channels, whatever they may be. We have just approved a heavyweight committee to consider economic affairs and we have been generous enough to give it one sub-committee. Do we have the balance right?

Would it not be more sensible to disband EU Sub-Committees A and B on economic and financial affairs, international trade, the EU’s internal market, energy and transport and pass their activities to our Economic Affairs Committee, perhaps giving it another sub-committee in the process? Are we right to have a Sub-Committee C on foreign affairs, defence and development policy when we do not have a committee on our own defence and foreign affairs? Should we not set one up and include the work of Sub-Committee C in its remit?

Furthermore, do we really need two EU sub-committees: on justice and institutions, Sub-Committee E; and on home affairs, Sub-Committee F? Could they not be rolled into one? These suggestions would leave us with an EU Select Committee and just two sub-committees: Sub-Committee D, on agriculture, fisheries

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and our environment—all areas firmly under the control of Brussels; and a new combined E and F Sub-Committee? That would largely free up the energies of four sub-committees for distribution elsewhere.

In this respect, I am not sure whether our Science and Technology Committee feels that it is now adequately equipped with its new second sub-committee. Clearly it is a vital area of our national life. If so, I merely point out that it had to struggle to get what it needs with the powers that be.

I make these suggestions because I believe that the committee work of your Lordships’ House, with the single exception of our EU committees, is of huge value to the nation. The expertise and wisdom that resides in your Lordships’ House is unrivalled anywhere else in the country. The standard of debate is dauntingly high. I see our committees as one of the irrefutable justifications for your Lordships’ House in its present composition and at or somewhere near its present size. How could we field anything like the number of Select Committees that serve this House with a House of some 300 Members?

3.45 pm

However, our EU committee is different. Brussels pays virtually no attention to its views, as can be seen from a series of Written Questions tabled in 2008 by my noble friends Lord Vinson, Lord Tebbit, Lord Stoddart of Swindon and Lord Willoughby de Broke, and by me. The only example that the Government could give of Brussels taking up in legislation one of our committee’s suggestions was a small amendment to the audiovisual media services directive. That information is to be found in Written Answers, col. 38, on 10 March 2008. I will put a copy of the written exchanges in your Lordships’ Library.

The effectiveness of our EU committees is further scandalously undermined by the Government’s continual breach of the scrutiny reserve, whereby they promise not to sign up to any new law in Brussels that is still under scrutiny by the Select Committee of either House of Parliament. The latest Written Answers on this problem—to the noble Lord, Lord Roper, and to me—confirmed that the reserve was broken 281 times in your Lordships’ House and 299 times in the Commons in the five and a half years to June 2011. That means that 580 new pieces of legislation from Brussels passed into law in breach of the Government’s promise that they would not do so when they were still under scrutiny by the Select Committee of either House.

I do not blame the Government for this; it is more that the juggernaut in Brussels could not care less about national parliaments and their democratic sensibilities. The whole project of European integration was set in motion precisely to delude and destroy national democracy. I will not go into all that again now; events are speaking for themselves.

In conclusion, I am aware that many noble and Europhile Lords believe that our Select Committee is taken very seriously in Brussels. They tell us of our famous red reports being consulted with much respect by Eurocrats of all descriptions. In our last debate on this subject, the noble Lord, Lord Sewel, told us that Brussels was at long last going to reform the common

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fisheries policy, thanks to advice from our Select Committee. I said then, and say again now, that that remains to be seen. The noble Lord has now been elevated above such mundane debate. I welcome him to his new position and congratulate him on it.

I hope that noble Lords who support our EU Select Committee as presently constituted will welcome the amendment. It would give them the chance once a year to show us how valuable its work has been in the national interest. It would give your Lordships the opportunity to decide its future and whether there is any merit in the suggestions that I put forward.

I hope for one last thing: namely, that we will not be told that the advantages of our EU committee, like our membership of the EU itself, are so obvious that there is no point in discussing them. I beg to move.

Lord Boswell of Aynho: My Lords, the House will have noted the comments of the noble Lord, Lord Pearson, on the importance of effective scrutiny, and his interesting and detailed suggestion on the configuration of committees. First, I briefly thank the House for entrusting me with responsibility for the European Union Select Committee; and, secondly, I acknowledge the fine example set by my predecessors, including my immediate predecessor, the noble Lord, Lord Roper. I have no conceptual problem with the need for efficiency and scrutiny, and I remind noble Lords that they will shortly receive the sessional report of the Select Committee and will have ample opportunity thereafter to consider it further.

Lord Willoughby de Broke: My Lords, I support the amendment of my noble friend Lord Pearson. It seems eminently sensible. I spent four years on the EU Select Committee. Any Members on the committee now will know exactly how much time is taken up by membership of that committee and of its various sub-committees—the amount of reading, work and supporting of the committee reports when they are debated in the House. However, like my noble friend, I remind the House that precisely one item only has ever been amended by the Commission following the issuing of a Select Committee report. I really wonder whether this is right and whether the committee should be required—it seems a harmless amendment, I must say—to report back to this House and to the nation on the effectiveness of its work and on the effect of its reports on the legislation coming out of Brussels. At the moment, the latest fact is that just one piece of legislation in the past 10 or 15 years has actually been affected by the vast number of reports issued by the EU Select Committee.

I am not sure whether the noble Lord, Lord Boswell, supported my noble friend’s amendment or not, but it seems to be very sensible. I hope that the House will support it.

Lord Grenfell: My Lords, I take this opportunity to congratulate the noble Lord, Lord Boswell, on his appointment to the chairmanship of the committee, a chairmanship which I enormously enjoyed when I had the honour to hold it.

What the noble Lord, Lord Pearson of Rannoch, is saying today is so familiar to me it is almost like listening to “Auld Lang Syne” every New Year’s Eve.

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It is utterly predictable but probably less tuneful. Every year, he shows that he misunderstands the purpose of the European Union Committee. It is not to tell Brussels what to do; it is to hold the Government to account for what they do. The function of a committee of the House of Lords is to hold the Government to account, and that is precisely what it does. If it takes that number of sub-committees to examine the more than 1,000 documents that come through, so be it. You need the people and the Peers to do that.

However, the real point is this: in order to be able to advise the Government on how they should react to what comes from what the noble Lord described as the juggernaut in Brussels, you need to explore the minds of those working in Brussels and spend a lot of time examining the Green Papers and the White Papers, attending the meetings and so forth so that you can fulfil your function, which is to advise the Government on how they should react. That is what the committee is all about. It is not about telling Brussels what to do.

Lord Stoddart of Swindon: My Lords, I am afraid that the noble Lord, Lord Grenfell, will now hear the second verse of “Auld Lang Syne”. Before I remark on the amendment of the noble Lord, Lord Pearson, I congratulate the noble Lord, Lord Sewel, on his appointment as Chairman of Committees and the noble Lord, Lord Boswell, on his as Principal Deputy Chairman of Committees. However, I support the noble Lord, Lord Pearson, in the amendment that he has put before the House. He has been very persistent in doing so. It is right that the House should hear some alternative views about the European Union. It often does not and should do so more often.

The Select Committee has six sub-committees; it used to have seven but now it has six. However, their very existence shows the power of the European Union over matters relating to this country and how it has encroached on our national life and into the very nooks and crannies of our country.

