9 Oct 2012 : Column GC405

9 Oct 2012 : Column GC405

Grand Committee

Tuesday, 9 October 2012.

Arrangement of Business

Announcement

3.29 pm

The Deputy Chairman of Committees (Lord Geddes): My Lords, before we commence, it might be for the convenience of noble Lords if I remind them that each debate is limited to one hour. If any of those debates should take less than one hour, the Grand Committee will adjourn for the balance of that 60 minutes. In the first debate, there are a large number of speakers and I have been asked to remind Back-Bench speakers that speeches are limited to four minutes, which means that when it says four on the time clock, you have had the four minutes.

Education: Further Education Colleges

Question for Short Debate

3.30 pm

Asked By Baroness Sharp of Guildford

To ask Her Majesty’s Government what assessment they have made of the potential contribution of further education colleges to their local economies and communities.

Baroness Sharp of Guildford: My Lords, I asked for this debate because I wanted to draw attention to a report which came from a commission that I chaired last year looking at the role of colleges in their communities. Our remit was to investigate the role that further education colleges,

“can and do play in their communities and the added public value they can bring to these communities as leaders of learning”.

You will see that this remit reflects the title that has been given to this debate and I am delighted that so many people have put their names down to speak in it. I am only sorry that it means that they have so little time to speak.

It is worth starting with some statistics. There are 347 further education colleges in England. They serve a total some 3 million students, 1 million aged 16 to 18 and 2 million aged 19 or over. They offer an immensely wide range of courses, from basic numeracy and literacy through to graduate-level studies. In subject matter, they range from agriculture to Zen Buddhism. The communities that they serve are widely diverse: they provide for black and white, rich and poor, public and private sector, employers and employees, helping young and old alike to gain and enhance their skills and education, and providing pathways to further and higher education and better jobs. We learnt early in the commission that there is no such thing as a typical college—each is very individual —but the best of them stand out, reaching deeply into the communities that they serve and providing leadership and

9 Oct 2012 : Column GC406

encouragement, so that these communities are, in the words that the Prime Minister used to describe his vision of the big society,

“free and powerful enough to help themselves”.

As in other areas, the coalition’s aims have been to free up the college sector from the micromanagement and centralised control that dominated their lives in the first decade of this century and to give their leaders the space, flexibility and discretion to shape their own futures within broad parameters. One of those broad parameters was that they should better serve and be answerable to their communities, not only to employers in terms of local skills needs—although this is a very important priority—but also to individuals in the community in terms of opening up new opportunities and raising, and helping meet, aspirations. This is important because, as all the research shows, positive outcomes from education in turn promote health, happiness and a sense of well-being.

In our report we suggested that one of the keys to success was for colleges to work in partnership with other organisations, to link up with employers, charities, local authorities, police, youth offending teams, health services, Jobcentre Plus and all kinds of organisations. In many cases, both partners gained. It was a win-win situation in which colleges were fulfilling their primary role of promoting and extending learning and skills among young people and adults while at the same time, for example, providing youth facilities which helped limit crime and anti-social behaviour; or providing adult learning, which gave older people or ethnic minorities a sense of purpose and fulfilment far more effectively than any local authority friendship service or mental health therapy could do. We coined the term “dynamic nucleus”, because our vision was of colleges at the heart of their communities, acting as a catalyst and sparking off a whole range of such shared activities. I sometimes use the analogy of a Catherine wheel: the college is at the centre but sparks off all kinds of other activities. There was potential, we argued, to unlock “social energy” within the community which, if channelled to positive ends, could increase both economic and social productivity.

Two important factors underpin this vision. The first is leadership. In visiting many colleges in the course of the inquiry, I was impressed by the inspirational leadership to be found in the best of them. These people were not just competent administrators; they were entrepreneurs and creative thinkers, prepared to try out new ideas, take risks and perhaps, above all, find ways of getting things done. In part, such leadership is innate, but it can also be learnt by example and by training. It is vital that we nurture such leadership and prepare to train more to take up the challenge. I pay tribute to those in the sector who recognise how important training and CPD are in improving the quality of teaching and the learning experience for all students.

The second factor is to make sure that these leaders are given the scope to be creative and entrepreneurial. Last year’s Education Act gave colleges a good deal more autonomy, which was a move in the right direction, as is the move by the Skills Funding Agency away from the detailed funding formula to the single adult skills budget. We argued, however, that if colleges

9 Oct 2012 : Column GC407

were to be expected to “seed” a whole lot of new activities, they needed greater flexibility on the funding front. In particular, we argued for what we called an innovation code: a funding formula that, subject to proper audit procedures, would allow up to 25 per cent of the adult skills budget to be used to meet local priorities.

In many respects the Government’s White Paper published last year, New Challenges, New Chances, provided a very positive response to our recommendations. In particular, John Hayes, then the Minister responsible for skills and adult education, shared our vision of strong, entrepreneurial colleges. There are many good things happening. Both the SFA and Ofsted recognise and will be looking for evidence of community involvement and responsiveness to local needs. The community learning trust pilots are going ahead. The new foundation code of governance comes into play this year and looks to accountability to the college’s “wider community” and an annual statement of public value. I am immensely encouraged by the support that has been forthcoming from BIS, the department with primary responsibility, and by what is happening on the ground among the colleges themselves.

I do, however, have a number of quibbles, and I would be grateful if the Minister could respond to these. First, I am very disappointed by the interpretation of the innovation code. Although we were delighted that New Challenges, New Chances picked up the idea, we should have read the small print more carefully, for what is being proposed, which has now been further developed in the guidance recently issued by the SFA, provides only very limited flexibility. Indeed it limits that flexibility to using funds to meet specific skills gaps that have been identified with local employers and where there is not at present an appropriate qualifications credit framework—QCF—qualification. The college may use funding from the adult skills budget to research and provide the course while a suitable qualification is developed. However, this is far from the idea of encouraging creative and innovative thinking to seed new projects, often to be run in partnership with others, which might in due course be developed into such a qualification, but where securing funding from, say, the ESF or the localism budget might be more important.

This in turn raises questions about the whole management of the skills budget and the development of localism. There is at present a fuzziness, it seems to me, about where responsibilities lie. Who, for example, is responsible for identifying and initiating responses to skills gaps? Is it the LEPs—on which, incidentally, colleges are still badly under-represented—or core cities? What is perceived to be the role of the employer ownership pilots? Where, if at all, do local authorities fit in?

My third and final quibble concerns the emphasis we put in our report on the benefits of partnership. I ask the Minister whether enough effort is being made to put joined-up thinking into the local agenda. Take, for example, the development of the National Careers Service. While no one disputes the need for good information, many of those seeking careers guidance want not just the website but face-to-face guidance. Is

9 Oct 2012 : Column GC408

it not sensible for there to be a link-up between a college’s careers service, which advises those who take college courses, and those referred to the NCS by Jobcentre Plus? Is co-location of the two services not a good idea? Why should it not be pursued?

I will end by reiterating the general thesis of the report: there is considerable potential for colleges to play an active role in promoting growth, prosperity and well-being within their local communities, but the greatest benefits come from working in partnership with others, be they employers, the public sector or voluntary organisations. The more we can do to encourage such partnerships, and to encourage organisations to be innovative and creative in forming them, the more we are all likely to benefit.

3.40 pm

Baroness Wall of New Barnet: My Lords, I want to thank the noble Baroness, Lady Sharp, as I am sure will many other noble Lords, for the opportunity to debate this important issue. More and more FE colleges are recognising and understanding the importance of their role. I also congratulate the noble Baroness on the interesting report she produced in November last year and associate myself with at least two of the findings that she has just covered: certainly on the lack of flexibility in the funding, but equally on the careers service, which has gone from multiple opportunities to a single website, which people find less inviting and more remote.

I know the work of many FE colleges across the country and could describe some of their initiatives but want to concentrate in the short time we have on the Liverpool Community College. This is the only FE college in its home city. I was introduced to the college by EAL, the awarding body whose qualifications are a key part of the college strategy to help local people into work and offer employers what they need: a pool of skilled, motivated and well-rounded workers who live and work locally, affecting the local economy and bringing added value to their community.

Seeing the emergence of green technologies in the region, the college has benefited from the interest many young people have in gaining environmental qualifications, which they see as work, and quality of life and community improvement opportunities. This learning is inside and outside the college, involving students and out-of-work residents, raising awareness of how everyone can make a difference locally. People are involved in some very impressive projects throughout the city, as this qualification has spread itself further afield.

The city has two famous football clubs. I want to refer quickly to the joint working between the team I support, Everton Football Club, and the college, which are working with local employers, opening up opportunities for hard-to-reach residents. The success of their current project is already making a big difference both economically and culturally by giving participants a stake in their community. Individuals, young and old, unemployed—people who have been looking for work for ever—really love to go to the club, not only to get fit but to work around the business there, and the economic and green environment is really part of the way in which that project is working.

9 Oct 2012 : Column GC409

Lord Geddes: Perhaps I can advise the Committee very briefly. The electronics have gone. Therefore, noble Lords will have to exercise their mathematical abilities and deal in multiples of four.

Baroness Wall of New Barnet: I will conclude, if I may. I was so inspired when I looked at the number of colleges that I could talk about today by just how much is going on. Like the noble Baroness, Lady Sharp, I want to share the fact that more of this could happen if we just had that flexibility and encouragement that we are seeking.

3.43 pm

Baroness Brinton: My Lords, I also pay tribute to the noble Baroness, Lady Sharp, for securing today’s debate, but she has done much more than that. She has championed the sector for decades, and her most recent role, as chair of the independent commission, has shown how she really understands what the sector already does and what it, government and employers need to do in the future.

Our further education colleges are the hidden gem of our education system: the breadth of teaching and learning that they cover, the large and varied number of students that attend, and—key for today’s debate—the importance and relevance for our local economies and communities. The noble Baroness, Lady Sharp, spoke about the strategic position of further education in the UK today. With only a brief time to speak, I want to focus on how FE colleges work within specific sectors.

If our universities are sometimes described as the brains trust of Britain, the FE colleges are certainly the engine room that provides people with the right skills at the heart of the economy. My young hairdresser, Harry, went to West Herts College at 16 and for three days a week was apprenticed to a salon which worked closely with the college. Three years on, he is a confident and skilled hairdresser who has benefited from both arrangements. He is now employed by the same salon, which has been delighted with him. The key has been the partnership between student, employer and FE college, with the college as the dynamic nucleus to which the commission refers. His route is one that we might expect—the bedrock of providing key skills for all local economies, whether in hairdressing, plumbing, catering or construction.

I also want to applaud the teaching and learning for more specialist sectors. For example, in Dundee, over the past few years a real economy in digital technology has emerged, quite specifically in digital games. Forget Pac-Man, we are talking about the dark arts of highly complex technical computing skills as well as artistic and performance art. Working with local, usually very small, creative companies, Dundee College has developed a number of courses at varying levels to help provide this growing and increasingly profitable sector with trained staff. That includes using professional standard facilities, providing good practice-based skills for essential entry-level technician jobs, while at the same time preparing students well for moving on to honours level work right at the cutting edge of technology and creativity.

9 Oct 2012 : Column GC410

Dundee College also links into the highly effective Scottish Creative Loop, and Skillset, the sector skills council for the creative arts, to give employers and students the best information and support. This is happening not just in Scotland, nor just in the creative sector. Whether it is specialist healthcare pathways, heritage construction skills or skills for the financial sector—wherever you look—many of our FE colleges are playing an essential role in providing the new specialist skills needed for UK plc to grow out of the recession.

I agree with my noble friend Lady Sharp that FE colleges need to be represented on local area and economic partnerships as well as work closely with sector skills councils. They certainly need more flexibility with funding routes. My one regret is that the message is not always known, even by funding bodies and government agencies, let alone by many employers. While the burden to celebrate and develop this excellence rightly remains with the FE sector, let us help them sing it from the rooftops because it is key to our country’s future.

3.47 pm

Lord Bilimoria: My Lords, in 2005 I was appointed chancellor of Thames Valley University, now the University of West London. At that time I was by far the youngest university chancellor in the country. Prior to that I had been on the board of governors of TVU for five years, and I saw first-hand the unique contribution that a modern institution like TVU was able to make to education. In many ways, it was the other end of the spectrum of traditional universities, such as my old university, Cambridge. TVU was able to reach people and teach courses that Cambridge could never dream of.

One of our mottos at TVU was “Further and Higher” because it provided both further education and higher education where students had the opportunity to come in and study quite often a vocational FE course and then had the option of moving straight into employment with that qualification and knowledge, or to stay on, study more and move into higher education and graduate with a degree. In fact, the very successful community colleges in the United States, which were based on two-year courses, have historically enabled students who were unable to go to university to engage in post-secondary education and, if they had the will and were able to, to progress on to universities and obtain undergraduate degrees.

I would like to ask the Government what measures they are taking to provide students of further education colleges with opportunities to progress to universities and to top-up their FE qualifications to graduate. Are they encouraging formal links to be made between FE colleges and neighbouring universities? At TVU we were able to provide this under one roof, which made it much easier. I have seen the power of education: once people’s eyes are open to it and they are on that ladder, they want to learn more. Are we providing enough opportunities for our people to do this?

I thank the noble Baroness, Lady Sharp, for initiating this debate, and for her commendable report on putting colleges at the heart of local communities. American FE colleges are called community colleges because

9 Oct 2012 : Column GC411

they are meant to be accessible to their local communities. Basically, there should be opportunity and accessibility for school leavers, particularly now that the Government have made it mandatory for children to continue education until the age of 18, and for adults who want to engage in FE for the first time, quite often part time, as well as for those who want to learn more to improve their prospects or to change their tack, at the community’s doorstep.

At TVU we worked very closely with the businesses and the communities surrounding our campuses. However, the Government have put in harmful cuts to adult education. Will they admit that adult learners will be deterred by the fact that they will now be expected to take out loans to fund their further education? Is this the way the Government want to encourage our workforce to get skilled?

Our FE colleges provide so much vocational training that is desperately needed to improve the skills of our workforce. We have a skills shortage in this country. The Government’s apprenticeship schemes are great and laudable, but does the Minister agree that apprenticeships can be greatly enhanced by attending FE colleges as well and gaining qualifications in a formal setting? At TVU, the London School of Hospitality is one of the jewels in our crown. It is one of the best hospitality and catering schools. We created a course with Buckingham Palace for butlers and valets. The students gain work experience in the palace, as well as attending classes at the London School of Hospitality. They have on the job, on the ground training, as well as the benefits of being in a college environment.

I see that the report of the noble Baroness, Lady Sharp, recommends ways of helping SMEs with apprenticeships and consultancy support. Will the Government support this? We talked of FE colleges working with the local community. A few years ago in Hounslow, Gillette closed down its famous factory and moved to eastern Europe. TVU helped train and reskill the redundant workforce so they could be re-employed.

The Government are removing the educational maintenance allowance. Students will now be deterred from pursuing full-time further education from the ages of 16 to 18. Do the Government not think it is important that we should encourage our children in that age group to be full-time students, and that this will harm them?

