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House of Lords

Thursday, 7 February 2013.

11 am

Prayers—read by the Lord Bishop of Bath and Wells.



11.06 am

Asked By Lord Judd

To ask Her Majesty’s Government what bilateral and multilateral discussions they are having on the regulation of the civil and military use of drones.

Lord Wallace of Saltaire: My Lords, Her Majesty’s Government and the UK Civil Aviation Authority are working with both the International Civil Aviation Organisation and the European Commission and EU member states on developing harmonised rules and regulation for the safe integration of civil remotely piloted aircraft systems into both European and global air space. The Ministry of Defence is not involved in any bilateral or multilateral discussions specifically on the regulation of the military use of remotely piloted aircraft systems but is involved in more general discussions on arms control, such as the UN Convention on Certain Conventional Weapons.

Lord Judd: My Lords, I thank the Minister for that encouraging reply. Does he not agree that, as far as the domestic situation is concerned, whatever the value of drones for emergency services and the like, their increasing availability makes the need for some sort of code an urgent priority? When it comes to the international scene, how do the Government define the difference between extra-judicial killing and legitimate killing? How can transparent accountability for every civilian, not least innocent children, be ensured? How can the use of drones in areas not defined by the UN as conflict zones be justified? Is there not a desperate need for something like the Geneva Conventions?

Lord Wallace of Saltaire: The noble Lord has asked several complex questions and I will try to answer some of them. The development of civil systems is clearly a complicated area. Basically, for large unmanned systems, the same rules apply as for manned aircraft. For small unmanned systems—there are now some very small unmanned systems—provided they are within the sight of the person controlling them, regulations need not apply. Clearly, a lot more work is needed in that area. On the international dimension, the question of extra-judicial killings is something which, as those who have read this morning’s Guardianwill know, is being actively debated in the United States as we speak.

Baroness Falkner of Margravine: My Lords, on 20 November 2012, the Senior Minister of State at the Foreign Office, the noble Baroness, Lady Warsi, assured me that the UN special rapporteur for human rights and countering terrorism was preparing a report to

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the UN on the issue of drones. That was in response to a question I had asked her along the lines of the Question asked by the noble Lord, Lord Judd, today. Can the noble Lord tell the House what progress there has been in terms of Her Majesty’s Government’s contribution to the report of the special rapporteur and when we can expect it to be forthcoming?

Lord Wallace of Saltaire: My Lords, I am not briefed on that specific question and will have to write to the noble Baroness. We are, of course, in conversations with others about the use of drones. On the specific issues being discussed in the United States at the present moment, I simply stress that the United Kingdom has used drones for military purposes only in Afghanistan.

Lord Singh of Wimbledon: My Lords, does the Minister agree that the control of the military use of drones is absolutely necessary internationally? The carrying out of extra-judicial killings in the sovereign airspace of other nations is a very dangerous precedent. Something needs to be done about it very urgently.

Lord Wallace of Saltaire: My Lords, the question is very much about the use across national boundaries in areas where there is not an active conflict. I simply stress again that the United Kingdom has used military drones only inside Afghanistan and that we are in Afghanistan at the invitation of the Afghan Government. There is an active debate in the United States about the American use of drones across national frontiers in areas where it is a question of terrorist threats to the United States rather than local conflict.

Baroness Kinnock of Holyhead: Since we know that 51 states now have the technology to use drones, does the Minister agree that it is essential that a proper legal framework is urgently put in place and that action is taken to ensure that there is accountability and reparation when things go wrong as a result of a drone attack? Does the UK support the stated view of the UN special rapporteur, who is to conduct an investigation into the spread of drone technology, that we urgently need to know the extent of civilian casualties, the identity of militants targeted and the legality of strikes where the UN does not recognise that there actually is a conflict?

Lord Wallace of Saltaire: My Lords, unmanned aerial vehicles are spreading around the world. My figures say that some 80 countries now have some capacity, or have been involved in purchasing such capacity, so this is spreading very quickly. Clearly, we do need to develop international law and practice on this. We also have large issues about what happens in ungoverned space, such as aspects of the Sahel and, until very recently, some parts of Somalia. I stress that the largest single use of unmanned aerial vehicles for military purposes is in surveillance and reconnaissance and not in direct strikes.

The Lord Bishop of Bath and Wells: My Lords, I welcome the Minister’s remarks about the progress in the United States. However, does not a world characterised by the proliferation of armed drones, without an internationally supported framework of regulation,

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undermine our core interests such as preventing armed conflict, promoting human rights and strengthening international legal regimes? Could the present role of the United Kingdom be one which enables and begins the process of trying to find some kind of international regulatory process?

Lord Wallace of Saltaire: My Lords, there are some benefits from unmanned drones, particularly in terms of reconnaissance—maritime reconnaissance off Somalia and so on—because these aircraft have much longer endurance than manned aircraft. I would add that the question of whether distantly controlled aircraft encourage people to be less careful in their use of military weapons is one which I have spent some time studying. I am rather reassured that, because of the ability of unmanned aircraft to loiter over the site, not only is target acquisition more carefully attended to than if you are in a fast aircraft but you are asked to look at what happened afterwards. I am told that this means that those who are controlling these aircraft have a thorough sense of responsibility for what has been done.

Lord West of Spithead: My Lords, following on from the Minister’s previous answer, whenever one makes war less horrible—war is horrible, death is horrible and being involved in the risk is horrible—and kills people remotely from some leafy suburb in the middle of one’s own country, it makes it remote, which has huge implications and is very worrying. It needs a lot of control. Does the Minister agree?

Lord Wallace of Saltaire: My Lords, the Armed Forces are well aware of that and that matter is under active discussion at the present moment.

Housing: Social Housing


11.15 am

Asked By Baroness King of Bow

To ask Her Majesty’s Government what plans they have to improve the social housing stock during 2013.

Lord Ahmad of Wimbledon: My Lords, I thank the noble Baroness for her Question. For 2013-14, the Government have allocated £411.5 million to 38 local authorities and £123 million to 13 housing associations, with stock transferred from local authorities, enabling them to bring properties up to the decent homes standard. This funding is, of course, additional to the local authorities’ own funding. Following self-financing, which was introduced in 2012, local housing authorities now keep their rental income, allowing them to ensure that their properties reach, and most importantly maintain, the decent homes standard.

Baroness King of Bow: The Minister will be aware that the figures that he has just outlined in areas such as Tower Hamlets represent a 60% cut on the money available to improve social housing in the spending review. However, is he also aware that backloading the

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social housing budget means that those in the worst housing conditions have to wait the longest for upgrades? Can he clarify whether the Secretary of State will ask the Chancellor to increase the amount of money in the next spending review to make up for that previous shortfall and, if so, will they abandon the backloading of the budget that hurts hardest those in the worst housing? Combined with the bedroom tax, this makes people in social housing feel that they are under a sustained and unjust attack from this Government.

Lord Ahmad of Wimbledon: First, perhaps I may correct something that is misunderstood. The bedroom tax is not a tax; it is a benefit. My right honourable friend the Prime Minister made that clear, and it needs to be reiterated. On the point about decent homes and Tower Hamlets specifically, I will share the figures with the House. The decent home benefits grant in 2011-12 was £12.5 million; in 2014-15 it is projected to be £45 million. That, to me, is an increase in any terms.

Baroness Gardner of Parkes: My Lords, will the Minister tell me whether he is aware of the fact that there is quite a supply of housing in London, and that it is simply unusable because people have bought their flats in social high rise housing and now wish to move for various reasons, but no one will give a mortgage on those properties? They are completely locked into them because they are high rise and have a stigma attached to them because they were social housing. Doing something about that would release housing that people could obtain mortgages on, and they could feel confident that in due course they could move on.

Lord Ahmad of Wimbledon: My noble friend is correct; London has a disproportionate amount of non-decent homes, primarily due to the high numbers of homes of non-standard construction that she has highlighted. It is important for the Government to work with the private sector to decide how these homes can best be released for greater housing requirements in London. That said, we are providing a greater number of funds available to London, and, of course, are working closely with the Mayor of London’s office to ensure that we meet the decent homes standard in London.

Lord Martin of Springburn: May I say to the Minister that many young couples went into housing that was post-war? Often these post-war housing estates, good as they were, were four and sometimes five-apartment housing. Now in their advancing years, if they have to leave and downsize, that means having to leave the community they love and have lived in for many years. The community-based housing associations have an excellent record of building two-apartment housing in these housing estates. I hope that every encouragement is given to them.

Lord Ahmad of Wimbledon: First, I agree with the noble Lord about the challenges that young couples face in finding housing. It was not so long ago that my wife and I were a young couple ourselves. Nevertheless, to take up the specific issue, the noble Lord is correct. We have to ensure, as a Government, that we work

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both with housing associations and the private sector to provide a future housing provision across the country that works for the new generation.

Baroness Royall of Blaisdon: Will the Minister answer the specific question asked by my noble friend about the backloading of funding, which is extremely important to those who live in the worst conditions in social housing?

Lord Ahmad of Wimbledon: That is a matter that the Secretary of State for the DCLG and the Chancellor will be discussing in the next budget round.

Lord Shipley: Does the Minister agree that there is an urgent need to build more new social housing and that one way that could be done is for the housing borrowing cap of local authorities to be removed and to be substituted by the prudential borrowing code, which enables the self-financing of social housing? That could be backed up by the Local Government Act 2003 so that Ministers have a power to cap any individual local authority that broke the rules. Given the importance of housing and the growth agenda, will the Minister look at that proposal?

Lord Ahmad of Wimbledon: The housing issue, along with other proposals, will be looked at, but I want to make it clear that the Government are investing more in social housing. We are investing over £4.5 billion in the spending review period to deliver up to 170,000 affordable homes in England. This investment, importantly, as I mentioned to the noble Lord, Lord Martin, is about working together across the board in the housing sector, bringing different parties together. This £4.5 billion will leverage an extra £15 billion from the private sector investment, making a total of £19.5 billion investment in social housing up to 2015.

Lord Soley: In his reply on the backloading issue, the Minister referred to another Minister in his own department. May I say that that is not an adequate answer and that we will need an answer of some type to that, even if not at this precise moment? He might be able to give something in writing. When one Minister refers to another in the department, it suggests that the department does not know what is happening.

Lord Ahmad of Wimbledon: I am sorry that the noble Lord feels that way, but it is a matter for the Secretary of State. That is what I said. I will, of course, write to the noble Lord, copying the noble Baronesses, Lady Royall and Lady King, in on the specific issues raised.

Young People: Personal Finances


11.21 am

Asked By Lord Kennedy of Southwark

To ask Her Majesty’s Government what action they are taking to ensure that young people have a proper understanding of managing personal finances before leaving school.

The Parliamentary Under-Secretary of State for Schools (Lord Nash): My Lords, I agree entirely with the sentiment underlying the noble Lord’s Question.

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The ability to manage one’s finances is a very important skill that all young people should have. The Question is also brilliantly timed as my right honourable friend the Secretary of State for Education is currently on his feet in another place, outlining the draft programmes of study for the national curriculum, among other things. The new national curriculum will place a renewed emphasis on mathematics, which itself will include a strong focus on arithmetic, money and percentages. In addition, citizenship will include a strong and specific emphasis on financial education.

Lord Kennedy of Southwark: I thank the Minister for his reply. Leaving school with the skills, knowledge and confidence to manage money is vital—we agree about that. If those skills are not learnt in school they will probably never be learnt. I found out that the average age when a child makes their first purchase online is 10. What cross-departmental work is going on to ensure that those essential skills are learnt, and would he agree to meet me and some campaigners on the issue to discuss this in more depth and explore what can be done further?

Lord Nash: Specifically on online matters, child safeguarding and internet safety are both areas that the Government take very seriously. Schools will provide a grounding in that, but I will agree to meet the noble Lord and discuss this further.

Lord Flight: My Lords, I am grateful to the noble Lord, Lord Kennedy, for raising this matter and for the Minister’s reply. This is territory on which I have sought to campaign. Within the two territories to which he referred—mathematics and citizenship—will the territory of understanding concepts be covered? One of the key problems is that unless people have actually had it explained to them, they do not know what a pension or a mortgage is. It is not just about mathematics.

Lord Nash: The noble Lord is absolutely right. The draft programme for study states that pupils will be equipped with the financial skills to enable them to manage their money on a day-to-day basis as well as to plan for future financial needs, and that they understand the concept of wages, taxes, credit, debt, financial risk and a range of more sophisticated financial products. I should hope that any proper education on that front would cover those points.

Lord Laming: Will the Minister assure the House that in his new ministerial responsibilities he will give particular attention to young people who have been in the care of the state? Does he agree that we expect the greatest coping skills from the young people who have had the fewest opportunities in life and do not have families to support them after they leave school?

Lord Nash: I note the noble Lord’s comments. We have met with a wide range of SEN groups in formulating our plans. Appropriate adjustments will be made to exams for pupils in that category.

Lord Tomlinson: Does the Minister agree with me that, on the basis of the Question from the noble Lord, Lord Kennedy, and with the emphasis that he

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has placed on the continuing development of these financial skills, one day a young person who might aspire to become Prime Minister might know the difference between debt and deficit?

Lord Nash: I would like to think that day has arrived but I note the noble Lord’s comments.

Lord Addington: My Lords, does my noble friend agree that whenever it comes to an issue that needs to go into the national curriculum we always have our own hobby horse, and then another great cohort of us tells us that the curriculum is too crowded? Will my noble friend make sure, if we are going to take this on, that it is integrated into maths lessons?

Lord Nash: It will be covered in terms of some financial fluency in maths lessons but I think it is going to be more integrated into citizenship.

Lord Geddes: My Lords—

Lord Davies of Oldham: My Lords—

Noble Lords: Order!