The Select Committee on the European Union costs £2 million a year, which is not a mean sum. It is absolutely true that the benefits from its discussions, although they are erudite and make easy reading, are nevertheless not influential, so far as this House and Parliament can see, in altering the views and policies of the European Union itself. Decisions are taken in secret so that we do not even know what views are being put forward by the Government, so again we cannot see what influence our own Select Committee has on our own Government.

We spend £2 million on this committee. There is another Select Committee in the House of Commons. It does not do quite the same thing, but I wonder whether it might be worth considering a joint Select Committee of both Houses to scrutinise EU legislation and regulations. That is a matter that might be taken up by the House and the other place at some point in the future. I support the amendment moved by the noble Lord, Lord Pearson.

Lord Hannay of Chiswick: My Lords, I would like to say a few words on this, having been a member of your Lordships’ European Union Committee on two

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occasions and still currently so. There are many errors of fact in what has been said by the noble Lords, Lord Pearson of Rannoch and Lord Stoddart of Swindon, and others. Our job is to make recommendations to the British Government, and the point about the British Government not telling us what account they have taken of our recommendations is untrue. They are required to do so within two months and they always do so. They state their reaction to every single one of the recommendations. It is also untrue that the Commission does not say what it has done in reply to the recommendations. Every one of the reports is now replied to by the vice-president of the Commission responsible for relations with the national parliaments, and they are all on the website. I wish the noble Lord, Lord Pearson, good reading because there are probably several thousand replies from the Commission that he could usefully read. He might then understand a little better what is done.

My penultimate point is that we have not yet reduced the number of sub-committees to six. We are waiting for the Chairman of Committees to be allowed to put his proposal to us in order to reduce them from seven to six, but we have not yet done so. The last point that I want to make about this is that it does not always seem to be very well understood that the job done by the EU Committee and its sub-committees is that of scrutiny of EU legislation, a job that is done by the whole House on UK legislation. If it is not done properly through the EU Select Committee and its sub-committees, it will not be done at all, and that would be a real loss of influence for this country.

Lord Tebbit: My Lords, it verges upon the unbelievable to think, from the description just given to us by the noble Lord, Lord Hannay, that the bureaucrats of Brussels are waiting in fear of what the sub-committees in this place might say about proposed European legislation and are then devoting thousands of hours to reasoned arguments against it. I suspect that that does not actually happen.

To come back to the clear point, we have before us a proposal that these distinguished and hardworking Members of the House should consider these matters time and time again, even though there is no evidence that anything changes as a result of their consideration and recommendations. That is a fact that has been shown to be so from the answers to PNQs. Either we change what we are doing and do something to draw attention to this so that the Government might get excited about it and act in some way, or we simply say to these distinguished Members of the House, “You are wasting your time. Why not go home and dig the garden? Do something constructive”, or something like that.

These Members are simply wasting their time. If they are wasting their time, as I believe they have been in recent years, it should be brought to the notice of this House by means of a debate so that we can consider what to do about it, one way or the other: either close down the operation or require Her Majesty’s Government to do something effective. The amendment proposed today is one way of getting something moving on that front.

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4 pm

Baroness O'Cathain: My Lords, I hesitate to disagree with my noble friend Lord Tebbit, but there are occasions when the workings of the sub-committees and the Select Committee have actually borne fruit. We have done a number of reports where we put the consumer first, as well as the management of money.

Only recently we had huge success in dealing with the issue of the roaming of data when abroad. That might not sound important to a lot of people but with the growth in the use of iPads, I can assure noble Lords that it is. I spent a night in a hotel in Ireland recently with my iPad—I mean, reading my two newspapers on my iPad in the morning; sorry about that—and it cost me £30. I just could not believe it. We then made our report in a very short exercise—and I see members of my sub-committee agreeing with me—and we got huge acres in the techie press of agreement that this was the way to go, and I am sure that something will happen. It is only a small thing but it is something to convince my noble friend that in fact we are achieving something.

The Chairman of Committees: My Lords, I had anticipated an amendment from the noble Lord, Lord Pearson of Rannoch, although not the one that actually emerged. He has put me in something of a difficulty. I do not know whether to respond to his amendment or to his speech because the two seem to be somewhat disconnected.

As the noble Lords, Lord Hannay and Lord Grenfell, have pointed out, the noble Lord fundamentally misunderstands the function of the committee. The committee’s job is to scrutinise Her Majesty’s Government’s response to European initiatives. It also takes on the role of inquiry into particular policy areas. This is where the argument about effectiveness is cited.

The noble Baroness, Lady O’Cathain, has already pointed out with regard to roaming how the committee is able to influence the development of policy. I have previously pointed out with regard to fisheries policy that if you look at the proposals coming forward from the Commission on the reform of the common fisheries policy, they are heavily drawn from the report of our own EU Committee. That is the sort of influence that can be brought to bear in a positive way.

Finally, on the issue of preparing an annual report, the committee already has the power to issue an annual report if it so wishes. Again, listening to the words of the Deputy Chairman of Committees, it seems that he—and the committee—would be quite happy to look at whether something like an annual report could be produced. On that extremely helpful note, I invite the noble Lord to withdraw his amendment.

Lord Tebbit: Back in May 2008, I asked the then Government whether they could find more than one example of a European Union legislative institution having been altered as a result of proceedings in either House of Parliament. It was a fairly straightforward question. No such examples were given. I wonder whether my noble friend has some examples that might have occurred in the past two years under this Government.

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The Chairman of Committees: My Lords, I am much more concerned about being able positively to influence policy development rather than seeking the post-hoc position of trying to change policy and legislation once it has been enacted. Surely it is much better that we are in there, bringing to bear the expertise of this House on issues of major European policy.

Lord Pearson of Rannoch: I am most grateful to all noble Lords who have spoken: to the noble Lords, Lord Grenfell and Lord Hannay, and partially to the Chairman of Committees. They all said the same thing: that I had got it all wrong, that I had not understood that the EU Select Committee is there not to tell Brussels what to do but to hold the Government to account and to advise them how to act. Well, as a matter of fact, I am aware of that; my point is that the result is ineffectual, as witnessed by the 580 scrutiny overrides and so on. I accept the point made by the noble Lord, Lord Hannay, who said that the Government indeed reply, copiously, to all our Select Committee reports and that the Commission replies to the Government’s views. However, the result remains the same. On the example relating to fish that has been given by the Chairman of Committees, let us wait and see.

The amendment and the debate have been worth while. I have to disagree with my noble friend—if I may refer to him as such—Lord Tebbit in one regard. I agree that members of the European Union Select Committee are largely wasting their time, but I do not propose that they should go and dig their garden. Their energies should be redistributed around the other committees of your Lordships' House, particularly the ad hoc committees of the future, which will be increasingly important.

I am grateful to the Chairman of Committees for giving me some support and to the chairman of the Select Committee for not ruling out of order what I had to say. I am grateful, too, to both noble Lords for giving us the hope that future annual reports of your Lordships’ Select Committee may indeed include what I have requested. I am most grateful to the noble Lord for his generous reply. I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Motion agreed.

