House of Lords
Tuesday, 10 June 2014.
2.30 pm
Prayers—read by the Lord Bishop of Norwich.
Healthcare Professions: Regulation
Question
2.36 pm
Asked by Lord Hunt of Kings Heath
To ask Her Majesty’s Government what plans they have to modernise the regulatory framework for the healthcare professions.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, we asked the Law Commission to undertake a major review of professional regulatory legislation, which reported in April this year. The report is complex and needs thorough consideration, which we are currently undertaking. We are committed to legislating on this important issue when parliamentary time allows. In the mean time, we are already using secondary legislation to make urgent changes necessary to make sure that patients can continue to be confident they are receiving safe care.
Lord Hunt of Kings Heath (Lab): My Lords, the noble Earl will recognise that the Law Commission work has been extremely valuable. The outcome is potential legislation to modernise all the regulatory bodies in the health service, which has the full support of all the regulatory bodies. The noble Earl cannot be serious in suggesting that a lack of time prevents Parliament considering that Bill. It was widely expected to be taken in this Session, and I am sure that we could come back a week or two earlier to help the noble Earl get this through. Is the real case not that the Government are so worried about their stewardship of the NHS that they dare not bring a Bill on healthcare in this Session?
Earl Howe: No, my Lords. We understand the frustration felt by the regulators that this has not been taken forward yet, but other government priorities have had to take precedence. That is the reality that we must accept. As I have said, we are committed to legislating on this important issue when time allows. With that in mind, we are currently working hard in consultation with key partners, including the professional regulators and patient and professional representatives, on our response to the Law Commission’s work. The complexity of that exercise cannot be overemphasised.
Lord Willis of Knaresborough (LD): Would my noble friend agree that, after the very challenging Bills that went through the House in the first two Sessions, this Bill would have support right across the Chamber, across both Houses and across all the professions in
terms of patient safety? Would my noble friend also agree that this would be a wonderful opportunity for us to tackle the appalling situation whereby 1.3 million healthcare support workers are not regulated and do not have standards, and no one can judge fitness to practise? A draft Bill would at least give us an opportunity to frame that legislation.
Earl Howe: My Lords, as my noble friend will know, we have debated the regulation of healthcare assistants on a number of occasions. The Government’s view is well known. However, I agree with him that the content of the Law Commission’s draft Bill is welcome to many parties—indeed, the Government are keen to see it progress. Much of the proposed legislation is already law in one form or another. The review is about pulling together all the different bits of legislation, introducing consistency across the professional regulators where practicable, making sure legislation is fit for purpose and, importantly, introducing flexibility for the regulators to respond to changing situations.
Lord Patel (CB): Will the Minister confirm that the Department of Health intends to bring in an urgent amendment via a Section 60 order to allow the GMC to implement the urgent reforms that it needs to protect patients and bring doctors to account?
Earl Howe: Yes, my Lords, we are working with the GMC to develop secondary legislation that will strengthen and protect the separation of the GMC’s investigation and adjudication functions by establishing the Medical Practitioners Tribunal Service in statute, as well as modernising the adjudication procedures, and to address a number of lacunas in the legislative framework. We are seeking to have the Section 60 order on the GMC’s fitness-to-practise processes in place before the general election.
Baroness Pitkeathley (Lab): My Lords, I declare an interest—
Lord Walton of Detchant (CB): My Lords, I declare an interest—
Baroness Anelay of St Johns (Con): My Lords, there are many with an interest but it is the turn of the Opposition.
Baroness Pitkeathley: I declare an interest as chair of the Professional Standards Authority. The authority has already done preparatory work for the Department of Health on which changes to Section 60 orders would be in the interests of public protection and cost-effectiveness. Can the Minister say that the Government will take account of this work and the views of the regulators as they consider their next steps?
Earl Howe: My Lords, yes, I can give that assurance. In fact, there is a range of Section 60 orders that are at various stages of development, which we hope to introduce over the coming months.
Lord Walton of Detchant: Yet again I shall declare an interest as a past president of the GMC from 1982 to 1989. To follow up a point made by my noble friend Lord Patel, I spoke recently to the current chair of the General Medical Council, Sir Peter Rubin. He and his colleagues are very concerned about the introduction of a number of important changes in the interests of improving medical treatment and medical education, and to protect patients, which will require amendment of the Medical Act. What are the prospects of seeing any such amendments introduced in this House and debated before the next election if the Bill introduced by the Law Commission is to be long delayed?
Earl Howe: My Lords, I have already said that we will introduce a Section 60 order amending the powers of the GMC, as it has requested and as we agree should happen. There is a range of changes that we hope to incorporate in that Section 60 order and I hope to have further news on that quite soon.
Lord Winston (Lab): My Lords, I draw the Minister’s attention to the regulation provided by the Human Fertilisation and Embryology Authority, which is allowing entirely unvalidated experimental treatments, such as pre-implantation genetic screening, for patients who then have to pay to experiment on themselves. Many clinics are also advertising on the Underground and some have relationships to do work that is not allowed by British regulation in other clinics overseas. Is the noble Earl prepared to respond to that really burning issue and the exploitation of infertile women?