Lord Davies of Oldham: The Liberals are part of the coalition. I agree with the noble Lord, Lord Flight. This is not just a question of mathematics but of knowledge. It is quite clear that a very high percentage of adults who invest their hard-earned money in all sorts of organisations have no idea of the costs that have been taken from them by the people controlling the fund. The evidence is clear that a very large percentage of our population are quite ignorant of such costs. That is why we need financial education.

Lord Nash: I agree entirely with the noble Lord and that is why we are enacting these proposals.

Lord Geddes: Does my noble friend agree that this is vitally important for those embarking for the first time on tertiary education—particularly the requirement to budget their expenses?

Lord Nash: I agree entirely with my noble friend. Schools should provide these pupils in particular with all the information that they need, including budgeting, student loans, bursaries and any other products available.

Lord Phillips of Sudbury: My Lords, I declare an interest as president of the Citizenship Foundation. With his very welcome news when he first answered this Question, does it mean that citizenship is now going to remain part of the core curriculum?

Lord Nash: There will be a Statement on this later. It remains part of the core curriculum but it is not a mandatory GCSE.

Lord Elton: Following the question of the noble Lord, Lord Tomlinson, does my noble friend agree that if eventually all the electorate were to realise that you cannot throughout your life spend more than you

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get, they would be more accepting of Budgets that would reduce the deficit and get this country back to where it should be?

Lord Nash: I agree entirely with my noble friend.

Energy: Nuclear New Build Programme


11.29 am

Asked By Lord Foulkes of Cumnock

To ask Her Majesty’s Government what action they are taking following the announcement of the withdrawal of Centrica from the nuclear new build programme.

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma): My Lords, the Government are determined to make the UK a leading destination for investment in new nuclear, which will play a key role in our future energy mix. The decision by Centrica reflects the company’s investment priorities and is not a reflection on UK government policy. New nuclear in the UK is a highly attractive proposition, as the recent purchase of Horizon Nuclear Power by Hitachi clearly shows. With the reforms that we are introducing in the Energy Bill, we are confident that we will see investment move forward. In the last quarter alone, alongside the successful sale of Horizon we had the granting of the first nuclear site licence in 25 years at Hinkley Point.

Lord Foulkes of Cumnock: My Lords, will the Minister confirm that Centrica is in fact the third firm to withdraw from the new nuclear build programme and that it cited as the reason uncertainty because the Government have not yet set the financial framework for new nuclear build? The Minister again today, like earlier in the week, sounds rather complacent on this. Can she give the House a clear indication of when the Government will make the decisions that will end this uncertainty?

Baroness Verma: My Lords, if we are talking about complacency, I would remind the noble Lord that his party was in Government for 13 years and failed to look at long-term investment in the energy sector. This Government have taken that on board. I remind the noble Lord that the decision that Centrica took was, as with the other two companies he mentioned, a commercial prioritisation and nothing to do with UK policy. If the noble Lord will allow me, I will quote Sam Laidlaw, chief executive of Centrica. He said the decision was about the prioritisation of its commercial priorities.

Lord Jenkin of Roding: My Lords, I share the concerns about Centrica and discussed them at some length yesterday with EDF. I have a much more serious concern to raise with my noble friend. I am very worried about how the Cumbria county councillors were persuaded to vote against moving to the next

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stage of a nuclear waste consultation. I will quote from an e-mail that was inadvertently sent to a Copeland councillor, and obviously sent by an anti-nuclear campaigner. It contains a chilling message. It says that they need a campaign to tell the councillors of,

“the threat that they might be personally liable for irrational or reckless decisions, particularly ones which do not put care of their constituency at their heart”.

It goes on that,

“the point is, to scare the crap out of them personally when they go to vote”.

Is that any way to treat a serious government consultation? Why is it no one’s business to try to rebut these mischievous statements that have circulated around the county over the past three months?

Baroness Verma: I thank my noble friend for drawing my attention to that. I invite him to forward me the e-mail that he quoted so that my officials might look at it in closer detail. I know that passions were raised on both sides of the argument in Cumbria, but that is right and proper in a democratic process. However, my noble friend is right that a lot of scaremongering and misleading information was distributed out there. Unfortunately, when we go down the road of ensuring that this is a community-led, voluntary process, one of the by-products is that there will be misleading information. I will look very carefully at that and if it is something that I need to raise further and looks as if it is intimidation, I will take it as a matter perhaps for the police to look at.

Lord Campbell-Savours: My Lords, what is the status of that proposed project now that Cumbria has said no and yet the districts of Copeland and Allerdale have said yes? Where are we now in this whole discussion?

Baroness Verma: My Lords, the noble Lord raises an important point. I have taken the decision to reflect on why the process did not work as well as it should have done. I will be in communication with the councils again to see where we have learnt lessons and where we might have done a little better in our engagement with the broader public and local businesses. The process is the right one. It is a government policy and will remain one. I just need time to reflect on how to make the process better.

Lord Avebury: My Lords, reverting to the question of Centrica’s withdrawal, how does this affect the negotiations on the replacement contract at Hinkley Point? Is there any possibility of opening up competition on that site, considering that the contractor is said to be offering a strike price of £100 per megawatt hour for the electricity that will be produced, saddling future electricity consumers with a large additional burden?

Baroness Verma: My noble friend obviously has information on the strike price that I do not have because as yet no commitment on strike price has been made. We are still talking and we want to be able to reach a commercial term that is fair, affordable and value for money for all.

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Baroness Smith of Basildon: My Lords, my noble friend Lord Foulkes spoke of the need to encourage investment in new nuclear. Under current plans we are still below the level that the Government say we need. To get to that level, we do not need investment alone; we also need to ensure we have a highly skilled workforce in engineering, manufacturing and construction. What discussions have the Minister and her departmental colleagues had with the nuclear energy companies regarding apprenticeships and training to ensure that we have the highly skilled workforce we need?

Baroness Verma: The noble Baroness is absolutely right. We need to ensure that our supply line is fully equipped and that we have the right skills in place as we move forward with nuclear. We are mindful that we are working very closely with the appropriate skills sector groupings on skills and we are making progress. We will give a further, fuller answer once we have got a more detailed plan in place.

HGV Road User Levy Bill

HGV Road User Levy Bill

Second Reading (and remaining stages)

11.37 am

Moved by Earl Attlee

That the Bill be read a second time.

Earl Attlee: My Lords, HGVs play a crucial role in our economy by supplying businesses and servicing customers. Of course, HGVs are only one part of our national and international logistic system. We also have transport by sea, rail and air.

I am sure that the House will agree that we are well served by all those who work in transport and logistics. We should be particularly grateful for their sterling efforts during the recent bad weather, driving their vehicles and operating their equipment in horrendous conditions, often at night or during unsocial hours.

Approximately 1.5 million trips are made by foreign-registered HGVs into the UK each year; they contribute towards the well-being of our economy and are part of our logistic system. However there has been an inequality for some time in that UK hauliers are often charged when they travel abroad through tolls and other charging schemes whereas foreign hauliers are able to use the UK road network for no charge. This is a situation which the Government wish to address through this Bill.

The HGV Road User Levy Bill is a money Bill which comes to this House unamended from its introduction in the Commons on 23 October 2012. It will enable the introduction of a new levy for all heavy goods vehicles that weigh more than 12 tonnes and that are being kept on or are using the UK road network. This new levy is aimed at recognising the cost of the damage that HGVs do to our roads and ensuring that they make a contribution towards this.

The Department for Transport undertook consultation on this subject in early 2012. The results indicated that stakeholders, especially those in the logistics sector, support the planned changes.

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Subject to the legislation being passed, we plan to introduce the levy from April 2014, when it will apply to both UK and foreign-registered hauliers. The levy, which is being introduced alongside other measures including reductions in HGV vehicle excise duty, is set at a level that will mean that, overall, more than nine out of 10 vehicles in the UK fleet will pay no more than now, with almost all the rest facing a fairly small increase in charges of up to £79 per year. Introducing the levy for foreign vehicles and offsetting the charge for the vast majority of UK vehicles will help the competitiveness of UK businesses, while ensuring that we continue to enjoy the benefits of free trade with Europe.

I know that the noble Lord, Lord Berkeley, is interested in the subject of time versus distance-based charging. I do not want to pre-empt his speech and will address his concerns when I wind up.

As your Lordships will be aware, any form of road user charge is subject to the strict conditions set out in the Eurovignette directive. It specifies the maximum daily charge as being €11, likely to rise to €12 by 2014 to compensate for inflation, which will mean that it should equate with the £10 per day that we intend to charge the largest and heaviest foreign vehicles that use our roads.

To ensure that no additional administrative burden is placed on UK business by the introduction of the charge, UK hauliers will start to pay the levy in a single transaction with vehicle excise duty when it is renewed from April 2014, and will therefore be able to pay the charge either six-monthly or annually. For the annual rate, we have selected a fee of up to £1,000 for the heaviest vehicles as being a level where, subject to the restrictions already mentioned, the Chancellor will be able to offset the increase to UK hauliers through reductions in vehicle excise duty, which will be set out in the Finance Bill 2013,

For foreign operators, who do not pay VED, the levy will be payable through an online portal or over the telephone. Foreign operators will also have the option to select time periods varying between one day and one year, allowing them to pay the charge at the appropriate level for their trip.

As I said, in the case of the largest vehicles, the annual charge will be £1,000; for the smallest vehicles it will be proportionately less, at £85 for the year. However, most foreign vehicles that come into the UK are those in the heaviest two bands. For the largest, heaviest foreign vehicles, we consider the charge of £10 per day or £1,000 per year to be fair, proportionate and compliant with the relevant EU legislation. For the daily amount we are seeking to charge at the highest level permissible while remaining compliant with EU law.

I accept that for about 40 UK vehicles, the overall charge for hauliers will be much greater; it has proved to be impossible fully to offset the charges in those cases. However, I should make it clear that the increase is largely due to current VED rates being close to or below EU minimum levels, which restricts our ability to rebate fully to offset the charge, rather than the implementation of the charge itself.

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Operators facing increased charges have the option to down-plate their vehicle, a simple paper-based exercise costing £27, which will fully offset the increase, although they may be more restricted in the loads that they are able to carry or the distribution of the load on the vehicle.

We estimate that the revenues gained by having foreign hauliers pay a charge are likely to be between £18.7 million and £23.2 million annually. Although I appreciate that that is not an enormous sum in the grand scheme of things, and I am sure that noble Lords would like it to be much higher, the charges have been set at the highest possible allowed by the Eurovignette directive, while allowing other measures—principally reductions in vehicle excise duty—that should ensure that more than 9 out of 10 vehicles in the UK will pay no more than now.

The way the scheme has been structured will ensure a fairer deal for UK-registered HGV operators, who should not have to bear an additional financial burden as a result of the levy’s introduction. While the revenues raised through the charge and the fines levied for non-payment will be paid directly into the Consolidated Fund and will therefore not be spent directly on transport projects, I would like to reassure the House that the Department for Transport will ensure that sufficient funds are directed to allow VOSA—the Vehicle Operator and Services Agency— to deliver effective enforcement of the scheme.

The legislation before the House today is not designed as a precursor to increased charges on businesses, or on wider road users. This charge has a very clear focused objective. I beg to move.

11.45 am

Lord Berkeley: My Lords, I am grateful to the Minister for that helpful introduction. It has filled a few holes in my knowledge of the Bill and is a good opportunity to discuss the policy surrounding this.

My first question is: why is this a money Bill? It seems to introduce changes to policy and to methods of collecting charges for road vehicles which probably merit greater scrutiny in your Lordships’ House. Of course, we cannot do that for a money Bill, so perhaps the Minister can explain exactly why it is a money Bill.

In that context, the Minister will know—because I mentioned it in a speech on Monday in Committee on the Growth and Infrastructure Bill—that I think that it would be much better if the Government came up with a consistent policy for tolling, charging, or whatever we like to call it, for vehicles using the Dartford tunnel, the new tunnels, congestion charging in London and other cities, and possibly eventually on the M6 toll road as well, for a start. All of those are effectively distance-based, unlike this one which is basically time-based. I expect that this is meant to avoid any policy intention to widen it to other vehicles; and of course, on that basis, it has to comply with the Eurovignette directive. I believe that the Commission has started to look at a wider charging solution for roads across the EU which is probably designed, as much as anything, to try to reduce the congestion on the most congested parts. However, I would be very pleased to hear the Minister’s explanation for why this is a money Bill.

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The Minister explained that this was intended to increase the fairness between UK-registered and continental-registered vehicles, because when continental vehicles come here they do not pay the equivalent of a toll or VED, but when our vehicles go to the continent they have to pay tolls on some roads—most of which I think are distance-based. However, can he explain whether the locally registered trucks in any of the closer member states—on the roads which our own vehicles probably use the most—pay something equivalent to VED which visiting trucks from the UK and elsewhere would not pay? It would be a comfort to know that the balancing on which this Bill is based applies both ways. I am sure that there is an answer to that, but I do not know it.

In the case of non-UK heavy goods vehicles, Clause 4(2) places the liability for paying this levy on the holders of Community licences. I know that “Community licence” is defined in Clause 4(8), but can the Minister explain to the ordinary human being what that means? What is a Community licence? Is it one similar licence which every truck in the entire EU has, or does each member state have a different one? Whoever is going to enforce it will need to be familiar with 26 or so different types of licence if we are not careful. That will be quite difficult. I shall come back to that in a few minutes.

