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Grand Committee

Monday, 24 February 2014.

Arrangement of Business

Announcement

3.30 pm

The Deputy Chairman of Committees (Baroness Andrews) (Lab): My Lords, I advise the Committee that, if there is a Division in the House, the Committee will adjourn for 10 minutes.

Public Bodies (Merger of the Director of Public Prosecutions and the Director of Revenue and Customs Prosecutions) Order 2014

Public Bodies (Merger of the Director of Public Prosecutions and the Director of Revenue and Customs Prosecutions) Order 201417th Report from the Joint Committee on Statutory Instruments 27th Report from the Secondary Legislation Scrutiny Committee

Motion to Consider

3.30 pm

Moved by Lord Faulks

That the Grand Committee do consider the Public Bodies (Merger of the Director of Public Prosecutions and the Director of Revenue and Customs Prosecutions) Order 2014.

Relevant Documents: 17th Report from the Joint Committee on Statutory Instruments, 27th Report from the Secondary Legislation Scrutiny Committee.

The Minister of State, Ministry of Justice (Lord Faulks) (Con): My Lords, the purpose of the draft order is to give legal effect to the administrative merger that took place just over four years ago, on 1 January 2010, between the Revenue and Customs Prosecutions Office, which was the prosecuting arm of HM Revenue and Customs, and the Crown Prosecution Service. The decision to merge the CPS and the RCPO was announced in April 2009 by the noble and learned Baroness, Lady Scotland, who was the Attorney-General at the relevant time. The purpose of the merger was to create a strengthened prosecution service, to safeguard and improve the high-quality work done by both organisations in serious and complex cases and to provide efficiency savings. Those objectives have to a large extent been achieved.

The merger that took place in 2010 did not involve legislation. Sir Keir Starmer, who was then DPP, was appointed Director of Revenue and Customs Prosecutions as well. Since that date, the person holding the positions of both DPP and Director of Revenue and Customs Prosecutions—now Ms Alison Saunders—has been running the two offices under one umbrella. There is a single management structure and cases investigated by HMRC are now prosecuted by a specialist fraud division of the CPS.

Although the administrative merger has been a success, there are disadvantages in the two organisations still existing as legally distinct entities. First, it might give the appearance that the merger is incomplete and could readily be reversed. This might call into question whether the change is intended to be permanent.

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Secondly, it has practical implications for how the organisations work. The Government consider that a legal merger would bring about greater efficiency and effectiveness. That is why we are bringing forward the present draft order under the Public Bodies Act 2011. The Act provides for the functions of certain public bodies—listed in the schedules—to be abolished, merged or transferred. The effect of this draft order is to transfer the functions of the Director of Revenue and Customs Prosecutions to the DPP, thus putting the existing merger of the RCPO and CPS on a statutory basis.

As there is a requirement for Ministers to consult on proposals before laying a draft order under the Act, a consultation exercise took place in 2012. Views were sought on the proposal that legal effect should be given to the administrative merger and on whether the proposed approach would achieve the desired effect. Those organisations and individuals who commented—only eight did so—either supported the proposal or did not object to it. There was concern that the specialist expertise of the RCPO should not be lost; the Government agree that this is an important aim. As the consultation response explained, cases investigated by HM Revenue and Customs are handled within the CPS by the same specialist casework division that prosecutes the most complex and serious fraud and corruption cases investigated by the police.

An order made under the 2011 Act must serve,

“the purpose of improving the exercise of public functions, having regard to (a) efficiency, … (b) effectiveness, … (c) economy, and … (d) securing appropriate accountability to Ministers”.

I am grateful to the Secondary Legislation Scrutiny Committee for its careful consideration of the draft order, and I welcome its conclusion, which was expressed in these terms:

“the Government have demonstrated that the draft Order serves the purpose of improving the exercise of public functions and complies with the test set out in the 2011 Act”.

I do not think that your Lordships would welcome a detailed description of the draft order, which—as is so often the case—is by no means as brief as my summary of its effect might suggest. As for its effect, I cannot do better than quote these lines from the Scrutiny Committee’s report:

“The Government present a convincing argument that the overall effect of the transfer of the responsibilities of the RCPO to the CPS will result in streamlining the process by including it in a larger group where economies of scale can be identified from using prosecutors and administrators for a wider range of duties. Although the economies realised by this Order are comparatively small, the improvements to efficiency are more substantial, with the potential for the more flexible structure possible under the new arrangements”.

I commend the order to the Committee. I beg to move.

Lord Hope of Craighead (CB): My Lords—

Lord Beecham (Lab): My Lords, try as I might—oh, I am so sorry.

Lord Hope of Craighead: My Lords, perhaps I can insert a few words of welcome for the measure. I used to prosecute in the High Court of Justiciary in Scotland

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as an advocate depute. From time to time, cases arose north of the border where the Revenue wanted to prosecute in the High Court. As the Minister will know, in Scotland all prosecutions are in the hands of the Lord Advocate. I remember having to deal with officials from the then Inland Revenue and, separately, HM Customs, who were somewhat upset that they could not conduct those prosecutions themselves but had to hand the papers over to me or my colleagues so that we could conduct the matters on their behalf.

Of course, the order has nothing to do with the position in Scotland, which is quite unaffected, and it is unnecessary to do anything about it because it is well established that prosecutions will continue to be handled by the Crown Office under the overall supervision of the Lord Advocate. As the noble Lord said a moment ago, my experience was that efficiency was promoted by combining the prosecution element—the exercise in presenting the material in accordance with the best use of the courts—in one body. It seemed to me at the time rather odd that, south of the border, there was this division of functions, which gave rise to uncertainty in my mind as to exactly why it was necessary for there to be a separate prosecution system at all in the hands of the Revenue or HM Customs.

So, from a rather unlikely quarter, I admire what is being done administratively and entirely approve of the Minister’s suggestion that it should now be endorsed in legislation. I am sure that this is a good measure to promote efficiency.

Lord Beecham: I must begin by apologising to the noble and learned Lord. I had not noticed that he was here and obviously intended to speak; I apologise for that.

As I said, try as I might—and I certainly tried—I cannot find anything much to object to in the 19 pages of the order or, indeed, the 134 amendments embodied in it. The principle is clearly right and it is sensible to combine the two positions. However, although this does not quite fall within the Minister’s brief, there are still questions to be asked about the operation of the service as a whole, particularly in relation to staffing.

Of course we are only talking about part of HMRC for the purposes of the order, but within HMRC there have been significant staff reductions. To be precise, 1,697 staff left in 2012-13. That forms part of a significant reduction in funding of HMRC amounting to about £2 billion, or 16.5%, by 2015. The Chancellor’s reinvestment, as it were, of £154 million, which was announced with a flourish a couple of years ago, will not make much of an impact on that massive cut.

The question arises, therefore, about the implications for staffing on what had been the HMRC function. Will the staff be protected, or will there be reductions? The record of HMRC in recovering moneys is clearly not very good. The Public Accounts Committee criticised it for collecting more than £1 billion a year less in December 2012 than it would have done, had it had the relevant staff.

Another question in relation to staffing is: will those who will be employed in the completely unified structure be paid comparably to those with whom

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they will no doubt be locking horns in the private sector? For that matter, is there much of a two-way flow between the department as it is now constituted and the private sector? I am not talking about the prosecution side thus far, as far as I am aware, but concerns have been expressed about people coming to work for the Inland Revenue from the private sector and then going back to the private sector and so on. I am not asking the Minister to answer this today, but it would be helpful if he would let us know the position in relation to movement inward and outward of staffing, particularly on the Inland Revenue side.

One of the concerns raised—I do not think with any great force in the consultation—was about the need to maintain within the prosecution side expertise of Inland Revenue matters. The Government seem to be satisfied on that, and I am not challenging that assertion, but it underlines the need to keep an eye on matters. No doubt the Government will be reviewing the situation as it progresses.

A further point relates to the third arm of prosecutions in this country, which is the Serious Fraud Office, which comes under the aegis of the Attorney-General and is separate from the DPP and HMRC, which we are now discussing. Given the somewhat challenging history of the SFO in recent years, I wonder whether it might be opportune at some time to consider a further merger between that department and the structure that we are formally approving today. I am not suggesting that the Minister can give an immediate response to that, but it is something that his colleagues could look into. In principle, it might seem sensible to have a seamless prosecution service dealing with serious fraud and tax fraud and the other matters that come under the direct surveillance of the DPP.

Having said that, we certainly do not object to this order and wish the fully combined departments well in their endeavours on behalf of the public and the taxpayer.

Lord Faulks: My Lords, I am grateful for the remarks of the noble and learned Lord, Lord Hope, for bringing to the debate his experience from Scotland and for endorsing the desirability of this move from that vantage point. As well as making certain economies, we think that it will prevent potential demarcation disputes of the sort to which he referred.

The noble Lord, Lord Beecham, as ever, probes slightly beyond the scope of the statutory instrument, as I am sure he would be the first to accept. On the question of staffing and training, there is perhaps one aspect with which I can help the Committee. The legislation removes the barriers to the staff of the CPS and the staff of the RCPO from working on mixed duties.

The question of training is relevant. The HMRC prosecution work will remain for the immediate future within the CPS central fraud division, which prosecutes cases nationally. Expertise already exists within the division and the new staff are trained internally. Where any HMRC work is to be devolved, this will be managed carefully and appropriate training and support will be provided.

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I am given to understand that RCPO is entirely separate from HMRC, and there have been no staff reductions as a direct result of the merger. I anticipate that the noble Lord, Lord Beecham, was talking of staff reductions more generally, but I can confirm that, in so far as the issue of the statutory instrument is concerned, there are no such reductions.

As always, I will take back his remarks and observations generally about the Serious Fraud Office and whether or not further consolidations might be made with profit, as well as his observations generally about staffing and the involvement of the private sector. I am grateful for those contributions.

We submit that the draft order is a modest but worthwhile measure. In effect, it will complete what was unfinished business and should enable improvements and efficiency to take place. I commend it to the Committee.

Motion agreed.

Electoral Registration and Administration Act 2013 (Transitional Provisions) (Amendment) Order 2014

Electoral Registration and Administration Act 2013 (Transitional Provisions) (Amendment) Order 2014

Motion to Consider

3.47 pm

Moved by Lord Wallace of Saltaire (LD)

That the Grand Committee do consider the Electoral Registration and Administration Act 2013 (Transitional Provisions) (Amendment) Order 2014.

Lord Wallace of Saltaire (LD): My Lords, I have been asked by others involved in the ERA process how many more electoral statutory instruments there might be to consider. I am pleased to report that in the case of individual electoral registration the preparations for implementation in June are well advanced and it is anticipated that there will only be a handful of additional SIs during the remainder of this year.

The two short instruments before the Committee today will enable some fine-tuning, getting IER off to the very best possible start, which I am sure noble Lords will all welcome. Perhaps I should say, and I hope that the noble Lord, Lord Kennedy, will convey this to his colleagues on the Labour Benches, that some of them still seem to be very sceptical about the transition to IER, but so far this has been a remarkable success story, as the matching has been more complete than we had expected. That is part of the reason why we are continuing to adjust as we take this process along.

The draft order makes a small change to allow the start of confirmation matching to begin nearly a week earlier, from 16 June to 10 June. We hope and expect this to increase, from 64% to 83%, the proportion of unconfirmed electors receiving these invitations to register during July, rather than in the holiday month of August, which we expect to deliver a significantly better response rate. This is surely a common-sense piece of fine-tuning and well worth doing.

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The second instrument, the draft regulations, will enable the testing of the IER digital service to continue for as long as may be necessary before it goes live, ensuring that the system will be able to do everything required of it once IER begins.

The Grand Committee will have observed that the order and regulations amend existing instruments, some of which were made only quite recently. Given that these are two more instruments, why do we need to make these now and add to the rather large ensemble that we seem to be creating?

To explain, the changes that we propose build on work carried out over the past year. The regulations now being amended to extend the testing period were made in March 2013 so that we could conduct the dry run of the process for confirming existing electors. In planning this, we had regard to the principle that the use of personal data for testing should be limited to a defined period. Last year’s regulations therefore provided for exchange of data to end around now.

In addition, not having a crystal ball, when those regulations were made we could not have known exactly what the testing schedule for 2014 would be, partly because the contracts with electoral management systems suppliers were yet to be concluded. However, a simple change to the dates in last year’s order will ensure thorough testing before we go live. When the dry run took place across Great Britain last summer, we got much better results than we had expected, indicating that at the transition to IER it should be possible to confirm an average of at least 78% of the electorate.

We were able to discuss with electoral administrators and the Electoral Commission options for making best use of the results of the live confirmation run. The solution emerged to allow the start of the transition to be brought forward a week from 16 to 10 June. The 2013 transitional provisions order was already before Parliament and to have withdrawn it to amend that one date would have caused uncertainty about all the other aspects of IER covered by the order, impacting everyone working on electoral administration across Britain.

In conclusion, these two short statutory instruments before the Grand Committee today will each, in their own way, play a further constructive part in the successful implementation of individual electoral registration in Britain. I hope that all parties will welcome this and I commend them to the Committee.

Lord Kennedy of Southwark (Lab): My Lords, it is good to be back here again to discuss these instruments with the noble Lord. To start off, the noble Lord made the point about some of my colleagues having worries about this, some of which I share. I worry about the speed of the transition and about what will happen if things go wrong. The Government have quite rightly put a lot of emphasis on voter fraud and on accuracy, but sometimes I feel that we put less emphasis on completeness.

As I have said many times to the noble Lord here and in the Chamber, on estimate around 6 million people live in our country who are not on the register but are eligible to be on it. I do not see much evidence that much is going on to get them on to the register.

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The Government should address that, and quickly. It is of equal priority to anything else that we are doing.

In general I support IER. Many noble Lords will be aware that I am a former member of the Electoral Commission, so I know about the work that has gone on in the Government and in the commission to get this right. However, I will keep pressing the noble Lord on the question of completeness, because it is important that all citizens are able to take part in our electoral process.

As the noble Lord says, the two instruments before us today bring forward minor changes, bringing IER into effect. The first order amends a previous order and brings forward the earliest date for the matching of existing electoral registers with data held by the DWP from 16 to 10 June. That is fine as far as it goes and I hope that the process will go smoothly.