Earl Howe: I recognise the importance of the issue that the noble Lord has raised. Some of those issues are extremely troubling. However, I do not have an up-to-date position on the policy position that the Government are taking but I will write to the noble Lord about that.
Baroness Masham of Ilton (CB): My Lords, is the Minister aware that clinical physiologists desperately need full registration? They have had voluntary registration for some years and they say it does not work.
Earl Howe: Yes, my Lords, I am aware of the request by the physiologists, and I will write to the noble Baroness on the up-to-date position.
Sudan: Meriam Ibrahim
Question
2.44 pm
Asked by Lord Alton of Liverpool
To ask Her Majesty’s Government what actions they have taken to secure the release of Meriam Ibrahim, sentenced to death for apostasy in Sudan, and to promote the terms of Article 18 of the Universal Declaration of Human Rights.
Baroness Northover (LD): My Lords, my right honourable friend the Prime Minister and other senior Ministers have condemned the sentence against Meriam Ibrahim in the strongest terms. We have raised our concerns with Sudanese Ministers and formally summoned the Sudanese chargé d’affaires in London. We urge Sudan to uphold its international obligations on freedom of religion by reversing this decision.
Lord Alton of Liverpool (CB): My Lords, I thank the Minister for that reply. In a week in which we are focused on violence against women, is not the cruel treatment of Meriam Ibrahim—sentenced to 100 lashes to be followed by execution, and shackled while giving birth—emblematic of a regime which, from Darfur to South Kordofan, systematically murders and mistreats its own people? While I greatly welcome the Prime Minister’s condemnation of those medieval and tainted laws, is it not time that we exposed the hypocrisy of countries such as Sudan that sign up to the 1948 declaration of human rights, especially to Article 18, yet honour it only in its breach and treat their citizens in this barbaric way? Should we not be offering Meriam Ibrahim and her two little ones immediate refugee status, unequivocally demonstrating the value of a civilised country and a humane society?
Baroness Northover: The noble Lord is absolutely right to highlight this case, and I thank him for highlighting the global summit taking place this week. This case shows how important that summit is.
As I mentioned, my right honourable friend the Prime Minister condemned the sentencing. He stated that he was absolutely appalled by the decision and called her treatment barbaric. The Foreign Office has called on the Government of Sudan to respect the right to freedom of religion and belief, a right which, as the noble Lord said, is enshrined in international human rights law, as well as in Sudan’s 2005 interim constitution. My honourable friend Lynne Featherstone also raised this case on 20 May with the Sudanese Foreign Minister. It is a case, above all, about freedom of religion and belief, and the noble Lord is quite right to highlight it.
Lord Anderson of Swansea (Lab): Would it not be appropriate if Muslim leaders in this country—perhaps throughout Europe—who benefit from our freedom of religion, were to make an appeal to the Sudanese authorities, perhaps with international organisations such as the OIC? Have the Government encouraged British Muslim leaders to make such an appeal?
Baroness Northover: One of the features about this case—there are others—is the international outcry. A striking thing is the way that it has affected the Government of Sudan, who were taken aback by it. That shows that this kind of campaign—as the noble Lord will know, a lot is going on through social media—can be effective, and that all voices need to contribute.
Baroness Berridge (Con): My Lords, I am grateful to my noble friend for giving way. The UK taxpayer gives millions of pounds each year to fund work in Sudan, including specifically funding the education and training of 20,000 young people. What assurances can my noble friend give to the UK taxpayer that such education and training by NGOs enhances freedom of religion and belief, pluralism and the right to change one’s religion in Sudan?
Baroness Northover: Education is extremely important, and my noble friend is right to highlight our commitment to it. The United Kingdom Government raise human rights with the Government of Sudan. We are very much involved with human rights lawyers and organisations. We are training the human rights commission and trying to ensure that the majority of people in Sudan can follow their chosen religion and have freedom of religion and belief, and that those who are in minorities are not discriminated against.
Baroness Cox (CB): Is the Minister aware that Meriam’s firstborn son, Martin, only about 18 months old, has been kept in prison with his mother because the authorities regard him as a Muslim and will not allow him to be raised by his Christian father, and that, if her death sentence is upheld, custody of her children will be granted to the Government because her husband is a Christian? Therefore, will Her Majesty’s Government raise with the Government of Sudan the issue of what is being done to assess the well-being of Martin, the little boy, while he is in prison, whether it is true that the children’s father will not be allowed custody of the children and whether that is in accordance with Sudanese law or an imposition of Sharia law?
Baroness Northover: We are keeping a close eye on the welfare of not only the mother but the children—I asked about this as I was being briefed—and we are in close contact with the defence lawyers. One of the striking things in this case is the application of an older law, which is not in keeping with the 2005 interim constitution or what Sudan has agreed under international human rights obligations. We are urging the Government of Sudan to undertake a comprehensive review of their penal code in the light of this, so that they now keep not only to what they have agreed within Sudan but to their international obligations. What is important is that the majority should be protected. We have an individual case here which highlights things; we must not forget the other cases, too.