In conclusion, Britain’s greatest strength is its people. British education is respected around the world. Our universities and those of America are the best in the world. However, to be able to compete in particular with the rising powers of China and India, we have to prioritise education and skills and support further education, both in modern universities like the University of West London, and in the form of local FE colleges, integrated into their local communities. This is key to our country being able to compete in the future.

3.51 pm

The Lord Bishop of Derby: My Lords, I, too, thank the noble Baroness, Lady Sharp, for giving us a chance to look at this area. I will briefly draw on a case study

9 Oct 2012 : Column GC412

from Derby College in my own diocese, and then raise three issues that we could look at more seriously.

The college is rising to the challenge of the report in terms of inspirational leadership, entrepreneurship and partnership. Its first core purpose is to develop individuals. The second is to support economic development. The third is to contribute to community cohesion and social action. It takes individuals and puts them in an economic and community framework: that is its core purpose. There are 30,000 learners, of whom 7,000 are full-time. That is a lot of people in one city in the network.

There are exemplary partnerships with local industry. Recently an engineering careers academy was set up. New apprenticeships were launched this year to meet the needs of local employers. People are working very hard in that area.

In the community there is citizenship training through national citizenship projects. Particular needs in Derby are met. Sadly, we have problems with the sexual exploitation of young people. The college is designing programmes to reach out and help young people and others in the community think about that. There are very imaginative schemes using art and working in care homes with older people. In terms of economic engagement and community involvement, there are some very impressive things.

I will flag up three issues briefly. One is funding—predominantly government funding. The college is doing all it can to look for new income streams and to be more efficient, but if we are going to maintain the very rich resources that we are developing and grow them in the way that the report suggests, we need to look at a suggested framework for resourcing this kind of enterprise. Could we do some common thinking about that and look at a common suggested framework for resourcing? If we allow each project to struggle with small local deals, we will return to the old world of projects that last for a few years and then run out and have to be renegotiated, with a lot of wasted energy. The Government and others could help with a suggested framework for resourcing.

The second thing was alluded to by another noble Lord. These colleges need to be engaged with LEPs much more strongly than they are. The pattern is very patchy across the country. In Derby the college is not involved with the local LEP. That is to its detriment and to that of the LEP.

Finally—noble Lords would expect me to say this—the report does not mention the importance of faith communities. In the mix of what community life is about and its potential for energising new citizenship, faith communities are increasingly important in providing that energy. I hope that in this sector there could be encouragement for that kind of engagement.

3.54 pm

Baroness Warwick of Undercliffe: My Lords, it is excellent that the noble Baroness, Lady Sharp, has secured this debate, and I add my thanks to those already expressed for her commission’s incisive work last year investigating the role of further education colleges in their communities. As the former chief executive of Universities UK, I cannot emphasise enough the enormous importance of further education

9 Oct 2012 : Column GC413

to higher education, particularly at the local level. It remains my passionate belief that all who can benefit from a higher education should be given the opportunity to do so; and for a huge number of people, whether school leavers or mature learners, that opportunity comes via their local FE college. It provides accessible routes to HE for thousands who might otherwise not benefit, and who then bring their enhanced skills and their ideas back into the local community.

But the “HE in FE” role is perhaps not as widely appreciated as it should be. The higher education that is delivered in FE colleges is often local employer-led. Half of all foundation degrees are now taught in colleges, and students are much less likely to come from families with a tradition of higher education. FE colleges have been key to improving access to higher education for disadvantaged or under-represented groups. Ethnic minorities, for example, make up 21% of students in colleges compared with 13% of the general population. Nearly a quarter of young, full-time first degree entrants to colleges come from neighbourhoods with low rates of participation in higher education. This is more than double the rate for all such entrants starting at universities.

To take another example, a group I have spoken about on previous occasions are children coming out of the care system. They remain one of the most under-represented groups in further and higher education, although some modest improvement has been made over the last few years. Research by the charity Buttle UK has shown that FE colleges are the most common route for care leavers into higher education. Yet the National Care Advisory Service says that up to a third of leaving care services have been forced to scale back provision because of budget cuts, despite rising numbers of young people requiring support. Can I put in a plea to the Minister that she can reassure us that even the modest gains we have made are not lost and that care leavers are not left further behind?

Further education colleges offer people the opportunity, on their doorstep, to gain skills and qualifications that meet local economic and social needs. The commission’s report rightly emphasises the importance of partnerships in ensuring that FE colleges can meet the whole spectrum of education and training needs of local communities. But they need support, and it is regrettable that recent pressures on budgets have seen some partnerships face difficulties as funding, for example for lifelong learning networks, has come to an end and there is now a cap on student numbers.

A core area for all FE colleges is providing apprenticeships. I applaud the innovative development of apprenticeship training associations where the colleges themselves, not the SMEs, become the employers, and everyone benefits. I hope that the Minister will tell us what the Government are doing to popularise ATAs as a cost-effective way for SMEs to take on apprentices around the country.

Finally, we know from the commission’s findings that FE colleges make the greatest contribution where they can provide courses and qualifications that meet local need, providing local people with skills. This requires, above all, as almost everyone else has said and the commission itself emphasised, flexibility. I hope

9 Oct 2012 : Column GC414

the Minister will tell us whether the Government will now take up the commission’s recommendation that up to 25% of colleges’ adult skills budgets should be made available to meet locally assessed needs. FE colleges really can change the lives of those failed by schools, who have lost jobs or who need a change of career. FE colleges at their best should be at the very heart of their local communities.

3.59 pm

Lord Shutt of Greetland: My Lords, I commend my noble friend Lady Sharp on the work set out in her report and, indeed, on initiating this debate. Let me declare my own interests. In 1973 I had the privilege of being appointed as a governor of the Percival Whitley College in Halifax. We later changed its name to the Calderdale College. I served for almost 25 years until 1998, including 19 years as chair of that body. I recall believing at the time that the only constant thing about FE was change. It is now 14 years since I stepped down, but I commend the present regime and congratulate it on its continued role. It has had recent enhancements to facilities, and is currently involved in a £6 million building enhancement programme.

It was my original intention to speak on governance, but I need to speak a little more about FE in Calderdale. I want to be certain that Calderdale is still well placed to contribute to the local economy and community. It has come to my notice that one of the local secondary schools is hoping to open an alternative college in September 2013, which will replicate some of the work that the college is engaged in. Now, the circumstances are these. Competition is okay, but—at FE level—Bradford is 10 miles away from Halifax, and Huddersfield is rather less so. Burnley and Rochdale, at the other end of Calderdale, are very near to Todmorden, too. So there are alternatives. It is always right that there is an alternative in case faces do not fit.

Also, in the period 2013-19, the projected population of those who are 16 to 19 will reduce by 8%. There is a consultation going on, in accordance with Section 10 of the Academies Act 2010, but that consultation looks like motherhood and apple pie. I ask the Minister whether the Secretary of State for Education specifically considers demographic trends, existing education and training provision and value for money when deciding whether to approve an application to open a free school for 16 to 19 year-olds. I also ask how far in advance of the provisional opening date of a free school for 16 to 19 year-olds the Secretary of State undertakes his statutory duties under Sections 9 and 10.

I very much see the point of a free school where there may well be lack of provision and potential numbers are on the rise, but now I am doubtful about that. A free school is one thing, but there seems to be an absence of free money about. Clearly, there is some detail in what I have been asking and I would be very happy, if the Minister cannot deal immediately with what I have said, to see that in writing.

4.02 pm

Lord Jones: My Lords, as the Times first leader states today, the question of where this country stands in the world economy remains. How will it make its

9 Oct 2012 : Column GC415

way in the world and respond to the competitive pressures from the East? When I began my parliamentary life in the constituency that I represented, we had three great manufacturing industries, 10,000 jobs in textiles and 13,000 in steel. Today, we produce no steel and no textiles. These cyclical manufacturing industries fell prey to competitive pressures from the East.

I am very glad that the noble Baroness, Lady Sharp, chose this debate. I am convinced that FE colleges will help to buttress and develop what remains of British manufacturing industry. FE colleges are at the heart of reskilling and retraining the British economy. Deeside College in north-east Wales stands alongside the third great industry that I mention: aerospace. This magnificent college helps one of Europe’s greatest companies, Airbus, to retain world leadership in civil aerospace. Airbus employs nearly 7,000 people in north-east Wales. Deeside College trains Airbus apprentices to a high standard. The Airbus factory in north-east Wales produces the wings of the iconic, world-famous giant jumbo, the A380. The FE college’s engineering department brings the apprenticeships to world standard.

The Airbus director is Paul McKinlay. The college principal is David Jones. The training manager is Gary Griffiths—the greatest trainer, arguably, in Britain. This collaboration of college and factory guarantees prosperity for the north-west and for north-east Wales. This collaboration ensures British paramountcy in the immensely demanding and fiercely competitive sphere of technical manufacturing. College and factory guarantee an industrial future for Wales and the north-west.

I believe that investment in FE colleges will enable Britain and Wales to emerge more quickly from debilitating recession. I believe that FE colleges as a trainer are Britain’s medium-term answer to the great crisis that western nations face. I see our universities as the long way forward, but no praise can be too high for FE colleges in Britain today.

4.05 pm

Baroness Maddock: My Lords, I, too, congratulate my noble friend Lady Sharp on securing this debate and on her report, which everybody has appreciated this afternoon in their contributions. The report clearly shows the importance of further education colleges in their communities. It concludes that an FE college is embedded in its community in almost every town and city in England and Wales. However, where I live, in Berwick-upon-Tweed, we are not in that happy position. That is in stark contrast to the situation when I lived in south-west Hampshire and was chairman of governors at Brockenhurst College, which at that time was, I think, in the top three.

My purpose in taking part in the debate is to highlight the very low level of FE provision in north Northumberland. We are at the heart of a very rural area with a sparse population. We have one high school with a sixth form in the town. The next nearest high school is at Alnwick, 30 miles away, or one hour by bus. The nearest college is at Ashington, which is more than 50 miles away and one and a half hours by bus. There is, of course, a college in Newcastle, which

9 Oct 2012 : Column GC416

is 67 miles away and 50 minutes by train, but because it is quite a long way away the cost of that train journey is quite high. I am pleased to say that, since the Liberal Democrats took minority control in Northumberland, students can now get their train fares to Newcastle paid.

Northumberland College in Ashington delivers some courses locally—mainly trades and other practical skills involving some of our excellent local tradesmen. There are some good apprenticeship courses, but the college does not do any A-level courses. As a town we have a very low skills base and we have low levels of take-up of further and higher education. It is difficult to get the exact figures for Berwick because the last Government reorganised local government in Northumberland and we now just have figures for the whole of Northumberland, which do not reflect the very great differences between the north and south of the county. Again, I cannot get the exact figures—I used to be able to get them from Berwick Borough Council—but we have almost the lowest average wage in the country. Those who leave Berwick for higher education tend not to come back, as there are few job opportunities locally.

Many in Berwick have been working to try to improve FE provision with a view to getting some higher education opportunities as well. Under the Labour Government, I supported local efforts to bid for the programme for more universities, particularly for communities such as ours that are a long way from higher education. Despite being the furthest from higher education in England, we were unsuccessful.

Local efforts have not been helped by local government reorganisation and the demise of One North East. We thought that various sites and buildings owned by the local authority and One North East might provide the possibility for a college. I regret to say that, during 13 years of the Labour Government, there were no new college or school buildings anywhere in north Northumberland. Travel to colleges elsewhere is expensive and takes time, as I have indicated. It is not helped by the fact that the A1 in north Northumberland is still a single carriageway, despite dualling to the south and to the north over the border in Scotland.

I have two questions for the Minister. Are the Government aware of gaps in FE provision such as those in north Northumberland? What opportunities are there now for the development of an FE college in our area embedded in its community and providing the benefits so clearly set out in the excellent report of my noble friend Lady Sharp?

4.09 pm

Lord Young of Norwood Green: My Lords, I, too, congratulate the noble Baroness, Lady Sharp—although I was tempted not to, just in the interest of time. This is a bit like speed-debating on a serious and complex issue. I also congratulate her on her report, which had the benefit of being succinct as well as interesting in its analysis.

The noble Baroness’s timing for this debate is right too. Ed Miliband’s speech, at a certain conference that I was at last week, focused on the important issue of skills and training. He also set out a clear vision.

9 Oct 2012 : Column GC417

A Britain that recognises high-quality skills training is just as important to our modern economy as academic qualifications. Our concern about the Government's approach to education and training relates to its inconsistencies. Michael Gove wants to bring back two-tier academic exams—but I will not pursue that issue any further now, in the interest of time. However, we think that that is an antiquated view of education in the light of the needs of a modern economy.

We believe that we need to meet the challenge of every young person staying on until 18 by making maths and English mandatory for all and creating a new gold-standard technical baccalaureate. I would be interested to hear the Minister’s attitude to that proposal. I was pleased to see that the noble Lord, Lord Baker, welcomed it.

We must once and for all get rid of the perception of vocational qualifications as somehow second class—an attitude which I think persists. If I have one criticism of the report it concerns the comment about colleges opting,

“to retreat to the low-risk areas of 16-19 provision and apprenticeships”.

When I read that I thought, “Hmm, they’re not always low risk”. One of the problems with apprenticeships is, unfortunately, that there are some examples of low-quality apprenticeships that undermine the brand value that we have spent a lot of time trying to restore. I do not say that in an attempt to score any points, I think that it is a really serious issue. I think that apprenticeships are currently getting the attention and merit that they deserve, with more and more companies actually treating apprentices, when they finish their apprenticeships, as though they were graduating. That is what we want to encourage.

We have concerns about the Government's record. The noble Lord, Lord Bilimoria, talked about the scrapping of EMAs and the trebling of tuition fees. Support is being withdrawn for people aged 24 and over who are taking A-level equivalent courses and above—that is level 3 and higher, which includes apprenticeships. Loans of as much as £4,000 are also being introduced for FE students. We cannot help but feel that that will act as a deterrent at a time when we want to encourage more retraining, more reskilling and lifelong learning.

I do not have the opportunity to pick up all the key points made today but I endorse many of them, especially the point made by my noble friend Lady Warwick about ATAs—I would be interested to hear the Minister’s response on that—and the point about group training associations, which are a key part of encouraging more companies to offer apprenticeships. The UK’s track record on that is still abysmally poor. Only about one-third of FTSE companies offer apprenticeships, and only 4% to 8% of companies offer them. That is an abysmally low figure. The Government are failing to lead by example by not ensuring that apprenticeships are a key part of the contractual liability when government contracts are let. We did that when we were in power and that is why we ended up with nearly 400 apprentices in the Olympic contract as well as with another 400 in Crossrail. I cannot understand why the Government do not want to go down that particular road.

9 Oct 2012 : Column GC418

I am conscious of the time and do not want to incur the Committee’s wrath, so I will conclude with just a couple of quick points. As I said, lifelong learning and upskilling of our workforce is central to producing a modern, high-wage, flexible economy. I agree with the points made about the importance of the careers service—it is not good in its current form. I also agree with noble Lords who made the point about FE colleges being better represented in local enterprise partnerships. As for the idea of the dynamic approach, when I looked at the diagram I thought for a minute that the Liberal Democrats had embraced nuclear power—but then I realised that it was just a metaphor. Nevertheless, it is a good one.

