8 Jan 2013 : Column GC1

Grand Committee

Tuesday, 8 January 2013.

3.30 pm

Public Bodies (Abolition of British Shipbuilders) Order 2013

Considered in Grand Committee

Moved By Lord Gardiner of Kimble

That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of British Shipbuilders) Order 2013.

Relevant documents: 14th Report from the Secondary Legislation Scrutiny Committee, 11th Report from the Joint Committee on Statutory Instruments.

Lord Gardiner of Kimble: My Lords, I start by reassuring your Lordships that while this order will abolish British Shipbuilders as a public corporation, its liabilities will transfer to the Secretary of State for Business, Innovation and Skills. On this basis, there will be no impact on the ability of British Shipbuilders’ former employees to claim legal compensation for industrial diseases suffered as a result of their employment with British Shipbuilders.

British Shipbuilders was constituted by the Aircraft and Shipbuilding Industries Act 1977. British Shipbuilders owned and managed large parts of the UK shipbuilding industry. British Shipbuilders privatised all its active shipbuilding subsidiaries, initially through the privatisation of the war shipbuilding yards in 1985 and 1986, and subsequently through the sale of the merchant yards and the one remaining engine manufacturer.

British Shipbuilders is no longer a trading enterprise and does not have any funds of its own. It exists mainly to meet residual liabilities to its former employees. This legal responsibility is funded in total by the Department for Business, Innovation and Skills. Funding these residual liabilities currently costs the department about £7 million a year in health-related compensation payments. These payments are mainly as a result of asbestos-related diseases.

British Shipbuilders was considered as part of the Government’s public bodies reform programme and our commitment to reduce the number and cost of quangos. British Shipbuilders does not perform the functions for which it was originally created and does not need to remain a public corporation. The Government therefore put forward a proposal to abolish it using the powers of the Public Bodies Act, which received Royal Assent in December 2011.

The Department for Business, Innovation and Skills launched a consultation in February last year on the proposal to wind up British Shipbuilders and transfer its property, rights and liabilities to the Secretary of State for Business, Innovation and Skills. The department received four responses to the consultation, none of which objected to the proposal but two of which

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wanted reassurance that the transfer would not impact on the ability of former employees to make legal compensation claims for industrial diseases suffered as a result of their employment with British Shipbuilders. The department confirmed that the transfer would have no impact on the ability of former employees to claim legal compensation for industrial diseases suffered as a result of their employment with British Shipbuilders. An impact assessment in relation to the abolition of British Shipbuilders was not carried out as the savings from the abolition will amount to around £15,000 per year. This saving will reflect the reduced need for company secretarial services post abolition.

A firm of solicitors is contracted to manage all industrial disease compensation claims of British Shipbuilders. A separate company is contracted to deal with pension services, which involves investigating and handling unrecorded claims from former employees. These contracts will be transferred to the department immediately prior to abolition.

As required by the Public Bodies Act, the Government have obtained the consent of Welsh Ministers for this order. We are also in the process of seeking consent from the Northern Ireland Assembly and the Scottish Parliament. We understand that the Northern Ireland Assembly and the Scottish Parliament will consider this order over the coming weeks.

Following the abolition of British Shipbuilders, the department will be responsible for the contracts that deal with the industrial disease claims and pension queries. Post abolition, future compensation claims will be paid directly by the department and will be included in the department’s annual accounts. For these reasons, I beg to move that the Committee do consider the order.

Lord Young of Norwood Green: My Lords, I welcome the Minister’s assurances on any outstanding compensation or pension claims. I do not think I need to make any further comments in these circumstances. I am not establishing a precedent for any other debate, but we can start the new year on a happy note.

Lord Gardiner of Kimble: My Lords, I thank the noble Lord, Lord Young of Norwood Green, for considering the order so briefly, which is appropriate in these circumstances. British Shipbuilders is effectively a shell company, with its main remaining function to act as a vehicle through which the long-term disease liabilities of former employees are managed. As British Shipbuilders has no funds of its own for this purpose, it is completely dependent on the financial backing of the Department for Business, Innovation and Skills. As I have already mentioned, the abolition of British Shipbuilders will not impact on the ability of former employees to claim legal compensation. After the consideration against the criteria set out in the Public Bodies Act, the Government have concluded that British Shipbuilders does not need to be a public corporation in order for the Government to meet its residual liabilities. Abolishing British Shipbuilders as a corporation will avoid the need for it to function as a shell company, employ a company secretary and produce an annual

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report and financial accounts. I thank the noble Lord for his contribution to the debate and commend the order to the Committee.

Motion agreed.

Public Bodies (Abolition of the Aircraft and Shipbuilding Industries Arbitration Tribunal) Order 2013

Considered in Grand Committee

3.36 pm

Moved By Lord Gardiner of Kimble

That the Grand Committee do report to the House that it has considered the Public Bodies (Abolition of the Aircraft and Shipbuilding Industries Arbitration Tribunal) Order 2013.

Relevant documents: 14th Report from the Secondary Legislation Scrutiny Committee, 11th Report from the Joint Committee on Statutory Instruments.

Lord Gardiner of Kimble: My Lords, the Aircraft and Shipbuilding Industries Arbitration Tribunal was established by the Aircraft and Shipbuilding Industries Act 1977. It was created to determine any question or dispute which was expressly required by the Act to be subject to arbitration or any matter in respect of which jurisdiction was specifically given to the tribunal by the Act. In practice this meant considering disputed valuations of assets at the point of nationalisation.

The Aircraft and Shipbuilding Industries Act 1977 nationalised three aircraft companies and most of the major shipbuilding companies that were based in England and Scotland. The Act created British Aerospace and British Shipbuilders as public corporations. The tribunal was established in 1978 and considered two applications, one from stockbrokers in respect of Cammell Laird and the other on behalf of Vickers auditors. The tribunal completed its determination of both cases by 1981 and has not met since. British Shipbuilders subsequently sold its shipyards and British Aerospace was privatised.

The Department for Business, Innovation and Skills launched a public consultation on the abolition of the tribunal in February 2012. This was a six-week rather than a 12-week consultation as the tribunal had been defunct for such a long time. The department sent copies of the consultation to the relevant trade body and to the companies that had been part of the public corporations and continue to operate following privatisation. The department received two responses to the consultation, both of which supported the proposal to abolish the tribunal. An impact assessment has not been produced because abolition of the tribunal will not generate any savings. It is a tidying-up matter.

The Aircraft and Shipbuilding Industries Arbitration Tribunal was considered as part of the Government’s public bodies reform programme and the Government’s

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commitment to reduce the number of quangos. The tribunal has been defunct for 30 years and does not have any further cases to consider. The Government therefore put forward a proposal to abolish the tribunal using the powers of the Public Bodies Act. The Government are in the process of seeking consent for this order from the Northern Ireland Assembly, and I understand that the Assembly will consider this order over the coming weeks. The Government have consulted Scottish Ministers as required by the Public Bodies Act and, although it is not required under the law, have consulted Ministers in Wales. For these reasons, I beg to move that that the Committee consider this order.

Lord Jones: My Lords, I thank the Minister for his considered and courteous introduction. I rise to support not to oppose what he proposes. I note that both orders carry the date of 1977 as a start point. In an attempt to give brief context to these orders, I point out to the Minister that the Aircraft and Shipbuilding Industries Act was hugely controversial at the time of its enactment. I was present in the other place as a Member of the then Administration, and I would be the first to say that 35 years is a very long time. It is just possible that the Minister, with his expertise and his group of able advisers, will also remember when the legislation was enacted but, if not, perhaps a few brief remarks on whence the orders have sprung may not be amiss.

The legislation engendered massive confrontation in the Chamber of the other place. It was hugely controversial. As the legislation made its way in the Committee corridor, it was often almost impossible to enter the Committee Room because of the huge number of interested parties—in shorthand you might say they were lobbyists, of the most honourable kind—from the industries concerned. Also there were trade unionists who knew that they had a problem concerning their long-term employment. In the Chamber itself, on the fateful night, the nature of the legislation was challenged. Was it a hybrid Bill or was it not? The consideration of such proposals by the then Administration was hugely controversial. In the vote of that night, there was a tie, and it was for Mr Speaker Thomas, as he was then known, later Lord Tonypandy, to make the decision. In terms of tradition, he cast his vote where the Government’s proposals lay—a time-honoured practice. At that time, the then Secretary of State for Industry was Mr Eric Varley, who subsequently entered your Lordships’ House, having had a distinguished political career. Mr George Thomas, as he then was, came under huge pressure on that night and in the months leading up to that fateful vote, because his decision in the end on advice from his clerks would be crucial. I thought that your Lordships would need to know the content of this set of orders.