The Minister explained that UK-registered hauliers will be able to obtain their licences under this levy in the usual way, with the VED, on a 12-month or six-month basis. He said that a foreign haulier coming into Dover could buy a licence on the web or on the phone. Presumably there will be a kind of booth at Dover, or something, where you can pay for the licence at the time. If, as I believe, everybody will have to have a sticker with the licence on their windscreen, there is a question about how a haulier going backwards and forwards across Europe will manage to collect his post with the sticker in it. Or will there be a place where he can collect it every time he comes into the UK? Otherwise, it will be a bit of a mess, really.

This morning I got an interesting briefing from the Freight Transport Association, which raised the question of whether these stickers were necessary. That begs the question of how the Government intend for this new levy to be enforced. Window stickers are fine on cars, because traffic wardens go along and look at out-of-date licence stickers, and you then get a nasty message from the DVLA. However, traffic wardens are not going to be much use in enforcing this on trucks, because trucks do not usually park in the streets where traffic wardens operate, thank goodness.

Anyway, in Clause 10 we have a definition of who can stop a vehicle, and that person is called a “stopping officer”. I have never heard of a stopping officer before. Is it a police officer? Who is it? The definition says what his powers are, but how many of these stopping officers will we have in the country? If they are doing it already—which would be something I do not know about—in how many cases a year do they achieve this stopping? I am not convinced that there will be any enforcement at all of this new licence. If it is to be done by number-plate recognition, as the congestion charge is in London, can the Minister

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explain how that will work with 26 different number plates from 26 different member states plus a few from outside the EU? We get Turkish and other non-EU vehicles here as well. Is a system in place whereby all registered number plates from around Europe and beyond can be registered? And when they are indentified, what will happen to them?

I hope that the Minister can explain how this enforcement system will work. My suspicions are that it will hardly be done at all. UK vehicles will have to do it because they are paying with their VED, but who is going to do it for the foreign ones and where are they going to do it?

Finally, the Minister explained the revenue gain of £18.7 million to £23 million, which is probably worth having. It goes into the bottomless pit of the Treasury, but that is probably all right. Can he tell us the cost of administering this new scheme, both for UK-registered vehicles and foreign ones? In the debate on road-user charging I also said I believed that the cost of administering the road-user charging system in London—which is very good, and at the time it was introduced there was no better technology—is somewhere between 30% and 40% of the revenue gained. However, I think that the cost of some of the new electronic systems on the continent is about 5% of the revenue gained, which of course is much better. Therefore, what will be the cost of administering this scheme? Let us hope that it does not exceed the extra revenue expected.

With those few questions, I look forward to the Minister’s answers and to seeing this legislation implemented.

11.55 am

Lord Snape: My Lords, it is a pleasure to follow my noble friend Lord Berkeley on this topic. I well recall nearly 40 years ago when I was first elected to the other place and was told that the most effective political lobby in the United Kingdom was the farmers. I came to realise that in that conclusion they may well have been right. After all, I seem to remember that the farming lobby managed to blame the spread of foot and mouth some time ago basically on Ministers in the Labour Government rather than on their own practices.

Certainly, one lobby that runs the farming lobby very close in its effectiveness is the road haulage lobby. Most of us in your Lordships’ House are old enough to remember the immediate post-war period when heavy goods vehicles—I think this referred to those above seven tonnes, but it was a long time ago so I would not like to put my shirt on it—had to carry a 20 miles an hour plate and were restricted to that maximum speed. Given the number of heavy goods vehicles that appeared on our roads after World War 2—many of the drivers were demobbed from our Armed Forces—that issue was the first campaign that I remember the road hauliers lobby indulging in. It was very successful and it has indulged in many campaigns since, many of which have been successful.

Since the end of World War 2, we have seen heavy lorry weights increase dramatically. I think that the maximum now is 44 tonnes, although the Minister will correct me if I am wrong. It used to be about 12 tonnes,

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so the industry has done well there. The length of heavy goods vehicles also has increased fairly dramatically over that period. Each and every increase in weight and length has been accompanied by a cry from the road haulage industry that there would be fewer vehicles on the road because they are bigger, longer and heavier, and that once the motorways had been built they would not be much of a nuisance anyway.

This is not strictly speaking a matter for this debate, but I would be interested to know—perhaps the Minister will tell me, or write to me if he does not have the figures now—how many heavy goods vehicles above the 12 tonnes figure mentioned in the Bill are on our roads now compared to, say, a decade or two decades ago. Although it is not a matter for this Bill, it would be interesting to see not only how successful the road haulage lobby has been but how accurate it was in its predictions.

Another of the lobby’s major complaints was about the number of foreign lorries on our roads. Reverting back to my experience in the other place, I chaired for 15 years the West Midlands group of Labour MPs. It was one of my duties—whether it would be considered onerous or not I leave to noble Lords to work out for themselves—to attend meetings of the Sandwell chamber of commerce, which covered my former parliamentary constituency. The chamber of commerce may not have been dominated by the issue, but certainly a strong presence from the road haulage industry raised the same issue more and more often. It questioned the number of foreign heavy goods vehicles on British roads, and how they were filling up on cheap European derv and able to snatch the bread from the mouths of British hauliers by demanding not only the freedom to travel on our roads, which of course they had, but to take loads back to the continent, which rightly should have been the job of British hauliers.

I was a bit cynical and not inclined to believe that entirely, because every time I asked how many of these wicked foreign hauliers were behaving in this manner I did not get an answer. I found it difficult to believe, and I believe that I expressed the rather unpopular view at the chamber of commerce that I could not honestly believe that Mr Norbert Dentressangle, in his brightly covered lorries, was as guilty of undermining the British road haulage industry as the allegation made at the time suggested.

The Minister talks about 1.5 million trips, which I assume refers to round trips. Are we talking about 750,000 heavy goods vehicles that will be covered, at least in theory, by this measure? I should like to know just how many of these wicked foreign hauliers there are. They cannot use the excuse that they are driving around on cheap, continental derv anymore, because I understand it is just as expensive on the continent as it is in the United Kingdom these days.

The Minister went on to say that the maximum price we could charge foreign hauliers on a daily basis was €11. That will make a big dent in the deficit, whether or not the Prime Minister was accurate in his summing up of it. I cannot off the top of my head multiply 750,000 times €11, but while it is not an inconsiderable sum it will not make much of a dent in

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the road budget, let alone the deficit as a whole. Therefore, is this piece of legislation actually necessary, given the amount of money it is likely to raise?

The Minister did not use the phrase “a level playing field”, but he implied that this would balance the differences between British hauliers and their continental counterparts. However, €11 a day does not strike me as a particularly large penalty if one considers that for a heavy goods vehicle to travel 100 miles on a German autobahn, it would pay tolls of between €35 and €46. We throw open the whole road network of the United Kingdom for €11, but if you drive a heavy goods vehicle through Germany it costs €35 to €46.

As I indicated, the Minister said that this mighty measure before your Lordships today would raise the sum of £19 million to £23 million. He might recollect that a few days ago we had a debate about toll roads, and I pointed out that there was a toll road in the West Midlands that was not used much by heavy goods vehicles. I have noticed that Eddie Stobart vehicles do use it, but by and large those are the only heavy lorries that I have ever seen on the toll road. The heavy goods vehicle industry generally uses the M6 motorway, which passes through my former constituency on an elevated section. During my 27 years as the Member of Parliament for West Bromwich East, I calculated that the taxpayer had spent something like £800 million repairing just that one section of the M6 because of the damage done to it largely by heavy goods vehicles. On the department’s own figures, the heaviest heavy goods vehicles do as much damage to Britain’s road network as 30,000 private cars. This great sum of £19 million to £23 million, therefore, might repair one archway of the Ray Hall viaduct in the West Midlands, but it will not make much of a dent in the overall road budget.

I therefore have to say to the Minister, as the wartime sign said, “Is your journey really necessary?” as far as this piece of legislation is concerned. We heard from him that continental hauliers can pay on a day-to-day basis—not something that is open to British hauliers, who pay through VED on an annual basis—so why give them this particular benefit, which will be not shared by their British counterparts? I do not know whether, again, this is a matter for Europe, but why not insist that lorries used in the United Kingdom pay on an annual basis? Then they could come and go as they wished. Why allow them to pay on a one-day, two-day or weekly basis: a privilege denied to their British counterparts? Perhaps the Minister could explain.

Of course the penalties for non co-operation, under this legislation, can only be described as pathetic as well. Is a maximum fine of £200 really going to deter a heavy goods vehicle driver with, perhaps, £30,000 worth of valuable cargo? It is surely not serious that we impose a penalty that is so palpably inadequate. The Minister and the Government ought to look again. Even that penalty is based, as I understand it, on a vehicle limit and the number of axles. Who in this country of ours would be able to tell the vehicle limit or count the number of axles?

That leads me to the point raised by my noble friend Lord Berkeley about enforcement. Is the Minister seriously going to tell your Lordships’ House that there will be proper and adequate enforcement of this

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legislation? If he is, I do not believe him. Let me refer him to one of this morning’s newspapers. I am sure that the

Daily Mail

is the Minister’s favourite newspaper. From its optimistic front page to its unbiased sketch writing, I always think of it as a newspaper of value and repute. Today there is a story in the

Daily Mail

which I cut out as, reading it on the train, I thought: “The Minister will be interested in this one”. It is headed: “Toll of illegal foreign cars on UK roads”. I appreciate that it is not about foreign lorries, but I will come to those in a moment. The story says that:

“Only four out of an estimated 15,000 foreign cars driving illegally on British roads were caught last year. And not one of their drivers was prosecuted”,

the Department for Transport said yesterday. Given that record, it does not inspire me with confidence that our jails will be full of non fine-paying continental lorry drivers. What can the Minister tell us about the likelihood of enforcement under this legislation?

About 15 years ago, the then traffic commissioner for the West Midlands, Mr John Mervyn Pugh, invited me to join him on what he described hopefully as a purge of overloaded vehicles on the M6 motorway, particularly foreign ones. My noble friend asked about an enforcement officer. I presume that that enforcement officer must be from the police, because we were accompanied by three or four police cars. Between Birmingham and Stafford, the police directed heavy goods vehicles off the motorway so that they could be checked.

Lord Berkeley: Clause 10 refers not to an enforcement officer but to a “stopping officer”. Perhaps my noble friend would like to comment on that.

Lord Snape: Whether stopping or enforcing, my only response is that I guess he would have to be in police uniform. Perhaps I might take your Lordships back 15 years to the enforcement on the M6. I still have the paperwork, which I kept. Out of 14 vehicles that were stopped, only three of which were foreign, six were overloaded. In two of them, the driver had exceeded the permitted number of hours. A couple were borderline, while one was taken off the road immediately because of its lack of roadworthiness. Only 14 vehicles were stopped because, within about 40 minutes, there were no heavy goods vehicles heading north on the M6. This is before the days of mobile phones; it was presumably in the days of CB radio, or whatever it was called.

The problems in enforcing legislation such as this are enormous. The fact is that we do not enforce the existing heavy goods vehicles regulations at the moment. How can we, when the traffic commissioner’s total staff 15 years ago was four to cover the whole of the West Midlands and Wales? Given the Government’s clampdown on the Civil Service, I do not suppose that there are 44 of them these days. I suspect that if those four positions are still in situ, that is about it. Are these the people who are going to enforce this particular legislation? I honestly very much doubt that.

The Minister says that there will be a reduction in vehicle excise duty for UK-based hauliers. I have to ask why. I have a copy here of the report of the Armitage inquiry, Lorries, People and the Environment,

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from December 1980. Your Lordships will be relieved to know that I have no intention of reading that fairly bulky document, but as I would summarise it it pointed out that the number of heavy goods vehicles on Britain’s roads in those days was possibly more than the road network could cope with. If we have moved on from 1980 to 2013, I repeat the question: how many heavy goods vehicles are there on our roads these days, compared with then?

I hope the Minister does not think that I have been too rude about this legislation but it is palpably inadequate and will not be enforced. I do not think that unenforceable legislation—given the present lack of enforcement, that is the only way this can be described—is at all sensible. It is not actually necessary because, despite the propaganda from the British road haulage industry, I do not see this as the great problem that it outlines. If it is, let the continentals pay exactly the same price as British hauliers pay to drive across Europe. If a Bill is necessary, I am afraid that this is not it.

12.09 pm

Lord Wigley: My Lords, I will intervene very briefly and take up the last point emphasised by the noble Lord, Lord Snape, that there should be a level playing field and the same system of charges should apply. I do not object to the approach that the Government are undertaking, although the amount of money to be collected is miniscule in the context of the needs and indeed, I suspect, the damage that is inflicted on roads and the cost of adapting roads to handle the ever larger vehicles that seem to be coming over.

The point that I want to put to the Minister—he may or may not be in a position to reply—is that of course the highway system is devolved. We in Wales have a very substantial cost arising from the two main east-west roads, the M4 in the south and the A55 in the north, which carry a very large volume of traffic to and from the Irish Republic via Holyhead and the ports of Pembrokeshire. This means that a disproportionate cost lands on the budget of the National Assembly, and that is over and above the cost of adapting the small roads, bridges and all the rest to be able to deal with some of the very large vehicles coming from the continent.

Is the money just going into the Treasury as another source of funding that is not in any way related to expenditure on roads? If it is meant in some way to meet the additional costs arising from such transport, what mechanism is there to allow even a small proportion of this to go through to the budget of the National Assembly? On a 5% basis we would expect about £1 million, which is hardly going to fill the potholes that are caused by these vehicles. As a matter of principle, this is something that should be taken on board. Certainly, if this is a first step, I hope that there will be further steps to genuinely provide a level playing field.

12.12 pm

Lord Davies of Oldham: My Lords, Her Majesty’s Opposition welcome the Bill, and regard a great deal of it as eminently workable. It will improve the situation and remedy a grievance that we have recognised for

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many years, as far as our road haulage industry is concerned. That does not mean that we do not have some criticisms of the Bill. I had a few carefully listed, but half of them have been made by my noble friend Lord Berkeley in his excellent speech, and the other half by the noble Lord, Lord Snape, in his similarly excellent contribution.