Infrastructure Planning (Waste Water Transfer and Storage) Order 2012

Advisory Committee on Hazardous Substances (Abolition) Order 2012

Motions to Refer to Grand Committee

4.07 pm

Moved By Lord De Mauley

That the draft orders be referred to a Grand Committee.

Motions agreed.

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Arrangement of Business


4.07 pm

Lord Newby: My Lords, if Back-Bench contributions to today’s debate on the gracious Speech are kept to seven minutes, the House should be able to rise before midnight.

Queen’s Speech

Debate (5th Day)

4.08 pm

Moved on Wednesday 9 May by Lord Cope of Berkeley

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most Gracious speech which Your Majesty has addressed to both Houses of Parliament”.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, it is a privilege for me to open this debate, which my noble friend Lord Sassoon will wind up later today—much later today, because 58 Peers are down to speak.

I look forward greatly to the maiden speech of the right reverend Prelate the Bishop of Durham. He brings a broad experience to this House and it will be very welcome to hear him give us some more information on that.

The measures laid out in Her Majesty’s gracious speech reflect the Government’s ongoing efforts to revive the fortunes of the economy, to create the best possible climate for business investment and to steer the UK firmly in the direction of growth.

As my colleague, the Business Secretary, pointed out in another place, the global financial crisis destroyed roughly 10 per cent of our economy. Recovery to date has been slow and halting; ongoing turmoil in the eurozone will especially make further progress equally challenging.

We can look with some satisfaction to the creation of more than 600,000 new private sector jobs within two years, almost twice as many as have been lost in the public sector, and to today’s news that unemployment is falling. That is heartening, but there are still too many families missing a breadwinner. This, above all, is testament to the misguided economic stewardship of the previous Government. Theirs was a flawed approach, predicated on ever greater debt, overly dependent on an unstable banking sector and neglectful of manufacturing.

I regret, therefore, that the noble Baroness, Lady Royall, is moving her amendment. It is only two years since Labour was thrown out by the electorate. I echo the Prime Minister in noting that her party’s only solution to overborrowing, overspending and excessive

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debt is more of the same. We stand firmly by the measures we have taken to date: tackling the deficit, reducing burdens on business and maintaining low interest rates. This latest legislative programme is again focused on economic rebalancing, rewarding hard work and delivering sustainable growth.

At the same time, we recognise that simply passing more laws will not in itself create the change we need. The Foreign Secretary reached the heart of the matter in today’s Times:

“Governments never have and never will create wealth solely through their own efforts. We can pave the way, but it will be talented and hardworking British people and companies who propel our country towards a prosperous future”.

I intend to devote much of my speech to those Bills which focus most directly on addressing that issue, although I will also cover key measures, including pensions and local government. Under the banner of the enterprise and regulatory reform Bill, we are promoting the UK’s transition to a green economy. The UK green investment bank—a global first—has initial funding of £3 billion to March 2015. Its mission as an independent institution will be to mobilise private finance in green infrastructure, helping to give UK businesses a head start in nascent markets.

Secondly, the Bill will tackle anti-competitive behaviour and ensure more open markets by establishing a new Competition and Markets Authority. Assuming the functions of the Competition Commission and the competition functions of the Office of Fair Trading, it will speed up existing processes within clearer time frames. Regulation is sometimes unavoidable, but it must never be excessive. Some burdens will be entirely done away with under this Bill; others may face sunset clauses. In addition, we will extend the primary authority scheme, allowing more businesses—especially SMEs—to access consistent advice on specific regulatory issues. The new arrangements will save many more small businesses from time-consuming, and often duplicative, inspections.

Many SMEs also regard the current operation of employment tribunals as a disincentive to expansion and hiring extra staff. We agree that it is absolutely necessary to protect people from abusive employers and no measures in this Bill will dismantle those protections. It is also important, however, that where disputes do arise, employers and employees receive help to resolve them without facing the costly and time-consuming employment tribunal process. I trust your Lordships will agree that this objective can be best achieved through helping parties to settle any dispute before a tribunal claim is lodged. We will encourage greater use of settlement agreements and streamlining the tribunals process itself, including a new rapid resolution scheme.

A similar desire to improve the lot of small businesses informs the Groceries Code Adjudicator Bill, designed to protect their interests as supermarket suppliers. Retailers, of course, should not be prevented from securing good deals on behalf of consumers, but nor should they be able to take unfair advantage of farmers and other small suppliers. I know that noble Lords on both sides of this House are eager to see the adjudicator introduced.

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The adjudicator will have the powers necessary to uphold the code. As importantly, he or she will support investment and innovation in the supply chain by stopping supermarkets passing on excessive risk and costs to suppliers. That means serving the long-term interests of consumers and the economy, in which agriculture and food manufacturing are major segments.

This wish for business to be both successful and responsible explains another section of the enterprise Bill. In this case, we are seeking to re-establish the link between performance and reward at director level. In March, we issued proposals on giving shareholders binding votes on directors’ pay, and invited comments. We are now considering the consultation responses.

Britain needs a resilient banking sector that lends to productive business in the real economy. Our conclusion, following the independent commission led by Sir John Vickers, is that essential banking services must be ring-fenced from other activities and that insured depositors should have priority over unsecured creditors in cases of insolvency. The banking reform Bill will make these changes to foster financial stability and achieve a more resilient banking sector. The retail ring-fence will separate the vital services on which households and SMEs depend from more volatile wholesale and investment banking. This will insulate those services from the effect of shocks elsewhere in the financial system and ensure that if banks get into trouble, problems can be resolved without taxpayer support. The Government will complete all primary and secondary legislation by the end of this Parliament, and banks will be expected to implement the ring-fence as soon as practically possible thereafter.

We are legislating in two other sectors of vital national importance. The energy Bill will reform the electricity market to guarantee supply, reduce emissions more cost-effectively and improve regulatory certainty by making government and Ofgem better aligned. It ensures that the Office for Nuclear Regulation will be able fully to meet the future challenges of regulating the nuclear industry, as the first new power plants since the 1980s are built. Overall, the Government want to see a balanced portfolio of renewables, including new nuclear and carbon capture and storage, with gas playing a role during the transition and as back-up. The draft water Bill, meanwhile, will increase choice for business and public body customers, meaning they can obtain more competitive prices and demand more tailored services. The existing competition regime for water supply will expand to cover sewerage and there will be greater opportunities for new firms to enter the water and sewerage market.

Perhaps your Lordships will allow me to conclude by highlighting three other elements of the Government’s programme. The Local Government Finance Bill, introduced in another place in the previous Session, will shortly be debated in your Lordships’ House. Creating growth, reducing debt and handing back power to local people are at the heart of this Bill. It will incentivise local authorities to go for economic growth by reforming the business rates system, make councils more accountable to taxpayers and give local authorities autonomy in providing for their most vulnerable people. The local audit Bill, which we are

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publishing in draft for consultation and pre-legislative scrutiny, includes proposals to abolish the Audit Commission and open up local public audit to the private sector. We estimate that this could save £650 million of public money over the next five years.

Finally, following the agreements reached with trade unions for the three largest unfunded schemes, the public service pensions Bill will deliver affordable, sustainable and fairer pensions, and ensure that costs and benefits between employers, workers and other taxpayers are balanced more fairly. Pension benefits that have already been earned will be protected. These pensions will remain among the best available, continuing to provide guaranteed, index-linked benefits in retirement. Equivalent private pensions would cost around a third of an individual’s pay. Those closest to retirement will not see any change regarding when they can retire or any decrease in the pension they receive at normal retirement age.