It was historic because, in the early 1970s, the Upper Clyde shipyard was occupied, and the occupation, which was very controversial and huge in Scotland, was led by a legendary trade unionist, Mr Jimmy Reid. He enunciated a famous principle in the thick of the fight, saying that a rat race was for rats. I pass hurriedly by on that. Following the occupation came the astounding requirement to nationalise the iconic Rolls-Royce factories.

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3.45 pm

By my mentioning those two industrial developments, you can understand the nature of the challenges that Britain was then facing. That Act was an attempt to shore up Britain’s manufacturing base—there were other measures. Shipbuilding then was a huge industry; aerospace was a huge industry; coal was a huge industry; and steel was a huge industry. In relatively few years, those industries virtually disappeared and with them came colossal redundancies and major unemployment which ran on into the 1980s. The vote that evening proved that the then Administration’s hold on power was tenuous and, by 1979, another, most famous, Premier took the reins of power.

Today, no airliner is manufactured in Great Britain. There is the magnificent making of wings in north-east Wales by Airbus, but there are no airliners of standard size made now in this nation. We would be very hard- pressed to find a truly significant shipbuilding industry outside one or two sites in the north.

Additional to Upper Clyde and Rolls-Royce there was during the Heath Administration the OPEC nations’ decision in November 1973 to increase the price of oil by four times. The consequence of that was massive inflation and subsequent unemployment. The 1977 Act and consequential subsidiary legislation were attempts to cope with world-shaking eventualities.

The noble Lord, Lord Healey, who was at that time the Chancellor of the Exchequer, had to face up also to the suggestions of the International Monetary Fund. The then Prime Minister, Mr James Callaghan, needed to get majorities for his legislation in that Parliament. Although he did not form a coalition, he seemed to reach some form of understanding with the then leader of the Liberal Party, who is now a Member of your Lordships’ House.

I perceive that legislation as being part of a nation’s attempt to hold on to its manufacturing base. It does not appear to have been very successful, in so far as manufacturing now accounts for perhaps 12% or a little less of GDP. We now face massive challenges from the east. I was grateful for the Minister’s considered introduction and I hope that my remarks will enable him and his very able advisers to have a better context thereafter.

Lord Young of Norwood Green: My Lords, I, too, support the order. As usual, I am grateful to my noble friend Lord Jones for a tour d’horizon and history lesson. Some of it I remembered well, and some not so well—so I was exceedingly grateful. I hesitate to correct him on one matter, and he can tell me whether I have got it wrong, but I thought that, in relation to the Upper Clyde, it was not just an occupation but a work-in that Jimmy Reid organised, which was unusual at the time.

Lord Jones: Amendment accepted.

Lord Young of Norwood Green: I know that because it was not so long ago that there was a programme on Radio 4 relating to it. However, the noble Lord, Lord Jones, was right to give us that historical context and to set the scene.

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I have read the report from the committee. There was some concern about the consultation, but I think that in the end it was prepared to accept that it was sufficient, so I have no further comments to make.

Lord Gardiner of Kimble: My Lords, I thank the noble Lords, Lord Jones and Lord Young of Norwood Green. I particularly thank the noble Lord, Lord Jones, because he put into a fine historical context some of the dilemmas of that part of our industrial history. I took on board the point about manufacturing. One of the challenges that we have had in this country is that we have not thought as much as we should have about how we ensure that there is a British manufacturing base. I particularly took on board the noble Lord’s point about aircraft.

There is good news on motor vehicles, where we are now beginning to see some very good statistics on the production of vehicles. In fact, if my memory serves me right from a briefing a few months ago, we are now manufacturing more cars than we are importing. It is a great accolade to the management and the workforce for working so well together that we have these successes.

However, returning to the job in hand in regard to the Aircraft and Shipbuilding Industries Arbitration Tribunal, as I have said, it has been defunct for more than 30 years and has no assets, employees or further cases to consider. After consideration against the conditions set out in the Public Bodies Act the Government have rightly concluded—and noble Lords on all sides of the Committee have agreed—that the tribunal no longer needs to exist and that abolishing it would tidy up the regulatory landscape. It is for those reasons that I commend the order to the Committee.

Motion agreed.


Charging Orders (Orders for Sale: Financial Thresholds) Regulations 2012

Considered in Grand Committee

3.54 pm

Moved By Lord McNally

That the Grand Committee do report to the House that it has considered the Charging Orders (Orders for Sale: Financial Thresholds) Regulations 2012.

Relevant document: 13th Report from the Joint Committee on Statutory Instruments

The Minister of State, Ministry of Justice (Lord McNally): My Lords, the purpose of this draft order is to introduce a financial threshold of £1,000 for the enforcement of charging orders by an order for sale where the charging order was made to secure the payment of money owed under an agreement regulated under the Consumer Credit Act 1974. A charging

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order made in such cases may not be enforced by way of an order for sale where the amount owing, including interest, is less than £1,000.

Before I go into greater detail about the order, let me briefly provide background on charging orders and orders for sale. When a creditor has not received payment for a court judgment, they may apply to the court to enforce that judgment. They have several enforcement options open to them, including applying for a charging order on a debtor’s property or asset. While the majority of charging orders are made against property, the provisions themselves also cover land and stocks and shares.

The purpose of the charging order is to secure the debt. It does not, in itself, lead to repayment of the debt until the debtor sells their asset. The creditor may also choose to pursue other enforcement options or make a further, separate application for an order for sale. This application seeks the court’s permission to enforce the existing charging order by ordering the sale of the property, or other asset, either immediately or at some point in the future if a suspended order is made.

Both the application for a charging order and the further application for an order for sale are always listed for hearing before a judge and so are subject to case-by-case judicial discretion and case law. In each case the judge will consider, among other things, the proportionality of the debt as set against each of the parties’ assets and commitments; whether—if it is a property in question—it is the primary residence of the debtor or a secondary residence or a commercial property; who else may reside within the property, including children; the balance of rights between the creditor and the debtor; and whether the debtor should be granted additional time to pay, resulting in a suspended order.

Evidence shows that under the existing arrangements only a very small proportion of charging orders—some 0.5%—result in an order for sale, and some of these may be suspended orders. This is in part due to the fact that the process of applying for, calculating potential equity in and administrating the sale of a debtor’s property is economically risky for creditors. This, together with case-by-case judicial discretion, means that it is very rare for debtors to lose their homes as a result of a charging order.

With that background, I turn to the reason for the regulations before us today. Although it is indeed very rare for debtors to lose their homes as a result of a charging order, it is important that the Government ensure that all appropriate safeguards are in place to ensure that this does not happen as a result of what might have originally been relatively small, unsecured borrowing. The coalition commitment to introduce a threshold for orders for sale applications reflects this. However, it is also essential that protection for debtors is balanced against the rights of creditors. The Government believe that responsible creditors who are owed money and have gained a judgment in court have the right to enforce that judgment. Without

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effective enforcement we risk jeopardising the authority of the courts and public confidence in our justice system, as well as there being a negative impact on the economy if lenders are not confident that they can recoup money that is rightly owed to them.

Following extensive public consultation, we intend to introduce a £1,000 financial threshold, as set out in the draft regulations. While this differs from the £25,000 threshold set out in the coalition agreement, it was concluded to be the most appropriate level at which the necessary balance between the rights of debtors and the rights of creditors could be most effectively struck. While stakeholder opinion was, perhaps predictably, split between creditors and debtors, there were other groups who also held strong opinions—for example, the legal profession and the judiciary.

A number of arguments against a high financial threshold, or even any threshold, were given. With a high threshold, such as £25,000, there is a risk that creditors may seek to recover their debt by initiating bankruptcy proceedings as an alternative to enforcement. This would be a more draconian outcome for debtors than an order for sale. As many noble Lords will be aware, bankruptcy often results in debtors losing their homes, whereas the protections which are already in place within the enforcement system—and which will continue to be in place if these draft regulations are approved—protect most debtors from losing their homes.

4 pm

A high threshold may mean that creditors may be less likely to risk providing unsecured credit if it is seen to be more difficult to recover. This would reduce the availability and increase the cost of unsecured lending, which can be a valuable and much needed source of credit to some individuals. It is also important to remember that when we talk about creditors, this does not just mean large organisations. It also means individuals and small businesses which may be severely impacted by a high threshold, as debts below £25,000 may represent a significant proportion of their commitments and assets, making it important that they can recover this where possible.