There was just one point that the noble Lords did not talk about, which was to do with a strategy for roads that might involve road charging. There is a provision in the Bill which clearly anticipates that the devolved Administrations must have some opportunity if they wish to do this, and the noble Lord, Lord Wigley, of course has presented the Minister with that question.

My speech is therefore greatly reduced, because on the whole I am very much in favour of the Bill and somewhat less pessimistic than my noble friend Lord Snape about the issue of enforcement. I am sure that the Minister is going to establish that technology has moved on with concepts like automatic number plate recognition, which allows vehicles to be identified with great readiness and pulled over and stopped effectively by VOSA, which of course is responsible for implementing this part of the administration.

Lord Snape: I apologise for interrupting my noble friend. There is a question that I should have put to the Minister, but perhaps he could do so equally well. Supposing a lorry driver is stopped for not having a proper piece of paper saying that he has paid £200. What happens then? Is he to be detained at the port of exit? Are we going to reinvoke the European arrest warrant if he heads home? Perhaps my noble friend could question the Minister about that.

Lord Davies of Oldham: My Lords, the driver is responsible for the vehicle and its legitimacy, so he will be stopped all right, and the vehicle will not be released until the necessary charge has been paid. I doubt if the driver will have £5,000—which is the maximum fine—in his back pocket, so the charge will go to his office in the country from which he has come, and that office will have to pay. I agree entirely that it is hard luck on the driver, if that is the sentiment my noble friend is putting forward—but the people who own the lorry have to comply with the law, and I understand that it will be enforced. We would all expect it to be enforced and modern technology will ensure that it is.

I have had sympathy with the road haulage industry and with British motorists for a very long period—from the first time I went to France and found that French autoroutes could charge heavily while we provided free roads for any French motorists who deigned to come to Britain. That always seemed a little unfair. The situation for road haulage is much more serious. After all, the industry shifts 68% of our goods and employs 220,000 workers. Many of them are skilled, because driving in modern conditions on all roads, both European and British, requires skill and concentration. We should recognise the importance of the industry. The issue became more acute when, as the House will recall, additional fuel tanks were placed

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on heavy vehicles so that not only did they not pay for the roads but they did not buy any fuel in Britain, because continental fuel was cheaper. The sense of obvious unfairness—the feeling that something needs to be done—has been with us for some time.

We will take advantage of the Eurovignette to make progress on this. When some critics of the European Community say that nothing good comes out of Europe, I commend the concept of the vignette—what a wonderful, attractive word to describe a piece of necessary legislation, particularly as it is derived from its original meaning of a small illustration with no defined borders. That looks entirely appropriate for the European directive on which this legislation is based. It will bring considerable benefits, but I expect the Minister to respond to the points made by my noble friends and the noble Lord, Lord Wigley. I am certain that he will make every effort to emphasise the necessary compliance procedures for these requirements, because the idea that people would flout these charges and get away with it after we have put the legislation in place would appal us all.

One issue that the Road Haulage Association always complains about, which did not come up, is cabotage—the deployment of these lorries to be used for transfers of goods within the country, at the comparative advantage indicated by lower fuel costs. This Bill does nothing significant about that. Perhaps the Minister will comment on it.

I am also most interested in the revenues that will be derived from the successful implementation of this measure. Both my noble friends emphasised the fact that these lorries cost a great deal in terms of the maintenance of our roads. I am sure that all noble Lords have travelled on our motorways and have noticed that on many roads the middle and outside lanes have reasonably good surfaces while there are almost two trenches on the inside lane where the heavy goods vehicles progress. Of course, the majority of those are British trucks, but it shows the cost to the roads system that heavy goods vehicles incur—in particular because Europe has been very much to the fore in increasing the size and weight of lorries over the years. My noble friend Lord Snape indicated that the 44-tonner was, after all, brought in on the basis of European initiatives.

What is going to happen to this revenue? The noble Lord, Lord Berkeley, had his worries about where it was going and asked why this was a money Bill. It is a money Bill because the enforcement of the charges is a form of taxation. This money is not hypothecated to anything to do with road usage or necessity, but goes happily into the Consolidated Fund. We all know what the Consolidated Fund means in terms of priorities. What it certainly means is that we can guarantee that none of this revenue relates to road expenditure. My noble friends emphasised the costs to the road system.

There is another dimension that I want to bring up: road safety. The Road Safety Foundation has made it quite emphatically clear that the actual design of roads, which costs money to do well, is an important contribution to road safety. One particular group of road users who have been vulnerable to lorries in recent years are cyclists. The difference between the road structure in Amsterdam and the road structure in

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London is so evidently a crucial reason why Amsterdam cyclists feel safe and London cyclists often ride in terror—with just cause. We have had a number of serious accidents and fatalities where cyclists have been hit by lorry drivers who had no idea the cyclist was present.

Safety issues can be improved now because there is the possibility of fitting out lorries with sensors and mirrors that eliminate blind spots, but they cost money. We would need some enforcement. At present, the price of doing nothing is a risk to cyclists in all our cities and the price is becoming greater each year.

I cannot hope to direct the proceeds of this Bill towards safety because, as I say, there is no chance of hypothecation. However, I hope that the Minister will recognise that that which assists the development of road haulage and, in one respect, brings some sense of fairness between the British road haulage system and continental trucks coming into Britain should also be attended by some concern about road safety.

The Minister has quite a lot on his plate to answer, in the challenges that have been presented in the speeches from the Back Benches. I merely endorse the questions that have been asked, because they are exceedingly pertinent. I hope that the Minister’s answer is sufficiently strong for the Opposition to remain confident that this measure is an advantageous one for the country.

12.25 pm

Earl Attlee: My Lords, as I stated in my opening speech, this legislation will help to deliver a fairer deal for UK hauliers and go some way to correcting an inequality which has existed for too long. For this reason, I believe the Bill should be welcomed. Turning to the aims of the Bill, we consider our plan to charge £10 per day, or £1,000 per year, for the largest vehicles, to be fair, proportionate and compliant with the relevant EU legislation. One of the challenges in dealing with this problem is that anything we do must be compliant with EU legislation. We must treat UK and foreign hauliers in the same way.

The noble Lord, Lord Snape, asked about the implementation costs. The total set-up costs are estimated at between £3 million and £6.7 million, which will be spread over the years before the scheme goes live for foreign hauliers. Thereafter, we estimate the annual cost to be £3 million to £4.8 million. These estimates are at a relatively early stage and will be developed further.

The noble Lord, Lord Berkeley, asked whether there will be a vignette and whether there will be booths at Dover. There will be no vignette sticker, or booths at Dover or at any other port. The levy will be paid for by a website or telephone transaction, which will feed into a database that will be available publicly and to VOSA officials. Enforcement of the levy will be carried out primarily by VOSA officers, on a targeted basis, using the payment database to show which vehicles are in the country and which have—or have not—paid, alongside VOSA’s normal stopping process for enforcement.

Foreign heavy vehicles mainly travel on a strategic road network and therefore ordinary traffic wardens

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do not have a role in this. If they detect a vehicle without a vignette by chance, they can do something about it but, being realistic, a traffic warden will not be dealing with this problem. Using ANPR technology at both fixed and mobile sites, VOSA will be able to identify and stop vehicles that have not paid and hold them until a penalty deposit of £200 is paid. That is a penalty deposit and not an on-the-spot fine.

Lord Higgins: If the website shows that a particular vehicle has not paid the levy, will it be charged before it leaves this country, on the way out?

Earl Attlee: My Lords, if VOSA detects that a vehicle has not paid the levy, I suspect the vehicle will not be going very far—perhaps to the next service station—until it has paid it, which can be done electronically.

Lord Snape: The minimum penalty is £200. Is the driver supposed to pay that on the spot? If he does not have any British cash or that amount of money, under what powers will the vehicle be detained and where?

Earl Attlee: My Lords, that will be done under the powers that were wisely introduced by the previous Administration, who also set the level. I agree that it is at quite a low level and made that very point from the Opposition Benches—I cannot remember whether it was the Front Benches or the Back Benches—at the time we introduced the necessary powers. The key thing is that we will be able to stop the vehicle. That is extremely inconvenient to the operator, and I will have more to say on that point.

The noble Lord, Lord Berkeley, asked me what a stopping officer is. Stopping officers already exist. They are appointed under the powers in the Road Traffic Act 1988, as amended, and are able to stop vehicles in relation to enforcement of vehicle roadworthiness and driver’s hours. Stopping officers are VOSA enforcement officers.

Lord Berkeley: I have a question before the Minister leaves that subject. There is presumably a database with every vehicle’s number plate on it. Are stopping officers lurking in every motorway service station or do they pick these things up from cameras above motorways? How are they going to find these lorries that have not paid even before they direct them into somewhere safe to deal with them? If I was a foreign lorry driver and did not want to pay, I would keep off trunk roads and go on the side roads, like many people do in France if they do not want to pay the motorway tolls.

Earl Attlee: My Lords, I plan to address most of the points made by the noble Lord later on. To answer his point about leaving the strategic road network and going on to minor roads: an operator would have difficulties with that because the vehicle would be much less productive, while he would be trying to avoid only a £10 per day charge. I suggest that the extra cost of lowering your average speed by using local roads would simply not be worth it. For cases that go to court, the offence is a level 5, which can incur a fine of up to £5,000.

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However, the real deterrent for operators is the inconvenience of being stopped, as well as another inconvenience that I will come to in a moment. VOSA already carries out risk-based stops for a number of different offences, including weight, vehicle defects, and driver hours, among others, and the levy enforcement will simply be added to this regime. I also suggest that when VOSA detects a vehicle that has not paid the levy, that is exactly the same as if the driver had put a big sign on the lorry which says “Stop me, because I’m a problem vehicle”.

I am aware that the British Vehicle Rental and Leasing Association has identified an area for a small potential cost burden to operators, which has been introduced due to the way that the levy is rebated, when compared to how VED is currently and will continue to be rebated. It may be helpful for me to say a few words on this. Currently when a vehicle is delicensed—typically, when it is sold—the previous owner can claim back the outstanding whole months of VED, with the rebate calculation done in twelfths. From the introduction of the levy in April 2014, UK operators will still be able to reclaim VED on the same basis, but the levy can be reclaimed only in tenths. To comply with EU law, and to maximise revenue from monthly charges, the annual rate is set at 10 times the monthly rate. This means that in effect it is discounted when compared with the costs of 12 monthly levy charges.

The decision to offer rebates on the basis of tenths is to prevent foreign hauliers paying for a year, using the vehicle for a month or less on the UK’s roads, and then reclaiming 11 months. The value of the loss incurred by the operator is entirely dependent on when the rebate is claimed.

The legislation before the House is not designed as a precursor to increased charges on businesses or on road users in general. This charge has a very clear, focused objective, and its introduction is entirely separate from the reviews on future road policy which the Department for Transport is currently undertaking.

I will now deal with a few other points. The noble Lord, Lord Berkeley, asked why it is a money Bill, and the noble Lord, Lord Davies of Oldham, very kindly helped me. The Bill only concerns money, and is certified as such by the Speaker of the House of Commons; it is not a matter for the Government.

On the wider points made by the noble Lord, Lord Berkeley, on the methods of tolling, following our debate during the passage of the Growth and Infrastructure Bill I offered a meeting at ministerial level with the noble Lord; I hope that that meeting, which is in hand, will be with me. I have mentioned detection. I was asked about VED in other countries. All EU countries have VED for HGVs, or a local equivalent circulation tax. VED or equivalent is required in the Eurovignette directive, and minimum rates are set. Our new VED rates comply with the minimum rate.

The noble Lord, Lord Berkeley, raised a very important point about whether we should implement a levy on a distance or a time basis. I will say a few words about this important point. The HGV levy is a time-based

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charge which is both simple and inexpensive to operate. It allows more than nine out of 10 UK operators to be fully compensated through VED reductions. A distance-based scheme has been considered and has some benefits, in that hauliers who use the road network the most would pay the most. That seems, at face value, to be inherently fair. However, in reality it would cost hauliers more and it would not be possible to introduce offsetting measures for UK hauliers, which would mean that they would pay more than they do now. In many cases foreign hauliers would pay less than they would under a time-based scheme.

The introduction of a distance-based scheme has also been discounted as it would be very complex and costly to operate, and would potentially involve the use of a mechanism such as a fuel duty rebate, which is illegal under European law. This has already been tested in Germany. We also believe that the revenues gained from foreign hauliers would not cover the costs of operating this scheme. The Department for Transport looked at options for distance-based charging in 2010 and concluded that in order to fund it the scheme would have to be structured to be revenue-raising, and would therefore have a negative impact on UK hauliers, who would pay most of the charges.

Another difficulty is how to capture the distance-based data. That could be done with a tachograph, but the problem is that the tachograph and the records would have to be inspected by enforcement officers. In addition, the tachograph is in essence a safety device to ensure that drivers do not drive for too long. If we insert an economic effect into it, we would increase the chances that the drivers or the operator would interfere with the operation of the tachograph.

Lord Berkeley: I am grateful to the noble Lord. I will not go back over tolling, as we will have a meeting on that, and I am grateful to him. This is a tit-for-tat issue. He very kindly said that other member states also have a VED for domestic-registered trucks; for example, in France. Is there not a risk that those member states might play tit-for-tat and say, “Well, British hauliers going into France will be able to use the roads, with or without the tollings, but they won’t have paid the VED in France, so they’re getting an advantage”? Are we not in danger of getting a tit-for-tat situation across member states?