4.15 pm

Baroness Garden of Frognal: My Lords, I thank my noble friend Lady Sharp for initiating this debate and for raising such an important matter. The House has benefited many times from my noble friend’s knowledge and experience of the further education sector. Her report, A Dynamic Nucleus, has provided a seminal contribution to our understanding of the pivotal role played by further education colleges in their local economies and communities, helping millions of young people and adults to gain and enhance their skills and education. Both the quality and the number of contributions that we have had to the debate today indicate just how seriously we take it in this Chamber. One of the other things touched on by my noble friend was the fact that FE promotes well-being, while the right reverend Prelate mentioned the promotion of citizenship and social engagement. Those are factors that we must not neglect in the role of further education colleges in the community.

The report celebrates the work that colleges up and down the country are doing to support their communities and employers and sets out clearly the challenges and opportunities for the further education sector, local partners and commissioning bodies, as well as central government and its agencies. At the heart of the report’s recommendations is a recognition that there needs to be a shift away from accountability upwards to the Government and outwards to college communities, learners and employers. This view is central to the Government’s further education reform plan, New Challenges, NewChances, published in December last year. I join in the tributes paid to the Minister, John Hayes, who has been working with us on these issues for a long time.

Through these reforms we have stripped back the number of intermediary bodies that had flooded the further education system. We have removed top-down targets and prioritised funding on those who need it the most. Learner and employer demand drives the system as funding follows the learners. Through the Education Act 2011, we have also removed restrictions and barriers around college governance. I know that these are issues close to the heart of my noble friend and, indeed, to many others who have spoken. Colleges are now able to consider different, innovative delivery models and partnerships, including joint models with academies and universities, and mutualisation models to offer greater choice and

9 Oct 2012 : Column GC419

diversity to learners and employers. Perhaps I may pick up this point in connection with the remarks made by the noble Lord, Lord Bilimoria. In addition, we have responded to the Public Accounts Committee’s concerns about the level of bureaucracy in the system, with a comprehensive cross-government simplification plan. By delivering this plan, we seek significantly to reduce the red tape faced by colleges and providers.

Many of the recommendations in the report were for the sector itself to deliver, including sector bodies, and some progress has been made. In respect of those recommendations for the Government, we have supported and actioned them all. In order to support effective planning, the Skills Investment Statement 2011-2014, published last December, set out budgets for two years: an indicative budget for the 2013-14 financial year alongside the actual budget for 2012-13. In addition, resulting from my noble friend’s report, the Skills Funding Agency launched the Innovation Code to enable colleges to respond rapidly and flexibly to local business and employer needs and to meet current and emerging skills gaps. I have noted what my noble friend said about the feeling that that has not been implemented in the way and to the extent that she envisaged in the report. What I can say is that the agency is planning a communications campaign for November 2012 to promote the code with colleges and other training providers. This is under review and we hope for comments under that consultation to come back and inform it. The noble Baroness, Lady Warwick, mentioned the point about 25% of colleges’ annual adult skills budgets being devoted to locally assessed priority needs. In fact, the Government’s recommendation is that there should be no target for this; it should be a more flexible provision.

For the sector, the report called for greater involvement of employers and the local community in the design and delivery of the curriculum. There are some terrific examples of colleges working with their communities to develop their learning offer. We heard about some of them today. The noble Baroness, Lady Wall, talked about what is happening at Liverpool with green technologies and so on. There are other examples. Hull College Group uses local groups and forums to develop its learning offer and to shape the organisation. Barnet and Southgate College targets its learning offer to families in disadvantaged areas by working with regeneration groups and faith groups. I stress to the right reverend Prelate that faith groups come into these projects, and rightly so. Local libraries also come into the work of Barnet and Southgate College. Derby College’s Employment World supports adults to enter or re-enter employment, again working with employers.

Colleges are working to deepen their engagement with their communities and employers and are becoming more transparent about their performance and future plans for meeting the needs of their communities and employers. They are stating these aims most clearly. I know that colleges and providers recognise that they need to do more to foster effective working relationships with local strategic bodies, for example local enterprise partnerships—they came up from time to time in the

9 Oct 2012 : Column GC420

debate today—core city regions and local authorities. To do this, they will assess local labour market needs, agree skills priorities and shape their local skills offer to support local economic development and growth. Leeds City College has a particularly strong link with the local area: the chair of governors is also the chair of the local enterprise partnership. It seems to be a very happy arrangement.

All this work means that colleges need to be ready, and supported, to respond to the reforms—and the sector is stepping up to the challenge. For example, the Association of Colleges report, Thinking Outside the College, provided guidance to support continuous improvement in community engagement and accountability. Many colleges have participated in the work undertaken by NIACE on community curricula. The 157 Group is leading on work looking to the future at what colleges and providers will need to adapt to the changing needs of learners, employers and communities. I pay tribute to the AoC, NIACE and the 157 Group for the tremendous work that they do in this area.

I will pick up on one or two points made in the debate. The issue of local enterprise partnerships was raised by my noble friend Lady Sharp and others. The primary role of LEPs is to articulate and raise employer demand for and investment in skills. They work collaboratively with a wide range of interested bodies in their areas, including local authorities, which play a very important part in this, and independent providers. In core cities and in London we provide city regions with targeted funding to support collaboration with local providers.

My noble friend Lady Brinton, the noble Lord, Lord Bilimoria, and others raised the issue of funding. In a time of limited resources it is critical to prioritise investment where the impact will be maximised. That has been towards individuals who would not otherwise have undertaken training and where market failures are strongest. We focus full government subsidy on the young, on those lacking basic English and maths skills and on the unemployed. We have also protected the £210 million a year budget for informal adult and community learning. I think we would all agree that that is a very important part of the offer.

The noble Lords, Lord Bilimoria and Lord Young, mentioned the possible impact of loans on adults. The introduction of loans repayable on the same basis as those for higher education will maintain access to advanced and higher-level learning for adults aged 24 and over. We will monitor that to ensure that there is no disadvantage in the system.

The noble Baroness, Lady Warwick, and the noble Lord, Lord Bilimoria, talked about the progression from further education to higher education. FE already provides 40% of new entrants to higher education, hosting around 180,000 students on HNCs, HNDs, foundation degrees, apprenticeships and other entry-level qualifications. Many colleges have long and established track records in offering level 4 and above. However, some of this was neglected in the past.

I noted the reference to TVU. I come from that part of the world and remember when it was a high-ranking catering college and how much the provision was

9 Oct 2012 : Column GC421

incorporated within the university. I was fascinated to hear that students were working in Buckingham Palace, but I am not sure how many apprentices Her Majesty can take on. Obviously it is a very good route for those who choose to go that way.

There is provision to support learners following the ending of the EMA scheme and to target that funding more appropriately. My noble friend Lady Brinton mentioned hairdressing and plumbing. When I started work at City and Guilds, I dealt with hairdressing qualifications and I have great admiration for those skills. The work that is being doing with digital technology in Dundee is definitely one of the skills of the future.

The noble Baroness, Lady Warwick, mentioned care leavers. That is a very important area that we need to look at in all sorts of respects, in particular their ability to go on and have fruitful lives, as the records of care leavers are currently woefully below those of others. The other point raised by the noble Baroness, and by the noble Lord, Lord Young, concerned colleges helping SMEs through the ATA.

I am conscious of time. My noble friend Lord Shutt mentioned the proposal of the Maltings 16-19 free school. If I may, I will write to him on the specific points of that case, but it is out for consultation at the moment, so he will be able to feed into that consultation. The noble Lord, Lord Jones, raised, quite rightly, the issue of manufacturing and how further education is very well placed to support manufacturing. This is certainly an area that the country will need to increase in order to pull us out of the recession.

My noble friend Lady Maddock raised the issue of Berwick. We are publishing a report with Defra on community learning in rural areas, considering issues such as transport, class sizes, rural broadband and so on. Several of our community learning trusts are based in or include rural areas, as acknowledged in Defra’s recent report. My noble friend and, indeed, my noble friend Lady Sharp mentioned the National Careers Service. I regret that I do not have more time to go into that but I hope that I can write to them on that matter and where there are gaps in that funding.

This is a new and exciting phase for further education colleges, and their communities and employers have high expectations of them. I am confident that colleges will meet those challenges head-on and continue to deliver a rich and diverse choice to their learners, employers and local communities. I believe that the quality of this informed and incisive debate has contributed to the issues that we will all need to address and bodes well for the future of this particular sector. I once again thank my noble friend Lady Sharp for securing this debate and thank all the noble Lords who have contributed on this important issue.

The Deputy Chairman of Committees: I commend all noble Lords on their amazing temporal self-discipline. We have finished three minutes early. The Committee stands adjourned for three minutes.

4.27 pm

Sitting suspended.

9 Oct 2012 : Column GC422

UK Trade and Investment

Question for Short Debate

4.30 pm

Asked By Baroness Liddell of Coatdyke

To ask Her Majesty’s Government what progress has been made in improving the performance of UK Trade and Investment in relation to small and medium-sized enterprises in the United Kingdom.

Baroness Liddell of Coatdyke: My Lords, I am very grateful to have this opportunity to raise the issues in this debate, which I asked for quite a long time ago. I did so after hearing the Minister address a business breakfast on UKTI. Two things struck me. First, there were great similarities in some of the things that he said in his speech to what I said 10 years previously when I was doing his job. Secondly, we do not get anything like enough opportunity to discuss this issue, particularly in the troubled economic times that we are in.

SMEs are great drivers of the economy but they are going through a particularly difficult time. From the beginning I say that I am a friend of UKTI, but I am a critical friend and am not yet 100% certain that we have the delivery mechanisms in place to address some of the issues that are essential to the growth of SMEs, both in exporting and in operating within the domestic economy.

Let me begin by paying tribute to the Government and to the GREAT campaign. I have been a great fan, to coin a phrase, of cross-government working in relation to foreign direct investment. I have often felt that we missed a trick in not bringing together the British Council, VisitBritain—in which I have a registered interest as a director—and UKTI to promote what Britain is and what Britain is good at. In the run-up to the Olympics and the Paralympics, the GREAT campaign was an enormously good showcase for the values of Britain as well as for its skills, design and capability. I should like to ask the Minister what will happen to GREAT now that the Olympics and Paralympics are out of the way. What will happen to the money? Will GREAT go on? Will the money be continued? Or, will everyone huddle back in their silos, keeping well out of the way of the traffic, in case they dare to talk to one another at any point in the future? Those of us who travelled internationally and saw the GREAT posters and material in a lot of international airports realise what a powerful advocate it is for the UK.

I have a long interest in working with entrepreneurs seeking access to international markets. I suppose that I am a poacher turned gamekeeper in that I ended up as a head of mission. I have worked directly with UKTI and have to take some responsibility for some of its failings as well. One of the big criticisms that is made of UKTI—I am not 100% certain that it is justifiably a criticism—is that it is biased towards big business. It is difficult to envisage a situation where UKTI would not get behind big business. The scale of some of the projects that are either for export potential or for foreign direct investment is so overwhelming. It is easy to work with big business because it is structured

9 Oct 2012 : Column GC423

in such a way that it is easy to interrelate with it. We are always told about the great advantages to SMEs of the supply chain.

I say to the Minister that a camel can go through the eye of a needle easier than a small firm which does not have an international name can get into the procurement department of a major multinational. There is a body of work within what used to be called the DTI—it must be about 10 years old now—that looked at the supply chain in the oil and gas industry. Some of the best technology that exists in that industry has grown out of SMEs, yet the best closed shop in the world is multinational procurement. It makes the BMA and the Law Society look like a bunch of amateurs. It is critically important to get the people with the ideas and the ability to develop the business before the guys in the big businesses who actually buy those things. I think that that is an area that UKTI does not devote enough time to. Not all of it is about spending money; some of it is about knocking on doors. Some of the clever and influential people who gravitate towards UKTI, I would suggest, should turn their minds to how to make that supply chain work more effectively. I do not like the idea of SMEs taking scraps from the table, but if you run an SME—and I have run an SME—you really would do anything to get your foot in the door in that kind of context.

In this, I feel that I am criticising some of my dear friends. There are issues about the commercial acumen within UKTI. Some of it is because of the nature of an organisation whose staff rotate every four years, particularly with Foreign Office staff. You can get somebody who is a brilliant Arabist or an expert in hard languages running a UKTI operation. I know that 400 staff have had commercial awareness training but, frankly, nothing concentrates the mind more than seeing the whites of the eyes of a customer who will maybe take their business elsewhere. It is hard to teach people commercial awareness. I know that proposals have come up, year after year, about secondments into business, but it is very easy to second somebody into Rolls-Royce, BAE or GlaxoSmithKline. It is very difficult to second somebody into Joe Bloggs’ widget makers. I often think that that kind of white-knuckle experience is missing from some of the experience in UKTI.

I know that there have been considerable changes at the top. UKTI appeared before the Select Committee on SMEs not so long ago. I have never quite graduated on to a Select Committee; I am a new girl in here. However, I notice that it was pointed out that 75% of the new managing directors come from the private sector. Can the Minister tell us if any of them have ever grown a company from start-up, or if they have come from a business that is not AIM or FTSE listed? The psychology is very different. I notice from the annual report that there is great emphasis on attracting overseas venture capital. The best venture capital in the world is about six stations from here on the Jubilee line. One of the problems with accessing venture capital is that the risk profile of an SME is different. There is no opportunity to spread risk in the way that you can with a major company, as I found out when I referred to this in my maiden speech along the corridor and was summoned in by 3i. There is a venture capital gap;

9 Oct 2012 : Column GC424

there is no getting away from that. The cost of administering a venture operation in a small business is sometimes much higher. It is easier to get £50 million, sometimes, than it is to get £50,000. That needs to be addressed, and we need to find a route to do so. I would like to know how this new service that would link companies is actually going to work.

I was interested in the Secretary of State, Vince Cable’s, announcement last week about a new banking facility using the Co-operative Bank and the Unity Trust Bank. That was interesting, as it is not one of the big banks. I should declare an interest as a life-long co-operator with an account in the Co-op Bank. One of the problems with the banks is that small businesses are terrified of them, first because they often do not get the money, and secondly because of the pernicious system of personal guarantees. If you want money from a bank you can put your granny up as collateral. I think of the number of deals that I have lost because a husband has gone home to the wife and said, “I have got to put the house on the line”. If my husband came home and said that to me, I would chase him. It stands to reason that if you are asking people to take significant personal risk, you are limiting the prospects that are available for them. Many people go to informal investment. I pay tribute to Business Link in bringing in business angels.

Time is running on, so I will jump very quickly to another area. Can the Minister give us some idea of how the defence and security organisation is settling in as part of UKTI? That is a very difficult area for SMEs to crack. Often they need a guy with all the gold braid on him just to get in the door of a Government who might be in the procurement business. The annual report is very coy about how DSO is doing. If the Minister can give us some information, I would be very grateful.

In my last few seconds I will say to the Minister that there is one area in which officials will say I am out of date—but I have checked and I am not. UKTI is probably the most bureaucratic organisation under the sun. I have worked in many organisations but never in one that is quite so bureaucratic. Will the department look again at the bureaucratic structures of UKTI? There are good people there trying to do a very difficult job. Let us make it as easy for them as possible.