The fundamental principles behind this programme are clear. As my right honourable friend the Prime Minister made clear in his reply to the debate on the Address in another place, this is a coalition Government prepared to confront the long-term challenges which this country faces. We are a Government prepared to roll up our sleeves and deal with the deficit. We are a Government determined to unleash the private sector, to encourage growth across our country and to sort out our financial services. We are a Government who back hard-working people. We are a Government acting for the long term and in the national interest.

4.20 pm

Amendment to the Motion

Moved by Baroness Royall of Blaisdon

As an amendment to the motion for a Humble Address, at the end of the Address to insert, “but regret the failure of Your Majesty’s Government properly to address economic recovery, especially promoting growth and jobs, and the issues of general living standards and the one million young people out of work, and deplore the incoherence and the lack of vision of the measures proposed by Your Majesty’s Government for the coming Session of Parliament”.

Baroness Royall of Blaisdon: My Lords, I move the Opposition’s amendment to the Motion on the gracious Speech. We on these Benches do not do so lightly, and we acknowledge that it is a serious step. To do so is not unprecedented, although we recognise that it is unusual. In fact, the last time it was done was back in 1999, in an amendment against the overall thrust of the policy of the then-Labour Government. The mover of that amendment was none other than the noble Lord, Lord Strathclyde, so we are completely confident that the government Benches will strongly support our right to argue for this amendment today.

Our reason for tabling the amendment is straightforward. We believe that the Government are putting the wrong priorities first because the Government are putting the wrong people first: tax cuts for the rich, but hard-working families being asked to pay more; nurses being laid off, but an expensive and wasteful

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NHS reorganisation; and police numbers being cut back—indeed, as the police themselves say, 20% cuts are criminal—but nothing being done to tackle crime. There is no legislation, as was promised, on ASBOs. Rather than concentrating on Lords reform, the Government should be concentrating on jobs, on growth, on living standards and on youth unemployment.

Let us consider the economic state of the nation. The economy is in a double-dip recession with no end in sight. Indeed, the latest dismal figures for the building industry suggest that the estimate of national GDP growth of minus 0.2% in the first quarter was overly optimistic, an underestimate of the true scale of economic decline. The UK, as a direct result of this Government’s policies, is set to endure a longer depression than the country suffered in the 1930s. Just today, the Bank of England has cut its growth forecast for this year from 1.2 per cent to 0.8 per cent, and warned that the UK would not be unscathed by the storm which is still convulsing the eurozone. That is precisely why we should be part of, and influencing, the debate rather than standing in isolation. But it is still this Government, not events beyond our shores, who are responsible for the double-dip recession in which we are mired.

What is there in the Queen’s Speech that will do anything to kick-start the economy back into growth? Of course there will be Bills on competition policy and on banking, and on a green investment bank, as the noble Baroness, Lady Wilcox, said, but I would be grateful if in her reply, the Minister would confirm that the banking Bill is not going to be a carryover Bill, as we had understood.

These may be worthwhile measures. We certainly hope that they will be, but any effect that they have on economic performance will be in the medium to long term. They will make no discernible impact over the next few, crucial, years. The noble Baroness mentioned a Bill to reduce burdens on business by repealing unnecessary legislation. Well, we are all against “unnecessary legislation”, though it seems to me that we have encountered a lot of seriously unnecessary legislation recently—for example, on the National Health Service, something that produced a plethora of quangos. But I leave the verdict on these proposals to none other than the leader writer of that organ of radical thought, the Daily Mail:

“The promised bonfire of the quangos and red tape has been pathetic, with last week’s Queen’s Speech paying only lip service to deregulation”.

I do not think that the Government really understand. They do not seem to understand that it is their policies that have mired the economy in recession and that, without a change of course, without active intervention now, the prospects for a return even to the levels of output seen in 2008 are bleak. The coalition appears to be in recession denial. There is no hope and the people of our country are desperate for vision, hope and opportunity. But the Government lack any vision of how Britain might return to prosperity.

Lord Roberts of Conwy: Would the noble Baroness give way? I am very surprised that she does not give a hearty welcome to the increase of 105,000 in employment and the decline of 45,000 in the unemployed that were announced today, facts that were welcomed by the Leader of the Opposition at Prime Minister’s Questions.

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Baroness Royall of Blaisdon: If the noble Lord will give me a few minutes, I will get to the part where I do indeed welcome what has happened today with the unemployment figures. However, I will of course qualify that.

The oft-stated primary objectives of government policy to maintain sterling as a safe-haven currency by protecting at all costs Britain’s triple-A rating with the ratings agencies, and keeping interest rates low to stimulate investment, is interesting and important. However, the strengthening of sterling poses a threat to the recovery of industrial exports from Britain and, in the absence of any prospect of growing demand, low interest rates have been accompanied by a collapse in investment.

Put simply, the Government’s economic policies are incoherent. Consider the fact that almost 90% of the planned cuts in government expenditure are still to come, creating a headwind loss of 6% of GDP before growth can get going again, and the overall damage that their policies are doing to our growth prospects are all too evident. Even the ratings agencies are now beginning to wonder whether the UK’s rating should be downgraded because of the lack of growth.

Moreover, the human consequences of the Government’s economic policies are all too evident. As I said, I welcome the fact that unemployment fell today, but I note too that the number of people unemployed for more than a year—that is, under the definitions used, the long-term unemployed—rose by 27,000 to 887,000, the worst total since 1996, when the Conservative Party was last in power. It is the Government’s policies that have led directly to higher unemployment so that people lose their dignity and purpose and may have to claim benefits rather than working and thus helping to create economic growth and deficit reduction.

The number of people working part-time who say that they want a full-time job is at a record high, but of course the Government do not seem to care. A Downing Street source was quoted yesterday as asking why people only work part-time—more evidence of this Government being out of touch. They briefed the newspapers ahead of the Queen’s Speech about the family-friendly policies within it, yet do not understand that people may need to work part-time because they have childcare or other caring responsibilities, let alone that sometimes part-time jobs are the only jobs available.

The effect of the Government’s policies has been especially wounding for young people. Even after today’s figures, more than one in five young people are unemployed—over 1 million in all. Just when they should be starting out on their careers, perhaps thinking of settling down and building a family, they are left idle, untrained, demotivated, and devastated. As my noble friend Lady Hughes of Stretford spelt out so well yesterday, this coalition’s policies are creating a wasted generation that should weigh on the conscience of every single member of this Government. The Queen’s Speech contains nothing that addresses the problem of the unemployed young. The country as a whole will suffer from this neglect for years to come.

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Of course, the assault on the poor continues. The Institute for Fiscal Studies has shown that government measures introduced this April will have a disproportionate effect on the lower half of income distribution, with the biggest hits being suffered by households with children, and there is more to come. Only 12% of the proposed cuts have so far been implemented and we are told that, on the advice of his strategy adviser before he leaves the sinking ship and heads off to California today, the Prime Minister is considering a further £25 billion in welfare cuts. The much vaunted Budget increase in the personal allowance, which the coalition partners pretend help the worse off, is also systematically biased against the poor: 70% of the benefit will go to those in the top half of income distribution.