This brings me back to judicial discretion. As I described earlier, this already provides a great deal of protection to debtors, yet balances this against the needs of creditors. Responses to the consultation indicated that there was significant danger that introducing a threshold, especially a very high one, would restrict such discretion in individual cases. We do not want this to be an unintended consequence of introducing a threshold, so a lower threshold of £1,000 was seen as a proportionate response. It maintains the flexibility of discretion while ensuring that those with a lower level of debt are protected from applications for orders for sale.

In conclusion, the Government’s commitment to provide protection to debtors holds strong. We believe that the implementation of these regulations will deliver this protection without a disproportionate effect on the successful recovery of debt by responsible creditors. We have taken all stakeholders’ opinions into consideration

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and have tailored our approach in the light of this to ensure that we are introducing the most appropriate threshold level. I therefore commend this draft order to the Committee and I beg to move.

Lord Beecham: My Lords, the Minister has outlined the position in relation to charging orders and orders for sale but has omitted—with respect—a couple of highly relevant factors. The first is that we are here dealing with consumer credit arrangements and the lender has already priced in the possible risks of not recovering his money. Therefore, we are seeing something like double jeopardy, with the debtor having in any event to pay a higher rate of interest than would normally be the case—and would certainly be the case in the event of a secured loan—and also having now to face the possibility of an order for sale based on a charging order.

I have to confess that I certainly had not taken note of the regulation introduced last October which allows charging orders to be made—not the order for sale, but the initial charging order—even before the debtor has defaulted on the loan agreement. In other words, it is effectively at the option of the creditor to convert an unsecured loan into a secured loan, even before any default has been made. That is surely not a satisfactory proceeding. The coalition is to be commended for its original agreement to establish a significant threshold. Moreover the last Labour Government, who I am bound to say facilitated some of these proceedings, are to be congratulated on not in fact proceeding with their original intention of making orders rather like these and explicitly withdrawing from advancing such orders in 2009.

The accompanying Explanatory Notes and evidence base for this order disclose quite clearly that there is a significant number of cases under £25,000, but there is not much in the way of detail. Indeed, paragraph 211 of the report openly admits that the data set is very limited, meaning that any conclusion drawn from it is not robust. What is significant is that at the moment something like 10% of applications for charging orders are below £1,000. That is not a large number; in fact, it is almost so insignificant as to make one wonder why the Government are bothering at all to proceed with these regulations. The number of charging orders made for loans above £25,000 is very small indeed—some 6.7%—and there are not a large number of cases altogether. However, what is significant is that it would appear that in 2009-10 ultimately 566 orders for sale were granted, which was double the number of orders made as recently as 2005. Therefore, on the face of it, there is a growing trend to rely on these orders.

One reason advanced for not having a threshold higher than £1,000 is that it is open to a creditor to pursue bankruptcy proceedings on any debt exceeding £750. However, that of course then raises the question of whether that is a reasonable level in itself. Why have the Government not addressed the level at which bankruptcy proceedings might be instituted and aligned it properly with a reasonable level, particularly bearing in mind, as I said, that the risk has already been priced into the cost of the loans by these creditors? These are

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not normally small concerns; they are consumer credit agreements and it is often large firms that lend money in this way.

It seems that the Government are missing an opportunity to carry out one of their more welcome pledges in the original coalition agreement and that they will achieve virtually nothing in the way that these regulations have been put forward. Furthermore, looking at the timing, it is rather surprising that the regulations referring to charging orders were put through quite separately from these regulations. It seems to me that in principle they are linked and that it would have been better if the two had been considered alongside each other at the very least, because the former has clearly paved the way for quicker action by creditors, who see an opportunity to collect their debt via this process.

Citizens Advice has long campaigned on this issue and it produced a report called Out of Order some three years ago. It raised some interesting points not only on the matters that we are discussing today but also by asking what the Government might do about non-consumer credit agreements, for which these protections, such as they are, are not available. I am bound to admit that this is somewhat beyond the scope of these regulations but I ask the Minister to indicate—if he can today but, if not, perhaps subsequently by letter—whether the Government are looking at non-consumer credit agreements. Clearly, particularly in the present economic climate, there is a risk of many more debtors falling into greater difficulty and creditors pursuing them by these means. That might lead not only to difficulty for borrowers and their families but ultimately, in the event of orders for sale proceeding, to a greater charge on the public purse.

Of course, as the noble Lord pointed out and as the Explanatory Memorandum and other documents indicate, judicial discretion has to be considered, although it has to be said that, in the view of Citizens Advice, it is by no means clear that that discretion will be frequently exercised in the face of pressure from creditors. Citizens Advice takes the view that orders for sale should be permitted only where there is a willing default—that is, where it is not a question of somebody having a capacity to maintain the payments but where they decline to do so. Citizens Advice agrees that where a wilful default is made by people who can afford to meet the debt, a charging order and an order for sale will be an appropriate last resort. The trouble is that, as matters have developed, it is more likely to come about much earlier than as a last resort for people without the capacity to pay and, equally, without any wilful component in their behaviour, thereby exposing vulnerable people to what might well be regarded as predatory action by less than scrupulous creditors. That would be an unfortunate outcome which I am sure the Minister—because I remember some of his remarks when we discussed this in debates on the Crime and Courts Bill—would have little sympathy with but it may perhaps be an unanticipated consequence of the regulations before us.

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Lord McNally: My Lords, I am very grateful to the noble Lord, Lord Beecham, for that constructive response. I know from our exchanges during the Crime and Courts Bill of his long-standing interest in this area and I understand why he continues to probe on the matter. The Government remain committed to providing more protection for debtors and we are taking appropriate action to ensure that that happens. When we debated this on the Floor of the House, and again today, the noble Lord pointed out that the coalition agreement talked about a £25,000 limit and we now talk of £1,000. I suppose that the honest answer is that that was the outcome of the consultation. We now feel that the balance of what we wanted to do is better met by the guideline of £1,000 rather than £25,000, not least because we were advised that the higher limit could steer creditors more in the direction of bankruptcy solutions, with the impact that I indicated on house ownership, rather than a settlement under these regulations.

We were also very much influenced by the judiciary, which believes that a very low threshold, with a great deal of judicial discretion, provides a far more guaranteed protection for the creditor than the protection afforded by a higher level—

Lord Beecham: For the debtor.

Lord McNally: For the debtor, yes; I am sorry.

With these things it is always a matter of judgment. The judgment that we have come to, and the level we have set it at, is the result of consultation, with the aim of striking a right and proportionate balance that will give power and flexibility to the judiciary and a degree of protection for the lower levels of debt.

The noble Lord asked about early enforcement of parts of the Tribunals, Courts and Enforcement Act 2007. Following the Solving Disputes consultation paper we implemented Section 93 of the TCE Act. It closes an existing loophole, providing a greater degree of security to creditors and encouraging debtors who are in financial trouble to make more reasonable yet affordable offers to pay.

The Government consulted on introducing this section in 2010 in their Solving Disputes in the County Courtspaper. Some 74% of respondents supported its introduction, arguing that it offers protection both for creditors, for whom a charging order is often the only effective long-term solution to recovering a liability, and for the debtor. By commencing Section 93 of the Act we have given creditors a certain ability to convert unsecured loans to secured loans. I am sorry—I had better clarify that. One of the criticisms that has been made is that we have given creditors the ability to convert unsecured loans to secured loans by extending the use of charging orders in this way. We do not believe that that is true. Charging orders are used to secure an unpaid judgment debt, not a loan. Legitimate judgment creditors who have obtained a valid judgment through the courts should have the right to enforce the judgment by the most appropriate means available.

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4.15 pm

The availability of charging orders is also likely to dissuade frustrated creditors from opting to use bankruptcy law against debtors. A successful bankruptcy decision against a debtor would expose him, as I said, to his house and all his properties being repossessed. I have tried to be frank with the Committee, as has the noble Lord, Lord Beecham, and I understand the campaign waged by Citizens Advice on this matter—indeed, it may have influenced the original coalition agreement. However, after consultation, and in trying to get the balance right, we have come up with this solution. We will of course keep the matter under review. As to matters outside the credit regime, I was passed a helpful note which tells me that we will write to the noble Lord on the issue he raised.

Lord Beecham: My Lords, I would be grateful if the Minister could clarify a couple of matters. He referred to the order allowing charging orders to be applied for, but is he aware that under the regulations enacted last October it would be possible to do that without the debtor having at that stage defaulted? That would seem to convert an unsecured loan into a secured one.

My second question relates to responses. Am I right in thinking that the balance of responses reflects the fact that most of those responding were creditors rather than debtors, their representatives or organisations interested on behalf of debtors?