Earl Attlee: My Lords, the situation is, as I said in my opening remarks, that our operators often have to pay motorway tolls that no one pays in the UK, and because of the Eurovignette directive, whatever a foreign country did in terms of a vignette they would be limited to the prevailing limits of what you can charge. It could not, therefore, cost our operators more than €11 a day. At the moment our operators pay tolls to use the European road infrastructure.

The chosen time-based scheme, coupled with reductions to VED, is a simple, effective and targeted way of ensuring that UK hauliers pay no more than they do now. VED cuts are a time-based method of offsetting the charge, which means that they fit well with a time-based system. In addition, we need to remember that, in terms of administration, this scheme will have a negligible burden on UK operators.

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I always enjoy listening to the noble Lord, Lord Snape. He asked many questions, and I will answer as many as I can. I have probably answered quite a few already, and of course, I will write to him on some of them. He asked me what type of penalties there will be. As I believe I have said, drivers will be charged £200 at the roadside. Fines can be enforced electronically, and they can be invited to pay by credit or debit cards. The noble Lord, Lord Davies, made the point that with modern systems of doing business it is easy to collect the charges.

The noble Lord, Lord Snape, also asked if, under the directive we have to offer periods that are appropriate for the trip being made. If we offer only six-month or annual levies to foreign drivers we will contravene the European directive. He asked about the number of foreign vehicles and I can tell him that 3.6% of miles driven by HGVs in the UK are by foreign vehicles. For HGVs of 12 tonnes and over, the percentage is higher. The noble Lord, Lord Wigley, asked about revenue in VED. All levies or fines go into the Consolidated Fund, as we discussed. There are no plans for hypothecation, as the noble Lord suggests, but we will ensure that VOSA, as the primary enforcement agency, will have sufficient resources to enforce the scheme.

I am grateful for the helpful interventions from the noble Lord, Lord Davies, and for his support for the Bill. He asked me about cabotage. The Bill does not change the rules on cabotage but it does do a little to level the economic playing field. It is a difficult problem to deal with. I am delighted that the Bill has been so positively received. It has been long called for by industry and others from across the political spectrum, and I am delighted to be taking it through the House.

Lord Snape: Before the Minister delights or otherwise in taking it through the House, can he just answer the specific question that I put to him? How many vehicles are we talking about? I know that there are 1.5 million journeys and 3% or 4%, or whatever, of total vehicle miles, but how many heavy goods vehicles will be covered by this legislation?

Earl Attlee: My Lords, I cannot immediately answer that at the Dispatch Box. What really matters is how many vehicles are coming in; how many journeys are made. In my opening remarks, I said that there were 1.5 million journeys.

Bill read a second time, Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

Accountability of Civil Servants: Constitution Committee Report

The accountability of civil servants

Motion to Take Note

12.43 pm

Moved By Baroness Jay of Paddington

That this House takes note of the Report of the Constitution Committee on The Accountability of Civil Servants (6th Report, HL Paper 61).

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Baroness Jay of Paddington: My Lords, I welcome the opportunity to open this debate on behalf of your Lordships’ Constitution Committee. I am glad that we are able to debate our report reasonably soon after its publication as this is undoubtedly a fast-moving area. Since our report was published last autumn, the fallout from the cancellation of the west coast main line contract has continued. The Government have begun implementing some of the proposals of The Civil Service Reform Plan which was published in June last year, and other proposals remain the subject of considerable debate—often played out through briefings to the newspapers, which have usually given a rather negative view of the Civil Service.

The committee conducted its inquiry over several months last year and I am very grateful to the large number of distinguished witnesses, some of whom I am pleased to say are speaking this afternoon, who gave written and oral evidence. As always, the Committee was extremely well served by its official staff and by its legal advisers, Professor Richard Rawlings and Professor Adam Tomkins, who acted as special advisers for this inquiry. I thank them and other members of the committee for their hard work on this report.

As I said, the report was published in the autumn, in mid November, and I am very disappointed that only yesterday evening I received the Government’s formal response. Your Lordships will know that it is established practice that the Government respond to reports of this kind within two months of publication. In this case, that would have been by 20 January. I regard it as discourteous both to the committee and to the House that we have heard so very late from the Cabinet Office. This must mean that the committee has obviously been unable to consider the Government’s response and it is therefore impossible for me to respond to the Government’s reply, particularly on some of the points on which the committee and the Government seem to disagree. I look forward to the Minister giving us an extensive explanation of the Government’s position when he replies to the debate.

Coming to the substance of our report I should first make clear that this was not a general inquiry into the present state of the Civil Service. Our focus was specifically on accountability. We wanted to examine how well civil servants who play very significant permanent roles in our system of government are held to account. The increase in the size, functions and complexity of the state makes it important, of course, that all those who carry out responsible work on behalf of the public are properly accountable. One of the developing ways in which civil servants are held directly to account is through parliamentary Select Committees in both Houses, perhaps most prominently by the House of Commons Public Accounts Committee which, as the House will be aware, has been recently involved in controversial dealings with senior officials.

The Constitution Committee started from the simple but indispensable point of principle: Ministers are responsible to Parliament for all of their department’s business. This means that, in addition to being responsible for the policies they devise, Ministers are also responsible for the actions and inactions of their civil servants,

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and for the administration of their departments. Accountability must extend to cover those arm’s-length bodies which report to a department and the committee is also clear that Ministers are personally responsible for their political special advisers, including ensuring that those advisers follow their own code of conduct. In our report, the committee concludes that this overall responsibility must be essential if Parliament is to be able properly to hold the Government to account. Your Lordships may remember that the Constitution Committee affirmed this principle very strongly during the passage of Health and Social Care Act during the previous Session. It insisted that the Secretary of State for Health must remain fully responsible for the health service, regardless of the changes that were proposed in the Bill. Section 1 of the Bill was amended in your Lordships’ House so that that the principle is now in statute.

The corollary of ministerial responsibility to Parliament is that civil servants must be fully accountable to Ministers. It is in this area that there has been much recent debate. Relations between the Civil Service and Ministers are said to be at an all-time low. The Prime Minister has referred to “bureaucrats in government departments” as the “enemies of enterprise”. The Minister for the Cabinet Office, Francis Maude MP, has said that civil servants need to focus more on Ministers’ priorities. Blame for errors in handling the west coast main line bidding process was pinned firmly on civil servants in the Department for Transport, resulting in three of them being suspended. Recently, one former Minister, Mr Nick Herbert, said that he had been better supported in opposition than by the Civil Service in government.

It is perhaps not surprising, therefore, that The Civil ServiceReform Plan contains proposals to alter the relationship between civil servants and Ministers. One of its aims is to improve civil servants’ accountability. Perhaps the most high profile of these proposals is to give Ministers a greater role in the appointment of their departmental Permanent Secretaries. As noble Lords will be aware, particularly those who have themselves been Ministers, Ministers are already closely involved in the process as they agree the job description and the composition of the selection panel; they can meet the shortlisted candidates and then provide their views on the candidates and the selection panel. The Prime Minister retains a power of veto over the candidate proposed by the Civil Service Commission—a veto that he apparently and reportedly exercised late last year in respect of the nominated candidate for Permanent Secretary of the Department of Energy and Climate Change. However, what Ministers do not do—and have not done up to now—is decide from a list of names put forward by a selection panel who should hold the top job.

The Civil Service reform plan indicated the Government’s broad intention to strengthen Ministers’ roles in the recruitment process for Permanent Secretaries. It did not specify how, but said that the Government would consult with the Civil Service Commission. However, since then, both the Prime Minister and the Minister for the Cabinet Office, Mr Maude, have made it clear that they prefer Ministers to be given the

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power to select from a shortlist of names when recruiting a new Permanent Secretary. Mr Maude has indeed indicated that he has not ruled out legislating to achieve this. The Government argue that such a change is important for ensuring that the Civil Service is working to the Government’s priorities. If Ministers are fully accountable for all the actions and omissions of their civil servants, the argument goes, Ministers should be given the choice over the principal civil servants who carry out their decisions. Interestingly, in evidence to us, the Government’s proposal was also supported by, among others, the right honourable David Blunkett MP, a senior Cabinet Minister in the previous Labour Government.

On the other hand, others who gave evidence to us, including the Civil Service Commission, objected to giving Ministers the final say over the choice of Permanent Secretaries. They argue that it will lead to Permanent Secretaries being seen as the creatures of Ministers and will undermine Civil Service impartiality and the principle of appointment on merit. The temptations of cronyism and favouritism might, it was thought, prove too great for some Ministers. Others questioned what will happen in departments where Ministers are moved frequently. Will each change of Secretary of State result in a new Permanent Secretary? If so, the word “permanent” in the job title rings somewhat hollow.

The committee heard evidence suggesting that the position may not be as stark and as black and white as is sometimes suggested. We heard, for example, from the former Labour Home Secretary, Charles Clarke, that when a relationship between a Secretary of State and a Permanent Secretary breaks down the official may just be quietly moved on. Another Conservative ex-Cabinet member, the noble Lord, Lord Fowler, said that Ministers are often already given a strong informal say in the appointment process, including expressing a preference.

One thing we should remember is that it was only three years ago that Parliament passed the Constitutional Reform and Governance Act which enshrines in law the attributes of the Civil Service—integrity, honesty, objectivity and impartiality. The principle of appointment on merit clearly flows from these attributes. However, the Constitution Committee concluded that however the Government wish to modify the existing process for appointing Permanent Secretaries, they must continue to conform fully with those constitutional principles. We thought it would be odd if, having waited 160 years for the Northcote-Trevelyan principles and proposals to be put into statute, they were discarded so quickly.

We concluded that the same principles ought to apply to the Government’s proposal for so-called direct appointments. The Civil Service reform plan proposes that where a department lacks a particular expertise, a Minister should be able to make direct appointments into specific, fixed-term posts. On this occasion we heard concerns that such appointments might be used to create a new class of special advisers. We concluded that Ministers should be limited to requesting the category of expertise that they require. Permanent Secretaries should continue to make the individual appointments subject to the approval of the Civil Service Commission.

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One member of the Constitution Committee, the noble Lord, Lord Powell of Bayswater, who of course has had a long and distinguished career in Whitehall, has expressed this succinctly. Unfortunately, he is unable to speak today. He has said that bringing in expertise from outside for specific jobs or to carry through new initiatives is eminently desirable—Ministers are fully entitled to ask for that. He believes, however, that they should ask for expertise—for example, “Go out and get me a really good tax specialist”—and that they should not ask for individuals whom they just happen to know. Least of all, he believes, we do not need a new breed of callow special advisers—seasoned experts are required for these sorts of jobs.

None the less, in the area of long-term project management, the Constitution Committee was concerned about the Civil Service’s record of delivery. The list of big government projects which have overrun and cost vastly more than was budgeted is depressing. It is not easy to identify solutions to these difficulties; one common problem seems to be the high turnover of officials working on such projects. High staff turnover is a widespread criticism of the modern Civil Service. We recommend that there should be a presumption that a single, senior civil servant will lead major projects from start to finish. This should improve the ability to hold the Executive, and specifically one official in the Executive, a civil servant, to account for such projects.

The Constitution Committee also examined not merely the accountability of civil servants to Ministers but also the direct accountability of civil servants to Parliament. As the House knows, it is now commonplace for civil servants to appear before Select Committees, sometimes alongside Ministers and sometimes on their own. Such direct accountability is undoubtedly welcome. Select Committees benefit considerably from being able to hear civil servants in this way. Constitutionally and importantly, however, the appearance of civil servants before Select Committees is a supplement to Ministers’ responsibility to Parliament, not a replacement for it. Only Ministers can participate fully in the proceedings of Parliament—answering Parliamentary Questions and responding to debates. For this reason Parliament cannot hold a civil servant properly to account in the place of a Minister.

The Cabinet Office has developed guidance for civil servants who give evidence to Select Committees. The guidance is widely known as the Osmotherly rules—called after Sir Edward Osmotherly the marvellously Trollopeanly named official who originally devised them. The rules offer guidance on what civil servants should and should not say to committees and when it is appropriate for a Minister to appear rather than officials. The committee’s view is that the Osmotherly rules are simply Civil Service guidance and nothing more. They should not be given any greater political or constitutional weight. The Osmotherly rules have not been endorsed by Parliament and do not bind Select Committees in any way.

We recommend that any future revisions of the rules should be published in draft to enable Parliament and its Select Committees to scrutinise proposed changes. In his evidence to us the Minister, Mr Maude, indicated that he would support such parliamentary scrutiny—

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perhaps the noble Lord, Lord Wallace, can comment on this proposal in his reply.

Although civil servants frequently give evidence to committees, as I have said, they do so on behalf of their Ministers. For this reason, committees usually accept whichever official or officials a department recommends are best placed to give evidence on any given topic. Sometimes, however, committees will want to question a named civil servant—for example, the official in charge of a particular project or policy. The Osmotherly rules include a “presumption” that Ministers will meet such a request. We think this should be strengthened so that a call for a specific individual should be refused only in exceptional cases.

Accountability would also be strengthened if committees were able to question someone who had left the Civil Service or moved to another post. This practice should apply not just to former accounting officers—as suggested in the Government’s Civil Service reform plan—but to other former senior civil servants. Sometimes it is only by taking evidence from former office holders that a committee can get to the bottom of an issue and we do not think the Osmotherly rules should stand in the way of this practice.

As your Lordships are aware, successive Governments have maintained the principle that advice given by civil servants to Ministers should not be disclosed to Select Committees or to anyone else. This of course maintains the principle of ministerial responsibility—civil servants giving full and candid advice but Ministers taking the decisions. The committee did not seek to undo this principle, but thought that the practice set out in the Osmotherly rules needed revision. For example, under the Freedom of Information Act 2000 it is possible to access Civil Service advice if certain conditions are met. The Osmotherly rules suggest that in no circumstances would such advice be disclosed to a committee. Therefore, if the rules are followed strictly, Select Committees may paradoxically have weaker rights of access than someone submitting a freedom of information request. This seemed to us obviously unsatisfactory and so we recommend that on rare occasions when committees need sight of such advice, they should be able to request it.