I note in the order that publicity is to be undertaken by the Electoral Commission, which is welcome. I have some knowledge of the work that the commission is doing on that. However, I am not convinced that that is going to be enough. The Government will have to look at what else can be done. This is an enormous change that is taking place. I do not know what they can do; maybe the noble Lord can tell the Committee what other plans the Government have, or look at more plans. I certainly think that we should look at things such as specific funding to local authorities to do extra work. Noble Lords will know that EROs employed by local authorities do lots of the extra work, such as going door to door, and it may well be that additional funding is needed beyond what they normally receive. If at the end of this process there are fewer people on the register than there are now, it will be matter of much regret—in fact, we should aim to get many more people on the register. Perhaps the Minister could look at that.

How will the Cabinet Office monitor the completeness and accuracy of the electoral register throughout the process and after transition to IER? The second statutory instrument deals with the IER digital service. We have no issues with that, but I return to the general point that I made at the start of my contribution: with such a major change taking place, are we doing everything possible to ensure that those citizens who are not on the register now will be on the register in future?

Lord Wallace of Saltaire: I thank the noble Lord for his comments. I was conscious when I answered a question on this matter the other week of how long we have all been involved in this. The right reverend Prelate the Bishop of Wakefield asked me whether I had thought about the problems in Kirklees and I realised that it was the summer before last that I had been in Holmfirth talking to the Kirklees electoral registration officer. We have been at this, preparing for it, with local electoral registration officers and others for quite some time now.

I shared a lot of the concerns that others had at the outset and I have to say that I am impressed by the thoroughness shown by people at both the local and the national levels in working through to make sure

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that the transition is a success. We have in some ways the advantage of being able to learn from the Northern Irish experience, where there was a certain drop as one moved from household to individual registration, and we are working on several different fronts to deal with that. As the noble Lord will be aware, the biggest single reason provided by surveys for why people do not register is that they are not interested in politics and do not want to vote. That means that all of us in politics have to be out there arguing that it is in their interests both to register and to vote. National Voter Registration Day the week before last was an autonomous voluntary initiative, with which the Government were very happy to co-operate, to push that issue further up the agenda. We are co-operating with a range of voluntary organisations to get at particularly difficult, vulnerable groups who are less likely to register. We will continue to do that. We expect everyone to keep us up to the mark on this. We have allowed in the legislation for a final parliamentary vote to approve the transition after the next election, but so far, so very good and so much better than I expected, and I do not see it failing.

It was suggested that we might be more concerned about accuracy than about completeness. We are of course very concerned about completeness, which is why we are so pleased with the success of the data-matching exercise so far. We are providing additional funding to maximise registration; we have just provided an additional £3.6 million to be distributed to every electoral registration officer according to levels of electoral under-registration to help them with the costs of local activities for maximising registration. I remind the noble Lord that the boroughs that come up with the largest amount of under-registration are not those that have the strongest Labour vote or the highest poverty index. Kensington and Chelsea and Westminster come high among them, partly because there is such a rapid turnover in the population and people do not get round to registering while they are there.

We are providing funds to EROs because we understand that they are best placed to determine what local activity is most effective in maximising registration levels. We are not mandating how they make use of this funding; a great deal depends on local circumstances. I was shocked to be told some 15 months ago that in Wandsworth, for example, some 20,000-plus properties are now behind locked access, so that doing a door-to-door canvass has become a great deal more difficult. Those are not just council flats but the new blocks of flats along the Thames that sell for far too much money. So yes, we still face some difficulties but we are working extremely hard and providing extra resources and we are working with voluntary organisations to maximise registration and to make it as complete as possible. We hope to co-operate as actively as we can with all those concerned, including, of course, those within the Labour Party.

4 pm

Lord Kennedy of Southwark: I hope that the noble Lord accepts that we all have a responsibility for getting people on the register, but the Government have a very special responsibility. Secondly, he has made this point before and I am getting a bit irritated:

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I have never, ever suggested that it is about getting Labour voters on to the register. It is about getting voters on to the register—I do not care who they vote for. The fact is that there are 6 million people in this country not on the register to vote. I want to get them on. That is what I am all about, as a member of the commission and as a Member of this House. I do not care if they are in Kensington and Chelsea and all vote Tory. That is absolutely fine. They should be on the register.

Lord Wallace of Saltaire: I apologise. I may indeed have been casting that comment at some of the noble Lord’s colleagues who have made that point very strongly to me. We all share an interest in this and we want to get as many people to vote as possible. We have no idea what they will do when they vote—whether they will vote for one party or another or even spoil their ballot papers—but rebuilding public commitment to democratic participation is a wider issue that we all face. I hope that we will all work together to ensure that this transition is entirely a success.

I am reminded to repeat, as I announced in the House during Questions the other week, that we have just awarded five organisations nearly £250,000 of funding to promote registration in their areas. So we are working on this and the transition is not yet over. But the noble Lord will know, as I do, that unfortunately some parts of the British public are not particularly engaged in either local or national politics, which is a problem that we all face.

Motion agreed.

Electoral Registration (Disclosure of Electoral Registers) (Amendment) Regulations 2014

Electoral Registration (Disclosure of Electoral Registers) (Amendment) Regulations 2014

Motion to Consider

4.02 pm

Moved by Lord Wallace of Saltaire

That the Grand Committee do consider the Electoral Registration (Disclosure of Electoral Registers) (Amendment) Regulations 2014.

Motion agreed.

Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014

†Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014 Consideration in Grand Committee [Viscount Younger of Leckie] 19th Report from the Joint Committee on Statutory Instruments19th Report from the Joint Committee on Statutory Instruments

Motion to Consider

4.03 pm

Moved by Viscount Younger of Leckie

That the Grand Committee do consider the Industrial Training Levy (Engineering Construction Industry Training Board) Order 2014.

Relevant documents: 19th Report from the Joint Committee on Statutory Instruments.

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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con): My Lords, the purpose of this order is to seek authority for the Engineering Construction Industry Training Board—the ECITB—to impose a levy on employers in its industry in 2015, which will relate to an assessment of employers’ payroll in the 2013-2014 financial year.

It is worth spending a little time elaborating on the reasons why there is a statutory training levy in the engineering construction industry. The associated engineering construction industries construct and maintain the power and utilities infrastructure essential to the UK economy. The industries include coal and gas power, offshore oil and gas, chemical and pharmaceuticals, nuclear power and renewable energy. The construction and maintenance requirements for these industries require a mobile, flexible and highly skilled workforce. It is the employers in these industries who have, since 1991, come together to support collective action through the levy to develop the workforce, manage risks and address skills needs.

Skills are central to creating a strong, sustainable and balanced economy. The Government are committed to ensuring that skills provision meets the needs of employers and learners. While the Government have a role in setting the framework for success, employers need to be in the driving seat if we are to equip the workforce with the skills that employers need. The ECITB has a central role in the training of the workforce and in supporting the industry to achieve sustainable growth. In doing this, the Government look to the ECITB to minimise bureaucracy and to ensure that support to employers is both relevant and accessible. The ECITB is employer led, and its role is to encourage the provision of adequate training of employees and prospective employees in its industry. It provides a wide range of services, including setting occupational standards, developing vocational qualifications and delivering apprenticeships, as well as paying direct grants to employers who carry out training to approved standards.

Let us briefly reflect on what the levy has achieved. In 2013, the ECITB supported more than 2,500 apprentices at various stages of their apprenticeship programmes. Completion rates for apprenticeships in the industry are more than 90%, significantly higher than the national average. In each of the past two years, the ECITB has supported more than 30,000 learners in training programmes, including apprenticeships, skills and technical training and management and professional programmes.

The ECITB is a non-departmental public body that operates under the provisions of the Industrial Training Act 1982. The Government review all public organisations to ensure that they are delivering an effective service that offers value for money. The ECITB is currently being reviewed as part of this triennial review of industrial training boards. The review will report by the end of this summer.

The majority of employers in the engineering construction industry continue to support a statutory framework for training. The ECITB is a model of the successful application of such a framework, and the

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order that we are considering today will enable these statutory levy arrangements to continue. I welcome this order as evidence that employers in the engineering construction industry want to continue to invest in the skills of their workforce.

The Industrial Training Act permits the ECITB to raise a levy on employers so that the costs of training are shared more evenly among companies in the industry. This order gives effect to proposals submitted to us for a levy to be collected by the ECITB in 2015. The proposal involves the imposition of a levy in excess of 1% of payroll on some classes of employer. The Industrial Training Act requires such an order to be approved by affirmative resolution of both Houses.

The levy order can only be made if the following three conditions are satisfied: first, that the amount of levy is appropriate to meet the current skills requirements of the industry; secondly, that the proposals are necessary to encourage adequate training in the industry; and, thirdly, that the previous levy order received support from the majority of employers and the levy rates remain unchanged. I can confirm that my right honourable friend in the other place, the Secretary of State for Business, Innovation and Skills, is satisfied that these conditions have been met.

The Act also requires the ECITB to include proposals for exempting small employers from the levy. This order therefore provides that small firms will be exempt if their expenditure on payroll and sub-contract labour is below a certain threshold that the industry considers to be appropriate. I will come to the details of the thresholds in a moment. Those firms that are below the threshold and exempt from paying the levy are still able to benefit from grant and other support from the ECITB, and many of them indeed do so.

The ECITB does not propose to make any changes to its levy rates or small firms exemption thresholds for this levy order. The rate for site employees will remain at 1.5% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £275,000 or less on site employees will not have to pay the levy. The rate in respect of off-site employees—often referred to as “head office” employees—is 0.18% of total payroll, plus net expenditure on sub-contract labour. Employers who spend £1 million or less in respect of off-site employees will not have to pay the levy. Of all the establishments that are considered to be leviable by ECITB, it is expected that around 35% will be exempted from paying the levy.

For the ECITB, the one-year proposal is expected to raise around £29 million in levy income. The Committee will note that the ECITB order covers a one-year period, whereas the Industrial Training Act requires that levy orders should normally cover a three-year period. However, a one-year levy order can be made if, first, it is made within two years of an earlier levy order for which the ECITB obtained employer support and, secondly, the levy rate is being kept the same. For this order, the ECITB will be relying on the consensus established for the 2012 order, which had the support of 59% of employers, who were likely to pay 69% of the levy. Notwithstanding that, the ECITB also undertook a consultation with the industry last year, which showed that 68% of employers, likely to pay 76% of the levy,

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supported the proposal for the levy to continue. The ECITB has proposed a one-year levy order, at the request of the industry, to retain the flexibility to review the levels of levy required to meet future demand. Next year, the ECITB levy order will cover a three-year period, which will be coterminous with the Construction Industry Training Board three-year levy cycle from 2015 onwards and therefore allow the ECITB to develop longer-term plans.

The Committee will know from previous debates that the ECITB exists because of the support that it receives from employers and employer interest groups in their sectors. As I indicated earlier, there is a firm belief that without the ECITB there would be a deterioration in the quantity and quality of training in the industry, leading to a deficiency in skills levels. This draft order will enable the ECITB to continue to carry out its vital training responsibilities. I commend the order to the Committee.

Lord Jones (Lab): My Lords, it is traditional to thank the Minister for his introductory remarks, and I do so most sincerely. I want to advance just a few points, which I hope that he will see as relevant. If he cannot answer them specifically today, he may do so by letter.

I agree that the aim should be to achieve a balanced economy, as the Minister has said, and I agree that, inevitably in today’s conditions, employers should be in the driving seat—without any shadow of a doubt. The third main point that he made in his introductory remarks was that we need the Engineering Construction Industry Training Board, which is central to Britain’s manufacturing future. It is good to know that Ministers are looking in some detail at how the board operates.

Is it possible that the Minister could tell us how much in grant is being paid, to the latest date that may be available, by Her Majesty’s Government to the Engineering Construction Industry Training Board? What amount was paid in the two years previous to the current financial year?

4.15 pm

My recollection from another place is that the future of Britain’s training boards was a matter of great debate, some controversy and not a few voting procedures throughout the early years of the 1980s. My recollection is that Lord Prior—he did not have that title then—took the lead in the proposals on the future or otherwise of training boards. It occurs to me, in this year 2014, that it might be relevant to raise some matters concerning the future of training boards as it was seen in the early 1980s. I am not sure whether the Minister was born then, but certainly his officials may not know of the origins of the current policy of this Government from the point of view of where the matter stood in the early 1980s.

I recollect that the Minister who took the business—day in and day out, and particularly at night after 10 o’clock—was the late Peter Morrison, who was the Member of Parliament for Chester. In angry and controversial debates in that House, he had the difficult task of proposing that a large number of industrial training boards were to be abolished. These proposals were

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very controversial. There were responses from outside Westminster, which will come as no surprise, from the then very large trade unions, some employers and employers’ organisations. The winding-up proposals were steam-rollered through the other place and there is no doubt that the board that we are now debating was a survivor.

The conclusion that I drew from the then Government’s decision to eliminate many training boards was that the skills base of Britain was denuded, and denuded seriously and for some time. Some of the great blue-chip companies in Britain virtually abandoned all training—large numbers of them ended training. I believe that Britain’s economy and manufacturing base suffered permanently from what I thought were mistaken policies. It is good to hear the Minister today taking the view that he now has on the future of the ECITB.

There is a helpful Explanatory Memorandum, no doubt produced by the Minister’s able officials behind him. Will he amplify on how many apprentices he believes are now being trained in small businesses throughout our country? With training in mind, how are small businesses coping in today’s difficult climate? We all know that banks are being accused of not enabling small businesses to grow into the future as they should.

Can the Minister say who chairs the ECITB? Does he know the chair’s background, and likewise with regard to the CEO? It seems that these two people are of key importance in sustaining and developing the manufacturing base in this country.

I refer to paragraph 7.8 of the Explanatory Memorandum, to which the Minister alluded. It is an important paragraph on ministerial policy, and I want to know in what way he proposes to monitor the board’s activities, so that we have an assurance that the board and the Government’s view of manufacturing will continue to be positive.

Again, I thank the Minister for his opening remarks.

Lord Young of Norwood Green (Lab): My Lords, broadly speaking, I, too, welcome the statutory instrument. I thank the Minister for his introduction. I thank my noble friend Lord Jones for, as usual, giving us a historical analysis and some context for ITBs. I was around at the time, but I must admit that I could not remember all that detail about the wholesale slaughter of the industrial training boards.

Lord Jones: I hope my noble friend will allow me to say that the one omission I made in my boring remarks was that I was the opposition spokesman on these matters at that time.