Lord McNally: My Lords, the balance reflected the interests of the responders. The noble Lord is quite right: the creditors had one set of priorities and those speaking out of concern for debtors had others. That is the nature of consultations, as the noble Lord will be aware. I also pray in aid the strong view of the judiciary that it wants to retain as much judicial discretion as possible. In my remarks I listed the clear considerations that a judge takes and the fact that these matters come before a judge.

On the issue of whether it is pre-emptive, as it were, under the measures that we took last October, as I explained, it gives debtors who are in financial trouble the opportunity to make more reasonable and affordable offers to pay. The noble Lord appears to be saying that adjustments can be made only after disaster has struck, but that is not my reading. If I am not right in my interpretation I will write to the noble Lord. However, it seems to me that it provides an opportunity to intervene in a constructive way when people are running into difficulty.

Lord Beecham: My Lords, I am grateful to the Minister. However, as I understand it, the order does not require the debtor to be in any difficulty or to have made any default at all before the charging order can be applied for. That does not mean, of course, that the order for sale would automatically follow, but it is a precursor to that and can arise even before any default has taken place. We are unable to take this much further today, but I invite the Minister to look at the situation in due course.

Motion agreed.

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Baroness Garden of Frognal: My Lords, the proceedings have moved very quickly and we are missing some speakers for the next debate. I therefore propose that the Committee adjourn for 10 minutes.

The Deputy Chairman of Committees (Lord Colwyn): My Lords, I suggest that the Committee adjourn until half-past four, which is 10 minutes.

4.20 pm

Sitting suspended.

Sri Lanka

Question for Short Debate

4.30 pm

Asked By Lord Naseby

To ask Her Majesty’s Government what is their assessment to date of the implementation of the independent report from the Lessons Learnt and Reconciliation Commission in Sri Lanka, and of the challenges facing Sri Lanka in implementing recommendations still outstanding.

Lord Naseby: My Lords, first, I thank colleagues who wish to say something about Sri Lanka this afternoon. I appreciate that very much indeed. I would like to place on record the fact that the noble Lords, Lord Bilimoria and Lord Sheikh, are in the sub-continent and send their apologies to the Committee for being unable to be here this afternoon.

As I think the Committee well knows, I have no interests to declare other than the fact that I have been interested in Sri Lanka for 50 years, since I first worked there for the Reckitt and Colman group in 1963. I had absolutely no political interests at all at that time. I have paid two key visits among many. One was in January 2009 at the height of the war, which seemed to me an appropriate time to go, if I may use that phrase, to see exactly what was happening. The second was earlier this year when the peace was firmly established.

This debate is about the LLRC, as I will call it in shorthand. It is not about the Supreme Court and what has happened there, although I will allude to that later in my contribution. A war lasting 30 years or thereabouts is a very long war. A number of colleagues in the House came through the Second World War, which lasted only five years. Change is inevitable when a war ends and Sri Lanka is no different from anywhere else in that respect. However, one thing was different in Sri Lanka. I remember the sheer joy of VE Day, as I am sure do others. Initially, there was a sense of sheer joy in Sri Lanka but it was very quickly clouded by allegations of war crimes and allegations that Sri Lanka had abused certain other international laws. My analysis leads me to the conclusion that one of the key reasons why this happened was that although the Tamil Tigers were defeated on the ground in Sri Lanka, the network that they had set up across the world was still intact, many of the senior operatives were still in place,

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certainly vast funding was still available, and the propaganda machine was alive and well in the sense that the propaganda was still being pumped out. That affected particularly the million or so members of the Tamil diaspora who had left because of the conflict. They were clearly leant on—we know this from the evidence gathered in many countries—and as a result western Governments understandably felt that they had to listen. Whether or not they felt that they had to act is another matter.

In my view, if today’s debate is to do any good, we need to look impartially at what has happened. The LLRC was set up on 15 May 2010, one year after the defeat of the Tigers and the end of the war. The very fact that it was set up deserves a tick as that was a good action. The more than 1,000 oral and more than 5,000 written submissions indicate that an awful lot of people responded to it. The key point is that the report was published in full, is extremely thorough and is based on the key principles of restorative justice rather than retributive justice. Those of us who know south and south-east Asia well will appreciate that it very much reflects the philosophy of the five principles of Buddhism and indeed the principles of Hinduism. People of real eminence in that society were appointed to the relevant body. Sri Lanka has been criticised for doing that and for not inviting international observers to participate. However, we chose to have “good eminent people” from our own Civil Service, and people from that sort of background, on our Chilcot commission. The report we are discussing was produced just over a year ago, whereas three years on we still do not have the Chilcot report and none of us really knows when it will come out.

The other people who were making noises at that time were the human rights groups, the International Crisis Group, Human Rights Watch and Amnesty. Sadly, each refused to give any evidence at all on the grounds that they did not like the make-up and, in their view, the independence of the eminent persons. I think that that is a great pity and shows non-objectivity on the behalf of those groups. I am astonished that Amnesty in Canada has now accepted funds from the LTTE. I find it quite extraordinary that a human rights group should receive funds from the LTTE. That is its right, I suppose, but it somewhat undermines its moral standing. Now those same three groups are chasing up the Sri Lankan Government and saying that they are acting far too slowly to implement the recommendations. And yet—I have done a little bit of research on this—all over the world there are quite a lot of investigations going on into former wars and dictatorships, and some of them are taking an extraordinary length of time. Some of them are taking 11, 12, or 15 years. To take two that we might know a bit more about, one is in Bangladesh, which is again in south Asia, which set up in 2011 an inquiry into what happened in the 1971 war of independence. That has not reported. And, dare I mention it having been PPS in Northern Ireland, the inquiry into Bloody Sunday has now gone on for 40 years and still remains totally unresolved.

So what has happened on the ground? That is by far and away the most important thing. First, when I got there in the end of March, all the way through to the

8 Jan 2013 : Column GC15

middle of April, there was peace on the ground. There were no bombs; you can travel wherever you like in Sri Lanka, by day and by night, with no security checks. I spoke to a Tamil cook of a friend of mine—my friend is also Tamil—just outside Bentota. He had come down from Jaffna overnight, not requiring any special pass or anything; he booked a ticket in a bus station, got off at Colombo, changed buses, and came along the corridor through to Bentota. Asked by me whether he had had any problems, he said that he had no problems at all and that it was as easy as anything. So life for ordinary people in Sri Lanka is good at the moment. Plus, one has to say, British tourists have responded en masse—in fact, almost too readily in the sense that there is obviously a shortage of hotel accommodation, particularly in the east, where people want to go, and in the north, although they are trying hard to get on and build more hotels. So that is real positive benefit on the ground.

I went to Menik farm, where the 297,000 rescued from the war fled. First, I put on record that I saw the head of ICRC with no one else present and asked him whether ICRC was restricted from going into Menik farm. The answer was no. It is true that certain other UN bodies were restricted but, in my book—as one that has done a number of these types of events—ICRC, or the Red Cross, are the key people. Secondly, my wife is a qualified retired doctor and we looked at the reports on malnutrition to see whether there was malnutrition in those coming into the camp, and there was hardly any at all. I shall not go into the food dimension but I do have data on that. That place is now closed and those 297,000 are now all rehoused, which is pretty good in that time span: near enough 300,000 rehoused in a relatively short period. On top of that, a number of the Muslims, who were ethnically cleansed out of Jaffna by the Tamil Tigers, have also been rehoused.

Demining is happening and I say a big thank you to the UK Government, both the former Labour Government and the coalition Government, for the money given to Halo, which is doing a good job on the ground. I spent a whole day with Halo: the team is very good and I thank DfID and, in particular, the Government. I make a plea that when that work is completed somebody does an analysis on Jaffna’s needs and, in particular, the hospital, which I went to look at in some depth. I would be very happy to prepare a draft paper if that was found to be helpful.

The rehabilitation of combatants has been excellent and there is a good case history. Eleven thousand of them have been rehabilitated, with 260 judicially mandated. Child soldiers, of whom there were 595, are all now back with their families. Land issues are being taken very seriously but are proving very difficult to resolve after 30 years. The situation is not unlike that in England, where if you own a bit of land for 12 years you have legal rights to it; I think that it is 10 years in Sri Lanka. The high-security zone, which I visited, is down to 40% of what it was. It has to remain because of the problems in Tamil Nadu. The country’s massive infrastructure, housing and official language policy are all working well. A great issue has been made of

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abductions. I have looked at the figures: in 2011 there were 239, with 226 now traced; in 2012 there were 225, with 207 now traced.

Lord Wallace of Saltaire: It is 11 minutes on the clock.

Lord Naseby: No, I have been speaking for 10 minutes. I am taking injury time. I am taking my time from the annunciator.