Our final recommendation concerns situations where the evidence taken by a committee points to an individual civil servant being at fault. The Osmotherly rules suggest that in such circumstances it is for the Minister to examine the matter and take any further action. We were conscious that Select Committees are not disciplinary tribunals. However, if evidence leads a committee to conclude that a particular civil servant has been at fault, we think the committee should be able to express personal criticism and, in extreme cases, suggest that the department concerned considers disciplinary procedures.

In summary, the Constitution Committee’s report underlines the pre-eminence of ministerial accountability to Parliament and civil servants’ accountability to Ministers. We make clear that any plans to reform the Civil Service must not undermine the accepted principles of accountability or Civil Service impartiality. The report also concludes that parliamentary Select Committees should have greater access to individual

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civil servants and that the informal rules governing their appearances before committees should be revised and scrutinised by Parliament. I look forward to what I know will be an interesting and authoritative debate. I beg to move.

1 pm

Baroness Donaghy: My Lords, I congratulate my noble friend Lady Jay on her presentation of this important report. We were both members of the Committee on Standards in Public Life and our tenure overlapped for a short while. I much admired her commitment and objectivity on the subjects covered in this report and I continue to admire her contributions in the House.

I was a member of the committee from 2001 to 2007, when it was chaired by Sir Nigel Wicks and Sir Alistair Graham, in two very different styles. I was also acting chair of the committee during most of 2007, pending the appointment of Sir Alistair’s successor, Sir Christopher Kelly. The committee covered all the subject areas in this report and I draw attention to its ninth report, Defining the Boundaries Within the Executive: Ministers, Special Advisers and the Permanent Civil Service.

One of the important jobs of the committee, particularly for the chair and secretariat, was meeting delegations from other countries that aspired to the principle of political impartiality: a Civil Service able to transfer its loyalty from one elected Government to the next, and upholding integrity and appointment on merit. Many of those countries were in a pre-Northcote-Trevelyan state, where patronage led to the appointment of,

“men of very slender ability, and perhaps questionable character, to situations of considerable emolument”,

in the Civil Service. Other countries aspire to our system. There is a very thin line—one that newly elected Governments do not always appreciate—between our system and the return to patronage and corruption. I particularly like the quotation in the report by the noble Lord, Lord Wilson of Dinton, who, in a plea to allow the Constitutional Reform and Governance Act 2010 to settle in, said:

“There has always been a tension in politics between patronage and merit; it is an old battle ... Merit ultimately won, but the patronage virus is never dead and constantly needs to be beaten back”.

It is particularly on the appointment of senior civil servants that this pressure is felt. I am concerned at the continuing rumours that the Cabinet Office Minister is seriously considering legislation to give Ministers greater powers of appointment. Francis Maude has said that,

“It would be perfectly possible under the legislation passed by Parliament in 2010 for the Civil Service Commission to provide ministers with a choice between appointable candidates. I am sorry the commission has decided not to support this”.

The Committee on Standards in Public Life often met organisations covering similar areas, including the Civil Service Commission and the Office of the Commissioner for Public Appointments. I presume that that still happens. We were aware then of pressures on the Civil Service Commission to change its criteria.

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I imagine that the same is happening now. I hope very much that the Civil Service Commission will stand firm on this issue of further ministerial involvement in senior appointments.

The report holds the line to a large extent, for which I am grateful. However, I cannot resist commenting on the recommendation that Ministers contribute to the appraisal of certain civil servants. When I was chair of ACAS, I was asked to participate in a Civil Service appraisal exercise to ensure fairness between departments. I freely admit that I was overwhelmed by paperwork, with a lever-arch file for everyone under consideration: a veritable mountain of information. How this involvement in appraisals will work needs careful thought. With the greatest respect to Ministers, some will be better able or prepared than others to enter this arena.

I welcome the fact that the committee does not recommend that accountability and responsibility are seen as two separate elements. That way confusion lies. Yes, I checked the Oxford English Dictionary this morning. “Accountable” is defined as,

“Bound to give account, responsible”,

and “responsible” is defined as,

“liable to be called to account”.

I also welcome the recommendation in paragraph 53 concerning the Civil Service as a constitutional check. Civil servants who are accounting officers take their role very seriously and it is a real check on ministerial nonchalance. I know of at least one example where a formal, written direction from the Minister was sought. To add any additional powers or be overprescriptive would act as a barrier to the working relationship of a Minister and his or her senior civil servant.

The committee is absolutely correct in paragraph 59 that,

“ministers are responsible for the actions of their special advisers”.

However, in practice it is all too easy for a Minister to distance himself from the rogue activities of a special adviser, and too little is known about the day-to-day working relationship of more junior civil servants and special advisers. Ministers have been known to encircle themselves with their special advisers—if it is possible to encircle with two people—who then act as a barrier to the extent that a special adviser starts to look very much like a manager. A civil servant wishing to do well and mindful of their future career is unlikely to complain to their senior about this. Of course, there are also examples of the relationship working well. I am simply saying that too little is known about the day-to-day practicalities.

On the issue of project management, I believe that this subject deserves a whole separate debate. There are huge timing problems on large projects, largely because of delays in releasing money, interdepartmental differences in priorities, constant revision of the details of projects and the appointment of consultants who charge the right price but are not up to the job. I am sure we could all write a book about that. The committee’s recommendation that,

“there should be a presumption that a single senior civil servant will lead the implementation of a major project from beginning to end”,

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sounds good but will probably not work in practice unless the responsibility rests with a single department and no one has the right of veto. Peter Riddell referred to the fact that some projects lasted,

“the time of three Secretaries of State”.

That can be a very short space of time in some departments. At a more junior ministerial level, the Minister in charge of construction averaged eight months in the last Government.

My biggest concern about the report is in the area of accountability of civil servants to Parliament. I understand that there is probably huge pressure to change the rules and that the committee wants to tilt the balance,

“more in favour of the right of committees to request attendance of specific individuals”.

This is on the back of what is seen as a resurgence in the activities of Select Committees. It is not the first time and will not be the last; Select Committees rise and fall depending on the personality of the chair and the issues under consideration. I attended a number of Select Committees in the distant past, and received absolute courtesy from some and absolute rudeness from others. The big difference between my appearances—on dull and worthy subjects, it has to be said—and those of civil servants was that I could answer back. Civil servants should continue to give evidence to Select Committees,

“on behalf of their Ministers and under their directions”,

as stated in the Osmotherly rules. No one is trying to say that civil servants are,

“unfortunate, beleaguered public servants who cannot speak for themselves”.

I agree with Sir Alan Beith on that, but I do not agree with his conclusions. Of course Select Committees have the right to ask questions and elicit the truth, but care should be taken about the atmosphere surrounding such questioning. If I was a civil servant listening to the radio announcement that my head was going to be put on a spike by the chair of a Select Committee later that morning, I do not think it would encourage a free and frank exchange.

I hesitated about mentioning the name David Kelly as I feel sure his family do not want what happened to be resurrected and would want to live in peace. However, I was in a building with a number of senior civil servants when the news broke about his death. What was significant was not that they were terribly upset—of course they were—but they felt that their reputation had been impugned. It was an era when civil servants were being encouraged to be bold and imaginative and to take the initiative, and the encouragement of outside appointments was the order of the day. No one was going to be bold and imaginative after that day. So the context in which a civil servant is questioned, the tone adopted and the recognition that the quality of a policy is not for comment by that civil servant are extremely important.

Finally, with my ACAS hat on, I would advise caution about Select Committees recommending, even in extreme cases, that a,

“department consider appropriate disciplinary procedures . . . where there are strong grounds for doing so”.

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What would the strong grounds be? If any Permanent Secretary found himself or herself in such a position, I would be very happy to represent them.

In conclusion, I am grateful for the opportunity to comment on this very measured and balanced report. The relationship between politicians and civil servants is endlessly fascinating, and we must not forget that the eyes of the world are on us whenever we make changes.

1.12 pm

Lord Rodgers of Quarry Bank: My Lords, I was a member of the Constitution Committee when it thought about examining the accountability of civil servants but I am no longer a member and I played no part in the inquiry.

I am grateful to the noble Baroness, Lady Jay, for being responsible for this valuable report, although I was a little confused by both her summary at the beginning of the report and the summary of the recommendations in Chapter 6. The two lists do not match in any clear sequence. However, on the substance, I largely agree with the report’s conclusions.

It is perhaps appropriate to mention that I was a Minister for 11 years in six different departments at different levels of seniority. That was a long time ago but today’s arguments about the relationship between civil servants and Ministers and Members of Parliament echo down the years.

More than that, they are resonant with Herbert Morrison’s book Government and Parliament: A Survey from the Inside,published in 1954—long before the noble Lord, Lord Hennessy, brilliantly prised open Whitehall. Morrison says:

“It is my general experience that if the Minister in charge knows what he wants and is intelligent in going about it, he can command the understanding, co-operation and support of his civil servants”.

He goes on:

“The Minister should not be an isolated autocrat, giving orders without hearing or considering arguments for alternative courses”—

from civil servants. He then says:

“What the reader can be sure of is that the British Civil Service is loyal to the Government of the day. The worst that can be said of them is that sometimes”—

and this is familiar—

“they are not quick enough in accustoming themselves to new ideas, but then it is up to the Minister to educate them”.

Herbert Morrison had been at the centre of government in war and in peace for more than a decade. The book remains a very useful historic text on which a new or restless Minister might reflect. However, Morrison had little to contribute on the paragraphs of the report on Select Committees as his book was published long before the present system of Select Committees began to take shape. I remember in the 1970s that members of the Expenditure Committee questioned civil servants about the costs of Concorde but we had an unsatisfactory response as they often claimed commercial confidentiality. I broadly agree with the recommendations on Select Committees but Members of Parliament should not show off to or bully civil servant witnesses, and junior civil servants should not be put on the spot.

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Among the eclectic issues that the Times is currently pursuing is the Civil Service and it has been running a special investigation. Splashed across the front page on 14 January there was the headline:

“No, Minister: Whitehall in ‘worst crisis’”.

There was, it said,

“an increasingly bitter power struggle between ministers and mandarins”.

Then on 28 January the Times had a headline:

“Ministers renew battle to control top Civil Service jobs”.

Caroline Spelman, who was sacked from the Cabinet last year, said that although she had been “supported brilliantly” by her civil servants, she could not understand why a Minister could not choose or—by implication—get rid of his or her Permanent Secretary. We have to read between the lines in the report as there is no real flavour of these apparent turbulent events.

There are good reasons for stability at the top of departments. Civil servants should not be sacked or moved elsewhere because of the colour of their eyes, their cautious language or implied political leanings. However it has always been possible for Cabinet Ministers—with determination and the agreement of the Prime Minister—to dispose of a very difficult or unsuitable Permanent Secretary.

It is fully on the record the way in which Roy Jenkins, on his appointment as Home Secretary in 1965, got rid of the formidable Sir Charles Cunningham, even if it took some weeks to achieve. On the matter of choice, when I was appointed Secretary of State for Transport, the head of the Civil Service asked me to choose a candidate for my Permanent Secretary from two senior civil servants, and to find another if I did not like either of them. I am sure there have been many similar occasions under different Governments over the years.

The Government require a dialogue between Ministers and civil servants but there is sometimes a serious dispute. When I was a junior Minister a civil servant might challenge my view and remain persistent. I would say, “All right, talk to the Permanent Secretary and if he agrees with you, he will talk with the Secretary of State”. As the report says, a civil servant has to be “candid and fearless”. In turn a Minister has to be responsive and fair. These are entirely routine matters. Good sense and tolerance, as Herbert Morrison might have put it, are the essence of successful government.

On major projects, in paragraphs 40 to 44, I am not entirely convinced. I cannot see how a single senior civil servant can see through a long project in terms of his or her maturing career. Apart from the lengthy procurement of defence equipment—and not just aircraft carriers—even a major road may take a dozen years from a ministerial decision to completion.

A fortnight ago, the Department for Transport launched HS2—high-speed trains planned to be in service by 2026. I find it unrealistic and against a civil servant’s interest for a single individual to guide the project from the beginning to the end. It is ironic that we will have six, seven or eight different Secretaries of State during that period.

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The senior part of the Civil Service has—excellent as it was—changed for the better, as far as I observe it. Sixty years ago, my contemporaries joined the administrative class in the Civil Service mainly from Oxford and Cambridge or the LSE before the age of 25 or 26 and rose steadily towards the top. The current head of the Civil Service, Sir Bob Kerslake—Warwick University—joined the Greater London Council and became chief executive of Hounslow and then Sheffield. The noble Lord, Lord Bichard—Manchester—rose to become a Permanent Secretary after being chief executive of Brent and then Gloucestershire.

If Ministers were impatient in Herbert Morrison’s time, today’s Ministers are impatient about a new kind of civil servant with a different background and much wider training and experience. In reverse, it can be said that today’s Ministers now have less experience of running a large company or institution than 60 years ago. Of the 18 Secretaries of State and heads of department who gathered round the Cabinet table in May 2010, a couple of them had a substantial business career, and others had some commercial, financial or marketing experience. Half of the Cabinet were unfamiliar with a big organisation, which a government department is.

I welcome the report. I agree with the noble Baroness, Lady Jay: it is unreasonable that the Government have not responded to the report. I very much regret that. The report points in the right direction: to maintain and improve one aspect of our parliamentary process.