4.40 pm

Lord Cope of Berkeley: My Lords, I am delighted that this debate is taking place. I thank the noble Baroness, Lady Liddell, for instituting and promoting it. The timing, however it has come about, means that its chimes well with our work in the Select Committee on small and medium-sized enterprises and exports, which I have the honour to chair. Our remit is rather wider than this debate. We are concerned with all the Government’s work to support SMEs in exporting. We are interested not only in UKTI, on which this debate has focused—which is fair enough; I am not criticising it—but on UK export finance and the Government’s role in deregulation, tariff negotiations, tax issues, procurement policy and so on.

The Government can help through diplomacy over tariffs and other restrictions on trade, as well as by their purchasing policies, and by Ministers actively

9 Oct 2012 : Column GC425

promoting trade, as the Minister does so energetically around the world. I hope that I am correct in saying that the promotion is for SMEs as well as for large businesses such as those mentioned by the noble Baroness.

Commentators write about the difficulty of exporting manufactured goods, for instance to India, because labour there is cheaper. They do not often mention that there is usually a 30% to 40% tariff barrier to be overcome. The same is true in Brazil with many goods. That is also a great part of the difficulty that the Government can help with by their energetic diplomacy to try to get free trade.

Our committee published a call for evidence before the recess and received a large volume of responses from organisations, companies and individuals, including academics working in the field. We and our staff are busy going through them—as the noble Lord, Lord Haskel, who is a fellow member of the committee, will confirm. We have also started taking oral evidence. We are in the middle of a series of visits to different parts of the country to meet SMEs of every size and kind, and next month we plan to visit Brussels and Germany.

Visiting companies and organisations in the recess, and looking through the evidence as it came in, I was struck again by the variety among SMEs. It is something we must always remember when we talk about them. Variety is one of the essential facts about SMEs. They come in all sizes, and very different dynamics drive them. They are in all kinds of business. We are very conscious that they are in every sector. We will not be able to ignore the food sector, for example, because the noble Lord, Lord Haskins, is on the committee and he will see to that. Nor can we ignore the creative sector because we have the noble Lord, Lord Grade, as well.

If successful SMEs have one characteristic in common, it is above all that they are problem solvers. They do not let difficulties stop them. If they do not have a can-do attitude, they simply do not succeed. That does not mean that government in its various forms cannot make life easier for them, if only by getting out of the way. Positive help by Government for SMEs has existed for a very long time—since before I was small firms Minister in the Government of the noble Baroness, Lady Thatcher, 25 years ago. These days, of course, much of it is channelled through UKTI, but it also comes from local enterprise partnerships, chambers of commerce and so on. I will not comment directly today on the work of UKTI, as we are in the middle of our evidence taking and deliberation, but we are interested in, for example, whether the criticism made by the noble Baroness—that UKTI is too big business-oriented—is valid.

Nor do I want to comment today on the role of UK export finance with respect to SMEs, which is developing once more after a period in which it was not. I look to my noble friend the Minister for reassurance that his colleagues in government take SME exports as seriously as I know he does. I hope that he will also set out what UKTI is doing to reinvigorate its pitch to SMEs. As far as I can see, too few of them know of the help that they can get from UKTI, either directly or sometimes indirectly, channelled through other organisations, such as the ones that I have mentioned.

9 Oct 2012 : Column GC426

We have to recognise that many SMEs either cannot be helped by the Government or do not want to be helped by the Government or anyone else. After all, as far as many of them are concerned, the whole point is to do their own thing. In some cases, people are trying to do something differently from what they did when they worked in large firms and so on. Nevertheless, others want reassurance that it is all possible—it is possible to create a business and to export to difficult countries around the world. The fact is that it is possible. We have already come across some remarkable stories of SMEs doing business and exporting. Britain needs SMEs to flourish and particularly to export. We need to stimulate more potential entrepreneurs and to try to help them when they want to export. UKTI has a very important job looking after the interests of the entrepreneurs, the people who work for them, their customers and, of course, the UK itself.

4.47 pm

Lord Cotter: My Lords, I would like to start with the talk. I seem to remember a recent advertising slogan, “It’s good to talk”. How do we do that, when it comes to business? I believe that too often from the beginning of the current crisis we have heard talk about austerity and cuts. Austerity and cuts were emphasised long before they started happening. I think that that was negative talk, which had quite an impact on business. The continued talk about cuts and austerity, not balanced by talk about growth and going forward, has been a negative aspect. I hope that the Minister, whom I welcome in his role, will consider that point. It is not just for the business department to talk positively about this; it is for the Treasury and others as well. We need to correct the deficit but, as I say, we need the positives.

I congratulate the noble Baroness, Lady Liddell, on securing the debate today, which is about trade and investment. The Government have made a start with the Britain Open for Business initiative, in which there are many encouraging ideas. I hope that the Minister, later in the debate or at another time, will talk about the implementation of that. We need continual monitoring of progress.

I take on board the point made by the noble Lord, Lord Cope, about the need for publicity, so that people are aware of what help is available. A recent FSB report said that, in the case of UKTI, only 6% of small businesses were engaged. Out of those 6%—it may be wrong, but that is what was said—83% were encouraged by their contact. I take on board the point made by the noble Baroness, Lady Liddell, about concerns that too much is directed towards big business rather than small businesses. On publicity and the need for people to be aware of what is available, I know, having been in small business, how little time we have to consider, when we are thinking about how to survive, what else is available out there. I say to the Minister that, in lots of different ways, publicity is needed, direct or otherwise, to ensure that small businesses know that there is something out there that can really help them.

There is a need for us to be welcoming in this country and for Britain Open for Business to actually mean something. In this connection, I again go back

9 Oct 2012 : Column GC427

to the talk, and to what is said and what happens. I hear quite often that foreign firms and investors have great difficulty in getting visas for key staff, more so than in most countries in the European Union. We need to look at that and see whether it is correct. If it is correct, we need to look at it very carefully, because it does not take much bureaucracy and red tape for someone coming from overseas to feel that this country is unwelcoming.

In this connection, I refer to a recent controversy involving the London Metropolitan University. As a result of it, there was talk of revoking the licence of the university. The implications for students from overseas were such that they could have lost their opportunity of an education in this country. It is a major area of concern. Again, a message was going out, and it is very difficult to counteract messages once they get out and to say, “No, no, that’s not the case”. That was a case where the message was quite negative for this country.

We need to talk up business. For SMEs, publicity is crucial in order to know what is available. We should not go against the need to reduce the deficit; rather, we should emphasise the need to encourage business—not just business alone but the Treasury and other departments in the Government.

I look forward to the Minister engaging with us and reporting back on what progress has been made with the various initiatives. The noble Baroness, Lady Liddell, referred to her time in the other place. When I was in the other place, I argued time and again for the need for Ministers or politicians to appreciate what a small business is all about, and for civil servants and others to have placements in small businesses. I read that the Government were doing that a lot more, but I stress to the Minister that it cannot happen enough. Having struggled myself, I know that a Minister or civil servant would have to work in a small business for only two or three days to realise what a difficult field it is and how many skills you need to run it. I strongly support what has been said by previous speakers and underline to the Minister the points that I have made about involvement and speaking up for business.

4.53 pm

Lord Hunt of Chesterton: My Lords, I welcome this debate, introduced by the noble Baroness, Lady Liddell. I have experience with high-tech SMEs applying UK research and have had discussions with medium-tech SMEs around the world. I declare an interest as chair of a small company in Cambridge and am glad to say that we have just sold software to Beijing to predict its air pollution, which is quite a coup for the UK. It is the same software as that used in London and reported on by Ministers in May.

We have to remember that the development of SMEs was once extremely controversial politically. For example, in Cambridge, both the Conservatives and the Labour Party were dead against Cambridge turning into a high-tech town, and one of my Labour colleagues said, “My God, this is going to turn Cambridge into an inland Bournemouth”. We have moved a long way since those days. All parties now accept the

9 Oct 2012 : Column GC428

importance and social value of SMEs. I believe that there is some statistic that shows that some two-thirds of UK school leavers would have their own business if they could, whereas the figure is less than one-third in France. I do not know where that statistic came from, but I heard it some time ago.

A propos the strange remarks of the Chancellor yesterday, I should add that SMEs are not here as a sort of gambling operation, they are here to set up and do tasks and to provide reasonable employment. They are not speculations. Some people speculate on them—good luck to them—but that is not the primary role of people who have set them up, including people I know.

SMEs were invented by the Victorians and are remarkable organisations. Being a limited liability company enables you to do things you cannot do as a charity or as a partnership; an SME can do them. I support the present Government in their efforts to simplify things for SMEs so that they can run better. It is very much easier for SMEs here than in France, for example, which I know because our company deals with colleagues in France. The tax regime was improved by the Blair-Brown Government, particularly in maintaining tax relief on research. The present Government had a few wobbles on that when they first came in, but now they are solid on allowing tax relief on development.

The role of women in SMEs has increased enormously. Our own software company is composed of 80% women and is thus probably unique in the world. We have a very firm No. 2 who is a woman, and she jolly well made sure of that. The important point to make is that the Government introduced regulations to ensure that companies enable women to come back into employment. This is allowing highly skilled women to stay in the SME workforce.

This debate is about the role of UKTI. One of the issues for SMEs in Europe is the question of funding for research and development. The Technology Strategy Board is an effective body, and it is gratifying to note that the present Government have maintained it. However, I did not see any reference in the UKTI document provided for this debate to its connections with the board. It is important that UKTI should work with the TSB to look at where the overseas market areas are. In my view, we are still way behind the United States, which funds research undertaken by foreign scientists. Two or three of my papers were immediately funded to do research over in America; there was no such funding over here.

The other important feature of SMEs is the matching-grants approach adopted by the European Commission. In Britain it is difficult to get this sort of funding. You cannot easily get money from the research councils, so the approach of the EC of providing a matching grant equal to the funding provided by the SME is a good one. We do not do that in the UK and I believe that we could move more in that direction.

Last year I went with the noble Lord, Lord Oxburgh, to the big water show in Singapore. It is the world’s biggest annual exhibition of water. Water does not feature much in this UKTI report, perhaps because it is a low-growth industry, but it is jolly important. We saw enormous displays of water technologies from all around the world. Britain had only a small display,

9 Oct 2012 : Column GC429

and we heard grumbly representatives from British companies say that they got little support from UKTI to come to meetings such as this one. They were very vociferous. In fact we met the UKTI man who had come down from Kuala Lumpur. He listened to and recognised those grumbles. He commented on it later, when I visited the embassy and high commission, saying that there are so many trade exhibitions that there simply is not the funding available to enable small UK companies to attend.

The other important task for UKTI and the Government is the promotion of the role of governmental agencies in the UK. I used to be the head of the Met Office. At no point did my job description include anything to do with British industry. I complained about it to the then Conservative Government. They said, “Why don’t you go to the Sunday fete and help them?”. I was pretty cross and I expostulated about it. The representative, now a fine Member of the House of Lords, then said, “Well, that is the sort of thing they do in France, isn’t it”. The point is that our big government agencies could play an enormous role. However, the Environment Agency is not allowed to promote UK environmental software or technology abroad. I have spoken to the head of the agency about it. We have extraordinary limitations.

I have almost used up my six minutes. I believe that this document is helpful. Finally, there is a new point that is very interesting. As I understand it, the UKTI is now providing funding in order to bring companies into the UK, such as into the high-tech centre in east London. Doing that is fine, but the department might talk to those British companies which are working in the same area so as to make sure that it is about collaboration, not spurious competition.

5 pm

Lord Bilimoria: My Lords, when I accompanied Prime Minister Tony Blair on his visit to China and India in 2005, we christened the British Airways plane that we travelled in “Blair Force One”. In his excellent speech in India, Mr Blair said that he was wearing two hats: one as Prime Minister of the United Kingdom and the other due to Britain’s presidency of the European Union at that time.

I, too, am speaking in this debate wearing more than one hat. The first is as the founder and chairman of Cobra Beer, which I founded with my business partner, just the two of us. It grew from a micro-business to a small business to a medium business—the full spectrum of an SME. The second is now as the chairman of a larger business with a global joint venture with one of the world’s largest brewers, Molson Coors, headquartered here in the UK, and a joint venture with Molson Coors in India. I am also wearing the hat of the founding chairman of the UK India Business Council, where I have had the privilege of working closely with UK Trade and Investment, which has funded and supported the UK India Business Council. In fact, the UKIBC would not exist without UKTI’s support.

Ronald Reagan is famous for saying that the nine most terrifying words he had ever heard were, “I’m from the Government and I’m here to help”. I think

9 Oct 2012 : Column GC430

that that is very unfair, as government can genuinely assist business, not only in creating the right environment for business to flourish but in the way that UKTI helps British businesses go global. Yet it saddens me that when I make speeches around the country and ask an audience of, say, 200 businesspeople, “How many of you do business with India?”, just a few hands go up.

I thank the noble Baroness, Lady Liddell, for initiating this debate. The reality is that only 20% of British companies export—that goes for SMEs as well. If that could be increased to 25%, that would add another £36 billion to the UK economy. SMEs are the engine of our economy. According to the Secretary of State for Business, more than half the monetary value of the UK’s exports comes from SMEs. SMEs employ more than 60% of the private sector workforce and there are 4.4 million SMEs in the UK. In the past 12 months, UK Trade and Investment has helped more than 25,000 businesses, of which more than 90% were SMEs.

It baffles me why businesses do not make more use of the help that UKTI can offer. From my own recent experience, in 2009 we signed our global joint venture for the whole world, excluding India, with Molson Coors. Three years ago, Molson Coors was not interested in India and said, “You keep India”. A year later, as the global joint venture was progressing well, they expressed an interest in looking at the Indian opportunity. When I accompanied the Molson Coors team to India, we met with Barry Lowen, the head of UK Trade and Investment in India, who was able personally to reassure my colleagues from Molson Coors of the Indian opportunity. This helped greatly and a year later, in 2011, we signed a joint venture for India, called Molson Coors Cobra India, and bought, upgraded and expanded the only brewer in the state of Bihar.

A year later, in June 2012, the global board of Molson Coors, its enterprise leadership team, for the first time in its more than 200-year history, held a board meeting outside the United States, Canada and the UK—in India. During that visit, UKTI and the British high commission organised a high-profile event in Delhi for the board to meet key individuals who provided a variety of feedback, which gave the board the confidence not only to continue to support the Indian joint venture but, all being well, to sanction further expansion in India in the years to come. The role played by UKTI and the British high commission was absolutely instrumental.

As the noble Lords, Lord Cope and Lord Cotter, said, what more can the Government do to get this message out to British business, particularly SMEs, to take advantage of this help that is available to all British businesses? UKTI is on the ground in 96 countries. It is present around the world and can do much for British business and SMEs: it can carry out market-entry research, OMIS reports, at very reasonable rates; it can make introductions; it can help to host events; it can provide networking opportunities, host and organise trade delegations—I could go on. Why do businesses not know about this and make more use of it?