The Deputy Chairman of Committees (Lord Colwyn): The debate started at exactly 4.30 pm, so you are now in the 11th minute.

Lord Naseby: With great respect, Lord Deputy Chairman, if a time is up there, it is the time that I am speaking from. I cannot look down here.

Lord Wallace of Saltaire: It is the time for the Chamber. I am sorry, but that is what that is showing.

Lord Naseby: With the permission of the Committee, I should like two minutes to wind up.

On the numbers killed, four reports have come out recently. One was produced by the UN Country Team, which was never published. My plea to Her Majesty's Government is to ask for that to be published. That indicated that 7,000 were killed. A satellite analysis by the Americans indicates that fewer than 2,000 were killed within the graves that can be found. The recent census by Tamil teachers, again, indicates that just over 7,000 were killed. There were not 40,000 killed.

The second problem that the Government of Sri Lanka face is the ever-present threat of the LTTE overseas and the propaganda that is put out. However, Sri Lanka is an excellent member of the Commonwealth. It helped the UK in its hour of need at the time of the Falklands. There are those who, I know, want to downgrade the conference, but what greater stimulus can there be to Sri Lanka today to move forward on the areas that still have to be dealt with than to hold this conference? After all, the CPA held its conference back in September, attended by 700 parliamentarians from 54 countries. That went extremely well, as are preparations for the forthcoming conference.

Here we are in the Moses Room. I suggest that we need the wisdom of Solomon and the patience of Job, and let us not forget Kipling’s remarks that,

“A Fool lies here who tried to hustle the East”.

4.43 pm

Lord Wills: My Lords, the noble Lord, Lord Naseby, has done your Lordships’ House a service by enabling this important issue to be debated here today. The civil war in Sri Lanka was a prolonged, brutal and bloody business. Estimates of the numbers killed vary; most of the estimates that I have seen are considerably higher than those put forward just now by the noble Lord—I have seen estimates of more than 100,000. Many thousands of people were killed; tens of thousands more were wounded, tortured and raped. The LTTE, the Tamil Tigers, was a brutal adversary. It was guilty

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of terrible atrocities against civilians, including the widespread use of suicide bombing and deployment of child soldiers and human shields. However, there were also appalling atrocities committed by the opposing forces of the Sri Lanka Government. These have been well documented by the UN and by the Channel 4 films, “Sri Lanka’s Killing Fields”, which showed the deliberate targeting of hospitals and civilians by heavy artillery, deliberate denial of food and medicine to civilians in the no-fire zone, summary execution of civilians and Tamil Tiger fighters, and sexual violence against women members of the LTTE.

The opinion of the noble Lord, Lord Naseby, that the report from the Lessons Learnt and Reconciliation Commission, set up by the Sri Lankan president, is independent is not shared widely outside Sri Lanka.

In presenting the Government’s response to that report, the Foreign Office Minister Alistair Burt MP said,

“we continue to believe it is important that an independent, credible and thorough mechanism is put in place to investigate all allegations of grave abuses”.—[

Official Report

, Commons, 12/01/2012; col. 21WS]

The International Crisis Group—a distinguished group of diplomats and politicians whose trustees include a Member of your Lordships’ House, a former Secretary General of the United Nations, former presidents, former prime ministers and former foreign ministers—said that the report,

“fails in a crucial task—providing the thorough and independent investigation of alleged violations of international humanitarian and human rights law that the UN and other partners of Sri Lanka have been asking for”.

Sri Lanka can never rebuild itself adequately after its terrible civil war until there is full accountability for the atrocities committed in its course. This is a moral imperative, but it is also a practical one. How can the significant Tamil minority ever be reconciled to a regime that treats war crimes and crimes against humanity insouciantly? More important than implementing the recommendations still outstanding of the Lessons Learnt and Reconciliation Commission is the establishment of an independent investigation of these alleged atrocities and then a calling to account of everyone responsible for them.

I appreciate the efforts that Her Majesty’s Government have made to persuade the Sri Lankan Government to set up such an independent and credible mechanism to investigate these human rights abuses. Sadly, however, the Government’s efforts so far have not worked. To date, there has been no such investigation and no accountability secured for any of the well documented atrocities and other human rights violations committed by state forces. The International Crisis Group has concluded that,

“Sri Lanka is suffering from a crisis of institutionalised impunity for human rights violations by state forces and those working in collaboration with the state”.

The longer this situation continues, the more likely it is that those responsible for these atrocities will think they have got away with them, to the shame of the international community.

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We should never accept that those responsible for horrendous war crimes and crimes against humanity can escape responsibility for what they have done. Moreover, there are well substantiated reports that human rights abuses continue in Sri Lanka to this day. For example, the Amnesty report documented,

“numerous cases of disappearances which have taken place after the end of the conflict…there are reasonable grounds to believe that enforced disappearances have taken place in Sri Lanka as part of widespread attacks on the civilian population and they amount to crimes against humanity”.

Last month, the British Government expressed their concern about the current situation in Sri Lanka by saying that they,

“continue to have concerns about human rights in Sri Lanka, including the rule of law and individual freedoms”.

Now a critical decision is looming for our Government. In November, the Commonwealth Heads of Government Meeting is due to be held in Sri Lanka. The Canadian Prime Minister has made it clear that he will not attend,

“unless there is measurable progress in the human rights situation in Sri Lanka”.

The Government will soon need to decide whether they will adopt a similarly principled stand. There can be no evasion here because there can be no doubt about how attendance by the British Prime Minister and Her Majesty the Queen will be construed by the regime in Sri Lanka.

When the then Culture Secretary decided to spend his Christmas holiday in Sri Lanka just six months after the end of this brutal war, the state-run broadcaster in Sri Lanka reported that,

“his arrival, despite the accusations made by the British Government on the human rights record of Sri Lanka, is an indication that the charges have not been authenticated”.

What does the Minister think would be the reaction in Sri Lanka of the Sri Lankan Government and the state media when the visitor is not just a Culture Secretary but the British Prime Minister—and not just the British Prime Minister, but Her Majesty the Queen as well? We cannot allow our Prime Minister and Her Majesty the Queen to be used to cleanse any regime of war crimes and crimes against humanity.

I recognise the strength of the arguments that Governments should not grandstand, that strident public denunciations of other Governments could be counter-productive. I understand that; I understand that they can strengthen such Governments domestically and can turn the issue into one not of human rights abuses but of national sovereignty. There is always a case to be made for persistent, resolute, behind-the-scenes diplomacy as being the best way of effecting change but, so far, such diplomacy has produced no significant results. In such circumstances, there is a strong case for more resolute diplomacy to demonstrate the limits of impunity for human rights abuses. Ronald Reagan understood that when he stood up to the Soviet Union; Margaret Thatcher understood that when she stood up to Argentina over the Falklands; and this Prime Minister understood it when he stood up to Colonel Gaddafi. Do this Government now understand that they have to stand up to the Sri Lankan regime? Are this Government prepared to follow the principled stand of the Canadian Prime Minister?

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As the Minister considers her answer to that question, I should like to remind her what her colleague, the Justice Secretary, wrote in the Daily Telegraph just three weeks ago about his vision of human rights. He said:

“As Conservatives, we remain absolutely committed to the importance of human rights around the world”.

He identified as fundamental principles of a democratic nation the right to life, the right not to be tortured and the right to a fair trial. Those are all rights which have been denied to tens of thousands of Sri Lankans. I hope that the Minister can tell your Lordships today that these fine words, written by her colleague, the Justice Secretary, were more than just words and that they will be translated into action in relation to Sri Lanka.

I am sure that in addressing that question the Minister will also be aware that human rights, for which the Government of Sri Lanka have not shown very much respect, is one of the core values of the Commonwealth. Therefore, I should be grateful if, in replying, the Minister could answer these questions. First, have the Government already made a decision about whether to attend the Commonwealth Heads of Government Meeting in Sri Lanka and, if they have not yet made it, why not? If they have not yet made it, when do they expect to be in a position to do so? Secondly, does the human rights situation and what the International Crisis Group calls a crisis of,

“institutionalized impunity for human rights violations”,

in Sri Lanka have any bearing on the Government’s decision on whether to attend the Commonwealth Heads of Government Meeting? If so, what action do the Sri Lankan Government need to take before the Government will decide to attend the meeting? I recognise that the Minister may not be able to answer all these questions today but, if she cannot, I should be grateful if she could write to me with the answers.