1.22 pm

Lord Wilson of Dinton: My Lords, I welcome the report, which charts a careful and thoughtful path through complex constitutional issues which it would be easy to get wrong. There is much in it with which I agree and which I welcome. For instance, I welcome the endorsement of the principle of ministerial accountability to Parliament. As the Government recognised in their belated response, civil servants are accountable to Ministers and Ministers are accountable to Parliament. That is fundamental, and it is good to see it endorsed by the committee.

I also welcome the endorsement of what I think of as the Northcote-Trevelyan principle of recruitment on merit on the basis of fair and open competition. Those things may seem obvious, but they are bedrock to how we run our government, and it is important that they are understood, because we have no written constitution to which we can refer.

That said, inevitably, there are a number of points in the report which I would like to add to, retract or disagree with. The principle that Ministers account and that civil servants appear before Parliament on behalf of their Ministers is important to defend and understand. I note that it was asserted in evidence to the committee that the idea that civil servants are unfortunate, beleaguered public servants who cannot speak for themselves is from a past era. That I disagree with. You have only to watch some poor beleaguered civil servants still appearing before Select Committees to know that that is untrue. Civil servants go before Select Committees to explain the Government’s policy—they are not there in their own right. That has a

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consequence: it is necessary, if Ministers are going to have civil servants appear before Parliament to explain their position, that the Minister should be able to choose who does that.

If a Select Committee wants to summon a named official, it can of course do so, but there will inevitably be occasions when the Minister wants to choose who responds on their behalf. When I appeared before the Public Administration Committee as the Cabinet Secretary, the chairman complained after a while that, whoever he asked to appear, he always seemed to get me. I can understand the frustration that that caused, but it was the fact that the Prime Minister wanted me to explain the Government’s policy, the facts and, in the end, I think that the Government will hold to that position.

It is also the case that civil servants should in no way be disciplined by a Select Committee. Select Committees are not equipped to carry out that task. In many ways, they are arenas that can be very unfair and they are in no way equipped or trained to carry out the kind of fair processes that disciplinary arrangements require. I agree very much with the excellent speech of the noble Baroness, who I thought got it absolutely right. I agreed with pretty much everything that she said on that subject.

Similarly, I note and understand the view that retired civil servants should be able to be summoned before Select Committees. I argue only that there should be some form of statute of limitation. There must come some point when people are spared that recall. I remember one sad occasion in the 1990s, which people may not remember, where a former civil servant was summoned to account for something that had happened. He was not well—the Select Committee did not know that—and the whole thing covered everyone with a certain embarrassment. It is important that this should be done with some sense of proportion and appropriateness, but, in the end, Select Committees probably should be able to call back the only people who can explain what happened.

Other things in the report raised a wry smile. I noted the proposal that Ministers should be able to contribute to the appraisal of selected civil servants. This is not new. There was a process introduced in the 1990s that Ministers should be asked to comment on the performance of their Permanent Secretaries. I remember it. The Minister concerned will remain nameless—there could be more than one. I kept reminding him that he had not yet said anything for my appraisal. In the end, I went to see him to ask him to do it because we were way beyond the timetable and he said, “Will you draft me something?”, so there is a theory here which may not entirely conform with the facts. I do not ask the Minister to comment on that.

As to staying in the job, again, it is a noble ideal but it may not be so easily implemented in practice. When I proposed to Mr Blair as Prime Minister the setting up of the Delivery Unit, the concept was that the Government should select two or three topics in particular areas to which the Civil Service would pay close attention and devote its very best resources to achieve results over a given period, and that named officials should be assigned to those projects and remain with them

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until the end, accountable for whatever was required to happen. I do not think that it proved practicable. The world moves on; Ministers change; circumstances change; things happen to the people concerned. It is a highly desirable objective, but in practice it has to be tempered realistically with the way the world is.

I want to say two important things. First, I do not agree with the committee that accountability and responsibility are the same. The distinction between accountability and responsibility is useful. I think Ministers are accountable to Parliament in the sense of being liable to give an account, but I do not think that they carry responsibility for everything that they are accounting for. The air is thick these days with people demanding accountability and in the same breath demanding sacking. We need to be absolutely clear that the people who give an account are not necessarily the people who should be held responsible. I would wish to stick to this distinction, which originates with my noble friend Lord Armstrong from the Armstrong memorandum, if I remember correctly.

The other point I want to make is the importance of having the right people of the right quality in government. These proposals in the Constitution Committee’s report need to be seen in the context of the challenge that the Civil Service faces at the moment. The scale of reduction in the size of the service is astonishing. The reduction in size is bigger than the entire worldwide workforce of a company such BP. That is a challenge which no private sector company, other than one going bankrupt, has to face. It has been done at the same time as pay and pensions are under pressure, which is bound to affect morale. The Government are asking the Civil Service to implement major radical changes across a great broad front such as health, education, defence, Europe and welfare. All these things are demanding. It will require enormous skill and ability to implement those challenges, at a time when there is great churn. The choice of people for these jobs is crucial. It concerns me very much that so many people at the top of the Civil Service are leaving. I believe that only two out of 16 key Permanent Secretaries are still in post over the past two or three years. That is a big worry.

The last thing that the Civil Service needs at the moment is a demand for constitutional change. The Government’s best chance of achieving the scale of change that they are seeking is if they work closely in unity on a basis of trust with the Civil Service within a constitutional framework that is understood and accepted by everyone, without attempts to challenge what are bedrock principles.

Permanent Secretaries are in the public eye. If Ministers choose them, they will be perceived as people who are—I try to avoid the word “cronies”—the chosen people of that Minister. That could lead to very unfortunate consequences. If a Minister chooses a civil servant, that may not be the Permanent Secretary who his or her successor needs. Permanent Secretaries need to be people who can serve the current Minister, the next Minister and possibly a Minister from another Government. It is crucial that they are people who can serve Governments of any political complexion. If one Minister chooses them, that is something which is likely to lead to subsequent Ministers saying, “I want

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my person. If my predecessor had their person, I want the person who is my own choice”. The perception outside that it has become politicised is a real one. It is not theoretical—it is real.

However reasonable it sounds, there is a thin red line which the First Civil Service Commissioner is entirely right to defend. It is of fundamental importance. Noble Lords who have been Ministers will forgive me, but there is no evidence that the people who Ministers would choose would do the job better than the people who are chosen by the First Civil Service Commission. The importance of holding to the position which the First Civil Service Commissioner has outlined is fundamental. I would be very concerned indeed if there were to be any concessions on that.

Noble Lords will understand that there is much more that I wish to say. There needs to be a general acceptance of the constitutional deal that underlies the Civil Service. Governments who wish to achieve big change need to work within the constitution. It does not help to attack any of the principles that are bedrock to the way the Civil Service works.

1.34 pm

Lord Hennessy of Nympsfield: My Lords, each generation needs to re-examine its notions of Crown service and the accountabilities that go with it. I add my thanks to the Constitution Committee, and its chair, the noble Baroness, Lady Jay, for their resonant report of last November. It covers a great many of the crucial ingredients of what one might call the governing marriage at the heart of the British system; a marriage which brings together transient if, in the end, dominant Ministers and permanent, career, non-political civil servants in a relationship that one hopes will be greater than the sum of its parts. However, there has existed over the past 40 years a third party to the classic governing marriage in the shape of temporary, politically appointed special advisers who can bring great benefits to the work of the established couple but occasionally can also produce bursts of friction that can induce a serious domestic.

I am pleased—even relieved—that in general terms the Constitution Committee’s report has endorsed the main elements of the standard model in which civil servants are required to provide what the committee calls “candid and fearless advice” to Ministers in return for their Secretaries of State remaining can-carriers-in-chief in Parliament, in an age in which, quite rightly, senior officials are expected to give evidence to Select Committees of both Houses and to be visible and vocal to a degree not experienced by their forebears before the House of Commons created its departmentally related Select Committees in 1979.

I am particularly pleased that the Constitution Committee has emphasised in clear and powerful terms the indispensability of sustaining the classic career Civil Service virtues of integrity, honesty, objectivity and impartiality as enshrined in statutory form for the first time, as other noble Lords have mentioned, in Part 1 of the Constitutional Reform and Governance Act 2010—a mere 157 years after the lustrous Northcote-Trevelyan report of 1853 declared that such essentials should enjoy the protection of statute.

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It is this theme upon which I should like to concentrate today. Rightly or wrongly, there has been a whiff of potential politicisation of the very senior ranks of the Civil Service in the Whitehall air since last June when the coalition published its Civil Service Reform Plan. It is the so-called “Action 11” section of that plan that has simulated this tang of unease. Action 11 urges:

“Allowing Secretaries of State to have greater influence in the appointment of the departmental Permanent Secretary”—

as this—

“increases the chances of the relationship working successfully”.

Add to this the proposal for the appointment of,

“a very limited number of senior officials”,

from outside the career Civil Service,

“for time-limited executive/management roles”,

to fill gaps where,

“the expertise does not exist in the Department”,

and you may have created the possibility of seeping politicisation-by-stealth of the senior ranks.

I hope that the noble Lord, Lord Wallace of Saltaire, who is both a scholar of the workings of Whitehall—the Foreign and Commonwealth Office in particular—in his civilian life, if I can call it that, and a member of the new Civil Service Reform Board, established to implement the June 2012 reform plan, will be able to sing out a ringing declaration that this is not now and will not become the purpose and policy of the coalition as the promised review of Permanent Secretary appointments proceeds this year.

There have been rumours, mentioned by other noble Lords, that a Bill is being considered that would undo those parts of the Constitutional Reform and Governance Act 2010 that capture the prized principles of a politically impartial Civil Service recruited and promoted on the basis of merit and not on the political beauty of a candidate’s opinions.

These principles were one of the greatest gifts of the 19th century to the 20th in our country. If they foundered in the second decade of the 21st, it would be as tragic as it was ironic, as other noble Lords have mentioned, given that the country had waited a century and a half to have these precepts draped in the protective clothing of statute only to have them torn away a few years later because a set of Ministers had become irritated with their particular partners in the governing marriage.

I have attempted to discover if this is so. Mercifully, so far, I have found no trace of a “Stuff Northcote and Trevelyan” Bill, which I offer as a suggested title, in the minds of the current Whitehall guardians of the constitution. Yet I remain anxious. Why? Because Action 11 sounds to me, to be candid, like a hissy fit: an audible sign that all is not well in at least some of the relationships between Ministers and senior civil servants above and beyond the usual tensions that arise when Governments seethe through their mid-life crises, when it becomes quite plain that the great intractables of British society— economy and government —have become no more malleable because it is you and your colleagues in office rather than your rivals.

During such political rites of passage, it is tempting to blame the civil servants, the permanent fixtures in the choreography and geography of our governing

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institutions. Could it be that my traditionalist instincts have masked, for me, a set of new realities in the nature of government and politics that make the mid-Victorian nostrums of Sir Stafford Northcote and Sir Charles Trevelyan invalid at best, and positively harmful at worst?

It was the begetter of the Northcote-Trevelyan inquiry and the implementer of their report, Mr Gladstone, who wished, as his biographer Colin Matthew put it, that:

“A civil service appointed by patronage and influence would give way to a non-political administrative class”,

and that while the 17th century had been an age ruled by prerogative, and the 18th by patronage, the 19th would become one of rule by virtue. There was intense resistance to this notion of meritocracy. Queen Victoria hated it. The Foreign and Home Offices resisted for decades. However, it became the norm for the Home Civil and Diplomatic Services, the Armed Forces and the secret services. Its prime virtue is that Crown servants, in civvies or in uniform, should speak truth unto power: to tell Ministers what they need to know rather than what they wish to hear. Sir Charles Trevelyan had seen this approach first-hand at work in the Indian Civil Service. On his return to the UK, he made his case to the Commons Select Committee on Miscellaneous Expenditure in 1848 and then, as Permanent Secretary to the Treasury, to his new Chancellor, Mr Gladstone, in 1852.

How are the Trevelyans of our day operating his legacy? The Northcote-Trevelyan principles are holding. The Whitehall Senior Leadership Committee, with the involvement of the Civil Service Commission, spins off bespoke panels according to the nature and location of the Permanent Secretary vacancy. It receives direct input from the Secretary of State in the department possessing the vacancy about the qualities and capacities they, the Secretaries of State, are seeking. The leadership committee carries out the interviews and places a handful of candidates above the line, indicating that they are both capable of doing the job and in possession of the Northcote-Trevelyan non-partisan characteristics which would enable them to serve equally well a Secretary of State or Government of a different colour. After all, as other noble Lords have pointed out, we need permanent Permanent Secretaries, not temporary Permanent Secretaries who last for the duration of a single Secretary of State. As has been mentioned, there is already an alarmingly high rate of churn at Permanent Secretary level. The Secretary of State and, indeed, the Prime Minister can veto the outcome and the process starts again. However, the key safeguard is that if you do not meet the Northcote-Trevelyan requirement, you do not get above the line.

It is vital that these processes and the safeguards hold and are not contaminated by the virus of politicisation. Walter Bagehot, in an 1859 essay on Gladstone’s great rival Benjamin Disraeli, wrote how rare it was for a Minister to,

“engrave something new upon his age”.

That is exactly what Gladstone did in unleashing Northcote and Trevelyan in the 1850s, and striving to implement their reform as Prime Minister in the late 1860s and early 1870s. The mark of that engraving is still visible.

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I hope that the noble Baroness, Lady Jay, and her committee will continue to watch like hawks for signs of slippage back into the—for some—tempting restoration of political patronage at the top of the Civil Service. As a seasoned public servant put it to me recently, we want neither sofa government nor sofa public servants to sit on it.