All this, and yet there is nothing concrete in the Queen’s Speech to address the pressing needs of so many people in our country—and there is worse to come. In its report to accompany the Budget Statement, the Office for Budget Responsibility tells us that the coalition recession is not just resulting in lost income, lost jobs and blighted lives today, but is blighting Britain’s future, too.

The OBR could not be clearer,

“our estimates of potential growth do imply a significant and persistent loss of potential output relative to the pre-crisis trend … Our … estimates for 2011 imply a potential output loss of around 8 per cent … This shortfall widens to around 11 per cent by 2016”.

That is terrifying. It is because the sharp fall in investment since the coalition took power bequeaths the country crumbling infrastructure and underskilled workers. Yet there is nothing in the gracious Speech that would stimulate infrastructure investment or enhance the skills base.

However, I must admit that since the Queen’s Speech the Government have launched a new economic policy to tackle Britain’s economic problems. The noble Baroness mentioned her right honourable friend Mr William Hague, the Foreign Secretary. A few days ago, he declared:

“There’s only one growth strategy: work hard”.

Then Mr Eric Pickles, the Secretary of State for Communities, chimed in, saying:

“I think we all should work harder”.

So the youngster desperately searching for a job, who has sent of dozens of applications without success, sometimes without an answer or an acknowledgement, is told to work harder. To the thousands put on short time, the message is work harder. To the family struggling in the face of cuts in working tax credits, the message is clear: work harder. To the small business owner, unable to renew his or her bank funding, and seeing the prospect of securing future orders vanish, the message is work harder. To the building contractors facing 5% falls in demand, and retailers facing a shrinking high street, the message is stop whingeing and work harder. As Mr Hague put it so precisely,

“do more with less—that’s the 21st century”.

Well, the coalition is certainly guaranteeing that we will have less. It is not as if the Government are even willing to debate how new measures might boost demand in the economy. What is the Government’s response to

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UK manufacturers who want more support, including the creation of an industrial bank? Why was there nothing in the Queen’s Speech about infrastructure? Why no HS2 Bill? Why, for example, is there no debate over creating a national infrastructure bank? If Britain can afford to lend £10 billion to the IMF, then it can afford to lend £10 billion to a national infrastructure bank to attack directly the decline in productive potential that the austerity policies have produced. The Chancellor of the Exchequer said the IMF loan would come from the UK’s reserves, that it was not money that would otherwise have been available for public spending and that it would not add to the national debt. So let us perform that trick again, but this time at home. Why is there no debate over the American idea that austerity policies—cuts in spending or increases in taxes—should be contingent on the economy reaching predefined goals in terms of growth and/or employment? Legislation would commit the Government to cutting the deficit when the growth target had been hit, but the Government will not even consider the possibility.

The Government make the claim that they inherited a difficult economic situation. Well, they entered office two years ago in the face of a major world financial crisis, a crisis that had a particularly damaging effect on the UK because of the disproportionate importance of the financial services industry in our economy, as the noble Baroness said. However, she did not add that they inherited an economy on the path to recovery, growing at 2% a year, with a deficit plan in place that would have halved the deficit in four years, the target agreed by the G20 nations. It is their policies that have forced the economy back into recession. Two years on, they have no excuses. Their austerity policies have failed and should be abandoned, and they must also abandon the assault on the poor, the NHS and legal aid which they disguise as necessary pain.

It is not just us on these Benches or my party generally that makes this criticism. Even the most measured and careful of professions, the accountants, are making the same points. The Institute of Chartered Accountants for England and Wales was quoted yesterday as saying that the Government’s child benefit tax is seriously badly engineered. Another accountant said that nuking large-scale philanthropy at a time when the demands of charities are rising steeply does not make sense. That is no doubt why the Queen’s Speech includes a panic provision to reverse the Budget’s impact on charities.

The day after Her Majesty delivered the gracious Speech, the Daily Telegraph headline read:

“Queen’s Speech: why was there no plan for growth?”.

Around the world we see policy makers struggling to develop new ideas to escape austerity and resuscitate growth, the growth that everyone other than the recession deniers in this country knows is the only way to restore the public finances. The only Government not participating in this debate is this one. Their policies lack vision, they lack coherence, and they fail to address the pressing problems of the creating growth and jobs in this country.

The Queen’s Speech illustrates that in just two years their policies are not working and they have no idea what to do next. That is why we have tabled this

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amendment, to focus attention on what the Government are doing—pursuing policies that are not working and making cuts that go too far, too fast. We wish to focus attention on what the Government should be doing—that is, pursuing policies to promote jobs and growth, improve living standards and cut youth unemployment.

This Government are out of touch. Even elected Conservatives are coming to this conclusion. In Stroud, in my glorious county of Gloucestershire, the Conservative chairman of Stroud District Council, Councillor John Hudson, has recently resigned from the Conservative group, and indeed the Conservative Party, over the effect of the Government’s policies. He said:

“I’m a family man with three very young children, just trying to keep a roof over their heads, food on the table. To be brutally honest, and it sounds a bit socialist and I’m no socialist, the people who run the Government have no idea how the ordinary working man is coping”.

He is right. The Government are out of touch, incompetent and unfair. The elections show that, the polls show that and I look forward to this House showing that today. I also look forward to the maiden speeches of the right reverend Prelate the Bishop of Durham and the noble Lord, Lord Ashton of Hyde. I beg to move.

4.36 pm

Lord Razzall: My Lords, I am sure that the students of politics in your Lordships’ House, of which there are many, will entirely understand why the noble Baroness thinks that this is all the fault of the Government and blames the whole thing on government policy. However, we ought first to put into perspective what has happened to government expenditure during the period of the coalition. In real terms, expenditure has hardly been reduced at all.

If we take the official Treasury numbers, stripping out inflation and showing real spending indicates a reduction last year of just £8 billion. In real terms, that is a cut of a pretty modest 1.1%. The figure is also flattered by comparison with Labour’s spending in the election year, when it increased by £31 billion, making the high-water mark unusually high. Therefore, the real level of government spending today, against that in 2008-09, represents an increase of £23 billion, which is a 3.4% rise. I hardly think that the policy of economic cuts that the noble Baroness indicated is responsible for austerity. However, we know that austerity is particularly unpopular. We have to look only at what happened in elections in Greece, France and North Rhine-Westphalia to realise why the noble Baroness is on that particular bandwagon.

The Liberal Democrats on these Benches are of course part of the coalition but we retain our independence—

Lord King of Bridgwater: Don’t go too far.

Lord Razzall: The noble Lord, Lord King, does not want me to go too far so I will rein that back. As noble Lords will be aware, we have not necessarily been uncritical of a number of government policies and plans. However, on these Benches we stand four-square behind the coalition on the necessity of bringing the

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deficit down. Now is not the time to spook financial markets. We have to look only at what is happening in the eurozone, particularly Greece, Spain and Portugal, to realise the incalculable cost to our economy if we were to lose market confidence. Look at our current borrowing rates. I think we are now selling our gilt-edged securities at a lower level than we have in modern economic history. That is a huge benefit to our public expenditure and we need to retain the confidence of the markets.