The Government have rightly woken up to the fact that Britain does not have a balanced economy. We have let things slip. In 1978, manufacturing was 26% of GDP; today it is barely 12%. In 1970, services

9 Oct 2012 : Column GC431

accounted for 54% of GVA and manufacturing 40%; by 2009 it was 78% and 17% respectively. We need to encourage manufacturing. What we have not lost is the ability to be the best of the best in manufacturing in the world. In terms of advanced engineering, just look at Rolls-Royce, whether cars or aero engines. Look at Jaguar Land Rover—at our whole automobile industry in fact. At Cobra I am very proud that, first and foremost, I am a manufacturer.

What are the Government doing to encourage innovation? The noble Lord, Lord Hunt, alluded to this. It is a shocking fact that the UK Government’s investment in R and D is well below that of other advanced economies. Sweden’s investment is 3.5% of GDP; in Finland and Japan it is 3.4%; in Germany 2.5%; in the US 2.7%. In the UK it is only 1.8%. Skills development is crucial. According to the World Economic Forum, the UK workforce is 18th in the world, far behind those of Japan, Germany, Sweden and the Netherlands, for example.

The good work that UKTI does cannot operate in a vacuum. Government has to create the environment to help the capacity and capability of British businesses to excel and to be able to export and compete around the world. It needs to create the environment with a competitive tax regime and low red tape and regulation, which will attract inward investment and so help SMEs. Our taxes are too high, although I am happy to see that a survey published today says that, where red tape is concerned, we are actually far better than many other countries. Thankfully we are not in the euro, but our exports are still too dependent on the euro. UKTI must continue to encourage British businesses to look more globally, particularly to countries such as India. We are a trading nation, we are outward-looking, we are an open country and we can only succeed and compete by encouraging our businesses to go global. Otherwise the world will leave us behind.

5.06 pm

Lord Haskel: My Lords, before I came into your Lordships’ House, I, too, was in business. Many of the points that my noble friend makes about UKTI now were also apparent back then, long before my noble friend was there.

As the noble Lord, Lord Cope, said, I am serving on the committee that is looking into this very matter. As he explained, we have started our inquiry, so what I have to say benefits from our early work. Of course UKTI was a very early port of call for this committee. My impression is that here is an organisation in the midst of change, as my noble friend Lady Liddell pointed out. There are new people in senior jobs, some from the private sector. Some local appointments have yet to be made, but in general their task seems to be to reorganise the way in which they work. I believe that we all welcome this. The proposed direction of travel seems to overcome some of the criticisms that we have heard, such as UKTI making its services known, identifying priorities and getting those parts of government such as the Foreign Office and the Home Office to share these priorities and to work more closely with UK Export Finance, the old ECGD. However, it is early days.

9 Oct 2012 : Column GC432

However good UKTI is, its work alone will not improve our balance of payments. It is the businesses that have to export and it is the SMEs that are doing more and more of this. The real task must be to find out what it is that prevents small businesses from exporting. Is it lack of finance, lack of know-how, lack of knowledge about the markets, lack of contacts, lack of confidence or just plain old lack of interest? Perhaps the most difficult of these to deal with is lack of interest. You can demonstrate that exporting provides opportunities to increase turnover and to raise productivity and profitability, but people have to be receptive to these arguments. People also have to be prepared to take the risk as well as to undertake the hard work. So UKTI will have to be selective. It is the people that make the difference—this is the can-do attitude that the noble Lord, Lord Cope, told us about—and I believe that UKTI will have to recognise these people.

The main problem for those businesses that do export seems to be finance. The banks say that they are most anxious not only to finance exports but to provide additional services such as debt collection, document preparation, insurance and seminars on exporting, yet somehow businesses say that the banks are their biggest problem. Indeed, Mr Cable, the Business Secretary, said during an interview at his party’s conference that his department’s research showed a high rejection by banks of SMEs wanting to export. There is a mismatch somewhere. I am not sure what UKTI can do about it. After all, the Government have introduced several schemes to try to put this right with what I can only describe as mixed success.

In addition, there are other organisations trying to help exporters: financial service companies that will discount invoices; organisations that will fund your customer so that they can buy your product; the Institute of Export, which provides valuable and necessary skills training for exporters; market research organisations; mentoring schemes; and some large companies that help companies in their supply chain to export. The British Chambers of Commerce and trade organisations also supply information and try to help. Then there are the European single market incentives that the noble Lord, Lord Hunt, spoke about, such as the Enterprise Europe Network and the internet’s points of single contact. There is a lot on offer. So what is the role of UKTI with all this other help available? It is certainly not to duplicate it.

That brings me back to where I started: people. From the exporters whom I have met and from my own personal experience as an exporter, I know that the one thing that really convinces small businesses to get into exporting is when they meet somebody else who has done it and done it successfully. Perhaps they got into exporting by a chance visit, through some technical, scientific or commercial meeting, or through social networking or selling on the internet. The Government, somehow, have to encourage this. Perhaps one way would be to reduce the cost of travel for exporters by allowing a rebate on the air ticket tax, as they do on VAT. I finish where I started. It is this personal aspect that is the most effective, yet it is the most difficult. This is where UKTI has to work hardest if it is going to succeed.

9 Oct 2012 : Column GC433

5.12 pm

Lord Mitchell: My Lords, my noble friend Lady Liddell has done us a great service in securing this debate. We must thank her for that as well as the very impressive speech that she has just made. The contribution made by speakers from all parties is tribute to the importance of SMEs in the national economy.

It is no surprise that my party fundamentally disagrees with this Government’s economic policy, most particularly their refusal to moderate austerity and revert to a growth-based strategy. Yesterday, George Osborne said that there is no alternative. Today, David Cameron says that the economy is slowly healing. However, this morning, the IMF says that our economy is contracting and today’s trade figures are appalling. I wonder what planet these people live on.

In the SME world which I inhabit, the effect of austerity has been devastating. Without credit, businessmen simply cannot expand their businesses and cannot employ more people. I had guessed that by this stage of the debate every aspect of what UKTI does would have been covered, so I am going to stay away from it, at least directly, and talk about other agencies which the Government have to promote SMEs. The Government have been almost manic in introducing new programmes supposedly to help SMEs, but the results have been somewhat anaemic. The fact is that announcing a programme is one thing, making it work is something else. Not surprisingly, the Government have chosen the high street banks to deliver many of their programmes. The suspicion is strong, however, that instead of befitting small and medium-sized business as intended, the banks are directing these funds either to the more highly profitable consumer sector or else towards bolstering their own balance sheets.

The business growth fund owes its genesis to Project Merlin, which as the Minister will know was an undertaking written in blood by the banks to benefit British industry. But what do we see? We see the fund in many instances investing in companies not by funding investment or cash flow but, perversely, by cashing out managers and shareholders. The word on the street is that the business growth fund is a total failure. I would like to hear the Minister’s view on this.

I come to the business finance partnership. This is a £1.2 billion pot, of which £700 million is supposedly committed to mid-sized companies. It aims to promote alternative and non-traditional channels of finance. I am told by people who are in the know that little has happened. There is also the regional growth fund. Out of £1.4 billion earmarked for this project, only £60 million has been received by business. “Glacial” is a word I used to describe the fund. The enterprise guarantee scheme is also a flagship project. Again, I would like to know how it is progressing. There is also the export enterprise finance guarantee scheme that was launched to fund exports and is directed at SMEs. It is all good stuff, but by June of this year it had allocated only £3 million—or so I am told.

One government initiative that I fully support is the seed enterprise investment scheme introduced by the Chancellor this time last year. I am contemplating investing in various start-up companies, using this structure. It is very tax efficient. However, it seems

9 Oct 2012 : Column GC434

almost like a state secret. No one I know, and perhaps very few of your Lordships, has ever heard of it. Why has it not been marketed and why does it last for only one year? Schemes of this nature need time to bear fruit. Pulling up the project by its roots after one year to examine whether it is growing is hardly the way to develop a policy geared to providing new investment in new companies. We need business angels to help fund exciting businesses, particularly in my area, which is technology. Using the tax system to help angel investment is an excellent idea. I will make a plea to the Minister that may sound strange coming from a shadow Minister. The SEIS is a very good scheme. Please leave it in place, and please market the programme seriously so that more potential angels are attracted to invest.

The programmes introduced by the Government have been woeful in their level of success. For the most part they have been ill thought through and incompetently implemented. My advice to the Government is to think deeper about projects to help SMEs, to put much more effort into marketing them and, most of all, to give them time to develop.

5.17 pm

Lord Green of Hurstpierpoint: My Lords, I begin by congratulating the noble Baroness, Lady Liddell, on securing a very important debate on trade and investment, especially relating to small and medium-sized enterprises. The role of UKTI is complex and I will focus my remarks on the involvement with SMEs. I assure the noble Baroness that SMEs are an extremely important focus. As the noble Lord, Lord Bilimoria, reminded us, more than 90% of the client base of UKTI is SMEs. I will talk a little about how an organisation that, as the noble Lord, Lord Haskel, commented, is in transition—I agree that it is—and is attempting to make sure that it does the best possible job of support for SMEs.

The noble Baroness has long supported business, as Economic Secretary to the Treasury and Minister for Energy and Competitiveness in Europe in the first term of the previous Government, and as a successful high commissioner in Australia who was very active in supporting British business there. I checked the statistics. Whereas in most markets over the past 10 years Britain steadily lost share or had a share so low it was difficult to lose, in Australia between 2006 and 2009 we at least had a stable share and in some respects, particularly services, grew it. I am afraid that it rather declined after 2009; I wonder whether this was cause and effect.

I think that we all agree that we face a national challenge as we seek to rebalance our economy and find a stable and sustainable growth path that will create jobs. The old model that was in place in the run-up to the financial and economic crisis is, as we all know, bust. The economics textbooks state that if we cannot grow on the basis of consumers piling on debt and government spending growing larger, it will have to be on the basis of more successful trade and investment.

I shall not comment much on investment because it is a separate and complex topic, except to say that, on the whole, this country has had for a number of years a fairly good record in attracting foreign direct investment.

9 Oct 2012 : Column GC435

We cannot be complacent. We need to ensure that government policies are in place to ensure that that performance continues. However, we have a big challenge in trade. We have had a weak trade position for the past 40 to 50 years—this is not a new problem. For most of those years, trade has been a drag on growth rather than a contributor to it. I have already mentioned our market share in goods, which is down and/or the lowest during the past 10 years in virtually every priority market. It is rather better in services, but when you look at our performance in places such as Brazil, China, Colombia, Indonesia, Japan, Mexico and Russia—I could go on—you see that it is lamentable, being behind not only that of the Germans, which might be expected, but that of the French and the Italians, and I can think of no good reason why that should be the case.

I share the view of so many noble Lords who have spoken in this debate that it is critical that we focus strongly on SMEs. SMEs account for more than half of all goods exports—they account for rather less of services, but they are none the less an important part of the export proposition. We are behind the European curve. The noble Lord, Lord Bilimoria, has already mentioned that only 20% of our companies export versus a European average of roughly 25%. One way of looking at our challenge is to seek to get our SME propensity to export up to that European average. If we did that, we would go a long way towards curing our trade deficit problem.

I am convinced—again, I echo the sentiments of a number of noble Lords—that we have the potential to do this. The sheer variety of SMEs is an extremely important factor. The thing that I have enjoyed most about my job during the past 20 years is going around this country—I have gone around the world a lot, of course—meeting businesses of every shape and size in every sector and every region of the country. You find examples of creative, energetic exporters, with a high profile in their local community, who are going out and taking on the world. If one ever had a moment’s doubt about this country’s ability to pay its way in the 21st century, you need only to do what I have been doing to allay those doubts.

Furthermore, the evidence is clear that there are significant efficiency gains on average for any company that gets into the export markets. Therefore, succeeding in this SME exporting campaign is not only addressing our balance of payments but strengthening the backbone of the economy while we do it.

The Prime Minister last November set a target of 100,000 extra SMEs in the export markets by 2020. There is a strong focus on emerging markets, because, as I think we would all recognise, that is where the growth is coming from now and is likely to continue to come for the next generation. The central gravity of the world’s economy is shifting from west to east and from north to south, and the emerging markets in Asia, the Middle East, Latin America, Africa—at the moment, six of the 10 fastest-growing countries in the world are African—represent opportunities.

However, we all know that this is a challenge and that the first time that an SME exports is a daunting proposition—“Where do I begin? How do I go about

9 Oct 2012 : Column GC436

it?”. As a number of noble Lords have said, they do not have the administrative apparatus that larger companies have; they are often one-person bands or employ 10 or 20 people. It is a difficult task. What is the role of UKTI in this? It is many-sided, but it is critical. It is there to provide direct help. There is a public commitment on the part of UKTI to double its client base from around 25,000 now to 50,000 by the end of 2015. It should be there to provide specific services to small companies. It has two particular packages that are well targeted to their needs: a Passport to Export package, which is for a first-time exporter; and a Gateway to Global Growth package, which is for those businesses that have already moved into one market and are looking at opportunities in others. It provides market information; it helps form partnerships overseas; and it is there to help deal with the finance access question, which I shall return to shortly. It is there to nurture investors, too, but I shall not dwell much on that, if noble Lords will allow, on this occasion.

What is the present condition of UKTI? First, it has a clear strategy. We have a list of priority countries on which we are focusing—there are 19 of them, four topmost and another 15 in a second tier. You might guess three of the topmost—China, Brazil and India. The fourth is Turkey rather than Russia. There are particularly interesting strategic reasons for engaging as proactively as possible with Turkey. Russia is in the next tier.

There is a clear focus on the sectors that we should cover. There are five main groups of sectors with 18 subsectors, one of which includes water and environment technology. I believe that there is a lot of work to do to ensure that the sector competence in UKTI is up to the demands of private sector businesses going into the export markets. We have work to do on that. I can assure noble Lords that we are on the case.

A new management team is in place. The noble Baroness, Lady Liddell, asked whether any of them had a background in the private sector, and specifically whether they had worked with smaller companies. I am pleased to report that the person we brought in to take specific responsibility for the SME business of UKTI comes from the private sector. He has had a 25-year career as an MD or group executive of more than 20 different SMEs over time in a range of sectors, including pharma and automotive software. His last position before joining UKTI was as CEO of Biocompatibles International. I think that he has demonstrable and credible expertise. I am pleased to report that because it is important as regards a key leadership position in UKTI. It should not be the only position occupied by someone with clear private sector experience. We need to ensure that there are plenty of others through the system.

I am very interested in the comments that the noble Lord, Lord Cope, and others have made about the importance of getting practical secondment experience into SMEs. I shall take that thought away and see how we can make a reality of it. Although I am ashamed to say that I have never done it myself—I have worked only in big companies—I fully take the point that seeing what it is really like on the inside is important.

9 Oct 2012 : Column GC437

A new structure is in place that will give a clear focus on SMEs and on what we call high-value opportunities. They are the opportunities in infrastructure in particular in many overseas markets where very large spending is taking place by overseas Governments and where I believe that there is an opportunity to bring together on a cohesive basis the British offer, which will include not only some big companies but, critically, some SMEs as well. We have been putting our money where our mouth is.

Lord Hunt of Chesterton: In addressing that point, will the Government do more to enable SMEs to attend these very large trade shows where these jobs and this technology can be displayed? The difference between the UK and other countries is enormous in that respect. As I understand it, the Government decided to cut back on funding of that sort. Can the Minister reassure us?