Lord Young of Norwood Green: That accounts for it—it concentrated his mind wonderfully.

It was a helpful introduction by the Minister and I thank him for giving us some of the statistics. I was going to ask him about the number of apprenticeships and he gave us that figure, together with completions. Perhaps he could disaggregate that figure a bit further: how many apprenticeships were there in the 16 to 18 age group, and in the 19 to 24 age group? How many high-level apprenticeships were there?

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Also, how many apprenticeships are there in this sector in public procurement contracts? I am sure that the Minister remembers the many occasions on which I have berated the Government for their failure to insist on a compulsory requirement for apprenticeships in public procurement contracts. It would be interesting to know how many apprenticeships in this sector are involved with public procurement contracts.

There is one other aspect of the construction industry that is still a matter of concern. The thresholds are based on the number of employees, but, unfortunately, it is still a well known practice in the construction industry—

The Deputy Chairman of Committees: There is a Division in the House. The Committee will adjourn for 10 minutes.

4.22 pm

Sitting suspended for a Division in the House.

4.32 pm

Lord Young of Norwood Green: My Lords, to continue, I was making the point that it was interesting to hear the Minister talking about threshold firms. One of the continuing problems with the construction industry, as I was saying, is still the problem of bogus self-employment, especially on large sites where it makes a difference. I know, for instance, that there are some more enlightened managers of some of the large projects who have been trying to encourage companies not to engage in this and, as they should do, to register people for PAYE who are in fact continuously being employed; this would obviously count towards the threshold for the training levy. It would be interesting to hear whether the Minister has any views on that and whether he agrees with me that this is a continuing problem.

With those questions and that slight reservation, I welcome the order.

Viscount Younger of Leckie: I thank the noble Lords, Lord Young and Lord Jones, for their contributions to this afternoon’s debate. I would like to address several questions that were raised and, if I may, start with the noble Lord, Lord Jones, who asked how much was paid by the Government in grant to the ECITB. I can reassure him that the funding for the ECITB is raised from the employer levy, so the ECITB does not receive any grant-in-aid funding from the Government. However, all funds are accountable to Parliament, which might give some further reassurance.

The noble Lord, Lord Jones, also raised the history of ITBs and the background to the closure of the ITBs back in the 1980s. It is nice for me to know that he thought that I might have been too young in the 1980s to understand, or to have been around for, the levy system, but it happens that I was employed by a major multinational textiles firm at the time and was working in human resources. I remember very clearly working with my superior to monitor and fill in the levy forms, which were pretty extensive, so I have some experience of that.

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Bringing us forward to the modern day, I should say that the training boards continue with the support of employers, and the Government do not want to impose levies on industry but are responsive to employers who can benefit from such arrangements. That is the case for construction and engineering construction, which have mobile and flexible workforces. Who knows, other industries by sector may approach the Government for a similar regime. There are none so far, but the noble Lord makes a good point.

The noble Lord, Lord Jones, raised the issue of how the ECITB is monitored. The Minister in the other place has an annual meeting to review the performance of each ITB. The performance and accounts are for public record and are published annually. The Secretary of State for Business, Innovation and Skills appoints all the board members, and Government officials attend all the board meetings regularly to review performance with the boards.

The noble Lord, Lord Jones, asked about small businesses, with a particular focus on SMEs. It is very much a feature of the industry that the majority of employers are larger. I am happy to have a discussion with the noble Lord outside about my views about how small businesses are progressing.

On apprentices, the noble Lord may well know that we have managed to find 1.5 million apprenticeships since 2010. The noble Lord, Lord Young, also asked about apprenticeships and how many in the 16 to 18 year-old and 19 to 25 year-old bracket were involved in public procurement contracts. Although we do not have a breakdown of the numbers by age group or in public procurement contracts to hand, the nature of the engineering industry is likely to mean that the majority of apprentices will be aged 19 or over. I will certainly write to the noble Lord with any concrete figures that we can find to enlighten him.

The noble Lord, Lord Jones, asked who chairs the ECITB and who its CEO is. It is nice to be able to name names for once. The board is chaired and led by Andrew Collinson, who has extensive experience in the engineering construction industry, and the chief executive is David Edwards. The key feature of such boards is that they are employer led, and all the board members have experience of the industry and can speak on behalf of employers.

The noble Lord, Lord Young, raised the issue of bogus self-employment, to paraphrase his question. That is an issue in the construction industry. The orders cover not just PAYE but labour-only contracts. I agree that that matter needs further consideration, and I am grateful to the noble Lord for raising that point.

The proposal before the Committee relates to the engineering construction industry, and it continues to be the collective view of employers in the industry that training should be funded through a statutory levy system in order to secure a sufficient pool of skilled labour. I commend the order to the Committee.

Lord Young of Norwood Green: Before the noble Viscount sits down, I meant to ask this question during my contribution—I apologise to him. Were the

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figures he cited of 2,500 apprenticeships and 30,000 learners an increase on previous years? If he does not have the answer, obviously I understand.

Viscount Younger of Leckie: It may be appropriate for me to help the noble Lord by writing to him, but this might also be a moment to explain that the ECITB supports about 2,000 apprenticeships every year. I think I need to give a more precise and concise answer about the year-on-year figures, which I will endeavour to do.

Motion agreed.

National Minimum Wage (Amendment) Regulations 2014

National Minimum Wage (Amendment) Regulations 201419th Report from the Joint Committee on Statutory Instruments

Motion to Consider

4.39 pm

Moved by Viscount Younger of Leckie

That the Grand Committee do consider the National Minimum Wage (Amendment) Regulations 2014.

Relevant documents: 19th Report from the Joint Committee on Statutory Instruments.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con): My Lords, I shall also speak to the National Minimum Wage (Variation of Financial Penalty) Regulations 2014.

The purpose of these proposals is, first, to clarify that work experience opportunities offered to young people as part of traineeships, helping them to compete in the labour market, are not subject to national minimum wage requirements—this reflects the situation with other government programmes—and, secondly, to take a tougher approach on employers who do not pay their workers the minimum wage that they are legally entitled to by increasing the financial penalty that employers have to pay.

First, let me turn to traineeships. The Government are committed to tackling youth unemployment. Central to this is equipping young people with the skills that employers need. Employers tell us consistently that young people often lack the right skills, attitudes and experience when they apply for an apprenticeship or other job. Some 29% of employers say that experience is “critical” when recruiting, and a further 45% say that it is “significant”.

The traineeship programme was introduced in August 2013 to address this problem in England. Traineeships in England are a training programme that includes work experience. Lasting a maximum of six months, the programme has three core elements: work preparation training; English and maths for those without a good GCSE standard in these subjects; and a high-quality work experience placement with an employer. Traineeships unlock the sometimes hidden potential of young people who are motivated to work but unable to get on the first rung of the ladder because they lack basic skills and are not yet ready for work. Traineeships are there for these young people to equip them with the life skills and confidence that they need to make that vital first step into sustainable employment.

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Over 500 training organisations have indicated that they will deliver traineeships in the first year of the programme, and many employers are already on board, including household names such as Virgin Media and Siemens. Many smaller employers have been engaged locally by training providers. We expect the programme to grow over time, helping more and more young people to get jobs, but we rely on employers offering work experience opportunities to make this possible.

Exemptions from the minimum wage for participants in government schemes or programmes with work experience, such as traineeships, are commonplace in minimum wage legislation. The Government consider that traineeships are covered by an existing exemption. However, given that there are a number of government programmes with work experience to which different exemptions apply, we are pursuing a bespoke exemption that specifically names and describes traineeships in the regulations, for the avoidance of any doubt that any work undertaken as part of a traineeship is exempt from the national minimum wage.

I will now turn to the second reason that noble Lords are here today in Committee. The Government continue to be committed to increasing compliance with minimum wage legislation and effective enforcement of the law. Everyone who is entitled to the minimum wage should receive it. The Government actively target employers who disregard their responsibilities and we investigate any complaints made against them. We will not hesitate to pursue civil and criminal proceedings where necessary.

Her Majesty’s Revenue and Customs began enforcing the minimum wage in April 1999. Since then, HMRC has identified more than £45 million in arrears for over 200,000 workers during more than 65,000 employer interventions. Her Majesty’s Revenue and Customs follows up every single complaint from a worker made through the free pay and work rights helpline. This commitment is at the core of minimum wage enforcement.

Our compliance and enforcement action is making an impact. In 2012-13, HMRC identified £3.9 million in wage arrears for over 26,000 workers. This is a 33% increase in the number of workers that the Government were able to help in 2012-13 and a 26% increase in arrears identified compared to 2009-10. Noble Lords will know how vital the minimum wage is for low-paid workers, and the Government are actively keeping our compliance and enforcement strategy under review. Our approach will continue to be informed by intelligence and data, where we ensure that we make the best use of all the tools and resources at our disposal.

Employers have a responsibility to ensure that workers receive the minimum wage that they are legally entitled to and should be well aware of the different rates for the national minimum wage depending on the circumstances of their workers. If employers are unsure, they should call the pay and work rights helpline for information.

4.45 pm

The Government are taking a tougher approach on employers that break national minimum wage law and are bringing in these regulations to increase the penalties imposed on employers who underpay their workers in

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breach of the national minimum wage legislation. It is our intention that higher penalties will deter such employers and ensure that workers are correctly paid.

In 2012-13, 708 employers received penalties totalling more than £776,517 for failing to comply with national minimum wage law. The financial penalty is calculated as a percentage of the total underpayment as set out in the notice of underpayment served on the employer by the officer enforcing national minimum wage legislation. This regulation will increase the percentage figure from 50% to 100% and increase the figure for the maximum financial penalty from £5,000 to £20,000. If employers pay the unpaid wages within 14 days, the penalty is reduced by 50%. Employers also have 28 days to appeal against the notice of underpayment issued by HMRC.

In addition to this secondary legislation, we will go further to achieve the Prime Minister’s commitment to increase the penalty of £20,000 to apply per worker. However, we will need primary legislation to make this amendment to the National Minimum Wage Act 1998.

I conclude by reiterating the Government’s commitment to the national minimum wage and the protection it provides to the low paid without damaging their employment prospects. Through these regulations we are providing the necessary clarity that any work experience undertaken as part of a traineeship in England is exempted from the national minimum wage. However, we are taking a firmer stand against businesses that should be paying their workers the national minimum wage. I commend this order to the Committee.

Lord Jones (Lab): My Lords, I thank the noble Viscount, Lord Leckie, for his useful introduction—if I may call it that. Looking at the Explanatory Memorandum to the National Minimum Wage (Variation of Financial Penalty) Regulations, I think that it appears to the reader here in Grand Committee to be a helpful, positive approach.

I welcome a tougher approach—that may be quoted—and the aim of skilling the young unemployed must be welcomed. I note that on this matter he mentioned England but, perhaps understandably, he did not venture to mention Wales. Is he able to give any information when he replies to the Committee as to what is happening in Wales on this matter?

It is also worth welcoming the aim of increasing compliance, which will necessarily involve instituting criminal proceedings. We heard in the Committee just now a very welcome commitment to the national minimum wage itself, which is a foundation statement when bringing in legislation such as this to your Lordships’ House. However, I recollect that in another place, when the national minimum wage was proposed by the Government of Mr Tony Blair, the opposition to it was somewhat lengthy and rather loud. It is good to hear from Her Majesty’s Government now a different tone of voice and a very obviously sincere commitment from the Minister.

With reference to the legislative background, we can only give three cheers to the phrase in the Explanatory Memorandum which states that,

“workers are entitled to be paid at least the minimum wage which is specified as one of four hourly rates”.

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Also, paragraph 4.2 states that,

“the officer may serve a notice of underpayment requiring the employer to pay arrears to the worker or workers named in the notice”.

We can only imagine the difficulties of young people who are getting a miserable wage by law—some are not getting even that—and trying to make their way in a very difficult climate. Her Majesty’s Government should not lose sight of that dreadful situation across the nation today.

The Explanatory Memorandum also makes clear that there will be a requirement on,

“the employer to pay a financial penalty to the Secretary of State within 28 days of service of the notice”.

That has to be welcome, but I have questions concerning the policing that aims to prevent underpayment. Is the Minister able to tell us how many people make up that specific unit in HMRC’s enforcement section? If the work of the Government is to be done effectively, one hopes that that specific arm of government is adequately staffed. Often the suspicion is that HMRC is not adequately staffed, and it would be reassuring to hear what the numbers are.

Secondly, is the Minister able to tell us the total amount of fines for the latest available year? What was the largest fine imposed? Is he able to throw any light on that large fine, such as the details of the company? Is he able to enlarge on the answer, should he have it available to him?

Lord Young of Norwood Green (Lab): My Lords, I thank the Minister for his introduction of these statutory instruments. I will deal with the traineeships first.

When reading the Explanatory Note, I noticed that the traineeships do not get any pay, or if they do it will be up to the employer; nor is there any requirement to pay travel expenses or lunch et cetera. I wonder how much the travel expenses—never mind the lack of pay—act as a deterrent to young people taking up these traineeships.

Obviously, we welcome anything that makes young people more employment ready. There was a reference to English and maths, but I am always surprised these days when I do not see any reference to IT. That is now such a key part of any young person’s employment capabilities that I would have thought it would have been in the mix.

It was also interesting to hear from the Minister that 500 training organisations have agreed to deliver these traineeships. As we know from experience, some of the apprenticeship training that was being delivered lacked quality and the Government had to take action. Bearing that in mind—it is not only this Government who have suffered, as we also had some difficult experiences—I think that it really emphasises the need to ensure that there is a monitoring process to ensure that we are getting value for money and a quality training process.

On minimum wage compliance, there have been lots of announcements by the Government. I certainly welcome the number of probing questions asked by my noble friend. I will be interested to hear the Minister’s answers. The Government have been saying over a period of time that they are going to “name and

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shame” those firms. It might act as an extra deterrent if they did so. Like my noble friend Lord Jones, I welcome the Government’s espousal of the minimum wage. He is absolutely right to remind us of the dire predictions that were made at the time about the terrible effect that it was going to have and the millions of jobs that were going to be lost—not taking into account the impact on millions of workers who were being paid, in some of the worst examples, £1 an hour.