The Lord Bishop of Norwich: My Lords, can the Minister inform the House what conversations Her Majesty’s Government have had with Mr Barroso and Mr Van Rompuy, who are meeting international faith leaders in Brussels tomorrow to press for united action in this case?
Baroness Northover: I will have to write to the right reverend Prelate in this regard to fill him in on that. However, I can tell him that we are keeping this case under close review and working with a number of different people.
Baroness Kinnock of Holyhead (Lab): My Lords—
Baroness Anelay of St Johns (Con): My Lords, this is a matter of great concern to the whole House but, because we have now had a contribution—naturally—from a Member of the Bishops’ Benches, on my reckoning we should return to the Labour Benches. I appreciate the disappointment of my noble friend Lord Chidgey, who has been very patient.
Baroness Kinnock of Holyhead: My Lords, is the Minister aware that a number of courageous and remarkable Sudanese women will be in London this week to attend the summit on ending sexual violence? These women have dared to speak out against widespread sexual violence, the near total impunity for its perpetrators and cruel and degrading treatment such as the public flogging of women. Can the Minister therefore assure the House that, as well as continuing to press for the release of Meriam Ibrahim, the UK will work to ensure that a review takes place of the Sudanese criminal code, which permits torture and the denial of fundamental rights?
Baroness Northover: As I mentioned just now, we are seeking to have the Government of Sudan review their penal code in the light of the obligations that they have made. The noble Baroness highlights the global summit this week and we are very pleased that women from civil society in Sudan are there. There is also a faith meeting there and, in answer to an earlier question, it is highly likely that this case will come up during that.
European Union: Reform
Question
2.53 pm
Asked by Lord Davies of Stamford
To ask Her Majesty’s Government what are their specific objectives for the reform of the European Union.
Lord Wallace of Saltaire (LD): My Lords, the UK’s chief objective is to reform the European Union so that it is more competitive, flexible and democratically accountable, and works fairly for those both within and without the eurozone. As Her Majesty said at the State Opening of Parliament, the Government are working to promote these reforms together with other Governments, including strengthening the roles of the national parliaments of member states in the functioning of the EU.
Lord Davies of Stamford (Lab): My Lords, that is a very nebulous and unspecific response. Will the Government be guided in these negotiations by an honest and evidence-based assessment of the national interest? If so, is it not the case that such an assessment might well throw up opportunities for repatriating
powers but equally well throw up areas where it would be better in the national interest for more powers to be concentrated or given to the Union at the Union level? Will the Government remain entirely pragmatic and open-minded about that or will they reject out of hand, or shy away from, conclusions of that kind?
Lord Wallace of Saltaire: I thank the noble Lord for his complimentary response, as usual. I merely emphasise that reform is a process. We are negotiating with other like-minded Governments. I am sure that the noble Lord has seen the reports from the Dutch and Danish Governments on EU reform. As you know, the Prime Minister is in Sweden talking with his Dutch, Swedish and German counterparts today about a reform agenda. We are therefore working with others to change the EU so that it faces in the sort of direction that we need. Of course we are not spelling out exactly what we would want and what we will say no to unless we are given everything we want, because that would lock us into the sort of negotiation that would be one against 27 rather than a collective multilateral negotiation, which is what we need.
Baroness Falkner of Margravine (LD): My Lords, does my noble friend agree that the danger that the noble Lord, Lord Davies, is tempting us into with regard to specifics is the drawing up of wish lists and red lines that would automatically lead to Brexit should they be unfulfilled, and that the more pragmatic approach that my noble friend talks about is to see what the composition of the institutions looks like, to see what happens after May 2015 in this country and then to devise a negotiating strategy in pursuit of those practicalities?
Lord Wallace of Saltaire: My Lords, if one looks back to the Prime Minister’s Bloomberg speech, now over a year ago, it is clear that we have already been making progress on reform. We have seen the quite remarkable reform of the common fisheries policy, for which we have been working for years, and a budgetary agreement that for the first time reduces the EU budget in real terms. Reform, I repeat, is a process in which we work with other like-minded Governments, and on which we are already making progress.
Lord Kinnock (Lab): The Minister is absolutely right to try, as he said, to avoid locking in Britain’s position in the EU because of the way in which that would compromise the possibilities of negotiation and influence. That being the case, and I entirely agree with him, why was the Prime Minister foolish enough to declare his position regarding Mr Juncker way before there was any possibility of a context, thus surrendering the kind of influence that is essential on the top Commission job?
Lord Wallace of Saltaire: My Lords, this question was addressed yesterday in the House, and I am very happy to say that the Labour Party has expressed its agreement with the British Government’s position on it.
Lord Garel-Jones (Con): My Lords, does my noble friend agree that the principle of subsidiarity, which is already enshrined in the treaty and is supposed to ensure that the Union shall not act in areas where the member states can do so, whether at government or regional level, has in many ways been neutered by the bureaucratic procedures built around it—for example, the green card system? Will he give assurances that Her Majesty’s Government will try to convert the green card system into a red card system?