Lord Green of Hurstpierpoint: I am very pleased to reassure the noble Lord, Lord Hunt. When I arrived in this position I took the view that we had cut back too much. One might debate whether some of the earlier spending was fruitful but it may have been cut back too much. We have pulled it out of the nose dive and I am pleased to report that we have just allocated an extra £3 million to trade access programme activities, which is the area of trade fair attendance that the noble Lord is calling for.

This year, out of 288 missions, 178 were specifically focused on SMEs, a statistic which I should mention. I hope to reassure the Committee that we are serious about this. SMEs are critical to the long-term success of the economy and to the export challenge for this country. They are therefore at the centre of UKTI’s objectives.

There are plenty of challenges. More than one noble Lord has mentioned awareness. At the moment, the evidence is that about 56% of companies are aware of UKTI, which is simply not good enough. There is evidence also that only 24% are aware of UK export finance, which is miles away from being good enough. The satisfaction rates for the quality of service is not yet good enough. It is not that bad but it is in the mid-70s. I think that it should be at least in the high 80s or low 90s. Therefore, there is a direction of travel that we must make sure that we get to, which is partly about the quality of the people in UKTI. We are setting up a new unit within UKTI to focus on venture capitalists, because it is important to encourage venture capital into the economy and link it up with business opportunities.

I am conscious that my time is running out fast so I will just say a word on finance. The finance issue is quite complex. It is about venture capitalists and seed money. The noble Lord’s comments about the enterprise investment scheme resonated very strongly with me. I will take them away and we will see what we can do, but we are very clear that this is an important scheme.

More generally on business banking, there is a clear need to reinvest properly in business banking. In some ways I am better placed than many to say this. The banks have disinvested—unintentionally, but none the less in fact—in their business banking capabilities over

9 Oct 2012 : Column GC438

the past 20 years. We need to turn that around. We need to reskill the banks. The good news is that the CEOs are all very committed to this. The challenge is that it is going to be a bit like turning around an oil tanker—I am afraid that it will take some time and we have some work to do on that. But I can assure noble Lords that I hold regular round tables with the banks, at both CEO and head of commercial banking level. I and the Secretary of State are on this case.

I am very conscious that I have run out of time. I thank the noble Baroness for introducing this debate and noble Lords for participating. This is a challenge that I care passionately about, as I hope noble Lords can tell. We have a great deal to do but I believe that we can be successful as long as we stick at it.

Health: Cancer

Question for Short Debate

5.32 pm

Asked By Baroness Gardner of Parkes

To ask Her Majesty’s Government what assessment they have made of the increase in cases of cancer of the head and neck, in particular in younger age groups.

Baroness Gardner of Parkes: My Lords, my reason for bringing this debate today is to improve awareness of the increase in cases of cancer of the head and neck, and to consider what actions should be taken to deal with these very unpleasant and often fatal conditions. Tongue cancer and mouth cancer are the most common in the group of cancers of many sites within the head and neck area. My particular interest is oral cancer, which, as a former dentist, I look on as cancer of the mouth, but the definition includes head, neck and throat cancers, and the title of the debate is to widen the subject.

Oral cancer is the 15th most common cancer in the UK. Assessment is important but progress towards earlier diagnosis, urgent follow-up and specialist treatment is the real essential. Great work is being done in study, research and treatment, in London by the Eastman Dental Institute, King’s College London Dental Institute and the Royal Marsden, and others in different parts of the country. I would like to record my thanks to these organisations, and to the Oracle Cancer Trust, a charity that does much to help patients and increase awareness, for the data it provided me for this debate.

To quote from a review article published in Oral Diseases in 2010:

“Worldwide, oral cancer has one of the lowest survival rates and poor prognosis remains unaffected despite recent therapeutic advances. Reducing diagnostic delay to achieve earlier detection is a cornerstone to improve survival. Thus, intervention strategies to minimise diagnostic delays resulting from patient factors and to identify groups at risk in different geographical areas seem to be necessary. The identification of a ‘scheduling delay’ in oral cancer justifies the introduction of additional educational interventions aimed at the whole health care team at dental and medical practices”.

In the UK, between 1989 and 2006 there was a 51% increase in oral, tonsil and base of tongue cancers in men, from seven per 100,000 of the population to

9 Oct 2012 : Column GC439

11 per 100,000. Unfortunately, almost half of the oral cancers are diagnosed at stages 3 or 4, which are the advanced stages. Delay in diagnosis is now considered to be either patient delay or professional delay. Diagnostic delay is measured by the number of days elapsed since the patient notices the first signs and/or symptoms until a definitive diagnosis is reached. Studies suggest that 30% of patients delay seeking help for more than three months following the discovery of symptoms of oral cancer. There is a great need to improve public awareness not only of the condition but of the need to seek assessment as soon as possible, thus increasing the possibility of effective treatment. Early diagnosis can decrease morbidity and may improve overall long-term survival. In cases of laryngeal cancer, diagnostic delay has a remarkably worsening effect on survival.

What is the cause of oral cancer? Most cases of carcinoma are linked to lifestyle factors and should therefore be preventable. Most important is the excessive use of tobacco and alcohol, and in some groups, betel quid juice is relevant. Diet is significant, and another reason in favour of fresh fruit and vegetables. The recommended five portions a day should include red, yellow and green fruits. In a minority of cases, particularly among younger patients where known risk factors are absent, human papilloma virus, HPV infection, is now thought to be a likely cause. HPV infection has also been considered as a cause of oropharyngeal cancer. It is hoped that the recent HPV vaccination programme in teenage girls may have a longer beneficial impact on the incidence of this cancer. People with poor dental health, such as sharp broken teeth, dental sepsis or trauma from ill-fitting dentures, are at a slightly increased risk. An ulcer—a lesion that breaks the surface lining of the mouth—that fails to heal within two weeks with the appropriate therapy and correction of any possible causative factors, and for which no other diagnosis can be established, should be suspected of being a malignant ulcer. Hardening or enlargement of the lymph nodes in the neck are another warning sign, and attention must be sought by the patient.

There are many potentially malignant conditions, but I do not have time to list them today. It is for clinicians to be aware of these and to diagnose them. The public need simply to be aware that any noticeable change in the mouth should not go unheeded. Dental professionals need to keep abreast of the latest developments, and they can do this through lifelong learning, as they remain the major diagnosticians. However, it is essential that family doctors should be aware of oral anatomy so that they know the difference between normal and abnormal. When carried out competently, screening of oral mucosa should not take more than three minutes, and training should mean that these procedures are effective. Dentists should give advice to patients to enable them to recognise the signs and symptoms at an early stage and thus to seek early treatment. This would help, but it needs to go wider than that; pharmacists and dental hygienists need to do this as well.

A study published in 2010 in the British Dental Journal showed that oral cancer is an important health issue in Scotland. Some of the young appreciate that alcohol and tobacco are causative factors, but the

9 Oct 2012 : Column GC440

findings suggest that even among people who have the disease, understanding of the link between alcohol, tobacco and oral cancer is still limited. A number of people could recall the related television campaign and supported the view that it had played an important part in their own diagnosis and treatment. The West of Scotland Cancer Awareness Project, funded by Cancer Research UK, led many patients to make an initial appointment with a health professional to have symptoms investigated. I understand that this is the body which financed the television programme. This is a most important message, and a number of patients with oral cancer reported that it was the programme that had saved them. I hope that the Minister will pass that message on to the Department of Health.

Intra-oral cancer is particularly lethal, whereas cancer of the lip is less so. In my early practising days, many of my patients presented with a white patch on their lower lip. This is called leukoplakia and is considered pre-cancerous. In those days it was common to see men walking around with a fag hanging on their lip. Holding a cigarette or pipe almost constantly in place on that spot was one of the main causes of the symptom. Leukoplakia still occurs but for different reasons, as lifestyle habits have changed. The important thing to realise is that any white or red patch in the mouth should not be ignored. It requires proper assessment and treatment without delay.

I cannot say too often that early diagnosis is essential for the successful treatment of any cancer. Years ago, when we had free dental examinations, people went more regularly to the dentist, and early lesions were discovered, mostly by dentists. Dentists are usually still the first to see a mouth cancer, but it is essential that GPs are aware of the need to do routine checks, particularly if the patient has not had a dental check-up for some time.

Above all, the public need to be aware of the warning that comes with any change in their mouth, or any ulcer that does not heal. They should present immediately for assessment and possible treatment. If the practitioner—doctor, dentist or nurse—believes that there is cause for concern and the condition does not improve with treatment within two weeks, the patient should be referred for a biopsy, which is the only definitive diagnostic tool. If cancer is suspected, the referral must be marked “urgent”, in accordance with NICE criteria, to reduce the pre-treatment interval. The number of patients who attribute their successful treatment to the fact that they saw a Department of Health warning or information is high.

I will make a few brief points to close. There needs to be a referral change. In your Lordships’ House I have for some years pressed for mouth examinations to become routine when any patient attends an accident and emergency department or polyclinic—about which we seem to hear less now—and that in the interests of treating numbers and managing to finance this, unqualified staff could be trained in the first instance to carry out a quick check. If there is any cause for doubt about the mouth condition being normal, they would refer the patient up the line to either a specialist nurse or a dental hygienist who would then decide whether they should be referred further so that appropriate treatment could be provided, urgently if indicated. The previous

9 Oct 2012 : Column GC441

Labour Government agreed that this would be a worthwhile thing to do and confirmed that semi-skilled health workers could carry out these brief mouth checks. It would not require qualified dentists or doctors at the preliminary stage. I still think that this would be very valuable and I press the Minister to give it serious thought.

5.42 pm

Baroness Jolly: My Lords, I thank the noble Baroness, Lady Gardner of Parkes, for securing the debate. It is timely and allows all areas around the treatment of head and neck cancers to be discussed. I will examine areas around diagnosis, prevention, treatment and the pivotal role that cancer networks have played in achieving improved head and neck cancer services.

The noble Baroness is well known for her championing of the role of the dentist. In the area of cancers of the head and neck they can be key players in diagnosis, spotting signs and symptoms before the patient and their GP. However, there are issues around this that need resolving in the area of the training and continuing professional development of dentists and GPs.

The evidence on the incidence of head and neck cancers and their occurrence in younger age groups is mixed. The prime causes of most of these cancers are smoking, alcohol and a poor diet—back to the five a day and three different-coloured fruits—as well as the human papilloma virus. That suggests that the age range of those affected might be wide.

There is a clear public health role in prevention. If Public Health England and public health departments in local authorities carry out the roles envisaged for them in the Health and Social Care Act, the incidence of these cancers should reduce. However, care must be taken to ensure that the NHS, Public Health England and local authorities co-ordinate their approaches and campaigns. At least three-quarters of oral cancers could be prevented by the elimination of tobacco smoking and a reduction in alcohol consumption. The scheme to make cigarette purchase less easy is to be welcomed and I urge the Government to follow the advice and not the tobacco lobby in adopting plain packaging for cigarette packs at the earliest opportunity.

Can the Minister tell the Committee what plans the Government have to address the issue of underage drinking in the home? Despite the scenes of rowdy young people in town centres, most alcohol is actually drunk at home by young and old alike.

As we have heard, HPV is often linked to oropharyngeal cancers. The evidence of this cancer has doubled in 10 years. There must be a case for vaccinating all teenagers and not girls alone. Will the Minister consider looking at the evidence for this?

Most people do not know that radiotherapy cures more cancers than drugs. Cancer patients should have access to treatments that their doctors think will be best for them. It is essential that new radiotherapy techniques, such as intensity modulated radiotherapy—IMRT—are rolled out swiftly. IMRT can be really beneficial to patients with cancers of the head and neck. It focuses very much around the cancer itself and does not spread to surrounding tissue. It is a welcome announcement that £15 million is to be

9 Oct 2012 : Column GC442

found for such targeted radiotherapy treatment. For this to be widely available across England there are implications for both equipment and training, but it is a good start.

Currently all aspects of cancer care are co-ordinated by cancer networks, multidisciplinary teams looking at the whole pathway through diagnosis, treatment, hospice and palliative care where required, and aftercare when the patient returns home. This is all about integration at work. They have played a key role in driving up the quality of cancer services and patient experiences for the past 12 years. I draw attention to the excellent work of cancer networks and raise some concerns about their future in the new system.

In England there are 28 cancer networks that, since 2000, have been bringing together providers and commissioners of cancer care to work together to plan and deliver high-quality, integrated cancer services for people living with and beyond cancer in their local areas. These networks drive forward local cancer strategies. They are a key source of cancer expertise, encourage service redesign and integration, and monitor the performance of providers to highlight poor outcomes. Many cancer networks have been central to the implementation of NICE’s guidance on improving outcomes on rarer cancers. Many of the cancers that we are discussing today fall into that category. More specifically, they have also been acknowledged as key players in delivering NICE’s service guidance on improving outcomes in head and neck cancers. These are not common cancers, and the networks have been used to disseminate information.

NICE recommends that networks should be charged with deciding which hospitals will diagnose, treat and care for these particular patients. So when it comes to the quality of care that people living with head and neck cancers receive, networks have been driving service improvements throughout the country. An example of integration and service improvement is the Greater Manchester Cancer Network, which has a head and neck clinical sub-group with the aim of overseeing, supporting and bringing together multidisciplinary teams working on these types of cancer to ensure that each patient gets the most appropriate treatment and the highest standards of care. There are several networks that have co-ordinated to inform local strategies for head and neck cancers and to promote integration: East Midlands, Anglia, Central South and North London to name a few. These have been absolutely pivotal. They have also been critical in driving up patient involvement. The Peninsula Cancer Network hosts head and neck cancer support groups across Torbay, Cornwall and Plymouth for people who find it difficult to eat, drink or speak after having treatment due to head and neck cancers.

It was encouraging that, last year, the former Health Secretary made a public commitment to fund and support cancer networks in 2012-13. I welcome the proposals on clinical networks recently published by the NHS Commissioning Board Special Heath Authority which officially establish cancer networks as strategically clinical networks in the new NHS.

However, the significant changes proposed for the new structure for cancer networks leave me with a worry about how networks will be supported in delivering

9 Oct 2012 : Column GC443

their key services. In the sector, there are fears in three distinct areas. The first fear is of a drastic reduction in the staffing levels for cancer networks. The proposals indicate that there will be only eight permanent staff in each regional team, compared to 20 staff members currently in post per network. Research carried out by Macmillan also showed that a number of network directors reported difficulties in recruiting and retaining staff because of uncertainty around resourcing. Can the Minister assure the Committee that cancer networks will have sufficient staff to carry out their functions effectively?

The second fear is of a loss of experienced directors, which would have an impact on the effective running of cancer networks. Under the proposals, existing directors with a wealth of knowledge in the development and delivery of high-quality cancer care in their region will have to reapply for their roles. Recruiting and training senior staff, some of whom have had no previous experience in cancer, could have a negative impact on the quality of services and support that cancer networks provide. Can the Minister suggest what steps he will take to ensure that experienced directors and cancer experts are retained?