I am glad that the Government are now fully in favour of the minimum wage, although not every Conservative Member of Parliament seems to be—indeed, some of them have put down Motions calling for small firms to be exempted from paying it. I would welcome some assurance that the Government will not be going down any such road. Given their previous strange decision regarding their magnificent bargain offer to employees to get rid of their employment rights in return for shares, I wonder what take-up there has been on that. It was almost like buy one get one free—if you believe in that, clearly you also believe in a free lunch.

To return to this statutory instrument, I found myself a bit confused by all the statistics being given by the Minister. I think I have this right: he talked about there being £45 million of arrears; I was not sure how many complaints that had resulted from. I could not quite comprehend whether or not these figures were going down as a result of the enforcement. That is what we want to see. I was pleased to hear the Minister introduce the pay and work rights helpline. It seems to be carrying out its function.

We welcome the higher penalties, although we probably think that they should be even higher still because there still seems to be a significant number of employers that believe they can get away with not paying the minimum wage, which is a real disgrace. The Minister and the noble Lord, Lord Jones, referred to getting a 50% reduction if you pay what you should have been paying. I suppose that I can see some logic in that if it gets them to pay up, but I would like some assurance that, if the same employer were to commit this offence again, we would not allow them to have a second chance of getting a 50% reduction. Would that apply if there were a repeat offence?

To summarise, we generally welcome this measure. I would be interested to know why we have not yet had any examples of the Government actually naming and shaming employers, which might act as a further deterrent, and I would like some clarification on how many cases of enforcement there have actually been over the period that this has been taking place.

5 pm

Viscount Younger of Leckie: I thank noble Lords for their contributions during this very brief debate and I hope to address all the points that were raised.

The noble Lord, Lord Jones, raised important points about young people. It is true that there is much more work to be done. Although the deterioration of the labour market situation for young people predates the recession and this Government and the recession hit the employment rates among young people particularly hard—I think that everybody is aware of that—there are signs of recent improvements in the statistics.

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In the three months to November 2013, there were 920,000 unemployed young people. While that figure was down 39,000 both over the quarter and over the year, that number illustrates how much work we need to do and must do. However, around a third of young people were in full-time education. The unemployment rate for this group was 18.1% in the three months to November 2013—young people make up around 9% of the total population. The number of young people on the claimant count has fallen for 19 consecutive months and was 315,000 in December 2013. In addition, the number of young people who have been claiming JSA for more than 12 months is down by around 25% over the year.

Youth unemployment remains lower than after past recessions: for example, 9% of 16 to 24 year-olds have left full-time education and are workless, against 12% back in 1993 and 14% in 1984. I thought that it might be helpful to produce some context for this discussion but at the same time reiterate how much more work there is to be done.

The noble Lord, Lord Jones, referred to Wales—a very important country and I say so as a Scot. I should clarify that the national minimum wage is a reserved matter. Changes to the penalties regime will cover the United Kingdom. Traineeships will be available only in England and the bespoke exemption will apply only in England. Therefore, in effect, it is not applicable in Wales and there will be no impact there.

The noble Lord also raised the issue of policing to prevent underpayment and asked how many people made up the enforcement unit within HMRC. That is a very specific question on which I will be very happy to write to him to give the figures.

The noble Lord, Lord Young, raised the issue of pay for traineeships. As he said, the general view is that traineeships would not be paid; there is no obligation for employers to pay. It is very much hoped that all employers will see fit to pay for meals and for some transport, but there is no obligation to pay them. He also mentioned skills in maths and English. As he knows, we are progressing with those skills for those people who do not have the necessary GCSEs.

On IT, the noble Lord made a very good point. I think that it is fair to say—and it is a bit of a generalisation, I know—that most young people are pretty savvy when it comes to IT, but it is noted that the noble Lord has raised that issue. It is not part of the programme, but it is noted and I shall take it away.

Lord Young of Norwood Green: I agree with the Minister that they are savvy in some ways. Most of them have PhDs in social networking, though not necessarily in the dangers and risks. I am interested in IT skills as they would apply to enhancing their employment prospects, which is a slightly different sector.

Viscount Younger of Leckie: I fully accept that point. I shall endeavour to write to the noble Lord with some information on that if we have it, looking specifically at the traineeships and IT.

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The noble Lord asked whether the 50% reduction in penalties applied if someone was a repeat offender. The answer is yes. It applies only to the financial penalty. Just to be clear, the employer has to pay back the full arrears to employees within 14 days for the 50% reduction to be applicable.

The noble Lord raised an important point about quality and asked how we would ensure the quality of the traineeships. We have put in place a number of measures to ensure that the work experience is a high-quality learning experience for each young person. Only providers who are graded good or outstanding by Ofsted are eligible to deliver traineeships. The Department for Education has published guidance on what is required to ensure that the work experience is of good quality. Providers are responsible for actively monitoring the work experience placement and working with employers to ensure that it meets each individual’s needs. Providers are given funding to support them to do this, and we have commissioned an external evaluation of traineeships starting from the first year. My department, BIS, is funding the Education and Training Foundation to deliver a traineeship support programme for providers delivering traineeships, focused on ensuring that they are high-quality programmes. I hope that gives some reassurance to the noble Lord.

The noble Lord, Lord Young, raised the matter of naming and shaming. I can assure him that that is very much on our radar. He will be aware that the revised national minimum wage naming and shaming scheme came into effect on 1 October 2013. As I said earlier, the new rules are part of government efforts to toughen up enforcement of the national minimum wage and to increase compliance. By naming and shaming employers, it is hoped that our publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the national minimum wage. This is on top of financial penalties, to which I just referred, which employers already face if they fail to pay the national minimum wage. As for the timing—which was the specific question from the noble Lord—I cannot give a precise date, but we are likely to start naming employers very soon.

The noble Lord, Lord Jones, asked about the total amount of finance available for enforcement in the latest year available. HMRC enforces the national minimum wage on behalf of the Department for Business, Innovation and Skills. The national minimum wage enforcement budget allocation for 2013-14 is £8.3 million.

The noble Lord, Lord Young, asked a question as to what financial support is available to young people on traineeships. I mentioned earlier that employers are not required to pay young people, but I failed to mention that young people on traineeships will be undertaking educational training and will be able to apply to existing programmes of financial support aimed at learners, including the £180 million bursary fund for those aged 16 up to 19 and the discretionary learning support fund for those aged 19 up to 24. I hope that gives a fuller answer than my previous one.

I believe that I have covered all the questions raised, but I would like to reiterate, in conclusion—

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Lord Young of Norwood Green: I asked the Minister for some clarification on the figures that he quoted for HMRC—the amount that was in arrears—so that I could get a clearer picture of how well HMRC is succeeding in tackling this problem. He did not really return to that. There were two figures that I wrote down: one was £45 million in arrears, and I am not quite sure what period of time that related to; the other figure he quoted was something like £3.9 million in wage arrears. I just could not make sense of those; that might be my fault rather than his, so that is why I asked for clarification.

Viscount Younger of Leckie: The noble Lord is right to ask for clarification, not to the extent that we do not have the figures. The best thing to do would be for me to write to the noble Lord with the figures. There is a tabulation in front of me and I think it is better to give those specific figures, and to copy in any noble Lords here today who might also like to see them.

I would like to conclude by reiterating the value of the government-funded traineeships programme in England, which is providing young people with the skills and experience they so vitally need to take their first step into the labour market. Traineeships are a central pillar in this Government’s commitment to tackling youth unemployment. These regulations simply clarify the fact that employers offering work experience opportunities to young people as part of a traineeship on their journey towards employment will not be required to pay the national minimum wage, as is the case with other government programmes that include work experience. These regulations will now be debated in the other place in the charge of my honourable friend Jenny Willot MP.

Motion agreed.

National Minimum Wage (Variation of Financial Penalty) Regulations 2014

National Minimum Wage (Variation of Financial Penalty) Regulations 201419th Report from the Joint Committee on Statutory Instruments

Motion to Consider

5.10 pm

Moved by Viscount Younger of Leckie

That the Grand Committee do consider the National Minimum Wage (Variation of Financial Penalty) Regulations 2014.

Relevant documents: 19th Report from the Joint Committee on Statutory Instruments.

Motion agreed.


Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014

Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 201417th Report from the Joint Committee on Statutory Instruments 26th Report from the Secondary Legislation Scrutiny Committee

Motion to Consider

5.10 pm

Moved by Viscount Younger of Leckie

That the Grand Committee do consider the Public Bodies (Abolition of the National Consumer Council and Transfer of the Office of Fair Trading’s Functions in relation to Estate Agents etc) Order 2014.

24 Feb 2014 : Column GC290

Relevantdocuments:17thReportfromtheJointCommitteeonStatutoryInstruments,26thReportfromtheSecondaryLegislationScrutinyCommittee.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con): My Lords, with much to cover I hope that the Committee will forgive me if I set out the prospective changes in some detail.

The purpose of this order is: first, to abolish the National Consumer Council and transfer its relevant functions to Citizens Advice, Citizens Advice Scotland and the General Consumer Council for Northern Ireland; secondly, to transfer the Office of Fair Trading’s estate agency functions to the Commissioners of Her Majesty’s Revenue and Customs and Powys Trading Standards; and, finally, to transfer residual OFT functions relating to its former consumer advice scheme to Citizens Advice and Citizens Advice Scotland. The scheme itself was transferred to the citizens advice services on 1 April 2012.

This order will complete a programme of consumer landscape improvements that the Government first embarked upon in 2011. The National Audit Office report Protecting Consumers,published in June 2011, and the Public Accounts Committee report on the same issue both highlighted the fact that the existing consumer landscape was confusing, duplicative and therefore inefficient. To address that, in April 2012, following consultation, the Government announced a series of reforms to the landscape of consumer bodies. Over the past two years, we have streamlined the landscape of Government-funded consumer organisations to make it easier for consumers to understand where they need to go to get help. The reforms will deliver a better deal overall for consumers by making it clearer who is responsible for what and by facilitating better co-ordination between consumer bodies and enforcers.

The improvements that we have made so far include: focusing the new Competition and Markets Authority, which will replace the Office of Fair Trading from 1 April, on identifying problem markets and developing effective solutions to competition issues; establishing the National Trading Standards Board and Trading Standards Scotland in 2012 to prioritise national and cross-local authority boundary consumer enforcement; moving responsibility for consumer-facing education and general consumer advocacy to Citizens Advice and Citizens Advice Scotland; moving responsibility for approval of consumer codes to the Trading Standards Institute; and launching Consumer Futures in May 2013 to represent consumer interests in gas, electricity, postal services and—in Scotland—water services. These organisations work together as part of the Consumer Protection Partnership—the CPP—to collectively identify issues causing consumer detriment, and agree priorities for collaborative action.

Let me turn now to the specifics of this order. The order will abolish the National Consumer Council and transfer relevant functions to the umbrella bodies Citizens Advice, Citizens Advice Scotland and the Consumer Council for Northern Ireland. The function will be based in the head offices of Citizens Advice, not within the local bureaux on our high streets. This change will bring together the technical expertise of

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Consumer Futures with evidence from consumers across the country from the citizens advice service bureaux and the national consumer advice helpline. This combination of technical expertise and intelligence gathering will enable the Citizens Advice service to act as a robust advocate for consumers, influencing policy development on general issues and on the complex energy and postal services markets. Careful analysis of emerging trends in consumer complaints will enable Citizens Advice to speak out on behalf of consumers on areas of particular concern and to lobby policymakers to improve consumer welfare.

Alongside the Consumer Futures function, anyone needing impartial help or advice on a consumer issue will, as now, be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages. This means that the customer journey for the consumer who has a complaint is clear and simple.

Complaints data will not be the only intelligence-gathering mechanism available to the Citizens Advice service. It will also receive the National Consumer Council’s information-requesting powers, a move overwhelmingly supported by respondents to the government consultation in 2011. Although those powers are not used regularly, the threat of their use makes it easier to obtain key information necessary for effective advocacy. I will elaborate on this point for a moment, if I may. When this order was debated in the other place, there was some concern that the Government were intending to curb Citizens Advice’s access to those information-gathering powers. I stress that the Government have no plans whatever to diminish the ability of the Citizens Advice service to fulfil the role of consumer advocate by restricting that essential power.

5.15 pm

The Public Bodies Act 2011 requires that where statutory protections exist, they should be maintained in any transfer under the Act. That is what we are doing here. We are simply transferring the statutory provisions that would, as now, in theory give the Government the ability to limit the scope of this power in future, should that prove necessary, but I am happy to confirm that the Government cannot envisage a scenario where such a move might be required. I should also say that Citizens Advice is happy with this arrangement.

The transfer of the Consumer Futures function is a testament to this Government’s confidence in the major role that Citizens Advice plays in our civil society. We firmly believe, contrary to some claims in the other place, that the leadership of Citizens Advice will be well placed to deliver the Consumer Futures functions alongside its other bureaux and helpline services. Citizens Advice will of course continue to receive the same amount of funding from an industry levy to allow it to deliver that important work.

The order also transfers essential estate agency functions currently carried out by the OFT to commissioners of HMRC and Powys Trading Standards, prior to the abolition of the OFT on 1 April. Currently, the OFT can issue warning and prohibition orders

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against estate agents who have acted dishonestly or breached provisions of the Estate Agents Act 1979. Ultimately it can prohibit those persons it considers unfit from carrying out estate agency work.

The Government believe that from 30 March, those functions would sit best with the enhanced activities of trading standards. That is in line with our approach, set out under the Enterprise and Regulatory Reform Act last year, which noble Lords will recall, to focus the Competition and Markets Authority, the successor to the OFT, more explicitly on market-wide issues.

Under the oversight of the National Trading Standards Board, a lead trading standards authority—that is, Powys County Council—will make use of the network of national, regional and local trading standards intelligence to provide an effective, intelligence-led, value-for-money service.

The funds for policing the UK estate agency market will be transferred from the OFT to Powys County Council, via the NTSB’s enforcement grant, and ring-fenced to ensure that it is used for the purpose intended. Powys will be responsible for approving redress schemes which handle complaints from individual consumers, as the OFT is currently. It will have access to the same tools as the OFT to ensure that estate agents meet their obligations. We would of course expect the CMA to continue to play a role if there are any market-wide issues that need considering.

The new system will also benefit from trading standards’s traditionally close relationship with business. That allows for effective oversight and enforcement of the industry. It makes more sense to assign that responsibility to a single lead authority than to distribute it across a range of different trading standards teams, who would be less able to build up the expertise and capability.