Lord Wallace of Saltaire: My Lords, green cards, yellow cards and red cards are all floating around at the moment. The only one that is in the Lisbon treaty is the yellow card; the green and red card proposals are on the table and I think that they are mentioned in the House of Lords EU Committee report. With regard to subsidiarity, this is acquis—it is agreed. It is what the Dutch Government were talking about; the phrase in their report, as I recall, is, “European where necessary, national where possible”. That is something that the Danes, Swedes and a number of others agree on. The new Italian Prime Minister talked in terms that my own party leader, the Deputy Prime Minister, used many years ago when he was an MEP: “Better Europe, not more Europe”.
Lord Bach (Lab): My Lords, we all agree that the European Union needs reform. However, the Prime Minister seems reluctant, maybe for internal party reasons—of course I exclude the Minister from those internal party reasons—to set out any specific reforms that Her Majesty’s Government want to see, in marked contrast, if I may say so, to my party, which has set out specific proposals. Will the Minister assure the House that the Prime Minister will set out specific proposals in time for discussion at the next EU Council meeting on 26 June?
Lord Wallace of Saltaire: My Lords, I am very sorry that I have missed the specific Labour proposals; I look forward to receiving them from the noble Lord. The Prime Minister has made it quite clear that in terms of a stronger role for national parliaments, a much clearer definition of the areas that the Commission should be leading on and those where it should be much more cautious, a number of other Governments have already agreed that those are the directions in which we should now travel. However, every week Ministers from Britain are going to different European Councils of Ministers in which negotiations of this sort are under way. Actually spelling out a checklist, all of which had to be achieved or we would leave, would be absolutely the wrong way forward. In this respect I am absolutely at one with the Prime Minister.
Iran: Human Rights
Question
3 pm
Asked by Lord Maginnis of Drumglass
To ask Her Majesty’s Government what action they have taken to co-ordinate international representations about the execution of Mr Gholamreza Khossravi
Savadjani, a political prisoner in Iran’s Evin Prison, and about the use of capital punishment and the human rights situation in Iran.
Lord Wallace of Saltaire (LD): My Lords, we are aware of the execution of Gholamreza Khossravi on 1 June this year. The right to life is a fundamental human right and the UK opposes the use of the death penalty in all circumstances. The UK continues to call on the Iranian Government to implement a moratorium on the death penalty and to guarantee the rights and freedoms of all Iranians.
Lord Maginnis of Drumglass (Non-Afl): My Lords, I thank the Minister for his Answer. It is quite disappointing in so far as what seems to dominate is the relationship that his Government want to have with Mr Rouhani. Will he acknowledge that since President Rouhani was elected there have been more than 550 executions? They are running now at the rate of two a day. The influence of Rouhani across the frontier in Iraq has led to killings running at the rate of about 1,000 a month with 4,000 Iraqis being injured. All in all, since we intervened in Iraq not so many years ago, do we not have a responsibility to Iraq and Iran to make amends by standing up and publicly and internationally exposing the injustice to the people we left behind?
Lord Wallace of Saltaire: My Lords, I think the noble Lord’s last remark is a reference to the PMOI. I recognise that it is a linked issue. The UN rapporteur’s most recent report on human rights in Iran demonstrates that human rights in Iran continue to be awful and that Iran is the second most frequent executor of prisoners in the world after China and indeed, in terms of size of population, the largest. We have no illusions on the quality of prison life, the use of torture or the absence of an adequate rule of law within Iran. Nevertheless, Iran is a complex political structure. It is not as simple a dictatorship as some of the states with which we have to deal. We think it is worth while pursuing an opening with the new president, and we are cautiously and carefully negotiating to see what is possible. The noble Lord shakes his head, but I think we have learnt from our experience in Iraq that blundering into a country with a large army and overthrowing the regime does not always lead to a much better outcome. Evolution is better than revolution.
Lord Eden of Winton (Con): My Lords, does my noble friend recollect that when the present president was elected, there was widespread expectation that he would introduce a more humane and moderate regime in Iran? In the light of the disappointments—to put it mildly—which have since been evidenced in that country, what recent discussions have Her Majesty’s Government had with the Government of the United States of America who share jointly with us some responsibility for what is going on?
Lord Wallace of Saltaire: My Lords, we have close and continuing discussions with the United States on Iran, as on other Middle Eastern questions. I am
conscious that one of my colleagues was talking to his American opposite number yesterday. We deal with many states across the world whose record on human rights is imperfect, if not awful. Nevertheless, we have to deal with them and try our best to improve their record.
Lord Dholakia (LD):My Lords, will my noble friend bring some pressure to bear on the Iranian regime to ensure that the UN special rapporteur, Mr Ahmed Shaheed, is admitted and granted a visa so that he can examine precisely what is going on in some of the penal establishments in Iran?
Lord Wallace of Saltaire: My Lords, we are doing so and recognise that that is an enormous problem. That issue was flagged in his most recent report.
Baroness Afshar (CB): My Lords, it is important to emphasise that Islam has accepted all preceding religions and has absolutely denounced killing. Therefore, what they are doing in Iran is un-Islamic and abhorrent, as is the case in Saudi Arabia and many other countries. For a country that is ruling in the name of a religion, it is crucial to point out in the discussions that what they are doing does not adhere to the faith that they claim to support.