Taking the noble Baroness’s point about there being nothing in the gracious Speech about growth—

Baroness Kingsmill: I wonder whether the noble Lord thinks that the confidence of the markets is rather more important than the confidence of the electorate. It seems to me that throughout Europe the confidence of the electorate is being severely tested by the politics of austerity.

Lord Razzall: One of the advantages of the Fixed-term Parliaments Act is that it will take three years to discover the answer to the noble Baroness’s question. As regards the provisions about growth—it is a common criticism of the gracious Speech—I say to the noble Baroness, Lady Royall, that you do not legislate for growth; you create an economic climate in which growth can occur.

I have every confidence that the coalition Government’s policy is rather like the swan: above the water it is serenely swimming forward to reassure markets, while under the water it is paddling like mad in an effort to promote growth and hoping that the markets do not notice. There are a number of growth initiatives of which I know that my party is proud; for example, the creation of the green investment bank, the regional growth fund and the pension infrastructure platform to invest in UK infrastructure. Of course, there are more subtle ways in which the Secretary of State for BIS has been trying to encourage growth. It is significant that today, for the first time since 1976, we can announce a trade surplus in the sale of motor vehicles. As a betting person—who is usually successful—I suspect that we will have some good news on Ellesmere Port. All sorts of initiatives are happening.

If we are to go for growth, the role of the banks is critical. The immediate problem, which is a statement of the obvious, is that the banking system is being required to do three things simultaneously. The banks are being asked to maintain and increase lending to the SME sector. At the same time, over the next two or three years, they will have to provide billions of pounds to refinance the borrowing of major companies that fall. They are also being asked to increase their capital base to meet the regulatory requirements. Even Solomon would struggle to meet those simultaneous requirements, which is one of the reasons why we have the problems that we do.

Everyone says that there is not enough lending to the SME sector, which is undoubtedly correct. The noble Lord, Lord Sugar, came to your Lordships’ House and told us that any SME company which wanted a loan could always get one, and if it could not

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its financial plan was wrong. What world does he live in? The jury is clearly out on Project Merlin. The FSB says that a significant percentage of loans requested by the SME sector are not being granted. If we take the anecdotal evidence of the way in which some banks are behaving, we should look at what Barclays and NatWest did to Clinton Cards. They sold a £35 million loan book to American Greetings, which was the major supplier to Clintons. Immediately, American Greetings foreclosed on the loan and at least 8,500 employees are in danger of losing their jobs. Is that the way in which responsible banking should operate?

As regulation of banking returns to the Bank of England, the Bank must emphasise that effective regulation is crucial. First, the current system makes it difficult for new entrants either to compete with major retail banks or to introduce innovative new models, such as community banking on the American model. I suspect that my noble friend Lady Kramer will refer to that. Secondly, we need to think seriously about how the economy can rebalance as growth returns, away from financial services. The Vickers report looked at how we regulate banking in the context of risk to the taxpayer but the next task for future regulators is how to ensure that, as the economy recovers, the financial sector does not retain its bias in the British economy.

4.44 pm

Lord Bilimoria: My Lords, six months ago I read out this quote:

“The era of procrastination, of half measures, of soothing and baffling expedients, of delays, is coming to its close. In its place, we are entering a period of consequences”.—[Official Report, Commons, 12/11/36; col. 1117.]

Those were the words of Winston Churchill in 1936, and we all know what happened three years later.

We have finally had a Queen’s Speech, after what I believe was an unacceptably long gap of two years. Could the Government assure us that this will not happen again, and that we will have year-long sessions in future, as is customary?

One message that the Government have very clearly got across in their two years is talking tough about austerity, and the two big benefits of this have been that Britain has retained its AAA credit rating and continued to enjoy phenomenally low bond yields, as the noble Lord, Lord Razzall, said. But how long can tough talk last? I am glad that the Government have stopped blaming all the problems on the previous Government—although they have just done so. Now they are blaming Europe, and we have the eurozone crisis building up and about to explode, as many of us predicted. France and Germany, formerly the best of friends, are now at loggerheads, and there is growing certainty that Greece will have to leave the euro—it is almost definite—with all the possible contagion that this will bring. We have entered a double-dip recession. The Nobel laureate, Paul Krugman, wrote recently:

“Britain … has achieved the remarkable feat of doing worse this time around than it did in the 1930s”.

And what is in the gracious Speech? We hear that:

“A bill will be brought forward to reform the composition of the House of Lords”.

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Is that the most important thing in the public’s mind? We know that it is not. It is the lowest priority to this country, and if we go down that route we will be accused by our people of being like Nero, fiddling while Rome burns.

On top of this, we have had a Budget with some great measures in it, such as cutting the 50p rate of tax. I believe that it should go down to 40p. It also reduced corporation tax, which was fantastic. On the other hand, it was a PR disaster, upsetting so many people: charities, pensioners, heritage lovers, the Church of England and even pasty consumers. Now, as we have heard from the noble Baroness, Lady Royall, the Institute of Chartered Accountants in England and Wales has said that the child benefit plans announced in the Budget are seriously flawed.

On top of that, we have business leaders criticising the Queen’s Speech for not having enough of a plan for growth for business. As we have heard, the response from the Government is that these leaders of business should stop whinging and work harder. I know from running my business how tough it is to grow a business in this economic environment—and the Government are saying to me that I am not working hard enough? How dare they?

We have had blunder after blunder. The NHS reform has been badly handled to the extent that we face the dreadful thought of doctors going on strike. The defence review was rushed through, and now we face the blunder of having no carriers and no Harriers for almost a decade, with the Government executing a U-turn on the carrier aircraft which will cost us billions from the defence budget. Will the Government accept that they have made a blunder with regard to the loss of capability and of money on that score?

The Government have cut higher education funding, one of the jewels in Britain’s crown. Just last week a report was released that found that in government expenditure as a percentage of GDP for higher education, we in Britain came 41st out of 48 countries in the world. I have been saying for many years that we need to increase spending on higher education funding. One reason the United States is always ahead of the game is because it invests far more, in absolute terms and as a proportion of GDP, in both public and private expenditure on higher education. That is why its productivity and its innovation are always streets ahead. Why do not we learn from that? Could the Government explain?

Then we have had the big society—big talk and big platitudes, with the best of intentions. People could genuinely question whether the Government are in tune and in touch with people. Only one city out of 10 wanted an elected mayor. Now we have elected police commissioners, and we know that the public are not that keen on that. The turnout in elections is bad, with that for the London mayor elections at only 38%. In India, in the state of Uttar Pradesh, turnout was at 60% in the recent legislative elections. Do not the Government understand that people do not want more elections, politicians and partisan bickering? People’s worries are about their jobs, job security and economic prosperity; that is the priority.

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On top of this we have had the immigration cap, which wrong-headedly encompasses foreign students. Would the Government admit that, by including foreign students in the overall immigration numbers, they are forgoing an enormous opportunity, which brings up to £8 billion into this economy? Nick Pearce, a fellow member of the UK-India Round Table and director of the IPPR, recently asked:

“Will the next generation of world leaders, like Manmohan Singh, Benazir Bhutto or Bill Clinton, be educated in the UK if the UK Government restrict the flow of students to the UK’s world-class universities?”.