There is form here. The lead authority model has been extremely effective in delivering other trading standards services. For example, fraud worth more than £145 million has been tackled by the Scambusters and the illegal money lending teams in the past 18 months. The Illegal Money Lending Team is a trading standards unit based in Birmingham City Council, but it provides an England-wide service and has received plaudits for its successes.

When the order was debated in the other place, there was some concern about the process for appealing against warning and prohibition orders issued by Powys County Council. To confirm, the Government are not proposing any changes to the estate agents appeal process under the Estate Agents Act 1979 through this order. An appeal can be made to the First-tier Tribunal (Estate Agents), which forms part of the General Regulatory Chamber of the First-tier Tribunal. It is administered by the Tribunals Service, an agency of the Ministry of Justice. Appeals will therefore continue to be considered at the national level, not within Powys or Anglesey. In practical terms, this means that agents receiving a prohibition or warning order will appeal to the tribunal within 28 days of being notified, as is the case now.

Estate agents are also required to be registered with the OFT for anti-money laundering purposes and to pay fees to cover reasonable administrative costs. Carrying

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on estate agency business without being registered is a criminal offence. We are proposing to transfer this function to HMRC, which we believe will be well placed to deliver this work robustly. HMRC already supervises a number of other sectors under the money laundering regulations, and has both experience and capacity on the ground.

This order will also tidy up a number of minor legislative provisions relating to the operation of the former Consumer Direct advice line, transferred to Citizens Advice administratively in April 2012, with legislative changes to enable funding for calls relating to gas, electricity and postal services issues made under the previous public bodies order. Section 8(1) of the Public Bodies Act provides that Ministers may make an order only where they consider that it,

“serves the purpose of improving the exercise of public functions”.

Such orders must have regard to,

“efficiency … effectiveness … economy, and … securing appropriate accountability to Ministers”.

I am confident that the changes I am proposing meet all these criteria.

I will begin by addressing efficiency and effectiveness. Publicly funded consumer advocacy is carried out by a number of organisations, including the NCC, Citizens Advice, Citizens Advice Scotland, and to some degree by the OFT. There has been significant overlap between these bodies and there is therefore scope for efficiency improvements in the use of public funds; for example, both the NCC and Citizens Advice produce reports for consumers on the energy market and both have strong links with sector regulators.

This order will create efficiencies by greatly reducing the overlap and duplication of effort in consumer research and analysis by merging the expertise of the NCC with the Citizens Advice service. Both Trading Standards and the OFT possess enforcement powers under the Estate Agents Act. Transferring the OFT’s powers to Trading Standards will simplify the landscape.

The appointment of a lead enforcement authority to carry out this work on behalf of all authorities means that the supervision of prohibition and warning orders will be effectively co-ordinated and consistently applied across the UK. Enforcement activity will be better targeted through continued use of a central intelligence-gathering process and decision-making gateway. The potential for enforcement gaps relating to the estate agency industry will be mitigated.

Powys County Council has been chosen to act as lead authority following a robust tendering exercise, in which every local authority in the UK was invited to bid. Bidders were required to demonstrate how they intended to carry out their new duties and to provide a breakdown outlining how the funding will be allocated. Through this process, a panel led by the NTSB selected Powys as the authority best placed to provide the most efficient, effective and value-for-money service.

The transfer of anti-money-laundering supervision to HMRC also has substantial efficiency and effectiveness benefits. HMRC will be able to exploit operational

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synergies and share information across HMRC regimes where non-compliance is identified, thus realising efficiencies and introducing more effective measures.

The reforms implemented by this order maintain robust measures of accountability. Citizens Advice and Citizens Advice Scotland are required by both charity and company law to ensure good governance. It is therefore not necessary to impose further statutory governance provisions. Instead, the bodies will be held accountable through well established grant funding relationships, which will be expanded to set out the requirements and key performance indicators relating to these new activities. Performance will be closely monitored by my department to ensure that the successor bodies are delivering good outcomes for consumers and achieving good value for money for levy funders and taxpayers.

In the case of estate agency enforcement, Powys County Council is ultimately accountable to BIS. Powys will report to the NTSB in its role as co-ordinator, and the NTSB is accountable to BIS for the performance of its enforcement teams and projects, including estate agency work. Anti-money-laundering supervision is subject to HMRC cost controls and HM Treasury and parliamentary oversight.

There are also some small economic efficiencies resulting from this order. Under the OFT, the anti-money-laundering supervision of estate agents was 95% industry-funded, with the remainder coming from central government funding. The new regime will be 100% industry-funded. This represents a saving, albeit a modest one, of approximately £55,000 per year.

The Opposition in the other place questioned whether the Government had clearly met the compliance criteria under Section 8(1) of the Public Bodies Act. I remind the Committee that the Secondary Legislation Scrutiny Committee supported our view that we have thoroughly met all the relevant requirements. Indeed, the Committee was satisfied enough to invoke the 40-day scrutiny process rather than the 60-day one.

These proposals complete the Government’s programme of improvements to the consumer landscape. In abolishing the National Consumer Council and transferring relevant functions to Citizens Advice, and transferring the OFT’s estate agency functions to HMRC and Powys County Council, this order puts the finishing touches to a landscape that will work more efficiently and effectively for the public. I commend the order to the Committee.

Lord Whitty (Lab): My Lords, I declare one current interest and one past interest: I am vice-president of the Trading Standards Institute, and I was chair of the National Consumer Council and Consumer Focus.

This is the last block of changes that the Government are introducing in this field. While I will end up by wishing the organisations and their staff well in trying to work this out, I cannot but express regret and sadness at what has happened and some anxieties about the future. Not only will this order finally abolish the good work that has been done for the past 50 years by the National Consumer Council, founded by the late Lord Young of Dartington, but it reflects a failure by the Government—actually, successive Governments—in

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achieving just what the Minister started out by saying they were trying to achieve: namely, clarity for consumers, a lack of confusion and a lack of overlap. Even this last piece of the jigsaw transfers powers from two organisations to five, with another two, the National Trading Standards Board and the CPP, also involved, which does not exactly improve understanding and overlap.

When the NCC, Energywatch and Postwatch came together following the 2007 Act, it was a partial achievement of what the Labour Party had promised in the 2005 manifesto, with which I think my noble friend was very familiar. The original intention was to bring together all statutorily based bodies with an interest in representing the consumer in the policy-making and enforcement process. Actually, it never happened quite that way, due at that stage partly to interdepartmental problems, in that the Ministry of Transport refused to allow what is now Passenger Focus to move in, Defra batted a draw and, although there was a way of getting the Consumer Council for Water in, that was never actually triggered. The relationships with the panels that were set up in Ofcom and the then Financial Services Agency never fully materialised, although that is also reflected in the legislation.

5.30 pm

When the new Government came in, I thought that they had grasped the need to rationalise all the statutory-based bodies and the other powers. I understood that the original intention of BIS Ministers, and certainly of senior officials, was that they would try to bring together what was by then Consumer Focus, covering energy and general consumer issues, with the expertise that the NCC over the years had developed in consumer law, consumer redress, European consumer policy and so on, with particular problems on the postal and energy side. They were going to bring in the Consumer Council for Water and, hopefully, the transport bodies, and have a tighter relationship with those bodies that existed within other regulators.

That was also defeated by interdepartmental squabbles or defensiveness but was aggravated by the new Government’s double intention and their obsession with abolishing quangos on the one hand and public expenditure cuts on the other, both of which hit the activity of Consumer Focus seriously. They had another objective from the beginning, which was to transfer the whole function away from the public sector into the third sector. Some of my colleagues were deeply opposed to that but I could understand the rationale. However, they should have brought all the bodies together first and then transferred them into the third sector under the aegis of Citizens Advice, or whatever.

In practice, that opportunity was completely missed because the Cabinet Office insisted that a quango had to be abolished as fast as possible. The Public Bodies Bill was going through Parliament, and we know the inadequacies of that Act, how it was dealt with and how it has been implemented. At the same time, the Treasury was demanding cuts in public expenditure. Those cuts mainly hit the mainstream consumer activity of Consumer Focus, which was directly funded by the taxpayer. By and large, the money coming from industry, as the Minister said, continued and will continue in

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the new arrangement. However, all those areas of expertise that the NCC had developed have been hit seriously by cuts in expenditure. It is not true to say that there was significant overlap with the work of Citizens Advice. There was at the margin, but the work, and the prime focus of Citizens Advice, was different. The expertise is already being lost, and I fear that under the new arrangements there will be more loss.

This is not a happy story for consumer representation in policy-making. Nor is it a happy story in terms of the consumer who wants to know why his or her particular problem is not being covered by the service provider, the regulator or the Government; it is as confusing as it ever was. However, this has gone a long way down the road. I have anxieties about what will materialise. My anxieties are of three sorts, one of which in recent months has been largely allayed. It was about the apparent difficulty of getting Citizens Advice and the traditions of Consumer Focus and the NCC to understand each other. In recent months I think that that has significantly improved, or so I am informed. Of course, it is only part of the old NCC/Consumer Focus role that Citizens Advice will be taking over.

My second anxiety is that the focus of Citizens Advice will be elsewhere. It is a superb organisation in dealing with consumer complaints. Its role in policy has been more limited, and it has not had the relationship with the regulator and the industry that, for example, Consumer Focus, and Energywatch before it, developed in relation to the energy companies. Nor has expertise extended to the whole area of consumer law—perhaps, in particular, to European consumer law, where an expertise rested with the NCC and Consumer Focus and was recognised right across Europe. Indeed, the European organisation, BEUC, greatly relied on them to provide that level of expertise. That seems to be in danger of being completely lost in the new arrangements.

My third anxiety is simply about resources. Although, as the Minister said, the money that comes from the postal and energy sectors will be transferred, the money that is spent on these more general areas of expertise and input has already been cut. There has been some increase in the central government grant to Citizens Advice, but that is against the background of Citizens Advice seriously suffering, directly and indirectly, from public expenditure cuts more generally. A vast amount of the resources for Citizens Advice on the ground comes from local authorities, but that has been severely cut back in many parts of the country. Another part of its resources comes from charities, which themselves are quite dependent on public expenditure; that part has also been squeezed. I would like the Minister to give me the figures for the central government grant, but it seems to me that the Government had already cut the grant to Citizens Advice. They are now topping it up by an amount that is supposed to reflect the additional responsibilities arising as a result of the transfer of the functions of Consumer Focus and Consumer Futures into the organisation. I remain to be convinced that those resources are there.

On a happier note, and perhaps not putting quite such a gloss on history as the Minister, I am glad that the Government have changed their mind about the

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allocation to Citizens Advice of Section 24 powers in the 2007 Act. There were severe anxieties, some of them understandable, about transferring significant powers to demand information from providers of goods and services of all kinds that were given to Consumer Focus by the 2007 Act to a body that was no longer a public body. However, the Government seem to have seen the light on this one and those powers will now be transferred. I am glad that they are being transferred and that the Minister has reiterated the assurance that there will be no constraint on Citizens Advice using those powers. In reality, they will not be used very often, but the existence and threat of use of those powers will make providers of goods and services sit up if Citizens Advice takes on the role that Consumer Focus used to have of tackling major business bodies and government bodies over their treatment of the consumer. I therefore welcome that part of the order. I hope that the new arrangements work. I have my doubts because, frankly, it is a bit of a sorry history.

Although the transfer of estate agency functions to Powys looks slightly odd, it may well work. The reality, though, is that if you look at it in total, no one is going to understand why a problem with an estate agent in Balham is being dealt with by Powys County Council. Looked at more broadly, the reality is that as a result of this measure and the previous one, trading standards have taken on a lot more responsibilities at a time when their own resources, personnel and role within local authorities are being severely squeezed—in some local authorities, beyond the point where they are a viable operation. Therefore, while I do not disagree with giving trading standards some of the old OFT functions, I do not think that it will work effectively if the resources of trading standards in total are being squeezed at the same time. I hope that the Government will take those points on board.

Lord Harris of Haringey (Lab): My Lords, I declare an interest as chair of the National Trading Standards Board, to which reference has been made several times today. I will confine my remarks primarily to the transfer of functions in respect of estate agents from the Office of Fair Trading, and will comment on the process and some of the points that my noble friend Lord Whitty has just made.

Powys County Council was selected following due process, a tendering process in which a number of other local authorities—I cannot remember whether it was five or six—had made expressions of interest and put forward detailed tendering documents. Powys County Council was awarded the contract on the basis of the strength of its bid and the perceived view that it was best able to deliver the service most effectively.

It may seem strange that a single local authority—I think it matters not whether that authority is in Wales or England—is given a national function in this way, but the National Trading Standards Board does that in respect of a number of national functions. The Minister referred to the Illegal Money Lending Team for England. That service is provided through Birmingham City Council and the arrangement works extremely well. There is a similar arrangement for the Illegal Money Lending Team in Wales. Another example is

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the National Trading Standards eCrime Centre, which is provided by North Yorkshire County Council. These are national functions, nationally available, provided throughout the country but delivered through a single local authority. That is the arrangement that is being followed in this case.

The benefit of this structure is that while individual local authorities are leading on these issues, they are part of a national network and structure. They are able to work with local authorities around the country on the development of intelligence. A national intelligence unit for trading standards, funded by the National Trading Standards Board, is provided through Suffolk County Council. So it is part of a national network.

My noble friend Lord Whitty spoke eloquently about the way in which the Government have simplified and introduced clarity to the arrangements for trading standards and consumer protection. Of course, greater clarity and transparency would have been provided had the Government looked across legislation and considered the licensing of letting agents, which is also in progress at the moment, and seen a potential synergy between locating the licensing of letting agents with the licensing of estate agents, given that letting agents and estate agents are often effectively the same individuals. No doubt the Government’s desire for clarity and simplification will mean that these issues will be reviewed in due course.

No doubt the Minister will give us a clear assurance on this, but my understanding is that all the resources that were available to the Office of Fair Trading for this estate agency licensing work have indeed been transferred to the National Trading Standards Board, and that money will be passed through to Powys County Council to do this work. My noble friend commented on the difficult financial circumstances that most trading standards departments around the country are facing. The average reduction in trading standards budgets appears to be approaching 40%.

5.43 pm

Sitting suspended for a Division in the House.