Lord Wallace of Saltaire: My Lords, I entirely agree with that. We have to remember that there is something of a civil society in Iran, in spite of the current regime. Iran has an ancient civilisation and much pride in that ancient civilisation. The persecution of minorities—both religious minorities such as the Baha’i and ethnic minorities such as the Ahwazi Arabs—is also a stain on the current Iranian regime. We know that there are many people in Tehran and elsewhere who likewise disapprove of that. We continue to make our case.
Lord Alton of Liverpool (CB): My Lords, has the Minister had a chance to look at the letter sent to him at the Foreign Office by his noble friend Lord Carlile of Berriew last weekend? It concerns not just the death of Mr Savadjani, but a number of members of the Iranian resistance who are currently scheduled for execution. In the light of what the Minister has just said about the plight of the Baha’is, would he like to make some further comment about the execution of Baha’i believers in Iran?
Lord Wallace of Saltaire: My Lords, we have condemned extremely strongly the persecution of the Baha’i. There are still, as the noble Lord knows, a large number in prison. I have not seen my noble friend Lord Carlile’s letter; I will look at it and will write to the noble Lord.
Duchy of Cornwall Bill [HL]
First Reading
3.06 pm
A Bill to make provision to amend the succession to the title of the Duke of Cornwall, to remove the presumption of “Crown Immunity” applying to the Duchy of Cornwall, to remove various exemptions and immunities from the
Duchy of Cornwall, to confirm the right to Royal Mines within Cornwall and the Isles of Scilly vests in the Crown, to provide the right to Treasure Trove, bona vacantia and escheat within Cornwall and the Isles of Scilly lies with the Crown and to provide that any attorney or solicitor appointed in the affairs of the Duchy of Cornwall shall be called to the Bar or hold a practising certificate as appropriate.
The Bill was introduced by Lord Berkeley, read a first time and ordered to be printed.
Employment Practices Bill [HL]
First Reading
3.07 pm
A Bill to make provision to ensure that the terms and conditions of employment offered by employers do not put workers who are permanently domiciled in the United Kingdom at a disadvantage through offering any bonus or payment in kind; and for connected purposes.
The Bill was introduced by Lord Wigley, read a first time and ordered to be printed.
Voter Registration Bill [HL]
First Reading
3.08 pm
A Bill to make provision for the registration of voters by registration officers; and for connected purposes.
The Bill was introduced by Lord Roberts of Llandudno, read a first time and ordered to be printed.
Online Safety Bill [HL]
First Reading
3.08 pm
A Bill to make provision about the promotion of online safety; to require internet service providers and mobile phone operators to provide an internet service that excludes adult content; to require electronic device manufacturers to provide a means of filtering internet content; to make provision for parents to be educated about online safety and for regulation of harmful material through on-demand programme services.
The Bill was introduced by Baroness Howe of Idlicote, read a first time and ordered to be printed.
Armed Forces Deployment (Royal Prerogative) Bill [HL]
First Reading
3.09 pm
A Bill to make provision about the approval required for the deployment of Her Majesty’s Armed Forces by the Prime Minister in the event of conflict overseas.
The Bill was introduced by Baroness Falkner of Margravine, read a first time and ordered to be printed.
Queen’s Speech
Debate (4th Day)
3.10 pm
Moved on Wednesday 4 June byLord Fowler
That an humble Address be presented to Her Majesty as follows:
“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.
TheMinisterofState,DepartmentforBusiness,InnovationandSkills&ForeignandCommonwealthOffice(LordLivingstonofParkhead)(Con): My Lords, it is a privilege to open this debate on Her Majesty’s gracious Speech. We will be considering the Government’s priorities for business, employment, pensions, welfare, agriculture and the environment for the year ahead. The Government are committed to fostering and assisting the entrepreneurial spirit which thrives in the UK today. The measures in Her Majesty’s gracious Speech will open up new opportunities for businesses to innovate, compete, grow and, of course, to export.
The Government plan to introduce a small business, enterprise and employment Bill. This will contain a number of specific measures to better ensure a business environment that is supportive of small businesses, as well as further enterprise and employment measures. There has never been a better time to start, grow and operate a small business in the UK. Small businesses, as noble Lords know, make a huge contribution to the UK, accounting for around half of jobs in the UK and a third of private sector turnover.
In December last year, the Government published SmallBusiness:GREATAmbition, which set out our commitment to make it easier for small firms to establish and grow in the UK. The small business, enterprise and employment Bill will help deliver on that commitment and will further enhance it. Furthermore, the Bill will ensure that the UK continues to be recognised globally as a trusted and fair place to do business. It will deliver on the UK’s G8 commitment to introduce new rules requiring companies to obtain and hold information on who owns and controls them, which will encourage trust and growth within the UK.
The Bill will make it easier for small businesses to access finance. It will help improve payment practices between small businesses and their customers, particularly through greater transparency. It will provide small firms with better access to the £230 billion spent each year in public procurement contracts. The Bill will also aim to cut red tape by ensuring that there are frequent reviews of regulations which impact on business in particular.