4.52 pm

Lord Dholakia: My Lords, I thank my noble friend Lord Naseby for securing this debate. I have similar antecedents to those of my noble friend, having visited Sri Lanka a number of times. I was there first in 2009, when the civil war was raging, and I again visited the country when the war came to an end. My last visit was undertaken as a member of the CPA bilateral delegation, which gave me the opportunity to learn first-hand about the reconstruction, resettlement and reconciliation work in progress there.

Much has happened since then. We have the report of the UN Secretary General’s review panel on UN action in Sri Lanka, the report of the Lessons Learnt and Reconciliation Commission, referred to in this debate by my noble friend Lord Naseby, and the International Crisis Group report, which spells out the grievances of Tamil and Muslim leaders that still need to be resolved through the political process.

I am well aware that there are deeply held views about the war and its aftermath in Sri Lanka. This debate is not the place to confirm or deny what did or did not take place during that time. Evidence and its rejection have formed the basis of much publicity in recent times, and I have no doubt that this will continue.

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War may solve a few problems but it creates many others. History should not be forgotten but there must be a way forward towards building a stable and secure democracy which all the country’s citizens can enjoy.

We should not underestimate the task facing the Sri Lankan Government. To continue to sustain parliamentary democracy at this difficult time is commendable. There are bound to be difficult times ahead. The political process must work towards uniting the nation after 30 years of war.

During our visit to Sri Lanka, we were able to learn about the transition from operating and sustaining democracy during the civil war to running a democracy during peacetime. Politicians must be fully aware that winning the war does not mean that problems will go away. For this reason, there is a need to ensure that the rule of law applies to all citizens equally. It is a pre-requisite condition of a successful and stable democracy.

During our visit we were impressed with the success that Sri Lanka has in the education and healthcare sectors. It has a literacy rate of more than 90%. I ought here to single out the work of the British Council. Queues of students at the British Council offices provide clear evidence of the council’s success in assisting with the process of education. I plead with the Minister to ensure that the visa system does not discriminate against Sri Lankan students as there is evidence that they are now looking at Australia rather than the UK for their advancement.

Sri Lanka has free and accessible healthcare available throughout the country.

Despite the concern about our safety, we were allowed access across the north, east and west of the country: there was no constraint on our movement. Like the noble Lord, Lord Naseby, I met IDPs and those in camps. We could see at first hand the post-conflict reconstruction. It will still take a great effort to ensure that there is no disparity in the development and construction work in the north. To an extent, we were aware that the demining process was actively pursued but it has a lot of bearing in preventing the north of the country from opening up.

We are all aware that terrorists have no mandate and that oppression perpetrated by terrorists and those in power cannot achieve a peaceful society. The Good Friday agreement in Northern Ireland and the Truth Commission in South Africa demonstrated that a peaceful transition is possible only through an acceptable process. It is for this reason that we should attach importance to the report of the Lessons Learnt and Reconciliation Commission, which was set up in May 2010.

There is no dispute that excesses were committed by the warring parties—the collateral damage has been substantial—but there is now a need to move forward. Terrorism and violence have ended but suspicions still remain: the scars of the war will take a long time to heal. What is now required is an all-inclusive political process of dialogue and accommodation so that conflict by other means does not continue. This is one of the key recommendations of the report.

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The LLRC report sets out some clear recommendations on human rights issues arising out of the conflict. It received a large number of representations alleging the violation of fundamental rights and freedoms of people affected by the conflict. The LLRC had no hesitation in stating that its recommendation on these human rights issues were critically relevant to the process of reconciliation.

This is not simply a job for the Government: it is also a task for all state institutions, civil societies and citizens to exert all possible efforts towards this end. The LLRC report and its recommendations require clear action. For example, the report pulls no punches when it states:

“There is an urgent need to assist the victims and their families to overcome the trauma they suffered due to the conflict and to bring the perpetrators of any human rights violation to justice”.

I, for one, welcome this report for its brevity. It is not a whitewash and it is not easy to ignore. It is a good starting point towards the process of reconciliation and nation building. There is also a further important recognition that this process must reach out to the minorities and that the minorities must reposition themselves in their role vis-à-vis the state and the country.

I have known Dr Chris Nonis, the High Commissioner for Sri Lanka, for some years know. I know that he is keen to build links with the large Sri Lankan Tamil Diaspora in the United Kingdom. In turn, I hope that the British Tamil community will play its full part in rebuilding Sri Lanka. It is here that we can play an important role and I hope that the Minister will see what help he can give to build this dialogue.

Sri Lanka is a nation that deserves to be at peace with itself. It will take time to build the confidence of all communities, who have suffered enough during the civil war. It has the potential to eradicate poverty and to take its place among the democratic nations of the world. It will require the will of all its people, in Sri Lanka and in countries abroad, to make this possible. Unlike the noble Lord, Lord Wills, I believe that the 2013 CHOGM summit in Sri Lanka should offer all of its experience towards building a peaceful, democratic Sri Lanka.

5 pm

Lord Bates: My Lords, I, too, pay tribute to my noble friend Lord Naseby for securing this important debate. My interest is around the issue of conflict. I have never visited Sri Lanka and were it not for the opportunity provided by this debate and the outstanding brief prepared by the House of Lords Library for it, I would have known a great deal less about the tragedy that has hit that country.

However, I have followed and witnessed what has happened in a number of areas of the world which have been recovering from conflict and the hallmarks of that difficult path are all too evident in what is happening in Sri Lanka at present. The question is: what are the solutions?

We have learnt lessons from other areas—I am thinking in particular of our own issues in the Balkans and in Northern Ireland—and we know how difficult it is. In debates on foreign affairs in this House there is

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sometimes a level of arrogance where we pretend that we have got it all sorted and that we can lecture the rest of the world on how to get it right. However, the fact that a country like ours—with our wealth and our history of parliamentary democracy and justice—is still wrestling to achieve a settlement and peace in Northern Ireland should make us tread carefully and humbly into other people’s conflicts.

The first thing we learn from these kinds of conflicts is that, in the long term, violence never succeeds. The second thing we learn is that freezing-out never works: people need thawing out in conflict situations. In that sense, peace needs to be given a chance to take hold. In this circumstance, the conflict went on for 26 years and the peace treaty was signed two or three years ago. I guarantee as a fact that the people of Sri Lanka will still be wrestling with this issue in not five years’ time but in 50 or 100 years’ time. We know from our own experience that that is the kind of timescale that people need. History and the facts presented show that what we have now is a moment of opportunity for the international community to involve the parties to the conflict because, inevitably, they must be the parties to the peace.

I refer briefly to the report of the Lessons Learnt and Reconciliation Commission. I have read the entire report and it seems to me that the Sri Lankan Government are self-critical, which is an encouraging sign. I am disappointed that all other parties did not take part in it because ultimately, somewhere along the line, there will have to be another try at this and outside bodies will have to give their advice. I know that the Indian Government are trying to help. Potentially, South Africa would be much better placed to offer insight and help to people in this process.

I refer particularly to page 382, paragraph 9.255, of the report which contains a series of interesting recommendations. I say again that this conflict is no different from any other: we are very familiar with it; we know what needs to happen; we know that it is a long-term process; and we know that we have a moment of opportunity before us which we should seize. However, one hallmark of this Government, of which I am most proud, is the way in which they have been working at conflict prevention rather than intervention, and the Conflict Pool is an essential part of that.

There is one part of the report where it seems to me that we could make a big difference. The report identifies that a lot of work needs to be done in the area of peace education. It talks about a trilingual policy and the need to ensure a much broader ethnic mix of student populations, with a choice of courses offered in all three languages. The commission is also of the view that sport builds up interpersonal contacts among people of different communities, which is essential for the process of reconciliation. Perhaps I may refer the Minister, who I know will take these matters seriously, to that particular section. I know that there has already been a tremendous amount of work on clearing landmines—my noble friends have referred to it—but in the specific area of peace education and bringing international students together, I wonder whether the

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sporting legacy of the Olympics and the legacy of the Olympic Truce are things that we might be able to seize and build upon.

If all the countries simply look at ways in which they can offer practical help and provide support for all the different parties in working through this tremendous difficulty, I think that there will be a chance of long-term stability. The prize for that will come through economic growth. The worst catastrophe that comes from all conflict is that it impoverishes people not only morally but financially. We see from the briefing note that the cost of the war in Sri Lanka over 26 years ran to some $200 billion, which is five times its annual output. It is an enormous cost. Therefore, it is very encouraging that since the conflict has ended there has been significant progress and growth. The proportion of people living below the national poverty line has declined from 26.1% at the height of the conflict to 8.9%. With annualised growth in the region of 6%, 7% or 8%, getting into tourism, getting the economy going and giving people jobs and hope, as well as a future, and allowing them to move forward are things that we ought to be encouraging. Anything that Her Majesty’s Government can do to support and encourage the Sri Lankan Government in that way would seem wise.