5.53 pm

Lord Harris of Haringey: My Lords, when the Division intervened, I was simply making the point that trading standards departments around the country have been facing substantial reductions in their budgets over the past few years. It is estimated that, overall, trading standards funding from individual local authorities will, on average, have diminished by 40% by 2015, which is a substantial change. The only assurance that I can give my noble friend Lord Whitty is that the resources for the estate agency function will be ring-fenced.

The only other point that I wish to make is that the service that will be provided through Powys County Council will, however, be branded as a national trading standards function. It will quite clearly be a national function supporting estate agent regulation throughout England and Wales.

Baroness Hayter of Kentish Town: My Lords, I share the views of my noble friend Lord Whitty that this is actually a sad day. I am sorry that the Minister

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did not pay tribute to the extraordinary work that the NCC has done over its life. It has been seen as that third part of civil society. There have always been the employers and the trade unions, represented quite rightly by their bodies; a third body representing consumers has been really important for making markets work, being a big national player along with the TUC and the CBI. It is a great sadness to lose that, particularly—and I will come back to this—given the fragmentation that the Government have managed to put in its place. This was just about trying to get rid of a certain number of quangos; we know that that is what it was. There was a rush into it and very little understanding of what the NCC actually did because, as my noble friend Lord Whitty said, there was very little duplication. I should confess—or rather boast—that I was a member of the NCC council and there was very little duplication between what we were doing and what Citizens Advice was doing. Citizens Advice deals with people coming through the door; we were trying to think of problems five, 10 or sometimes 15 years ahead.

Sadly, we lost the argument by just 12 votes at the time that the Public Bodies Bill went through the House, and my guess is that, having dealt with the complexity of transferring those functions, BIS may have belatedly recognised the force of our arguments. There are problems with Citizens Advice taking over the work of the NCC. At the moment, it can answer only 45% of its telephone calls and we have heard from my noble friend about the cuts to the advice service, so there are problems there. However, we recognise that the decision has been taken and we therefore need, or want, whatever replaces the NCC to work as well as possible for the sake of consumers. That is the important criterion.

I have five questions ready to ask about the order, but before that, I have another question. Given the report on the pre-emption of Parliament by our own Constitution Committee—which noted, when the Public Bodies Act 2011 was merely a Bill, that a number of public bodies began to wind down their activities in anticipation of abolition—can the Minister confirm that no public money was spent on the abolition of the NCC and the transfer of functions prior to the relevant approval by Parliament?

On the order, there are five areas in which we seek either assurances or answers. One is on the transfer of Consumer Focus’s statutory information-gathering powers—which have already been mentioned—to Citizens Advice. There was an earlier debate here about whether those could be overused, and in fact our Secondary Legislation Scrutiny Committee returned to that issue. My concern is different: it is the potential underuse of those powers by Citizens Advice. Given the increasing demand on it for its own advice services from very hard-pressed consumers, my concern is that it might take its eye off its longer-term policy role, which has been played hitherto by Consumer Focus. It was partly with that in mind, when the ERR Bill went through, that my noble friend and I argued at that stage that someone—I think we suggested the CMA—should have a sort of reserve power to ensure that sufficient attention was paid to this element of Citizens Advice’s work, given that its own programme and budget were

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laid down by its individual charitable trustees. Those trustees are not accountable to BIS or any other arm of government. Our question, therefore, is: what happens if Citizens Advice falls down on that part of consumer protection? Who would know? It would certainly not be the consumers: there is no accountability for this work to consumers. The letter that Vincent Cable wrote to the noble Lord, Lord Goodlad, on 17 January, said:

“The Consumer Affairs Minister will hold…Citizens Advice…to account for effective delivery of these functions on behalf of consumers”.

I am not clear how that will happen. Will it be done simply by the terms of the grant? If so, how will the Minister hear consumers’ views and what action would she take if, for example, Citizens Advice failed to prioritise vulnerable consumers or the users of government-provided services? How would the Minister know and what would she do if she found any such problems?

6 pm

The second question arises about the transfer of the OFT’s role in issuing a warning and prohibition orders in relation to estate agents and the approval of the estate agent redress scheme, which was touched on by my noble friend Lord Harris. My noble friend also mentioned that the ERR Act made it mandatory for letting agents—sometimes, as he said, the same organisations as estate agents—to belong to a redress scheme. As he said, the Government are not giving the same powers to Powys on redress schemes for letting agents as they are for estate agents. So the existing OFT-approved redress scheme will come under the watchful eye of Powys, but those redress schemes will have to apply to a completely different body to be approved to be the redress scheme for letting agents. That would be nonsense; perhaps the noble Lord will take a moment to explain that to us.

The Secondary Legislation Scrutiny Committee also raised some serious concerns about how Powys could reconcile its accountability to different bodies. Obviously, Powys, as an elected authority, has a responsibility to its electors. As we have heard, it will be accountable to BIS for this part of its work, it will report to the National Trading Standards Board, and it will be accountable to the Trading Standards Institute for the administration of its grant. Perhaps the Minister could explain how easy it will be for the people concerned to report to so many different bodies. After all, as my noble friend Lord Harris said, it will be the national body covering 25,000 estate agents which, between them employ about 1 million people.

Meanwhile, there is the role of Anglesey. The Minister seems to say that appeals were to the tribunal, but the information I have from Powys dated 2 December 2013 outlining the appeal process—not for redress schemes but for estate agents who have been barred—states:

“The Banned/Warned person has the right to appeal against this decision and must do so within 21 days of being notified. Appeals will be referred to Isle of Anglesey County Council who will arrange a hearing of the Appeal with 14 days”.

Can the Minister confirm that I am reading that correctly and, if so, whether every estate agent in

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England and Wales would have to get themselves to Holyhead within 14 days for a hearing, and reassure us that Anglesey, which is, I think, only just out of special measures and likely to merge with another local authority, is up to that task?

Thirdly, I turn to the transfer of the ML role to HMRC. I just say: congratulations, this bit is brilliant. I hope that the Minister does not faint to hear that. In fact, in a previous existence, when I was chair of the Property Standards Board, I very unsuccessfully urged the then Labour Government to do that, so I am delighted that that is happening; it is very sensible. It means that the HMRC will then have a complete list of estate agents, so will be very helpful if the Minister could tell us whether that will be given to Powys, which would undoubtedly help it in its work. As an aside, it is rather silly that anti-money-laundering affects estate agents, who do not handle money, but does not affect letting agents, who do. Maybe someone else could deal with that.

Fourthly—this was touched on by my noble friend Lord Whitty—there is real concern about whether this new architecture will ensure the continuation of the European work that has been so well done by Consumer Focus and, before that, by the NCC. I do not think that the Committee needs telling how much consumer law is made in Brussels, so any reduction in that could be a real detriment to consumers. There is no mention of it, or indeed of the EU, in the explanatory document or in the scrutiny committee’s report—at least, I could not find it. Looking around the Room, I am not the only person who found that it was not there. It would be useful to have some clarification from the Minister about the continuation of this work.

Lastly, I reiterate what my noble friend Lord Whitty said: so much for a clear system. We get rid of the OFT and the NCC, and instead we have the Competition and Markets Authority, Citizens Advice and Citizens Advice Scotland, the Trading Standards Institute, Consumer Futures for a little bit, the Consumer Protection Partnership, the National Trading Standards Board, Trading Standards Scotland and Powys and Anglesey county councils. How that is a clearer architecture leaves me bemused.

The Government have said that they will monitor this set-up. Perhaps the Minister can tell us whether and how that report will come to Parliament. However, the Opposition do not consider that this order meets the test of the Public Bodies Act 2011, that measures should lead to a more efficient, effective and appropriate level of accountability to Ministers. It is a dog’s breakfast. It is accountable to Powys for some things, to trading standards for others, to BIS indirectly through a grant and accountable partly to the trustees of an independent charity. The one group to whom it is not accountable, of course, is consumers themselves.

The order implements an overhasty, ill thought-out change. It is simply about the Government wanting to abolish a quango. It is not about protecting consumer interests or about transferring the tool that is needed to a legitimate and single strong body. I fear that by splitting the system in this way, the order is diluting

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the powers to help consumers to get a fair deal out of the market. It is for that reason that we regret that the order has come here.

Viscount Younger of Leckie: I thank noble Lords for their valuable and detailed comments on an issue that I recognise holds some sensitivities in terms of these changes for certain members of the Committee. I thank the noble Lord, Lord Harris, for his broad support and some reassurances on the estate agency part of the changes.

I start by paying tribute to the work and experience of the noble Lord, Lord Whitty, over many years and indeed decades. I listened with some care to his comments but he will not be surprised to hear that I do not agree with much of his general analysis of the consumer landscape. We believe that these changes are beneficial. I shall start by addressing some of his overall comments, and I hope that that he will forgive me if I duplicate what has been said already.

He started by saying that the reform landscape and the changes set out under the order do not achieve the clarity that he had hoped for. We firmly believe that the reforms we are making are a great improvement. Consumers will have a single port of call for Government-funded information, advice and guidance. The Citizens Advice service will be well placed to use its expertise to direct its advocacy and speak up on behalf of consumers. I recognise that some of the detail of the order is complicated, but that is the nature of legislation. It is the outcome that is important.

The noble Lord and the noble Baroness, Lady Hayter, expressed sadness at the abolition of the NCC. I will say, if I have not said it in the past, that I personally recognise the great contribution that the National Consumer Council has made to consumer issues over the years, and the no small part that a number of noble Lords have played in contributing to that. I believe that I said this earlier, but the NCC’s strong track record of consumer advocacy was one of the key reasons for the body being folded into Consumer Focus when it was created by powers under the Consumers, Estate Agents and Redress Act 2007. The great track record of the NCC was enhanced and expanded when it joined with Energywatch and Postwatch to form Consumer Focus in 2008. It will be further enhanced when it joins the Citizens Advice service as a result of this order.

The noble Lord, Lord Whitty, asked how the consumer journey will work under the new arrangements. He cited the word “confusion” relating to other regulated issues. We believe that the consumer journey will not change significantly under these new arrangements. We are simply joining up the policy-making and regulatory oversight expertise of Consumer Futures with the existing consumer complaint-handling abilities of the Citizens Advice service. As a result of these changes, anyone needing impartial help or advice on a consumer issue, whether that is a general matter or on a regulated issue in a sector, will be able to phone the national helpline, contact their local bureau or use the interactive help on the Citizens Advice web pages.

The noble Lord, Lord Whitty, raised the issue of the failure, as he put it, to bring other related sectors within Consumer Futures. The order is more about

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better working and not simply about moving bodies around, which may have been the expression he used. Citizens Advice will work closely with other consumer panels, joining up on regulated issues of common interest and concern.

The noble Lord also raised an issue about the citizens advice bureaux and whether they had the expertise to deal with the work. I can reassure him that the Citizens Advice service is already fully engaged on policy and research across a very wide range of consumer issues. It has both the experience and expertise to provide a highly effective voice for consumers, and this capability will be bolstered by the expert staff transferring from Consumer Futures. The Citizens Advice service will benefit from its close connection to the citizens advice bureaux and its management of the new consumer advice helpline that is replacing Consumer Direct.

The noble Lord, Lord Whitty, also raised the issue of the funding of the citizens advice bureaux, and stated that it had been cut. I refute that by saying that the Government have not cut Citizens Advice funding. In 2014-15 we will maintain the core grant funding to the Citizens Advice service, which is a combined total of £21.8 million, at a time when other public bodies are seeing their funding cut. That will ensure that the vital central services provided by the umbrella bodies to the bureaux network are maintained. Funding to the service to deliver advocacy on energy—

Lord Whitty: My Lords, my question was slightly different. It concerned the addition of what was the Consumer Focus function, particularly the function that was not funded by industry, which has been handed over to Citizens Advice. Has the amount of money that was previously spent by Consumer Focus on that area of its work prior to 2010 been reflected in a proportionate increase in the funding of Citizens Advice? My impression is that it has not, and that while the aggregate amount for Citizens Advice may have been maintained in difficult times, the full reflection of what was previously done elsewhere is not reflected in that total figure. It would be useful to have the figures.

6.15 pm

Viscount Younger of Leckie: Absolutely. I was going to say that I will be more than happy to write to the noble Lord to confirm the precise figures. I reiterate that it is not our intent to cut the funding. The funding to the service to deliver advocacy on energy and postal matters will be maintained as currently allocated to Consumer Futures, at £8.7 million, with an additional £220,000 allocated to the general Consumer Council for Northern Ireland to deliver postal advocacy. This funding will be recouped via the levy from the energy and postal industries.

The noble Lord, Lord Whitty, also asked whether I would ensure that the lead local authority is properly resourced to undertake this work. This is to do with the estate agency functions. The baseline costs of policing the UK estate agency market will transfer, as he knows, from the OFT into the NTSB’s enforcement grant. This amount will be ring-fenced from the main portion of the grant to ensure that the full funding will be used for the purpose intended.

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The noble Lord, Lord Harris, spent some time speaking about Powys and the transfer of the OFT estate agency function. In thanking him for his support, I want to clarify—perhaps for the noble Baroness, Lady Hayter—that we believe that the role of Powys is very important within the new national enforcement regime, and I re-emphasise the national element of that for the avoidance of doubt. The noble Lord and the noble Baroness asked why the Government were not harmonising letting agencies in addition to the changes that we are making to estate agents. The noble Baroness will be aware that letting agents are already subject to consumer protection legislation. The Government do not believe in excessive regulation. The amendment of the Estate Agents Act to include letting agents would lead to overregulation of the market, which would run a real risk of reducing supply in the rented sector, which in turn would drive up rents and reduce the choice for hard-working tenants.

Baroness Hayter of Kentish Town: I am sorry that I was not clear. I absolutely understand that—I may not go along with it but I completely understand it. I asked about a different issue. At the moment, a redress scheme for estate agents has been approved by the OFT. Approval for that redress scheme will now go to Powys. I understand that. There will then be redress schemes for letting agents—I think they will be the same schemes, but that is neither here nor there. In order for a letting agent to be approved by the redress scheme, they will not be able to go to Powys to get a tick; I understand that they will have to go through the DCLG. That is the same issue mentioned earlier by my noble friend about two departments not quite co-operating. My question is not about the letting agents themselves but the approval of a redress scheme for letting agents. It is extraordinary that it is not being done in the same way as for estate agents.