The changes proposed to UK Export Finance’s powers will make it easier for small businesses to access export finance, which they so often need. The Bill will widen the powers of UK Export Finance, enabling it to support exporters itself, rather than, as is currently the case, only in relation to specific export
contracts. UKEF will also have more flexibility when providing support for small businesses, such as instances where they are part of a wider and larger supply chain. The Bill will also enable UKEF to support exports of intellectual property rights and other intangibles. All this means that UKEF will be able to increase the number of small companies it can help.
The Bill will also introduce a number of measures to reduce unfairness. There will be tougher rules to make sure that public sector workers do not get high payouts if they are re-employed in the public sector. It will tackle misconduct by directors and unfair employment practices and will provide reforms to increase the efficiency of the employment tribunals system and further reduce its burden on businesses. It will increase the penalty for failure to adhere to the national minimum wage and prevent abuses of zero-hours contracts. Honest, hard-working businesses can be more confident that they will not be disadvantaged by those who do not play by the rules.
The Government are already playing a key role in supporting the success of small businesses. Last year alone almost 500,000 new businesses were created in the UK, a testament to the business environment that we have created. The measures outlined will help them prosper in a UK that prides itself on being very much open for business.
The Government’s long-term economic plan is working. We are seeing more people in work than ever before and unemployment is falling rapidly. To confound our detractors, it is the private sector that is providing these jobs, the number rising by more than 1.7 million since the general election. Government should be about creating the right environment for jobs, not about being the employer. We are committed to building on this outstanding progress and continuing our work to reduce long-term and youth unemployment.
The Work Programme is growing and transforming lives. Nearly 250,000 people have been helped into lasting jobs, but we are determined to improve the results still further. We are rewarding better performing providers and expecting weaker providers to improve. Nearly 200,000 young people have benefited from our work experience and pre-employment training. We are trialling new types of help for young people, including intensive support for 16 to 17 year-old NEETs—that is, those not in employment, education or training, and not in receipt of benefits.
We are piloting new day-one help for unemployed 18 to 21 year-olds to help improve their maths and English skills and thereby their employability. We are requiring some young people to undertake work-related activities at the six-month point of their claim. We are committed to supporting young people to expand their skills and long-term employment opportunities through apprenticeships and newly introduced traineeships. At the same time, the Government are delivering the biggest welfare reforms in 60 years. The Government have brought in universal credit, personal independence payments and the new Child Maintenance Service, alongside employment initiatives such as the Work Programme, Help to Work and Disability Confident.
We have capped benefits so that households no longer receive more in out-of-work benefits than average earnings. At the same time we have delivered employment
programmes that have seen record numbers of people in work. We are delivering programmes that make work pay, encourage personal responsibility and deliver a fairer deal for the taxpayer.
In the past, welfare spending was not subject to firm controls and we saw the benefit bill rising under the last Government, even at a time of economic growth. We are determined to ensure that this does not happen again. The Government have already taken significant action since 2010 to bring welfare costs under control. To build on this programme, we have for the first time introduced a welfare cap that will bring over £100 billion of welfare spending under control. This cap will ensure that welfare spending remains on a sustainable footing for the future.
On pensions, we want very much to build on our achievements so far. Around 12 million people are not saving sufficiently to achieve their desired level of income in retirement, especially given—we hope—longer life expectancy. It is therefore vital that we ensure that there are high-quality, value-for-money pension schemes to encourage people to save sufficiently.
We have already made significant pension reforms: the new single-tier state pension from April 2016; automatic enrolment which will see millions more savers joining pension schemes; capping charges on default funds in defined contribution schemes; and setting minimum quality standards to ensure that savers get value for money. However, we are planning to do more still. Defined benefit schemes, where the employer bears all the risk and the employee is promised a specified pension, are, of course, in decline. On the other hand, defined contribution schemes, which are more flexible for employers but have no promise for the employee, are on the rise.
The best employers, of course, still want to offer good pensions, and for some, defined benefit or defined contribution schemes may still be the right pension arrangement. However, for those who want an alternative, our pensions Bill will allow a greater range of options. It will give employers and pension providers the opportunity to create defined ambition pensions, which will encourage greater risk-sharing between parties and allow savers to have greater certainty about their pensions. The Bill will also allow for new collective pensions, recognised in many countries as providing high quality, and enjoying support across the political spectrum.
The Budget announcement on new flexibilities in how savers can access their defined contribution pensions has been warmly welcomed. A Treasury consultation on this, named FreedomandChoiceinPensions, is due to close very shortly. The necessary changes to the tax regime will be via a Finance Bill later in the year. Those with a defined contribution pension will be offered free and impartial guidance on the options available to them at retirement. We will implement related measures through the pensions Bill.
I turn to environmental matters. The Government will publish a draft national parks Bill, which will enable the composition of national parks authorities and the Broads Authority to be widened in future, by an order of the Secretary of State. The main purpose of the draft Bill will be to provide for holding local elections to the authorities to improve local accountability.