The third fear is of cancer networks’ role being limited to early diagnosis. Although improving earlier detection of cancer is essential to preventing people dying prematurely—as we have heard today, head and neck cancers often go a long time before they are detected—cancer networks need a comprehensive remit to be able to continue delivering the functions mentioned above. They must continue to play a leading role in improving outcomes and the experiences of people living with head and neck cancers across the pathway. Can the Minister confirm that cancer networks will be able to continue delivering functions that cover the whole pathway? Cancer networks have played a leading role in delivering improved outcomes for rarer cancers, including head and neck cancers. I am pleased that the Government have recognised their value and formally established them as strategically clinical networks. However, significant steps are needed to ensure that they continue to have a comprehensive remit beyond early diagnosis. The Government should be mindful that severe reductions in resource would make it difficult for them to meet their commitment of supporting networks after 2013 and reaching their ultimate ambition of saving 5,000 lives a year. I would be grateful if the Minister could update the Committee on the Government’s plans for cancer networks and reassure us that they will have sufficient resource, human and financial, in the system.

I again thank the noble Baroness, Lady Gardner, for securing such an important debate. We must not forget that the NHS reforms offer an opportunity to refocus on delivering the best possible cancer care and outcomes for all patients, including those with head and neck cancers.

5.53 pm

Baroness Morgan of Drefelin: My Lords, I congratulate the noble Baroness, Lady Gardner of Parkes, on securing this important debate and thank her for her very informative and helpful introduction. As we move

9 Oct 2012 : Column GC444

towards the new health system, it is vital that people with rarer cancers are fully recognised and receive the specialist care that they need so that outcomes can be improved in the less common as well as the more common cancers. I declare an interest as chief executive of Breast Cancer Campaign, which is a research charity.

As noble Lords know, the Government published their strategy for cancer in January 2011, stating their ambition to save an additional 5,000 lives from cancer every year by 2014-15, to improve the experiences of cancer patients in England and to narrow the gap in cancer outcomes between different groups in society. In turn, the All-Party Parliamentary Group on Cancer, of which I am a vice-chair, published a report in 2011, Effective Cancer Commissioning in the New NHS, which set out recommendations that would support the NHS in achieving the Government’s aims.

The all-party group has spent this year campaigning for implementation of our recommendations, focusing particularly on the new accountability structures, the NHS outcomes framework and the commissioning outcomes framework. We have raised the issue of improved outcomes in less common cancers, including the head and neck cancers that we have heard about today.

Key to improving outcomes and to achieving the Government’s ambition of saving an additional 5,000 lives from cancer each year is earlier diagnosis, as we have heard so eloquently put by the noble Baroness, Lady Gardner. The earlier a cancer is diagnosed, the greater the chance a patient has of surviving it. That is why the all-party group has long campaigned for the NHS to be measured against one-year cancer survival rates as well as five-year survival rates for all cancers and all ages—not just the common cancers.

That is because in the new health system the NHS outcomes framework will be used by the Secretary of State to hold the NHS Commissioning Board to account for its performance. As such, it sets the overall direction and priorities for the NHS. We were pleased that the Government included one-year and five-year cancer survival rates for breast, lung and colorectal cancer for people aged between 15 and 99 in the NHS outcomes framework. However, as we know, cancer is one of the biggest premature killers in this country and we do not believe that the current version of the framework goes far enough.

We know that 53% of people who die from cancer in the UK have a rarer cancer, such as head and neck. There is a significant gap in survival rates between people with a rarer cancer, such as head and neck cancers, and those with a more common cancer. For example, the five-year survival rate for brain cancer is less than 20% compared with more than 80% for breast cancer. We must take steps to ensure that survival rates for rarer cancers improve and catch up with those for the more common cancers such as breast cancer. Across the board, there is a lot more to do and we need to do more. The APPGC is calling for one-year and five-year survival rate indicators in the NHS outcomes framework to be extended to all cancer types.

We are pleased that the Government are listening to our concerns and know that, as a result, they are considering developing a composite survival rate indicator

9 Oct 2012 : Column GC445

which would include rarer cancers. While we recognise the efforts being made to address the current absence of focus on rarer cancers, we believe that a composite indicator should be in addition to, rather than a replacement for, existing indicators. There is a very important reason why that should be so. It is vital that any new indicator provides additional insight into performance relating to rarer cancers. A composite indicator covering all cancers could mask poorer performance by the NHS in relation to rarer cancers through improvements in relation to the more common cancers. We should be concerned about that. Can the Minister say what progress has been made towards developing a composite indicator? Would it apply to those cancers not currently covered in the framework, such as head and neck cancer?

From Answers that I have seen to parliamentary Questions it appears that there will be a separate publication route for the composite indicator. Will the Minister be able to explain that a bit more? Could he reassure the Committee that any composite indicator will be in addition to existing indicators that are already planned and will not serve as a mask for poorer performance in the less common cancers?

While it is vital that the NHS Commissioning Board is held to account, it will be the clinical commissioning groups which will play a key role at the local level in achieving that additional 5,000 lives saved. The commissioning outcomes framework will be used by the NHS Commissioning Board to hold CCGs to account. In August this year, the Commissioning Outcomes Framework Advisory Committee published recommendations for indicators to be included in the framework. The APPG on Cancer was shocked that only one cancer-specific indicator was included in this recommendation—that of under-75 mortality. It may be that we have not understood it properly, so I look forward to being corrected on that.

However, the APPG on Cancer believes that the omission of one-year and five-year cancer survival rate indicators at this level is a serious oversight and a missed opportunity to ensure that every CCG prioritises not only the earlier diagnosis of cancer but the commissioning of high-quality services. We cannot understand the reasons for the omission. I have been assured that, once the boundaries for CCGs have been defined, survival data will be available at the CCG level, so it should be workable. Given all this, can the Minister support the inclusion of one-year and five-year cancer survival rates in the outcomes framework for CCGs?

We are also calling for proxy indicators for cancer survival, which are particularly important for less common cancers. They are: stage of cancer at diagnosis, which we have already heard about, and cancers diagnosed as an emergency admission. We want these to be included in the commissioning outcomes framework as quickly as possible because this is about gearing up the services in real time to improve as we go forward. These measures will provide a more immediate picture of where improvements are needed in the early detection of cancer. By assessing the performance of CCGs on these through the COF, local commissioners will be encouraged to contract services that improve early diagnosis.

9 Oct 2012 : Column GC446

I support the remarks made by the noble Baroness, Lady Jolly, regarding cancer networks. I do not want to repeat the detailed points that she made, but I, too, believe strongly that cancer networks have a vital role to play in continuing to drive up standards and achieving the Government’s vision to save additional lives. I was concerned to be advised that, with the NHS Commissioning Board undertaking specialist commissioning and CCGs commissioning other aspects of patients’ care, patients with head and neck cancers could find their care pathway being commissioned by two entirely different levels of NHS commissioning. That is just one example of the role that cancer networks can play in improving quality, outcomes and the patient experience.

Can the Minister reassure us that there will be sufficient staff, including experienced directors? Will they be retained in each individual cancer network so that they can deliver their functions effectively? Can he reassure us also that the cancer-specific expertise that currently exists in networks will not be lost through this restructuring and that cancer networks will be tasked with driving improvements across the whole cancer journey? As the noble Baroness, Lady Jolly, has stressed, it is not just about early diagnosis; cancer networks have a vital role to play throughout the patient journey.

Once again, I congratulate the noble Baroness, Lady Gardner of Parkes, on securing this important debate. It is essential that we use opportunities such as this to raise awareness of the less common cancers, as she has most ably done.

6.03 pm

Lord Hunt of Kings Heath: My Lords, I, too, welcome this debate and thank the noble Baroness for instituting it and for the very important points that she made. I refer the Committee to my declaration of interests, which includes a number of health interests. I also echo the noble Baroness’s remarks about the role of dentists in this area. She and I have a long-standing interest in this profession, and it is important that when we consider what action needs to be taken we look at the contribution that dentists can make.

At the start of the debate, the noble Baroness said it was important to draw attention to the increase in the incidence of several head and neck cancers between 1990 and 2006. My understanding from work helpfully produced by the Library is that we have seen the incidence of oral cavity cancers increase by more than 30%, salivary gland cancers by around 37% and palate cancer by 66%, while that of thyroid cancer has doubled.

Incidence rates for all types of cancer vary significantly between those strategic health authorities and cancer networks with the lowest and highest incidence, and the geographical pattern of distribution varies from cancer to cancer. This may well reflect the distribution of different risk factors, including those that predominantly affect certain ethnic groups. We have to bear that in mind when deciding what action needs to be taken.

It is important to have accurate and up to date information available. I was interested to read the National Head and Neck Cancer Audit 2011 and the

9 Oct 2012 : Column GC447

remarks made by Sir Mike Richards, the National Cancer Director. He pointed out that there have been further improvements in the completeness of the data submitted, but that more needs to be done. He urged cancer network directors, medical directors and head and neck cancer site-specific groups to reflect on this. Bearing in mind the remarks of the noble Baroness at the beginning of our debate, the more accurate information we have, the more we will be able to see the scale of the issue we face and decide what action needs to be taken. I hope that the noble Earl, Lord Howe, will be able to say something about how he thinks we might improve data collection in the future. The noble Baroness, Lady Morgan, made some important points about indicators, outcome measurements and requirements. Again, I hope that the noble Earl will be able to give some comfort to her with regard to looking at an extension of those requirements in the future.

I want to reflect on the points raised by all noble Lords who have taken part in the debate on the importance of improving public recognition, early diagnosis and treatment. I hope that the noble Earl will be able to say something about how this might be done, and perhaps how the work of GPs and dentists might be recognised and what we can do to encourage those professions to identify symptoms and advise their patients so as to make sure that where there is a suspicion, patients are encouraged to seek diagnosis and treatment.

Obviously, the backdrop to this debate will be the implementation of the Health and Social Care Act 2012. The noble Baroness, Lady Jolly, said that the reforms would allow for a refocus on these issues. I am not quite sure that I agree with her. Her speech was a very good description of why it would have been better if we had not had the reforms in the first place, and I think that there are a number of questions one has to ask about the architecture. We are looking for some further information about reports that the Government are going to reduce the number of cancer networks, along with their resources. The noble Baronesses, Lady Jolly and Lady Morgan, both spoke about that. It is important to note that the cancer networks have been universally regarded as a good thing that has led to a much more co-ordinated response. Given that we are now moving towards a much less integrated healthcare system, there is a real risk in reducing the effectiveness of these networks.

I would remind the noble Earl of the success of his department in relation to stroke services in London and the benefit of a strongly co-ordinated approach by reducing the number of centres for hyper-acute services. That is now being rolled out across the rest of the country. Surely we need that kind of co-ordinated leadership in relation to cancer services. I am not confident that simply leaving it to a smaller number with fewer resources working with clinical commissioning groups will do what is required. I hope that the noble Earl will be able to say something more about that.

I particularly noted the comment made by the noble Baroness, Lady Jolly, about the role of cancer networks in helping to select which hospitals should provide specialist services. I very much support that. It will be important, in thinking through the future

9 Oct 2012 : Column GC448

provision of cancer services, not to forget the role of hospitals. There is a great danger in the current mantra that everything is decided through the commissioning network and the role of hospitals is simply to do what commissioners tell them to do. Obviously, chairing a foundation trust, I am somewhat biased, but I have to say that most innovation and most ideas come from those hospitals where professionals work—the reality is that mostly they are the people who know what needs to be done. That is the importance of the cancer networks. The market mantra is that commissioners decide what should be done and then the providers do what they are told, but what we need in future is much more of a partnership. That applies to all cancer services.

Does the noble Earl think that clinical senates might play a role in this? I think that we are all signed up to the idea of clinical senates, but none of us quite knows what they are going to do. It occurred to me that, given the expertise that the senates will have in their membership, they might be able to give advice to clinical commissioning groups on the effective services that need to be provided in relation to cancer services.

Let me come on to health campaigns. The noble Baroness, Lady Jolly, referred to the need for local authorities and Public Health England to work together. I echo her question about how the department will ensure that that happens in the future.

Finally, I pick up the point raised by the noble Baroness, Lady Morgan. It will clearly be important that we ensure that enough money is invested in research in these areas—identification, early diagnosis and early treatment. I wonder if the noble Earl could say a little bit more about how he thinks research should be invested in in the future. This is a very important debate and I am sure that we are all grateful to the noble Baroness for instituting it. We look forward to the noble Earl’s response.

6.12 pm

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, I begin by thanking my noble friend for tabling today’s debate and for her excellent speech. I am aware that this is a very important issue for her, for everyone who has had a diagnosis of cancer of the head and neck, and for their families and friends.

The incidence of head and neck cancer in England rose from over 8,300 to over 9,600 between 2007 and 2010, while the incidence in the under-65s rose from just over 4,800 in 2007 to over 5,600 in 2010. We know that for most cancers death rates are set to fall significantly in the coming decades. This is encouraging and highlights the impact of changes in lifestyle, particularly reductions in smoking, and improvements in the speed of diagnosis and the treatment of cancer. As noble Lords have pointed out, there are a number of risk factors that can increase the chances of developing cancer, including oral cancer. Cancer Research UK has recently estimated that over a third of all cancers are caused by smoking, unhealthy diets, alcohol and excess weight.

Let me look first at smoking. The Tobacco Control Plan for England, published in March 2011, sets out three new national ambitions to reduce smoking

9 Oct 2012 : Column GC449

prevalence—among adults, among 15 year-olds and in pregnancy—and sets out a comprehensive range of tobacco control actions at all levels to achieve these ambitions. The Committee will also be aware of Stoptober, a new and innovative campaign that encourages smokers all to start their quit attempt together on 1 October. As for alcohol, the Government’s alcohol strategy includes a strong package of health measures. These build on the introduction of the ring-fenced public health grant to local authorities and the new health and well-being boards, giving local areas the powers to tackle local problems.

Most people know that smoking causes lung cancer and sunburn causes skin cancer. However, far fewer people know that a poor diet, obesity, lack of physical activity and high alcohol consumption are also major risk factors for getting cancer. To deliver on improved outcomes, public health services will provide people with information about these risk factors so that they can make healthy choices.

We know that HPV is associated with around a quarter of head and neck cancers. The National Institute for Health Research Clinical Research Network is currently hosting four trials focusing on the link between HPV and head and neck cancers. The Medical Research Council is also currently supporting two studies relating to the links between HPV and head and neck cancers.

Late diagnosis is also a cause of avoidable deaths from cancer in England. Generally, as my noble friend Lady Gardner pointed out, the earlier a patient is diagnosed with cancer, the greater the chance of being successfully treated. In order to achieve earlier diagnosis, we need to encourage people to recognise the symptoms of cancer and seek advice from their doctor as soon as possible. We also need doctors—and, where appropriate, dentists—to recognise these symptoms as possibly being cancer and, where appropriate, refer people urgently for specialist care. The Government have committed over £450 million over this spending review period to improve earlier diagnosis. Through the national awareness and early diagnosis initiative jointly led by the department and Cancer Research UK, we are working to improve earlier diagnosis by raising public awareness of the symptoms of cancer and encouraging earlier presentation. We are developing a “constellation of symptoms” campaign during January to March 2013 which will highlight symptoms that might be the result of a number of cancers, including rarer cancers.