Viscount Younger of Leckie: I have listened carefully to the noble Baroness, and I believe that she is correct. She mentioned the DCLG, and I can say that the reforms will create a new requirement for letting agents to join an approved redress scheme. It will be implemented through the Enterprise and Regulatory Reform Act 2013, which she was very much a part of, with my good self. The order simply transfers existing enforcement arrangements from one body to another rather than creating a new redress scheme. I do not know whether that answers the noble Baroness’s question.

Baroness Hayter of Kentish Town: We will exchange letters.

Viscount Younger of Leckie: Indeed, a further exchange of letters would certainly clarify the matter.

The noble Baroness raised an important point about Citizens Advice being able to answer only about 45% of calls—to paraphrase her question. I am not clear where those figures come from because Citizens Advice is now reporting very high levels of satisfaction on the use of its national call line. Perhaps the noble Baroness can advise me on where she got those figures. They

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may, dare I say, be slightly outdated, but I would be very pleased to speak to her offline, as it were, about that.

The noble Baroness also raised the important issue of accountability relating to Powys County Council. She said that it is convoluted and unclear, but we believe that that is not true. Ultimately Powys County Council will be accountable to BIS, as I explained in my opening speech. As she knows, Powys will report to the National Trading Standards Board in its role as co-ordinator, and the NTSB is accountable to BIS. I am not entirely sure why she is concerned about that because we believe that there is actually quite a short direct reporting line to BIS. Again, I am extremely happy to speak to her outside this Room to clarify what I mean by that. At the same time, the noble Baroness raised the issue of Anglesey. I can confirm that Anglesey’s licensing committee will play no role in appeals against Powys’s warning and prohibition orders. These will be made first to the First-tier Tribunal.

The noble Baroness also asked how the Government will ensure that Citizens Advice will deliver on the work that it has been given and how its work will be monitored. We will hold annual performance reviews with the Citizens Advice service to ensure that the new arrangements are effective and that the successor bodies are delivering on behalf of consumers. We will also make a review of the full suite of statutory provisions within five years of the order coming into force.

The noble Baroness also raised the question of whether Section 24—in other words, the information-gathering powers—would be underused. I reassure her that Citizens Advice will have full access to these powers should it require them. She also asked when Powys and HMRC would receive the list of estate agents from the OFT. HMRC is already in an information-sharing agreement with the OFT as a supervisor under the Money Laundering Regulations 2007. The order provides an information-sharing gateway for Powys that will come into force as soon as the order is made.

The noble Baroness also asked how the consumer will be represented in Europe. The CMA will be responsible for acting as the UK’s single liaison officer in ensuring compliance with the consumer protection co-operation regulation. It will forward individual enforcement actions to the NTSB unless they relate to problems where it takes the lead. However, Citizens Advice will continue to work closely with its European counterparts, as Consumer Focus does now.

I have given due regard to the Secondary Legislation Scrutiny Committee’s decision and comments. I hope that I have answered all the questions that were raised. If I have not—there were quite a few questions—I will be more than delighted to expand the letters that I have already committed to writing to the noble Baroness, Lady Hayter, and any other Peer. The Government conclude that the order meets the requirements of the Act, and I commend it to the Committee.

Motion agreed.

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Children: Competitive Sport

Question for Short Debate

6.23 pm

Asked by Baroness Heyhoe Flint

To ask Her Majesty’s Government what steps they are taking to encourage younger children to participate in competitive sport.

Baroness Heyhoe Flint (Con): My Lords, I am pleased to have the opportunity to lead this debate because last month I was incensed to read that Surrey Rugby, part of the RFU, was changing the ethos and rules for children’s mini-rugby, age six to 11, meaning that teams need no longer play to win and that they must also be of mixed ability, not the strongest that keeps on winning. My blood pressure shot up rapidly and the scheme provoked wider anger in the game. Ex-England international player and board member at Esher Rugby Club Simon Halliday said:

“We are appalled and have withdrawn from all Surrey rugby competition. In sport there are winners and losers. As long as you don’t demean the loser, it’s straightforward”.

Chris McGovern, the chairman of Real Education, criticised the Surrey rules, saying:

“This is not in the interests of children. It will rob them of motivation and incentive, and does not prepare them for the real world … Children can learn from failure and they have to lose sometimes”.

Steve Grainger, the RFU’s development director, countered:

“If we are not meeting children’s needs and not presenting them with a format that suits them, we are not delivering to our customers”.

What a ghastly word—“customers”. This guidance applies to Surrey’s mini-festivals. Scores will be regularly reviewed and current RFU regulations state that:

“Matches must be brought to an end if … at Under 7s to Under 12s the try difference rises to more than six”.

An accompanying Daily Telegraph editorial headed “Must try less hard” stated that,

“misplaced egalitarianism risks denying non-academic children the valuable opportunity of excelling on the sports field”.

My comment is that youngsters, whether playing rugby or on their Xbox, thrive on competition. A game where no one wins is not much fun.

Sport England must hope that its massive government investment into sport will help youngsters to learn more about life’s battles if they strive to win and learn how to lose. Sport England stated to me:

“We know that many young people enjoy taking part in competitive sport, and that others are more comfortable simply taking part with a focus on personal challenge. We think that competition and realising talent are essential elements of a high quality grassroots sports sector”.

Sport England is investing up to £35.5 million between 2010 and 2015 in the Sainsbury’s School Games, delivered by the Youth Sport Trust. Some 70% of schools in England have signed up for them. There is thus a clear demand for organised, competitive sport. Sport England’s investment philosophy for primary school sports is:

“We want all children to have good physical literacy—able to run, throw, jump, with confidence, through PE at their primary

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school; to have a positive experience, and associate PE with fun and enjoyment and also to have exposure to a range of activities including competition”.

To emphasise the Government’s commitment to young children having an enhanced sporting experience, the Prime Minister announced just three weeks ago that the Government will extend primary school sport premium funding up to 2020. It was previously guaranteed until 2016. This premium provides £150 million a year for primary schools to enhance their provision of PE, physical activity and school sport. The funding is fully ring-fenced, with an average primary school receiving around £9,250 annually.

The Youth Sport Trust, an independent charity devoted to changing young people’s lives through sport, chaired by the noble Baroness, Lady Campbell, very much welcomes the Prime Minister’s announcement. It states that it believes that this investment has the potential to transform PE, sport and physical activity provision in our primary schools, and that it is crucial that schools are supported and encouraged to use sport premium funding to secure sustainable improvements to provision. The Youth Sport Trust believes that participation in competitive sport at school is a key part in any child’s sporting journey, building key life skills such as teamwork, determination and leadership. The trust also believes that any focus on competition should allow all young people to participate fully in PE and school sport, including those who are less inclined to take part in competitive activities.

Going forward, if the Government are committed to driving the take-up of competitive sport in schools, it is imperative that measures to promote this are articulated as part of a wider PE and school sport programme. I would be pleased to hear assurances from the Minister that this commitment is at the forefront of government thinking.

The FA has made sensible changes at youth level, most notably that season-long competitions have now been removed in favour of shorter-format trophy events providing several competitions throughout the season, capturing children’s imagination and preventing runaway winners. This still promotes the importance of winning and losing and allows the recognition of winners, but here is a message to Surrey Rugby: no reselection is imposed on youngsters’ teams that have the audacity to keep winning.

The ECB Cricket Foundation’s Chance to Shine schools programme, with government backing, has the overall aim of reintroducing cricket into state schools. It uses cricket as a catalyst for developmental issues like behaviour, attainment, teamwork, life skills and values. The ethos is simple: link cricket clubs to local primary and secondary schools, provide qualified coaches to deliver cricket sessions and matches in schools, train teachers and encourage children to come and play at cricket clubs, thus encouraging competition. Since 2005, more than 2 million children, including 1 million girls, have received coaching through the programme—a great achievement.

Kwik Cricket, another ECB grass-roots initiative, provides children of primary school age with a fun, inclusive and fast-paced introduction to the game of cricket. The main aim is to inspire children to play

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cricket through a national competition framework. Each summer, the largest structured primary school initiative in England and Wales gives children aged five to 11 at 10,000 schools the opportunity to play and learn cricket in a competitive but fun environment. There is even an ECB Ashes school challenge, a free interactive primary school resource that enables students to learn about cricket’s most famous series. Perhaps in future England’s school youngsters could beat Australia interactively, unlike in the recent real live men’s Ashes cricket series. The women’s cricket team is of course absolved of this little barb.

The DCMS Taking Part survey 2013 states:

“For 5-10 year olds, the most common way of participating in competitive sport was playing sport in their school in organised competitions”.

It is a well known fact that increasing physical activity in lessons, including competitive elements, from twice a week to daily is reported to have a significant effect on primary school pupils’ academic achievements in maths, reading and writing. The DCMS document Creating a Sporting Habit for Life: A New Youth Sport Strategy made clear that a key goal for the Government was to increase the number of young people participating in school sport, including building a lasting legacy of competitive sport in schools. Competitive sport was also included in the PE component of key stages 1 and 2 of the revised national curriculum in England for September 2013, which sets out the purpose of PE for younger children as:

“A high-quality physical education curriculum inspires all pupils to succeed and excel in competitive sport and other physically demanding activities”.

My right honourable friend the Minister for Sport, Helen Grant, stated in the other place:

“Competition can be great, but not everyone likes it. We want people to be active and to enjoy sport, which is why changes have been made to the national curriculum to provide a broad range of team and individual activities such as dance that will appeal to those who may be a little less competitive”.—[Official Report, Commons, 12/12/13; col. 336.]

However, you try telling contestants in “Strictly Come Dancing” that dance is not a competitive art form, or even that cheerleading teams do not compete to be the best. The Women’s Sport and Fitness Foundation, which is backed by the Government, found in its survey Changing the Game, for Girls that,

“it was not competition per se that girls say they dislike, but rather other people’s negative behaviour in competitive situations, including: cheating … fighting … arguing”.

I am not sure which sport they were thinking of in this perception. Perhaps it was hopscotch or conkers.

If you want to hear what competition in sport can do for the development of youngsters, turning them into rounded adults fit for life and business, hear what Helena Morrissey, chief executive of Newton Investment Management, one of the most influential women in the City and member of the Women and Sport Advisory Board— created last September by the right honourable Maria Miller, Minister of State at DCMS—had to say on the subject:

“Watching my sons play rugby, football and cricket has reinforced for me the importance of learning to be part of a team … The importance attached to the boys’ team sports by their schools and peers is also great training for playing in front of a ‘crowd’. The

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boys learn to deal with performance nerves, to overcome disappointments, to have the strength of character to carry on when losing—and to enjoy victories”.

Helena Morrissey’s company sponsorship of the Women’s Varsity Boat Race is a leap of faith to make equality a reality in a corner of the sporting world. She said,

“and then our daughters will be inspired, their schools compelled and the curriculum altered—to develop, ultimately, more women prepared to run businesses and the world”.

That is what competition in sport can achieve. Britain’s triumphant gold medal winner in the skeleton bob at the Sochi Winter Olympics, Lizzie Yarnold, commented in a BBC interview:

“You don’t get better unless you push yourself”.

That is what competition should do for us all, young and old. I hope that my noble friend and the Government agree.

6.33 pm

Baroness Massey of Darwen (Lab): My Lords, I am delighted that the noble Baroness, Lady Heyhoe Flint, has secured this debate. She and I both played competitive—very competitive—hockey and cricket, and have the knuckles to prove it. Today I want to explore some of the issues around how far we should push competitive sport and to whom.

This debate is, of course, very timely, given the excitement of the recent Winter Olympics, the enthralling Six Nations rugby and the more disappointing Ashes tour of Australia, although of course the England women’s team won. Sport is around us all the time, and I am pleased to see that MPs and noble Lords are consistent in asking questions of Ministers about the importance of sport for young people.

There are of course concerns and tensions. Sport is only partly at international level and only partly competitive. As has already been mentioned, the noble Baroness, Lady Campbell, recently talked about “a crisis of inactivity”—not of sport, of inactivity. There have been reports of competitive sports encouraging pupils to cheat because of pressure to win and suggestions that pushy parents and grandparents on the touchline set a bad example for behaviour at sporting events. I have seen that. Sadly, there are examples of the poor behaviour of professional, or at least competing, sportsmen—usually, they are men—which degrade the name of sport.

Let me try to tease out the issue further. When I taught in schools and, indeed, when I was in school all those many years ago, it was clear that many children were not going to succeed in competitive sport. Sport for them did not improve self-belief and self-esteem; quite the contrary. Such pupils hated games, invented excuses not to do them, lied, forged sickness notes from parents, and so on. Sadly, they were often bullied and disparaged for not being able to catch, throw, run or swim. I am sure that it is the same in schools today. We know that many girls simply give up physical activity when they do not have to do it at school. What a pity.

I have always supported the notion of health-related fitness, as well as competitive sport; they are not mutually exclusive. Many schools now offer dance,

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movement and exercise which all can enjoy. Classes in yoga, tai chi, Pilates and Zumba—whatever that is—are proliferating in communities. They are not competitive, except perhaps in relation to oneself. Walking is competitive in relation to oneself and the elements. I went for a walk in Sussex recently and fought against the wind and the mud.

If there is enjoyment in being able to perform a physical activity, the activity may well continue, to the benefit not only of the body but of the mind. It is well known that physical activity also improves mental performance. Mr Gove recently praised the academic achievement of pupils in Shanghai schools. I wonder whether he is aware that in Shanghai, pupils also do one hour of physical activity a day.

I turn to cricket for a few final thoughts. Wasim Khan, chief executive of the Cricket Foundation, has spoken of concern that so many youngsters may be struggling “in a pressure cooker” to win at all costs. He has emphasised the need to play fairly and to respect the rules and the opposition. The ECB programme, Chance to Shine, cited by the noble Baroness, Lady Heyhoe Flint, is a brilliant example of taking sport into inner-city schools. It is competitive, but in a fairly light-hearted way.

The noble Baroness’s Question refers to younger children competing in sport. I must say that I would not like younger children to be demoralised by an apparent lack of sporting ability or being in a pressure cooker. Younger children should be, and many are, active creatures. They like being physical. If they can taste the excitement of competition, handled well and positively, that could be a good experience that it can be fun to not win. All I am saying—I think that the noble Baroness will agree—is that qualities of collaboration, teamwork and respect for others are part of sport and that those qualities should not be downplayed in favour of competition, particularly at an early age.