We are also committed to reducing the use of plastic bags to help to protect the environment. Discarded plastic bags blight our towns and countryside; they are a waste of resource and a very visible form of littering, and can cause injury to marine wildlife and harm the marine environment. Over 7 billion single-use plastic carrier bags were given out in England by supermarkets alone in 2012; that is 133 bags per person. I am sure that noble Lords will consider that next time they stand in a Tesco self-service queue and they are asked the question, “Are you using your own bag?”. I hope that the answer will be yes, next time. In October 2015, the Government intend to introduce a 5p charge on all single-use plastic carrier bags in England. In another measure, the Government will allow for species control orders to control the invasive, non-native species that pose serious threats to biodiversity.
The measures in Her Majesty’s gracious Speech will help make the UK the most attractive place to start, finance and grow a business. The Government’s pension reforms will allow for innovation and give greater control to employees, and the Government will introduce measures to help protect the environment. I am most grateful for the opportunity to introduce this part of the debate on Her Majesty’s gracious Speech and I look forward to listening to the contributions to the debate from all around the House. I know that I speak for the whole House in saying how much we look forward to hearing in particular from the right reverend Prelate the Bishop of Durham and my noble friend Lord Bamford, who will make their maiden speeches today. They have contributed much to the spiritual and economic welfare of this country.
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Baroness Sherlock (Lab): My Lords, I thank the Minister for that introduction to today’s debate. We have many interesting speakers to come and I, too, am looking forward to the maiden speeches. I am sure that the noble Lord, Lord Bamford, with his wealth of experience in business, will have much to share with us. I am particularly pleased to be here for the maiden speech of my own bishop, the right reverend Prelate the Bishop of Durham. I know that he has a strong interest in many of the subjects that we are discussing today, and I look forward to hearing what he has to say about them.
Although the Minister’s presentation was very enthusiastic, I confess that I struggle to share the enthusiasm that he has displayed for this Queen’s Speech. The 11 Bills announced here contain some things that are welcome, as far as they go, but, taken as a whole, I find the programme a bit underwhelming. I realised early on that two of the 11 Bills are actually about private pensions, at which point I had a strong sense of déjà vu, as it feels as if the noble Lord, Lord Freud, and I have spent most of our adult lives talking about pensions in this very Chamber. I went back to my diary and found that the last Pensions Bill got Royal Assent only four weeks ago. I understand that things move on—but that quickly? In practice, most of the measures in the pensions tax Bill were flagged up in the previous Budget while the Pensions Bill was still going through this House. In fact, many of us started debating the annuities market while having no idea that
the Government were about to unveil measures which would totally change the context. I completely exempt the noble Lord, Lord Freud, whose integrity is beyond reproach. Frankly, I do not think that he knew any more about it than I did: I think that it was all done on the hoof. However, I struggle to conclude that a strategic approach to reforming pensions needs three Bills just on private pensions in one year, but perhaps I lack imagination. I look forward to hearing more about them.
We have had the headline—namely, that the pensions tax Bill is aimed at people who are 10 years below retirement age with defined contribution pension schemes. In future they will no longer have to buy an annuity with their pension pot to give them a guaranteed income during retirement; instead they can access the money and spend it as they choose. At the time this caused speculation that people might take the whole pension pot and blow it on a cruise or a Lamborghini. Indeed, the Pensions Minister, Steve Webb, said that he was relaxed about the prospect of Lamborghini purchases. I confess that I had no idea how much a Lamborghini cost, so I googled it. I do not want to disappoint some people but, as the average pension pot is about £30,000 and you can easily spend £300,000 on a Lamborghini, I do not want anyone listening today, at least those at home, to get too excited. As I googled this information, it occurred to me that in future the targeted advertising that pops up on Google might be directed less at discounted filleting knives and more at Lamborghinis. What a disappointment I will be to those advertisers, that is all I can say.
For some people the idea of taking out their savings will be very attractive but others, especially those on middle incomes, might be better off with an annuity which gives them a guaranteed income throughout retirement provided that the charges are reasonable and the returns are good. We support giving people more flexibility but there have to be real options from which they can choose. I regret that the Government have failed to meet the challenge that Labour laid down during the debates on the Pensions Bill to sort out the dysfunctional annuities market once and for all. All they have done is to sidestep the issue by letting people take their money out, but that does not solve the problems so we will return to that issue as the Bill goes through this House.
Most importantly, these reforms have to meet three crucial tests. First is the advice test. It is essential that people get good independent advice. It cannot be a 20-minute chat over a cup of tea, as some in the industry fear. The Government need to provide a comprehensive and costed plan for delivering robust, high-quality advice and Parliament must be able to scrutinise those proposals to make sure that we do not end up in the midst of another mis-selling scandal. I remind the House of my registered interest as a senior independent director of the Financial Ombudsman Service, and mis-selling scandals and PPI are ringing in my ears as I say this.
The second test is the fairness test. The new system has to be fair to all savers, ensuring that those on middle and low incomes can still get the products they need to get certainty of income and that the billions we spend on pensions tax relief do not benefit just the very rich.
The third test is the cost test. We need to be fair across generations and to be careful that costs are not passed on to the state—for example, if somebody spends their pension pot and then the state is asked to pick up the tab for social care or for means-tested benefits such as housing benefit, which then falls back on taxpayers. Incidentally, when this measure was announced, the Telegraph pointed out that if everybody over 55 took their income as pension contributions it could cost the Treasury £24 billion a year. Obviously, that will not happen but, if just 10% did that, that is £2.4 billion in lost tax and NI receipts. The Government have a serious risk assessment to do first.