5.08 pm

Lord Triesman: My Lords, I join others in thanking the noble Lord, Lord Naseby. I, too, have read the report very carefully. It has real strength but it also has significant weaknesses, and I think that it is as well to look at the balance. After all, it covers a war which raged from 1983 to 2009, with pauses in it until Velupillai Prabhakaran was killed. Whatever is said about the figures, an estimate of between 60,000 and 100,000 deaths looks to be relatively credible in terms of the reports made by international bodies. I certainly have no reason to think that they are much in doubt. As my noble friend Lord Wills said—

Lord Naseby: I hate to intervene but there is no credible report that mentions 60,000-plus deaths. There are reports of 40,000 deaths from the UN and there are reports of between 7,000 and 8,000 from other UN bodies. If the noble Lord has a copy of any such report, I should be grateful if he would make it available to me, as chairman of the all-party group.

Lord Triesman: My Lords, I will go back through the UN figures and will provide the ones that I have seen. I was going to go on to say, as my noble friend Lord Wills did, that it appears that in the final stages the figure of up to 40,000 comes near to the death toll. The 18-month inquiry, which concluded in November 2011, covers all 26 years.

One thing is absolutely plain to me: in any civil war of that duration and intensity, the pain between the combatants and the communities from which they come is going to be very great. Significant inter-communal violence, which is very up-close, raw violence, has on the occasions when it has occurred led to the division of countries—for example, India and Pakistan—rather than to an attempt to keep one country in one form.

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It is certainly true, as the noble Lord, Lord Naseby, said, that one sees a good deal more evidence of peace, which is very good news, but it is also true that there are credible reports of civil rights abuses. I add my appreciation to that already expressed for the United Kingdom forces involved in the de-mining exercise. I had the great privilege of being with those forces in Colombia in South America and saw just how amazing and dangerous their work was. I remember how relieved one felt to be able to go away at the end of a phase when they could not always do so.

Both sides have made credible claims; both have eye-witness accounts; and both seek retribution. One side has sought prosecution of perpetrators, with greater emphasis focused, perhaps understandably, on the shelling of hospitals, which, by common consent, caused considerable civilian casualties. However, I also note that the commission expressed findings even on this issue, stating that it was impossible to say who had been responsible for that shelling.

The report contains findings on many other issues. It apportions blame for the causes of the war pretty evenly between politicians on both sides. It makes it clear that there were no steps taken by the Sinhalese which could have placated the Tamil people. It makes it clear that Tamil politicians worked up passions for militant separation which were impossible to accede to.

While there was support for the report, there has also been significant criticism. A lack of independence in the report has been alleged. Not even minimum international standards of protection of witnesses was accorded to many of those who might have given evidence.

However, I share a view with the noble Lord, Lord Naseby: that the decisions of Amnesty International, the International Crisis Group and Human Rights Watch not to take any part can scarcely have helped the process. It would have been better had they taken part and I am not sure that their reasons for not doing so are sustainable.

Many of the commission’s recommendations could be detailed very extensively, but I highlight those to deal with long-term detainees individually, to publish full lists, to ensure that freedom meant freedom—that is, once people had been released, they should not be re-arrested—to overcome legal delays in process, to disarm illegal groups immediately as a priority, to ensure that there is free movement in the country, to normalise civil administration and to make sure that documents were in languages that people could understand. Like the noble Lord, Lord Bates, I often feel—maybe I would—that sport can play a significant role in giving people the opportunity to see each other in circumstances that are not quite so gruesome.

However, people plainly want more, and herein lies the central dilemma. Reconciliation processes seldom satisfy those who have suffered the sharpest distress or grievances. No one in the United Kingdom would willingly accept any process where there was impunity. I do not know that it would ever speak well in our culture; nor do I think that it would speak well in anybody’s culture, because people want their most serious grievances addressed. As we have seen elsewhere, retributive justice after a war of this kind is very

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unlikely to achieve reconciliation—these are not easy choices to make—but that does not answer the question of impunity. That is why it is an audacious route to take to seek reconciliation in this way and why it is seldom welcomed by all those who seek complete justice or even confirmation that the evidence that they have provided, and on which they rely, is the only accepted truth that should be accounted for.

I am with the noble Lords, Lord Willis and Lord Dholakia, in believing that one has to be clear on both sides about the conditions for success if this is the route that one wants to take. The first condition is that there should be sufficient independence in the inquiry to command support—and I support what Her Majesty’s Government have said about that, which is useful and correct.

Secondly, reconciliation can work fully in my view, even against all the odds, only if substantive outcomes can be achieved in the programme of reconciliation that is recommended. I make these points here not because the international groups have all written to me and urged that they should be made but because I hope for the success of the country and want to think about how that might be achieved. The outstanding evidence is clear; the noble Lord, Lord Dholakia, referred to the first and perhaps most important point, that political processes have to encapsulate the rights for all groups and the rule of law, and that is fundamental. The aid agencies must be able to reach those needing aid, especially with medicines and medical facilities. I do not believe that there is evidence that that has fully happened, and I wonder whether the Minister has an observation on that.

There are clear failings in the existing IHL regime in respect of internal conflicts in both state and non-state armed groups. Does the Minister feel that there may be progress there? A large number of allegations have been made of abduction, arbitrary detention and disappearances—what is called a different kind of white van syndrome. There do not seem to me to be such clear outcomes as have been presented, and I wonder whether the Minister has views on that. I know from the work that was done in Argentina and Chile that, until those issues are fully nailed down, the families do not go away—and you can understand why. It will never satisfy them. The independent police commission has to function properly, and I am not absolutely clear from what I have read that it does function. I wonder whether the Minister has any observation.

I make one quick observation on Channel 4. Jon Snow is, in my view, one of the outstanding journalists of this generation. He has amazing standards and amazingly good personal, ethical values, which contrast with some others in the media. Yet questions persist about the authenticity of some of the footage of “Sri Lanka’s Killing Fields”. It is not for the Minister, but could Parliament perhaps encourage “Channel 4 News” to consider whether it has been deceived in any respect?

Lord Wills: I am very curious about this, because I did a lot of work researching all this, including reviewing those particular films. I looked at an Ofcom judgment; there were a lot of complaints about those films—

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hundreds, I think. Channel 4 was found not to be in breach at all by Ofcom, so I wonder whether my noble friend could specify what doubt there is. I am sure that he is aware that much of the footage in those films was filmed by Sri Lankan soldiers on their mobile phones. What possible doubt is there about the veracity of that footage?

Lord Triesman: My Lords, if my noble friend had allowed me just one more sentence, I was going to go on to say that I personally had no doubt about the authenticity of the films—that is my view. But when people, particularly in the current media climate, believe that it is important to be absolutely certain of these things, an excellent news programme such as I believe “Channel 4 News” is would do itself no harm if it repeated the exercise if it gave greater confidence. I personally have no doubt about the veracity, but my view may not be significant.

Finally, steps could be taken before the conformation of the final arrangements for the state visit, which is also very important—it is not just CHOGM. This is a real opportunity, in the spirit of Commonwealth standards and reputation, not least because the Commonwealth has an outstanding Secretary-General in Kamalesh Sharma, to ask questions, discuss progress and articulate a possible programme and means of verification of the programme. I know that that kind of Commonwealth role appealed enormously—it did in its time to me, and certainly it has done to the noble Lord, Lord Howell of Guildford, and I know that it does to the noble Baroness, Lady Warsi. For those reasons, I always attach great importance to what can be achieved by that kind of process. If it is done properly, it may well be that the value of the Commonwealth and of CHOGM in this instance will be very well demonstrated.

5.19 pm

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi): My Lords, I thank my noble friend Lord Naseby for securing this debate. I know that he and others within both Houses of Parliament have taken a close interest in Sri Lanka. The timing is most apt, a year after the publication of the Lessons Learnt and Reconciliation Commission, or LLRC, report, that has been referred to today.

Let me first note that the United Kingdom and Sri Lanka have a long-standing historical connection, and present-day ties include business, family, tourism and education. I assure my noble friend Lord Dholakia that large numbers of bright, talented Sri Lankan students continue to come to study in the United Kingdom and the diaspora community of around 400,000 people contributes significantly to our economy and rich cultural diversity. We are friends and it is a friendship that we value, even on the cricket pitch, despite being knocked out in the World Twenty20 in October by the host, Sri Lanka.