We will hold the NHS to account for improvements in outcomes through the NHS outcomes framework. As the noble Baroness, Lady Morgan, mentioned, we are working with the London School of Hygiene and Tropical Medicine to develop a composite survival rate indicator which covers all cancers to ensure that performance on rarer cancers can be monitored effectively. In addition, there is a cancer mortality indicator that is shared between the public health outcomes framework and the NHS outcomes framework, which is designed to improve prevention—to reduce incidence—as well as improve diagnosis and treatment.

The balance between composite and tumour-specific cancer survival indicators always needs to be considered. It is currently being considered. I would say to the noble Lord, Lord Hunt, on the composite indicator,

9 Oct 2012 : Column GC450

that these are complex measures requiring linkage of ONS population statistics with cancer registry data and attribution to clinical commissioning groups as well as testing the robustness of the measures. It is likely to take some months to complete the work that is currently in train. The commissioning board will decide, of course, on the content of the commissioning outcomes framework. It is expected to publish a list of measures for 2013-14 in the autumn. If the composite indicators are not included in the 2013-14 framework, the board may choose a separate publication route for the data that exist to ensure that the information is available transparently to the public.

I know that there is concern on the part of Macmillan Cancer Support, among others, around proxy indicators. I understand that the NHS Commissioning Board Authority is now engaging with clinical commissioning groups and other stakeholder organisations to discuss the shape of a commissioning outcomes framework, as I mentioned, for 2013 and beyond.

We recognise that there is a role for dentists in the early detection of some head and neck cancers, including mouth or oral cancers. We are working to ensure this, and the new patient pathway currently being trialled in 70 practices provides dentists with decision support based on current best practice. Patients receive comprehensive oral health assessments at regular intervals under this pathway. Those assessments require dentists to systematically assess the soft tissue as part of the clinical examination and include a social and medical history which, through the questions on smoking and drinking, allow the dentist to assess the patient’s level of risk for oral cancer and, if appropriate, offer advice on lifestyle changes. The pathway is being piloted as part of the work to design a new dental contract. The Government are committed to introducing a new contract based on capitation and quality. Supporting dentists to systematically provide high quality care through the pathway is a key part of this. I can tell both my noble friends that the General Dental Council has recently confirmed that improving early detection of oral cancer is to be included as a recommended topic in its continuing professional development scheme. More generally, the department supports the British Dental Health Foundation which sponsors annually a mouth cancer action month; officials work closely with the foundation as well.

Once head and neck cancer is diagnosed, patients need to have access to appropriate and consistent treatment, delivered to a high standard, across the board. Improving Outcomes in Head and Neck Cancers, published in 2004, set out recommendations on the treatment, management and care of patients with head and neck cancers. We have made a commitment to expand radiotherapy capacity by investing around £150 million more over four years until 2014-15.

My noble friend Lady Gardner raised the issue of public awareness of oral cancer. Work is underway on the third edition of Delivering Better Oral Health, a toolkit for the dental team. This will update the section on tobacco and oral health. A patient-facing version is also in development which will seek to make the public more aware.

9 Oct 2012 : Column GC451

My noble friend Lady Jolly spoke about vaccination and asked why boys, indeed all teenagers, were not vaccinated. The Joint Committee on Vaccination and Immunisation did not recommend the vaccination of boys because high coverage of the vaccination among girls means that it is not cost-effective to vaccinate boys to prevent cervical cancer. However, as with all vaccination programmes, the JCVI keeps its recommendations under review. The HPV vaccine is offered free each year under the national programme to girls aged 12 to 13 in school year eight. That is because the HPV vaccination is best given before the onset of sexual activity. Routine immunisation started in 2008, and a phased catch-up of girls aged up to 18 years of age was also implemented. However, scientific evidence is constantly coming forward and the JCVI will no doubt take account of that as necessary.

The noble Baroness, Lady Morgan, spoke about outcome measures for rarer cancers. Of course, she is quite right that early diagnosis is important in rarer cancers as it is everywhere else; we are addressing that, as I have mentioned. It is also important to improve treatment, and the recent announcement on radiotherapy means that access will be improved for specialised radiotherapy treatments such as stereotactic radiosurgery, used predominantly for brain tumours. Proton beam therapy is also an area that we are looking at closely. We are developing two proton beam therapy facilities, in Manchester and London, to be operational by the end of 2017. This treatment improves outcomes for a number of rarer cancers, including those which affect children.

My noble friend Lady Jolly asked what plans the Government have to address the issue of underage drinking while in the home. The new “Change for Life” programme helps people check if they are drinking above the lower-risk guidelines or not, and offers tips and tools to cut down. Dame Sally Davies, the Chief Medical Officer, will be overseeing a UK-wide review of the alcohol guidelines so that people at all stages of life can make informed choices about their drinking.

The noble Lord, Lord Hunt, and my noble friend Lady Jolly spoke about clinical networks. The final number of strategic clinical networks, and therefore the number of doctors, nurses and others who will support them, will be determined locally to meet the needs of patients. The full structure for strategic clinical networks will be published shortly. The establishment of clinical networks, hosted and funded by the NHS Commissioning Board, will ensure that patients everywhere in England benefit from dedicated clinical networks for four priority conditions and patient groups: cancer, cardiovascular disease, maternity and children’s services, and mental heath, dementia and neurological conditions. These networks will receive £42 million of national funding in the next financial year. We anticipate that these strategic networks will be supported and funded through the 12 network support teams. These teams will be hosted, again, by the NHS Commissioning Board local area teams. We anticipate an arrangement that would see support teams employing their skills across different networks as needed, but one that would also involve designated subject experts such as those with expertise in cancer commissioning.

9 Oct 2012 : Column GC452

The noble Lord, Lord Hunt, asked about research, which I agree is important in reducing deaths from cancer. The National Institute for Health Research health technology assessment programme is currently commissioning a feasibility study for assessing the clinical and cost effectiveness of photodynamic therapy for the treatment of locally recurrent head and neck cancer. The National Institute for Health Research Clinical Research Network is currently hosting 33 trials, including the four I mentioned earlier, and other well designed studies into head and neck cancer.

To conclude, the Government have set out an ambition in Improving Outcomes: A Strategy for Cancer to save an additional 5,000 lives each year by 2014-15. This means halving the gap between England’s current survival rates and those at the European best—and our aspiration is to be among the best in Europe. As my noble friend Lady Gardner has made clear, it is not just about saving lives after a diagnosis, it is also about preventing the cancers to start with. The Government’s strategies for prevention are designed to tackle increasing incidence.

6.25 pm

Sitting suspended.

Bangladesh: Human Rights

Question for Short Debate

6.31 pm

Asked By Lord Hussain

To ask Her Majesty’s Government what assessment they have made of the human rights situation in Bangladesh, in the light of reports of disappearances of well-known politicians.

Lord Hussain: My Lords, for at least a decade I knew Bangladesh to be only a progressive, multi-party democracy and a thriving economy in south-east Asia. It also receives £250 million in aid from the United Kingdom every year—until 2015, at least. However, in the past few years reports of corruption, torture, extrajudicial killing and the sudden disappearance of journalists and political activists from opposition parties have energised me to call for this debate.

According to Amnesty International, hardly a week goes by in Bangladesh without people being shot in Rapid Action Battalion, or RAB, operations. The RAB is a special police force created to combat criminal gang activity throughout the country. However, since its inception in 2004 the RAB has been implicated in the unlawful killing of at least 700 people. The Amnesty International report goes on to say that such deaths are typically explained away as accidental or as a result of RAB officers acting in self-defence, as victims are said to have been killed in “crossfire”. In many cases, the victims were killed following arrest. Nevertheless, investigations carried out either by the RAB or by a government-appointed judicial body have not resulted in judicial prosecution. The outcome of the judicial investigations has remained secret and the RAB has consistently denied responsibility for any unlawful

9 Oct 2012 : Column GC453

killings. RAB officials say that other wrong-doings have been addressed through administrative action against offending RAB personnel. Reports that the RAB has widely used torture and excessive force have similarly gone nowhere. Despite persistent allegations, Bangladeshi authorities have taken no action to prosecute RAB personnel. I shall give some of the examples in the report.

Rahima Khatun was shot in the head by Rapid Action Battalion officers on 3 June 2011 in a slum near the central Bangladesh district of Narsingdi. Rahima, aged 35, had objected when officers tried to arrest her husband. Seconds later, she was seriously injured by a bullet fired from one of their weapons. Now out of danger after receiving intensive medical care and detained for allegedly dealing in drugs, she is the first woman known to have been shot by the Rapid Action Battalion.

Another example is Limon Hossain. On 23 March 2011, Limon, a 16 year-old student, was shot in the leg by RAB officers in Jhalakathi. His injuries were so severe that four days later his leg had to be amputated. Limon Hossain’s family said that he had been shot while bringing the cattle back from the fields. Like the families of many other victims, they said that the RAB had no reason to shoot Limon and that the officers involved should be brought to justice.

There are other cases where deaths are not explained. In some cases, the RAB has not even explained how people whom witnesses say were detained by the RAB were later found dead. Nazmul Huq Murad, Forkan Ahmed and Mizanur Rahman went missing on 17 April 2010. On 18 April, Murad’s brother received an anonymous phone call saying that Murad was in RAB custody. The family’s inquiries brought no news of him until 27 April, when his body was found in the Mohammadpur area of Dhaka. It was buried in a ditch with the other two men, Forkan and Mizanur. The bodies bore severe injuries, including knife wounds. Ligature marks on the wrists showed that they had been tied with rope. The families of Mizanur and Forkan had also received messages that the two had been arrested by the RAB on 17 April. The RAB has not acknowledged that the men were in its custody and no credible investigation has ensued. According to the human rights organisation Ain O Salish Kendra, known as ASK, 216 deaths occurred in custody this year, including 116 deaths in prison. Many of the deaths were allegedly the result of torture.

I turn to the disappearance of a former Member of the Bangladesh Parliament, Mr Ilias Ali, and his driver. According to Amnesty International, Ilias Ali, the organising secretary of the Sylhet division of the opposition Bangladesh Nationalist Party, disappeared together with his driver, Ansar Ali, on 17 April 2012. I had the opportunity of meeting Mr Ilias Ali in Luton during his visit to the United Kingdom in 2011. He spoke to a hall full of British Bangladeshis passionately about Bangladesh and showed his concerns on the growing human rights situation and corruption in that country. He did raise fears about his own safety on his return, but was determined to go back and fight for the rights of his people through democratic means. Since his disappearance, his family has been in touch with me asking for help from the British Government

9 Oct 2012 : Column GC454

to secure his safe return. The family firmly believes that government secret agents or the Rapid Action Battalion are responsible for Mr Ali and his driver’s abduction. These fears are shared by many both in the country and abroad. According to Amnesty International:

“His is the latest in the spate of disappearances in which security forces, including the Rapid Action Battalion ( RAB) have been implicated, though they deny detaining those missing”.

Its report goes on to say:

“There appears to be a pattern of disappearances—a concentrated effort to eliminate people deemed undesirable”.

On the investigation procedures, the Amnesty report further adds:

“Prime responsibility for investigating deaths during RAB actions has so far fallen to the RAB itself. This is a clear conflict of interest. When the accused is tasked with investigating an accusation against it, the basic principles of independence and impartiality are compromised. The accused is free to destroy the evidence, distort the records and engineer the outcome. The content of RAB inquiries remains secret; their results have repeatedly been the same. None of the publicly available RAB investigations has ever blamed RAB personnel for an extrajudicial killing; rather, these investigations, where they have occurred, have blamed the victims, calling them criminals and portraying their deaths as justified”.

War crimes tribunals are another anomaly that I am sure the noble Lord, Lord Avebury, will probably have something to say about.

With that information, I should like to ask the Minister whether the Foreign Secretary would raise the question of human rights abuses with the Bangladeshi Prime Minister and ask for fair trials for the accused. Can UK aid to Bangladesh be linked to its human rights record? Finally, can I ask the Minister to pressurise the Bangladesh Government for Ilias Ali and his driver’s safe recovery and release?

6.40 pm

Lord Harris of Haringey: My Lords, we are all grateful to the noble Lord, Lord Hussain, for securing this debate on an extremely important issue. For me, this is a follow-on from the Oral Question that I asked on 23 May about what representations had been made about the disappearance of Mr Ilias Ali and other opposition politicians in Bangladesh.

In his reply, the noble Lord, Lord Howell of Guildford, who was then Minister of State at the Foreign and Commonwealth Office, talked about the representations that had been made by the United Kingdom Government with eight other EU countries, when they had called on the Bangladesh authorities to conduct a thorough investigation into Mr Ali’s disappearance. In reply, I hope that the Minister will be able to tell us what further representations or further dialogue there have been with the Government of Bangladesh since that Answer given by the noble Lord, Lord Howell.

At that meeting, the noble Lord, Lord Avebury, who is to speak after me, raised the question of whether it was possible to engage the UN working party on disappearances. I would be interested to hear what the noble Baroness can tell us about whether that engagement took place.

Interestingly, the noble Lord, Lord Howell, in his responses to various questions on that date, referred to £1 billion of aid being given by the UK Government.

9 Oct 2012 : Column GC455

I am not clear about whether he was aggregating several years together, but it is important that the Government address whether there is a relationship between the sums involved, over whatever period, and the human rights record. Is that something that can legitimately be expected as a quid pro quo for the support that this country gives to the people of Bangladesh?

The most important point to make in this debate is that the case of Mr Ilias Ali is not an isolated one. Mr Ali and his driver disappeared on 18 April, and two weeks earlier Mr Aminul Islam, a leader of the Bangladesh Garment and Industrial Workers Federation, was allegedly picked up by members of a law enforcement agency and horribly tortured and killed. In December 2011, Nazmul Islam, another opposition politician, was found strangled just a few hours after he had been dancing with his wife. His wife received very little assistance from the police when she reported him missing. I would be grateful for guidance from the Minister on her understanding of the developments that there have been in the investigations of these cases since then.

What is the Government’s latest assessment of the level of political violence in Bangladesh? We need to understand that. One of the most concerning features of this is the alleged complicity of law enforcement agencies, in particular the Rapid Action Battalion. The noble Lord, Lord Hussain, gave us a horrifying catalogue of cases which, it is suggested, are associated with their activities. There seems to be a culture of impunity among the security forces, and anyone who falls foul of the authorities is therefore vulnerable. Since 2004, there have been more than 1,600 extrajudicial killings in Bangladesh. To UK eyes, there are horrifying levels of political violence, with 300 people killed in 2006, 250 in 2009 and so on.

We have to recognise that political violence is not all on one side. There has perhaps been a trend in Bangladeshi politics for supporters of the ruling party—whichever one that might be—to feel that they are able to attack opposition supporters with a certain level of impunity. I think that comes from the broad powers that the law gives to the Government, which means that the Government of the day is, in effect, given control of the police as one of the spoils of victory.

Bangladesh is a fragile democracy and one of the poorest nations of the world—though one with tremendous potential if it is given an opportunity. The levels of political violence and alleged abuse of state power to suppress the opposition reflect very badly on the Government of that country, and on the efforts that are being made to generate wealth and development there. I have a simple question for Her Majesty’s Government. What can they do to make clear that such violence and attacks on opposition politicians are not acceptable? What further representations have been made, and what are planned? Is this being made a condition of future aid?

6.45 pm