6.38 pm

Lord Addington (LD): My Lords, I thank my noble friend for tabling this debate, although I fear that when I read the articles about Surrey, I understood why they are bringing that provision in. To deal with that first, rugby union is a game where physical size and strength are important. If you have a group of children who are bigger earlier, they do not compete; they smash down and defeat their opponents and drive them down. They gain nothing in terms of competition from being bigger and stronger; they do not actually have to be very good at the game; and those that they are walking over do not benefit from that either. That is why, in a club game, it is now encouraged that if someone matures earlier, you stick them in with older people. Thus, that article becomes more understandable. When someone says, “You’re taking away the trophy from my children and my club”, I say, “If you’re judging the success of your club by a trophy won by under-nines, go away and have a think about yourself”. That is my take on that.

When it comes to competition, I do not know a sporting activity in which competition is not involved. Competition does not mean the end result but the

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process by which you undertake these games—how, in any team sport where you have a ball, you move that ball around to achieve your ends. How you teach people to run and receive the ball within the confines of that game is the essential competitive element from which a score can be derived. The competition is the build-up, part of the structure, the movement and the correct way in which you do that. People get obsessed about scores, results and league tables that they can publish and point at—and they are often the people who are not taking part in the sporting activity.

In concentrating on the true competitive element—that is, getting somebody in a competition where the outcome is not more or less predetermined—you are creating competition. By evening the sides out, you create it. Why do you have first, second and third teams in adult sport, in amateur games? It is so that you have even competitive results. The RFU is removing trophies from its junior ranks because they are meaningless for the adult game. The idea that you should have a contest on as even terms as you can get, where the result is not guaranteed, is essential. If we can bring this into the youth policy, it means making sure that people are trained properly to create these situations.

To go back again to rugby union, the sport I know full well, it was probably the worst game for children ever at full 15 level on a full 15 pitch. “Let’s put the winger out there and see if he gets hypothermia first or dies of boredom”, because the ball is too big for him to carry and the pitch too big. All team sports suffer from this to an extent. Rugby is probably the worst, but I remember Trevor Brooking recently saying something about having a full-sized pitch and small children, and how the biggest kid who can kick it down the field and then win it in the air will win you the game. Half of both teams become irrelevant.

Therefore, when we are talking about competition, look at the essence of what it is. Forget about the league tables and the junior trophies. Let us talk about the really difficult bit: creating a situation in which someone gets something out of that process of competing with someone on as even terms as possible. It ain’t going to be for everyone, but most of us will benefit far more from having that skill than we will from not having it.

6.42 pm

Baroness Grey-Thompson (CB): My Lords, I thank the noble Baroness, Lady Heyhoe Flint, for tabling this debate. I have a number of interests in sport, all of which are declared in my entry in the register.

Too often, the offer in schools is seen as a choice between competitive and non-competitive sport, and the sporty and non-sporty children. Sadly, it is not quite that simple. As noble Lords may imagine, I am a huge supporter of competitive sport for everyone, but delivered in the right way, not just for those who are talented. It should be used as part of a drive to encourage lifelong participation in physical activity. Currently, 80% of women are not fit enough to be healthy. This alone should give us cause to think about primary school provision because that is where disengagement begins.

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In recent years there have been many improvements in how sport is taught and coached, along with the development of the talent pathway and its relationship with competition. However, age grouping is a rather crude measure, as while young people develop there can be a significant disparity in skill level, and even a little training can make a huge difference in performance. Sport Wales is doing some great work in this area which is,

“player-centred, development driven and competition-supported”,

moving away from competition being the main focus. This is very positive because it will do a great deal to improve people’s experience of competition and keep them involved for longer.

I have been on the losing side many times and, quite frankly, it is miserable. Many sports have guidelines on how winners should behave, and I am glad to see that this will be extended to what I call overenthusiastic parents. There has been a lot of debate about the right way to encourage fair play and, while losing can be perhaps a little easier to understand, if not accept, as you get older, it is down to the skill of the coaches and teachers to balance competitive teams but not in a patronising way. I have seen some great examples of balance and, while being beaten by a massive margin is miserable, knowing that someone was being easy on you is worse. We should be more creative, but I do not wish to see junior competitions dumbed down; trophies should be awarded for excellence, effort, and commitment.

The Minister for Sport in another place, Mrs Helen Grant, has been extensively quoted this weekend speaking about girls in sport. She was building on research that has shown why many girls drop out of physical activity and how they feel about competition. We know the issues—they have not changed that much in the years that I have been involved—but one piece of news that I am really pleased about is that the ECB has professionalised the women’s game and is offering paid contracts. I heartily congratulate it and cannot wait for other professional sports to follow. There may always be challenges around body image for young girls but we can make it cool for girls to be sporty and competitive, and what the ECB has done is very powerful.

What we can change relatively easily is how we deliver physical activity in schools. Young people need to be physically literate. If they are taught good, basic skills, they will be able to take part in a wide range of activities with increased confidence and think more positively about participating and competing. For me, the solution is simple: we need to help teachers to deliver physical literacy. The investment that the Government have made is incredibly useful, but think what we could do if we took a radical approach and changed initial teacher training. Can the Minister update us on what plans Her Majesty’s Government have to look at teacher training, especially at primary level, so that a lot of women teachers who may have dropped out of sport between the ages of seven and 12 can understand the principle of physical literacy and are better able to teach core skills? It is not about measuring how far children can jump, run or throw. We do not expect children to do long division without teaching basic maths skills, but that is what we are doing to our children in PE.

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None of this is easy to get right—if it were, we would have done it a long time ago. If this were a school report, it would read that we have shown some progress but we could do a lot better.

6.46 pm

Lord Allen of Kensington (Lab): My Lords, my background is a career that started in the steel industry in Scotland when I was 17 and has spanned more than 40 years working in business, broadcasting and the media, but I am delighted to be able to make my maiden speech on a subject that I am equally passionate about. I had the privilege of chairing the Commonwealth Games in Manchester in 2002, was vice-chair of the London 2012 bid and was Mayor of the Olympic Village. Visiting thousands of grassroots clubs as chair of nations and regions has fuelled that passion. I remember vividly one particular visit to the Percy Hedley Academy for Disability Sports in north Tyneside where I was asked to play wheelchair football, demonstrating that this sport is not for the faint-hearted as I sped around at 20 mph much to the amusement of the young, elite athletes.

I thank the noble Baroness, Lady Grey-Thompson, an athlete of distinction, a friend and a great inspiration, for her kind words of introduction. I also congratulate the noble Baroness, Lady Heyhoe Flint, a cricketing legend, on securing such an important debate.

Today is my first time at the crease on an unfamiliar pitch. I have yet to become familiar with the House but my own fitness has improved as, many times, I have gone down the wrong corridor or up the wrong stairs. In this, I have had great assistance from the wonderful staff and Peers alike, and I am very grateful to them for that. I also pay tribute to my sponsors, the noble Baroness, Lady Jay of Paddington, and the noble Lord, Lord Bragg, and thank them for their patience in answering my many “daft laddie” questions such as, “Why do we say ‘Good morning’ in the House when it is 2.15 in the afternoon?”.

Although feeling humble and, as you can see, slightly nervous in the presence of such distinguished Members of your Lordships’ House and so many sporting greats, today is an opportunity for me to highlight and honour the 2 million heroes who give up their time each week to help sports clubs in their communities.

In 2012, the world witnessed how London made the two greatest sporting events, the Olympics and Paralympics, even better. Seventy thousand Games makers and London 2012 volunteers around the country played a huge part. Every competitor I spoke to told me how important volunteers are at grassroots level: it had been volunteers who had inspired them, volunteers who had coached them and volunteers who had raised money for their equipment and training. We therefore need to encourage disabled and able-bodied people from all walks of life to join this army of volunteers: the Ritas who, after a gruelling shift at work, turn up even on the wettest Wednesday evening in Wigan, Winchester and Wishaw to coach the under-12s; the Roys who give up their time to repair and maintain the club houses; the Alans who do the fixtures and the transportation; and the Amys who spend many hours

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doing the accounting and the administration. These heroes are contributing to the many benefits that sport brings and, most importantly, to improving the health and life expectancy of our young people.

Data from Public Health England show that 30% of 10 to 11 year-olds are overweight or obese. Diabetes UK warns that type 2 diabetes—normally associated with obesity and inactivity in middle age—is now becoming prevalent in children, with around 1,400 children diagnosed with this condition. We need urgently to address and reverse those trends if we are to avert an obesity and chronic health time bomb. Getting kids into sport will play an important part but we need to build capacity, and that means more volunteers. Sport England reports that seven out of 10 clubs need more volunteers. I am honoured to be chair of the Join In Trust, which aims to match grass-roots clubs with the thousands of people who are looking to find rewarding and interesting things to do in their communities. Last year we signed up more than 100,000 sports volunteers. This is a good start, but we must do more.

6.50 pm

Lord Hoyle (Lab): May I say to my noble friend that I seem to be always doing “firsts” with him? I met him on the first day when he started at Granada and now I am following him on his maiden speech. He has a lot to offer this House, and I hope that it will not be the last that we will hear from him; I know that it will not.

I thank my noble friend Lady Heyhoe Flint for initiating this debate because it is very interesting. In field sports, it is often the adult motivation we are looking at rather than that of the children who are participating. We should start from that kind of standpoint. I will explain what I mean by that. Very often, many of the practices that adults expect of children are too difficult for the children themselves to do. They are expected to win at all costs. Every Saturday, I take our dog for a walk and I go past schools where they are playing football. I tell you as an engineer that the language that I hear there frightens the dog—and the dog is a Rottweiler—never mind frightening me. The other problem, which has been mentioned before, is about not being good enough, because, as has rightly been said, kids are at different stages of development. Very often, it is the most physically developed who get on to the team, and that is a detriment to the others.

Given my connection to rugby league, I want to talk about what we are trying to do there. We are running a new pilot scheme. In 2011 we decided to look at what was happening with seven and nine year-olds and see what we could do about it. We looked at the existing practices that were taking place, and from that a pilot scheme has evolved. It is designed to make playing itself more fun for the children—to make them enjoy it and want to do it. It is designed also to give them more time on the ball and to develop their skills. It is absolutely providing that. To give them an opportunity to develop skills is very important.

We called the new format we developed a festival format, and it is getting more and more children to participate. That in itself is very important. It is a

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modified game so all children can play. No child is left out: there are enough teams to ensure that everyone has a chance to participate in it. There are no substitutes either, so they all get a chance to develop their skills. Even when they have not been interested, we are finding that there is an interest that children take. More importantly, we are finding that this interest is being carried on later in life, so that the interest in sport continues.

The pilot scheme itself was launched in Leeds and was particularly successful in east Leeds, which is one of the more deprived areas of the city. We saw a dramatic increase in under-sevens who are participating in the game and registering to be in it. It is a new step forward, as far as we are concerned, in getting children involved in the game. I will finish on this because my time is up. Having been rolled out in Leeds, it is now being rolled out across Yorkshire and that will be followed by Cumbria, London and the north-west, so I hope noble Lords will wish it every success in the future.

6.55 pm

Lord Thomas of Gresford (LD): My Lords, I, too, thank the noble Baroness, Lady Heyhoe Flint, for sponsoring this debate, and congratulate the noble Lord, Lord Allen, on a wonderful maiden speech, which we all enjoyed.

I agree with other noble Lords that dads can be a bit of a problem. They are standing there yelling their heads off and trying to fulfil their own dreams; normally they were not very successful themselves. I remember one friend of mine pulling his youngster off the field and saying, “You little blankety-blank coward”, which I did not think was very helpful for a 10 year-old, and that is the sort of conduct that you see. I have been there refereeing, controlling dads on the line, coaching and trying to get parents to realise that little Johnny may not have been picked for the very best of reasons. The problem is that children feel that they have failed, and become disillusioned.

The noble Lord, Lord Hoyle, talked about rugby league and outlined the programme that the RFL has carried out. The one area that he did not refer to, however, was north Wales. I declare an interest: my son is the chief executive of the North Wales Crusaders. The club started up two and a half years ago, and rugby league is now the most delivered sport in schools in north-east Wales. It is simple and inclusive. Coaches focus on the physical literacy to which the noble Baroness, Lady Grey-Thompson, referred. It encourages them to run, pass, catch and dodge with the ball in hand, and promotes the fun aspects of the game before anyone gets hung up on winning. This is done first in school sessions and then encouraged at larger mass participation events. The North Wales Crusaders’ “Give & Gain Day” brought 400 children together from 20 schools to attend one event, where players from the professional team, who had qualified as coaches especially for the event, ran different “skill stations”, encouraging the children to develop that physical literacy before being introduced to a competitive environment.

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Competitiveness is introduced in a controlled and inclusive way so as to avoid the “biggest/strongest/fastest” issue that my noble friend Lord Addington talked about. I recall that when I was in school, one Kilblinski—known as “Killer Kilblinski” to his friends—was playing with us in the First XV aged just 15. The Crusaders have developed some simple strategies; for example, if a child scores a try, he is taken off the pitch for two minutes and given a break. This means that those who hog the ball spend less time on the pitch if they simply try to score every time they touch the ball and do not include those around them. That is a very sensible way of getting more involved.

In the past 12 months the Crusaders have held 578 coaching sessions, with 95 schools or clubs involved; 2,800 children aged eight to 17 did on average nine sessions each. However, the local council and Sport Wales—which is focused on the union game—provide minimal funding: between them, they do not even cover the cost of one community coach’s salary. That has to be addressed if this sort of participation is to be encouraged.

The absolute key to all this is bridging the gap between school and the community game. Sport does not end when the school gate is closed. North Wales Crusaders are developing a network of “doorstep” clubs, which can be easily introduced into all communities. Who knows? Rugby league may dominate the north of Wales as union does, very successfully, the south.

7 pm

Lord Moynihan (Con): My Lords, in 2006, Gordon Brown, as Chancellor, wrote an outstanding Olympic manifesto. In an article titled My Fight to Get Britain Fit for the Olympics, he outlined the following measures: to offer children four hours of school sport by 2010; to lead the world in 2012 as one of the fittest and most sporting of nations; to offer after-school sport and links to all local sports clubs; to have every school playing competitively in local leagues; to increase sports volunteering in schools and communities by 1 million; to provide every potential young sports star with extra support to help them train and develop; and that every school should have access to playing fields and better sports facilities.