The 2009 defeat of the Liberation Tigers of Tamil Eelam, or LTTE, brought an end to decades of conflict in the country, but a military victory alone cannot deliver the stable, lasting peace which all Sri Lankans deserve. It is for this reason that the UK supports the

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view, widely held within Sri Lanka and outside, that long-term peace can best be achieved through an inclusive political settlement that addresses the underlying causes of the conflict. Such a settlement must also take into account the legitimate grievances and aspirations of all Sri Lanka’s communities. The Government of Sri Lanka recognised this in appointing the LLRC, which submitted its report in December 2011. The report made more than 200 recommendations.

In January 2012, following the publication of the LLRC report, my right honourable friend Alistair Burt issued a Written Ministerial Statement in which he welcomed publication of the report and urged the implementation of its recommendations. The recommendations, if implemented in full, would go a long way to achieving the reconciliation which we believe will achieve lasting peace. Those recommendations included calls for credible investigations of alleged extrajudicial killings and disappearances, demilitarisation of the north, implementation of impartial land dispute resolution mechanisms and the protection of freedom of expression. However, as Alistair Burt said at the time, and to which the noble Lord, Lord Wills, referred, in the view of this Government the report left gaps and unanswered questions on alleged violations of international humanitarian law and human rights law, and we were disappointed by the report’s conclusions and recommendations on accountability.

Sri Lanka has made some progress against the LLRC recommendations. The UK recognises and welcomes the progress that has been made in a number of areas. UK officials have visited all nine provinces in the past 12 months and have seen much to welcome. Most importantly, the absence of conflict has brought greater security and opened up economic development. Demining, which has been referred to in today’s debate, including with UK financial support, is freeing up more and more land for resettlement and agriculture. Rehabilitation of thousands of ex-combatants, including child soldiers, has allowed many individuals to integrate back into society. The majority of internally displaced persons have now moved out of camps, although there is still work to be done in ensuring that all have permanent homes and are, where possible, able to return to their places of origin.

Despite a visible military presence, troop numbers in many areas are now well below 2009 levels. Infrastructure development is opening up the country, creating conditions for economic growth and enabling easier travel. All these are positive developments. However, the picture is not all positive. Much remains to be done in order to tackle the roots of conflict and ensure lasting peace and prosperity. The need for progress was highlighted in a March 2012 Human Rights Council resolution, supported by a majority of member states from around the world. It called on the Government of Sri Lanka to implement the LLRC report recommendations and to address alleged violations of international law. In July 2012, the Sri Lankan Government published an LLRC action plan, with deadlines from early this year for the implementation of the LLRC recommendations. However, it is notable that the action plan covers around only half the LLRC

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recommendations. We hope that the Government of Sri Lanka will reconsider and look at implementing the LLRC report in full.

This is not a case of unrealistic expectations. The UK has never suggested or expected that resolution following a long-running conflict can be instantaneous. We realise that the LLRC recommendations cannot all be implemented immediately. We have our own experience of reconciliation from Northern Ireland, and we know well that such a process is complex and can take time. I thank my noble friend Lord Bates for outlining possible and potential pathways. He is right: this process will take time. I will take back his suggestions regarding building on the Olympic legacy and, indeed, the Olympic Truce. He is also right that we must look to a future for all, but in the case of Sri Lanka true reconciliation is unlikely to be possible without a brave, open and comprehensive review of the painful past, and addressing the deep-seated issues in the LLRC report requires a long-term approach, tenacity and co-operation.

There are, of course, inevitable barriers to swift progress in some areas—for example, the need to broker agreements between various parties, undertake changes to legislation and devise equitable solutions to complicated issues such as land rights. However, to make this long-term progress requires a sense of urgency and it has to be on a positive trajectory.

I regret that a number of the recommendations have not been tackled at all or have been tackled in name only. The military presence in many areas is less invasive than at the end of the conflict but armed forces continue to occupy large areas of civilian land, now classified as high-security zones or military cantonments. Military involvement in civil and commercial activities has been reduced in some areas but still remains widespread and a source of tension. Not only has there been no agreement on political settlement but a recent Bill seeks to further centralise currently devolved powers. Moreover, almost four years since the end of the conflict, there have been no prosecutions for alleged misconduct during the conflict.

The Government of Sri Lanka face considerable challenges but they face them with the support of an international community eager to see lasting peace in the country. With this support comes scrutiny, and in 2013 this is set to be particularly intense. In March we have the anniversary of the Human Rights Council resolution, and the noble Lord, Lord Wills, spoke about the Commonwealth Heads of Government Meeting, which Sri Lanka is due to host in November. The CHOGM is an opportunity either for Sri Lanka’s progress to be showcased around the world or for bad news to be amplified. The UK believes that the host of CHOGM should uphold the Commonwealth values of good governance and respect for human rights. We will look to Sri Lanka to demonstrate its commitment to these values both now and in the run-up to CHOGM. A key part of this will be addressing long-standing issues around accountability and reconciliation after the war. The noble Lord, Lord Wills, will be aware that Sri Lanka was scheduled to host CHOGM in 2011 but, given ongoing concerns about the humanitarian and human rights situation, the UK and other Commonwealth members did not support its bid.

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Commonwealth members decided that Sri Lanka would host it in 2013, but at this stage it is too soon to talk about the UK’s attendance plans. I cannot give further details today, but we will be looking to Sri Lanka to demonstrate the Commonwealth values expected of any CHOGM host.

The noble Lord, Lord Triesman, raised current, ongoing concerns about the human rights situation. International concerns about human rights violations in Sri Lanka are not limited to the years of the war but remain since the end of the war as well. The UK has been candid in private and public about our concerns. In the 1 November UN Universal Periodic Review of Sri Lanka, the UK raised concerns about the attacks on and intimidation of journalists, human rights defenders and the legal professions. We recommended that the Sri Lankan Government investigate alleged grave breaches of humanitarian law during the conflict. This recommendation was accepted, along with 110 of the 210 recommendations made in that review. We also recommended that the Sri Lankan Government ensure a climate in which all citizens can express their opinions freely. This recommendation was rejected, along with recommendations to invite the UN special rapporteurs to visit and recommendations to ensure independence of the judiciary. We continue to have concerns about human rights in Sri Lanka, including disappearances—to which the noble Lord referred—political violence, reports of torture in custody and restrictions on free speech. We raised our concerns directly with the Government of Sri Lanka and called upon them to investigate reports of human rights abuses whenever they occur.

The noble Lord, Lord Triesman, also raised the issue of missing persons. A legacy of decades of conflict is that large numbers of missing people remain an understandable cause of considerable distress for many families. The LLRC report is committed to establishing a decentralised database of the missing by February of this year and we look forward to progress in this regard.

Events as recently as the last eight to 10 weeks are a source of concern for us as well as for other states and international organisations. These include impeachment proceedings against the Chief Justice, which coincidentally followed a number of rulings against the Government; violent disruption of student remembrance events in Jaffna and the detention of students; and the violent

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suppression of a riot at Welikada prison in which 27 inmates lost their lives. On 5 December, our high commissioner joined other EU heads of mission in a public statement expressing concerns about the rule of law and individual freedoms in Sri Lanka.

Following the end of the conflict, we want to see Sri Lanka win a peace that can be enjoyed by all its citizens. Progress has been made but is lacking in a number of areas necessary to ensure long-term peace and stability. We remain committed to helping the reconciliation process, recognising the Sri Lankan Government’s legitimate authority and looking to the Government to implement the LLRC recommendations in full.

Lord Wills: My Lords, I am very grateful to the Minister for giving way but I intervene as I suspect that she is about to conclude her remarks. I asked a number of specific questions. I quite understand that she cannot answer them today but will she confirm that she will write to me with specific answers to those specific questions?

Baroness Warsi: I will certainly do that. UK support includes funding activities on rehabilitation, access to language rights, community policing support and positive dialogue within and between communities in Sri Lanka and, indeed, engaging the UK diaspora. We recognise the need for a long-term approach but firmly believe that this must include some early evidence of progress. It is right that Sri Lanka’s friends should raise such concerns alongside more immediate human rights issues. As Alistair Burt said in his Written Ministerial Statement last January:

“Our long-term interest is in a stable, peaceful Sri Lanka, free from the scourge of terrorism, and as a fellow member of the Commonwealth, conforming to the standards and values which Commonwealth membership requires”.—[Official Report, Commons, 12/1/12; col. 21WS.]

That position remains unchanged.

I close by thanking the noble Lord, Lord Naseby, for his continued interest in Sri Lanka and for securing this debate today.

The Deputy Chairman of Committees (Baroness Gibson of Market Rasen): My Lords, that completes the business before the Grand Committee this afternoon. Therefore, the Committee stands adjourned.

Committee adjourned at 5.31 pm.