As someone who came to study in this country from India, I know how much foreign students bring to this country and the bridges that we build for generations to come.

On the other hand, where schools are concerned, I pay tribute to my old sparring partner, Michael Gove. For two years running he led the Oxford Union while I led the Cambridge Union—although we will not ask what the result was. Last week we both spoke at the Brighton College education conference. I believe that he is doing absolutely the right thing in freeing schools from the shackles of local councils, encouraging free schools and academies, and appreciating the independent schools in this country, which are the best in the world.

The gracious Speech states:

“My Government will build strategic partnerships with the emerging powers”.

As president of the UK India Business Council, which is backed by UKTI, I see the phenomenal opportunities offered by companies such as Tata, which owns Jaguar Land Rover, creates jobs over here and now exports Jaguar Land Rover cars back to India. That makes me feel very proud. However, as a proud manufacturer, I note that there was nothing in the gracious Speech about encouraging manufacturing or providing tax incentives for manufacturing. Will the Minister tell us why the Government cannot do this?

We have a bloated public sector that the Government are rightly trying to cut. Public spending should be 40% of GDP. We have taxes that are too high in terms of VAT, fuel duty and income tax, and we have a welfare state and a benefits trap that need to be addressed. I am glad to see that the Government addressed welfare spending in the gracious Speech although I understand that this is a sensitive issue.

Lord King of Bridgwater: The noble Lord says that no encouragement is being given to manufacturing. However, is he aware of the very encouraging recent news about major new investment in this country on the part of two major car companies? That is significant news for manufacturing and builds on today’s very welcome announcement that this year, for the first time since 1976, we have exported more cars than we have imported.

Lord Bilimoria: I could not agree more with the noble Lord. All I am saying is that, if we had more incentives for manufacturing, we would have even more such success stories. In fact, Britain has so much going for it. We have the finest universities, the best in design and creative industries, tourism, sport, advanced engineering, the City and our financial markets, the accounting profession, the law profession, and we have our wonderful

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monarchy and Her Majesty celebrating the Diamond Jubilee this year. We need to harness these amazing assets and use them to generate growth. We need infrastructure spending to create the environment for business to succeed. However, businesses are not getting the money. Will the Minister tell us what is happening with the £20 billion credit-easing scheme? I do not think that it is flowing through.

I conclude: more than anything else, the Government need to show real leadership, not to create fear through austerity or accuse business leaders of whinging and not working hard enough. They need to create hope and optimism—hope, not hopelessness. We have so many strengths in this country; they just need to be unleashed. We need to unleash the great British spirit—the spirit of Great Britain—and unleash hope, optimism, opportunity and aspiration.

4.52 pm

The Lord Bishop of Durham: My Lords, I am astonished to be here for two reasons. First, I am astonished that I am here at all. Secondly, I am astonished at the warm welcome that I have received, for which I very much thank your Lordships and all the staff and people who work in this place, who deal very adequately with Bishops wandering around, bleating miserably that they are lost—or, at least, this particular Bishop. It has been a great privilege to have found myself helped in so many ways. I am also grateful to the noble Baronesses, Lady Wilcox and Lady Royall, for their warm welcome today. I look forward to hearing the maiden speech of the noble Lord, Ashton of Hyde, a little later.

I am privileged to be the Bishop of Durham in the north-east of England, which has been one of the most formidable and remarkable parts of this country for more than 1,000 years. It is a source of spiritual and material regeneration and the home of the Industrial Revolution in a way that continues to this very day. We have just heard mention of the new investment by Nissan in car plants and about the SSI steelworks on Teesside and the train assembly by Hitachi within a couple of miles of where Stephenson manufactured the Rocket. These are all areas of intense international competition. These investments show the capacity of the north-east to face anything that comes and to be successful.

This morning I was speaking with the chief executive of the chamber of commerce about a company near Newcastle that makes remotely operated vehicles for subsea work. It has created 500 jobs in the past five years, which, again, is extraordinary. We were talking about how we can develop a trade mission to Nigeria—a country that I know well—in connection with that and with the oil industry, which I also know well.

All these successes mean that the north-east is not a problem to be solved but, rather, an asset to the country to be treasured and valued. At the same time, we face the gathering storms that have been there since 2008 and are getting worse today, threatening even more damage than they have done in the past few years. We see that there are resources and there are great arguments about the rate at which one decreases deficits. However, it is clear to everyone that the

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Government do not have as much money as perhaps they would like. There are also great arguments about personal indebtedness. Certainly I have recent experience in the north-east of the current level of loan-sharking, which, as someone in Sunderland said to me, is now finding its golden age. People are very stretched.

One area that remains extremely liquid is the corporate sector—an area that I am familiar with, having at one time been the treasurer of an oil company. The Ernst & Young ITEM Club spring report of 2012 said that financial surpluses in the corporate sector are now at 3% of GDP, expected to rise to 5% in 2016, and that last year the sector added £80 billion to its cash hoards. That £80 billion is hoarded in the Keynesian sense of money put away not because it is needed to pay imminent debts or to manage cash flow but, rather, because there is a sense of a lack of confidence. Those are the issues that are being faced.

Even though the north-east is the only part of the country to have a balance of trade surplus, what is making matters worse there is that engineering manufacturers are finding a shortage of skills. With youth unemployment at very high levels, they cannot hire people with the necessary skills for engineering. I have the privilege of being patron of the Northern Echo’s campaign for jobs, which aims to create 1,000 apprenticeships and internships over the next 12 months by asking companies to take on extra interns and apprentices. Skills in engineering and manufacturing are learnt not simply in the classroom but by being part of a working environment. One of the best things that can happen—it is seen in the Budget Red Book and is alluded to in the gracious Speech—is the creation of opportunities for new apprenticeships and new learning and skills. However, that needs targeted resources—mere widespread exhortation is not going to do it.

The second major area is confidence. As I said, £80 billion is being hoarded because of a lack of confidence. Once again, confidence does not come through exhortation but through action, so companies feel that if they do not get on they will fall behind. On 24 April, the noble Lord, Lord Davies of Oldham, made some passing remarks about the pressure on the construction industry, with the 14% fall in January. This morning, looking at the Bank of England agent’s report for the north-east, I read that 15% of all insolvencies in the past quarter were in the construction industry. Confidence comes from cranes and scaffolding: they build confidence as quickly as they erect buildings. Again, when resources are short, we need targeted use of money to bring about quick investment.

All over the country, particularly in the north-east, in schools and in the area of listed buildings—to the unschooled, I am dressed in a white nightie and a black dressing gown which means I have an interest in listed buildings as you might imagine—there is a large number of what President Obama refers to as “shovel-ready” projects. Those targeted investments saying, “You can have funds, grants, help and allowances provided you break ground within six months”, would immediately create large numbers of jobs at a much lower cost than we were hearing last week had been spent on some job creation exercise.

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The whole object is not merely economic growth and human flourishing. With economic growth we are able to deal with some of the great issues of human flourishing, such as loan-sharking, the breakdown of families, the high levels of unemployment and the 1,100 people who have visited a food bank that I opened last week—a food bank in this country. Such things destroy human flourishing and diminish the human spirit. The need for confidence and investment in skills is not merely to have a bigger economy but to enable us to see a transformation of our society. These things will not happen merely through exhortation but they require action and leadership.