I find it hard to believe that Mr David Cameron or his Minister for the Civil Service, Mr Francis Maude, for whom I have a lot of admiration, wish to overturn the Gladstonian gold standard. As for Liberal Democrat Ministers in the coalition, such as the noble Lord, Lord Wallace of Saltaire, that would amount to parricide. As for Conservative Ministers, they have their talismanic figure, too. I am grateful to Mr Nicholas Soames for bringing his grandfather’s words to my attention. In praise of one of his former officials, Winston Churchill said that he was,

“this faithful servant of the Crown, self-effacing, but self-respecting, resolute, convinced, sure of himself, sure of his theme … Governments, Liberal or Tory, came and went. He served them all with equal fidelity”,

consigning his personal,

“sentiments as a purely private affair”.

That is the enduring gold standard.

1.45 pm

Lord Morris of Aberavon: My Lords, I congratulate the Select Committee on its report under the chairmanship of my noble friend. It is both an illuminating report and enjoyable to read. However, I also share her regret about the extreme lateness of the Government’s response.

My experience of civil servants arises from having been a Minister for a very long time in five government departments. There is no issue with the integrity and dedication of civil servants. The real issue is whether they are organised in the best way to serve the state. The highest point for me, as a very young Minister in 1964—well before the Ark—was to be told by the person who was in effect running the Ministry of Power, Matthew Stevenson, that he had everything in place to implement the Government’s plans to bring the steel industry into public ownership, for which I had been given a small responsibility. In Stevenson’s words, by my recollection: “When I was a young man at the Ministry, I helped to nationalise steel. When I was older, now at the Treasury, I helped to denationalise it. Now that I am older still, I can assure you that I have the plans and staff to nationalise it once again”. That great civil servant was as true as his word, and put flesh on the bones of our shoulders, which had been pretty bare and innocent of too much detail. The low point for me was the Cabinet Office’s procedures for handling the memoirs I was obliged to submit to it as an ex-Cabinet Minister. All I would say is that I warn future writers to be wary.

A report not available to the committee was that of the Comptroller and Auditor-General. Had it been available, the committee might have pondered on its words:

“The Civil Service is badly managed, lacks vision … and fails to ensure value for money”.

It points to “fundamental management weaknesses” and recalls nine major attempts to reform Whitehall in the past 40 years: challenging words, to say the least.

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I turn to some of the committee’s conclusions. First, it says:

“We maintain our view that there is no constitutional difference between the terms responsibility and accountability”.

I am not sure. The Government’s response points out an important distinction between them. The consequences can be different, so far as blame is concerned. Crichel Down is said to be the high point of accepting responsibility. Since then, a much more complex system of government has evolved, with the development of arm’s-length bodies. The growth of the modern state has led inevitably to the diminution of direct parliamentary accountability. Indeed, as a young man I was able to put a question to the Postmaster-General, asking why a letter to one of my constituents had been delivered late—another age.

Fortunately, the growth of Select Committees in the House of Commons, and the flexing of their muscles in demanding more evidence, is helping to fill the vacuum. I suspect that our committees still have some way to go to be as strong as the committees of the American Senate. That leads me to my second point: endorsing the committee’s recommendation that the right of access by committees to civil policy should not be weaker than those making a request under the Freedom of Information Act. The committee has struck the right balance in underlining protection for civil servants under the decision-making wing of the Minister. The Government’s response seems to accept that.

Thirdly, I turn to some interesting paragraphs, which have been touched on already, on the appointment of Permanent Secretaries. The committee rightly maintains that appointment should be on merit. I believe that Ministers are entitled to, and should get, the men and women they want as Permanent Secretaries. In a recent letter to the Times, the noble Lord, Lord Jenkin of Roding, pointed out his experience on that score. The noble Lord, Lord Rodgers, in his contribution seemed to endorse that.

In 1974, when I became the Welsh Secretary I got my man, albeit in slightly different circumstances. For six years, I was served by the man in whom I had confidence and whom I wanted. The committee concedes that the Government’s proposals are in some respects the formalisation of practices that already occur. I agree with that too. I have considered the Government’s response, which underlines the involvement of the Secretary of State at each and every level. That must be so, and I accept and agree with it. I hope that the review being conducted will not ignore the reality of what happened certainly in my experience and in that of the noble Lords, Lord Jenkin and Lord Rodgers.

The bottom line is that a Cabinet Minister must have confidence that his Permanent Secretary will organise the department in such a way that it can deliver his policies. When, in 1966, I went with Barbara Castle to the Ministry of Transport, it was a failed department. The Minister was in the wrong job and he was sacked. He had failed to produce a transport policy. It was widely understood that the Permanent Secretary would not be sacked. He was sidelined and Barbara brought in a distinguished academic, Christopher

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Foster, an expert in transport, who distinguished himself as an adviser to many Governments to run the policy side of the department.

Fourthly, the Select Committee is nervous about having temporary civil servants on fixed-term contracts. Provided they have the vital qualities for a most senior civil servant, the appointment should be for the Minister to make and not have to be the Permanent Secretary, who may well have failed. The Government’s response seems to be the right one, which I warmly welcome.

Fifthly, the committee recommends the presumption that a single senior civil servant will lead the implementation of a major project from beginning to end. The Auditor-General welcomes the creation of the Major Projects Authority in 2010. Despite the difficulties that we have heard, I agree 100% with that laudable aim. An official should have a personal promotion, if necessary, in order to maintain continuity in the department. These projects are complex, and it is very important that a person should maintain their responsibility. I hope that the Browne review, to which reference has been made, will certainly ensure that there is an improvement on that score.

As well as persons in charge of projects, Permanent Secretaries come and go far too frequently, as do Ministers. Procurement Ministers should be in post for much longer. Over the years, the history of defence procurement is an indication of the lack of continuity of proper ministerial control. I am proud to have been a Minister of Defence for Equipment, although, fortunately or unfortunately as the case may be, the electorate sacked the Government. I would have regretted very much not being able to continue with some of those projects, which have the gestation period of an elephant. The most effective Minister under whom I have served was the noble Lord, Lord Healey, who was Defence Minister for six years. He knew the beginning and the end of all projects in that time.

I could not help smiling when I read about a departing woman Permanent Secretary of great distinction complaining about the lack, perhaps rightly, of women Permanent Secretaries when she was moving on to other pastures. That seemed to me to be a very odd comment to make. The committee might have spent a little time scrutinising the length of tenure of Permanent Secretaries in one post. It is a great worry that they seem to go from one department to another incredibly quickly.

Finally, when I had been Attorney-General for only a few months, I was asked to approve the bonus of a distinguished government lawyer. It was the first time I had heard of bonuses. I thought that the rate for the job had been negotiated. How could I as a Minister of only a few months’ standing in a matter of months decide on the exceptional performance and worthiness of this distinguished senior lawyer? Past Governments have gone down the wrong road with bonuses. I welcome the recent Parliamentary Answer that the number receiving awards has been reduced since 2010 from the astonishing figure of 65% to 25% of civil servants.

I am proud to have worked with a large number of dedicated civil servants, but I will not enlarge on that. I hope that what I have said is sufficient. All I will say

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is that I had no more suspicion of any diminution in quality when I last took office in 1997 than when I first became a Minister of the Crown in 1964—a span of more than 30 years.

1.57 pm

Baroness Tyler of Enfield: My Lords, I welcome today’s debate on this very important issue, and start by paying tribute to the work led by the noble Baroness, Lady Jay, and the members of the Constitution Committee for their excellent job. The committee’s strong endorsement of the basic principles of accountability in our parliamentary system and the convention of ministerial responsibility is very much to be welcomed.

My reason for speaking in this debate is to offer the perspective of someone who was a career civil servant for 19 years in six departments. You could say that it is the viewpoint of someone at the other end of the telescope from Ministers and Parliament. I should start by saying that I firmly believe in the principles that underpin an impartial British Civil Service. These principles go back to the Northcote-Trevelyan report and still hold firm today. I wish to continue to see a Civil Service that is appointed on merit and that people who advance in it do so on the basis of merit. I feel sure that the whole House would wish to see a Civil Service that is impartial, objective and honest, and that acts at all time with integrity. These are the watchwords of the modern Civil Service.

None of the above should prevent any of the welcome changes of recent years in the Civil Service, nor should they prevent it learning from elsewhere, be it from the private sector or elsewhere in international public administration. Indeed, I read with interest what is happening in New Zealand to sharpen accountability for senior civil servants and in Australia where there is a very different system for appointing and dismissing their equivalent of Permanent Secretaries. A greater level of exchange with other sectors, a greater level of professionalism in the Civil Service, particularly in relation to procurement and project management, and a greater awareness of the challenges of modern information systems and the rise of the 24/7 world of communications will all help to enhance the effectiveness of our modern Civil Service.

Indeed, the Civil Service reform plan has already made a start in setting out the type of changes needed to deliver a 21st century Civil Service. I welcome the commitment in that document, for example, to a greater focus on learning and development in the Civil Service, from talent spotting and developing a fast stream right up to addressing the training needs of Permanent Secretaries.

That said, I am concerned that some of the values of the Civil Service are being undermined by some of the current developments in parts of the Civil Service reform programme. I share the concerns that have already been voiced in this debate about the negative way in which the Civil Service is being portrayed by some Ministers, particularly when there is no right of reply and, as other noble Lords have said, at the same time as major cuts in staffing levels are being made throughout the Civil Service, with the impact that that is having on morale.

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I have four key points to make on the potential risks of undermining the values that I have set out, values which I believe are fundamental to our democracy. First, a worrying trend is developing—we have heard about it already in this debate—of too much political interference in the appointment of Permanent Secretaries. There has been much discussion recently in the media and elsewhere about this issue, and the noble Lord, Lord Hennessy, has already spoken most eloquently on this matter. In addition, the First Civil Service Commissioner has made very clear in his interventions that there is, in any case, always ample opportunity for a Secretary of State to make his or her views clear on the quality of the candidates being considered as Permanent Secretaries.

In a letter to the Times last year, Sir David Normington warned of the dangers of a more politicised appointments process, particularly if a civil servant becomes viewed as the personal appointment of a particular Minister rather than someone able and ready to work for a new Minister or a new Government. We all know how quickly the reshuffle merry-go-round takes place.

In my view, Ministers should not be able to overrule the decision of the Civil Service Commission. Some recent examples, such as the overturning of the commission’s recommendation for the post of Permanent Secretary at the Department of Energy and Climate Change, run the risk of undermining the principle of fair and open competition based on merit. I make no criticism whatever of the candidate eventually chosen in that department who, I know, is a highly regarded civil servant. However, the original candidate selected, and agreed by the Secretary of State, was, as I understand it and as was reported, subsequently overruled by Downing Street. If that was the case, then it was wrong.

Secondly, the proposal as part of the reform plan to contract out core policy functions and test the market in certain circumstances has real flaws and has not been properly thought through. If you are seeking impartial policy advice delivered to Ministers without fear or favour; if you are seeking people who can speak truth unto power it is best if those people do not have a financial interest in the advice they give. This is especially important when looking at long-term policy implementation, rightly one of the concerns of the Constitution Committee.

Of course Ministers will wish to have, and should have, access to a wide a range of advice from think tanks, other pressure groups, academics, management consultants with specific expertise and others. Of course, the Civil Service must not claim a monopoly of advice; it does not have it. However, there is always the risk that a private sector organisation, a think tank or any other organisation providing advice under contract to a Minister may be tempted to provide the advice that they think the Minister wishes to hear rather than what the Minister ought to hear, particularly if a future contract for that policy advice is in the offing. It is the role of senior civil servants to weigh up those at times conflicting opinions and give fair and impartial balanced advice to Ministers without any axe to grind or any personal or financial benefit to accrue to them or their department. I do not think there has been nearly enough attention or debate on this development and its serious implications for Civil Service accountability.

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Thirdly, I wish to nail the accusation that the Civil Service is inherently risk-averse and that somehow this is an inbuilt weakness of the system and the way it is held accountable. Under successive Governments, but particularly recently, as we have already heard in today’s debate, the cry has gone up from Ministers that civil servants need to be more entrepreneurial and more willing to take measured risks. I wish to challenge that accusation. The work of the Civil Service is not capable of such a precise parallel with the role of the private sector. In the latter case, entrepreneurs take risks with other people’s money or with private money in the hope that they will generate more money and profits. Sometime they do and sometime they do not. On occasions, the businesses involved will lose money if the risk does not come off and the investors have to carry that loss.

In the public sector, and particularly in the Civil Service, it is not private money that is being invested. Rather, the Government are investing taxpayers’ money in public services. Civil servants, and at the top of each department accounting officers, have a constitutional duty, as the report of the Constitution Committee makes clear, to ensure due propriety in the spending of that money. Permanent Secretaries and heads of department are responsible to Parliament for the proper stewardship of expenditure. The Public Accounts Committee exists precisely for the purpose of scrutinising and challenging accounting officers on their management of public money. It would simply not be acceptable for civil servants to say, “I took a risk with public money and that risk didn’t come off. I’m sorry”. As a society, we rightly expect more of public money and public servants. Of course, civil servants must understand risk and be explicit in their advice to Ministers on the risks involved in pursuing particular policies. The idea, though, that civil servants across the board should be less risk-averse—the flipside of that is, as a result, more entrepreneurial—does not stand up to detailed scrutiny.

Finally, I think we need to look again at the relationship between Ministers and civil servants—something that I fear is currently at something of a low ebb, with a real impact on morale. We also need to look at the three-way relationship between Ministers, the permanent Civil Service and special advisers, and the benefits that that can bring to the system. The best special advisers—and I have worked constructively with many in the past—add value and protect that vital frontier between politics and the non-party political role of an impartial civil servant. I am very pleased that the committee reaffirmed the clear principle that Ministers are responsible for the actions of their special advisers.