5.01 pm

Lord MacGregor of Pulham Market: My Lords, it is a very great pleasure to follow the right reverend Prelate the Bishop of Durham. I believe he is extremely fortunate to be the Bishop of Durham Cathedral. In my youth, I remember travelling from Scotland to London and I was always astonished by that wonderful building. When one of my daughters went to Durham University, I was able to appreciate it even more. It is a most marvellous institution and how fortunate he is and how well in his speech he has represented the interests and aspirations of his community. As High Steward of Norwich Cathedral, I believe that Durham Cathedral is a very different rival but it is certainly an outstanding establishment.

In the list of his political interests, I was fascinated to see that the top two are finance and the economy, issues not always connected with right reverend Prelates. He has shown in his speech today just how much his interests lie in that area. At a time of very tough public expenditure decisions, I strongly agree with his point about targeted investment of public funds.

The right reverend Prelate has had a most distinguished career in the church, including being Dean of Liverpool. He speaks with great knowledge, giving a spiritual and ethical dimension to the issues that concern many of us, as the personal and ethical adviser to the UK Association of Corporate Treasurers and as chairman of an NHS trust. I hope that as we approach the issues of salaries, high rewards and so on we will hear him speak from his point of view.

In this debate, we have a limited amount of time so I do not want to make a general economic speech as that would take far too long and I would be repeating what many others will say. Therefore, I shall focus on particular points. I say to the noble Baroness on the Front Bench opposite that I believe that she failed to recognise the impact of the huge financial deficit that this Government inherited. I believe that it will take many years to put right. I was interested to see that many of her points would involve substantially higher public expenditure.

As we look at the problem of the huge deficits in many eurozone countries, we should be grateful for the resolute policies that this Government have pursued. Without them, I shudder to think what the costs of borrowing would be now. Here I follow what the noble Lord, Lord Razzall, said. I have been somewhat surprised by some of the comments about the Queen’s Speech not giving priority to the economy. Of course, the Queen’s

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Speech is mainly concerned with legislation but there are seven pieces of legislation that will have a major economic impact. In particular, the Queen’s Speech makes it clear that the priorities are growth, which involves many policies beyond legislation, reducing the deficit and restoring economic stability. The noble Lord, Lord Bilimoria, mentioned finance Bills, which inevitably are not in the Queen’s Speech, but successive finance Bills have been very helpful to industry and to business generally.

I will concentrate on two issues. The first is the banking Bill, following the report of the independent commission, widely known as the Vickers report. I fully support what the Government are doing on this front and I am delighted that they have acted so quickly and as promised, despite the complexities of the issues. We have yet to see the Bill and obviously there will be a lot of concentration in both Houses to ensure that some of the difficult details are well sorted out. However, I am strongly supportive of the importance of the Bill. The Economic Affairs Select Committee of your Lordships’ House, which I chair, had a long session with Sir John Vickers. Although we did not come to any conclusions—that was not our intention—it was clear from the flavour of all members of the committee that we strongly supported the thrust of the ICB report.

Representatives of the banks, too, appeared before us. They appeared a bit reluctant but confessed that it was a done deal. Their main concern was about costs, and their estimate of these is in our report. However, the estimate of costs for the banks is small compared with the cost to the taxpayers and the economy of the bailout of the banking system over the past three to four years. If we needed a reminder of the importance of separating retail and investment banking, what happened at JP Morgan in the past few days was clear evidence.

I will concentrate on one further issue which has not had enough airing in the House: the impact on pensions of quantitative easing. This will need a longer debate, and I can only sketch out some of the issues this afternoon. Pension schemes in the UK were originally one of the jewels in the crown of schemes in the developed world. We witnessed a very sad decline in recent years in their range and scope, starting with the attacks on ACT by the former Chancellor of the Exchequer, Gordon Brown, which had a big impact. Since then, there has been the impact of longevity, the complexity of accountancy rules, the necessary legislation to prevent fraud and the collapse of schemes, leading to pensions Acts, pension regulators and PPF. The measures were all necessary, but the decline in the number of defined benefit schemes offered to all employees, and the restrictions of schemes on new employees and greater emphasis on defined contributions all accelerated the decline of defined benefit schemes.

Now the impact of quantitative easing is very clear. It is in addition to all that I described. Ten years ago, 80% of defined benefit schemes were open to new members. Now the figure is 19%. That is a dramatic decline. The big trend of schemes being closed to future accrual, as well as other measures to reduce the costs of meeting the deficit, is also substantial. The number

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of schemes closing to those areas has risen by more than 20% in the past three to four years, and a number are closing altogether.

Much recent concern related to the impact of quantitative easing. The problem here is the way in which liabilities are defined in pension fund schemes. They are defined fundamentally in relation to gilt yields. Therefore, while assets have from time to time improved over the past few years, the problem facing pension fund trustees—I declare an interest as the chairman of three pension fund trusts—is that however well they do on the asset front, they cannot keep up with the increase in their liabilities because these are linked to gilts. In addition to the volatility that company directors and boards face in dealing with their pension schemes, there are big extra costs to meeting the deficit, which are increasingly being spread 10 to 15 years ahead.

At a recent Economic Affairs Committee meeting, I asked the Bank of England Governor what he was going to do about this. I got a string of points in reply about how, if pension schemes matched their assets to their liabilities, it would not be a problem—that is to condense his argument a bit. However, there are very few pension schemes that can do that. I believe that the Bank of England’s scheme is the only one that has matched its assets to its liabilities. The Governor’s case was that asset prices, especially gilts, rise when yields fall, and so in a sense solve the problem of matching assets to liabilities. That option is not available to any other pension fund scheme.

What we have seen on deficits is that the £200 billion of quantitative easing asset purchases pushed up the liabilities of pension funds by £180 billion. The second load of quantitative easing—the £125 billion of asset purchases—pushed up the liabilities by a further £125 billion. These are huge figures. What is happening is that pension schemes are now facing huge deficits as a result of how we define liabilities linked purely to gilts. The Pension Protection Fund estimated recently that the aggregate deficit for defined benefit schemes eligible for entry to the PPF according to its Section 179 liabilities—I apologise for the technicalities—has risen over the past month alone to £217 billion compared with £206 billion the year before.

I am not asking that the policy of QE introduced for completely other reasons—for the economy as a whole—should be changed to accommodate pensions. But what we are seeing is that for short-term reasons—for economic and monetary policy—there are huge long-term consequences for pension funds as a whole and for many individuals caught in a short-term trap if they are reaching retirement and seeking to move into annuities. For example, a pension pot of a 65 year-old was £7,800 pension per year in 2008. It has now fallen to £6,112; a drop of income of 20% driven largely by the fall in asset prices.

I am asking that the method of valuing liabilities should be reconsidered. Actuaries to whom I have talked have been considering alternatives and there are some highly technical areas that provide alternatives. I do not have time to go into those today. But the stumbling block for them and the trustees is that the

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Pensions Regulator’s way out is to allow longer recovery periods. That is all that they can do if they go by the Pensions Regulator’s advice at the moment. We are having recovery periods going way ahead to 15 years and beyond. But that means an additional burden on the company and another problem that finance directors and boards face.