Then there is the private pensions Bill which, as the Minister explained, provides for new collective pension schemes, something called for repeatedly by Labour. The Dutch and Canadian models have shown that those kind of schemes can outperform individual defined contributions by some 30%, so in our view the potential for lower charges and the benefits of a pooled investment strategy can be desirable. As we have pointed out in previous debates, they also offer the potential for addressing the pension challenges in industries which have a high staff turnover and lots of small stranded pension pots. We on these Benches support the principle of the proposals on collective pension schemes but we will look for decent caps on charges and other measures to make sure that they deliver secure returns on the pensions in the future.
Labour is determined to ensure that the pensions market works for everyone. To that end, my honourable friend Rachel Reeves set up an independent taskforce to be chaired by Professor David Blake from the Cass Pensions Institute to look at how we can ensure that low and middle-income savers can get good value products in retirement and avoid mis-selling scandals. I call on the Government to provide a full impact assessment of the costs and risks of all the pension reforms together. I ask the Minister to assure the House that the Government will do both those things and also publish a distributional analysis of the reforms, including pension tax relief. Labour has said that we would lower the rate of tax relief for the top 1% of earners. I hope that the Government might agree to that. If they do not, we should at least expect the House to have all the details of the impact of the reforms before being asked to assent to them.
Moving on, reluctantly, from pensions, of the other nine Bills, most are not relevant to today’s debate but I should mention those that are. I will not detain the House on the Defra front with the draft governance of national parks Bill and the Broads Bill but would like to touch on the 5p charge for carrier bags. I am pretty sure that I do not use 155 bags a year so somebody else is using an awful lot—I will talk to them later. I certainly agree that far too many plastic bags are made and used in Britain and that a charge on all plastic bags is the best way to control their use. However, I worry that the policy announced by the Government is actually not quite that and, arguably, is an unscientific mess that could do some damage to the environment. The reason for that is that the Government decided to exempt biodegradable plastic bags, against all the best available scientific advice and despite repeated requests from the Environmental Audit Committee to explain
their position. I think that Defra has now accepted that there is no such thing as a really biodegradable plastic bag. There is not: the bag may degrade but the plastic does not. If the bags get washed into rivers they produce microplastics which absorb marine pollutants, are then ingested and work their way up the food chain. Could the Minister please explain why the Government ignored the scientific advice and decided to exempt biodegradable plastic bags from the charge?
There are plenty of other areas Defra could have acted on and I am disappointed not to see any in the Queen’s Speech. There is nothing for those whose homes are blighted by flooding, and nothing on sorting out rural broadband or protecting the health of children in high pollution areas. There is nothing for the 2 million households in England and Wales which spend more than 5% of their household income on water. Defra has responsibility for food banks. Food aid charities are handing out a record number of food parcels to people who are poor. Why could Defra not take the opportunity to investigate and do something about the underlying causes that drive people into food banks, including those in working families?
Next is the Childcare Payments Bill. Any help with the eye-watering costs of childcare is welcome but it does not begin to make up for the losses that working families face. Childcare costs have gone up 30% since the last election but these proposals would have nothing on the table until autumn 2015. Even then, just one in five families would receive enough help through tax-free childcare. It is welcome but not enough.
Finally, there is the small business, enterprise and employment Bill. My noble friend Lord Stevenson will talk about this more—and with considerably greater expertise, I am relieved to say. However, I want to touch on the principles behind it. It contains some measures that are welcome if rather late and a bit half-hearted. That makes me think that one of the themes of this Queen’s Speech—and of much government policy-making of late—is that, in a number of areas where the Government are acting, they have belatedly realised there is a problem and that something needs to happen, often provoked by a Labour announcement. We adopt a policy, it is popular because it is badly needed, then the Government rush out a cut-price version to try to counter it. It is always flattering to be copied but the danger is that these rip-off versions of our original designs look okay at first glance but you should not look too carefully at the seams. We have already seen the position with energy pricing. There are two more today in housing and zero-hours contracts.
Even more importantly, taken as a whole this programme does not do what is needed for the country. The Queen’s Speech seems to be predicated on an analysis that we have had a tough time but it is all getting better so we do not need a major legislative programme. I could not disagree more. The biggest problem is that the Government’s approach is still predicated on the assumption that a rising tide will lift all boats and that wealth will trickle down to all. If that was ever true, it is certainly no longer a safe assumption. The Government’s own record makes that clear. Working people have seen their pay fall by £1,600 a year on average. By the end of this Parliament, people will be worse off than they were at the start.
Something very serious has happened to the British economy: the link between our national wealth and the state of family finances has been broken. It is no longer safe to assume, if we see recovery, that it will benefit most working families in Britain. If anyone doubts that, talk to the people out on the doorstep. That has real implications for the way we go about the challenges ahead: restoring real growth, tackling debt and getting the economy working for working people. Low wages, insecure work and the hope of some wealth trickling down is not the way forward; it is actually part of the problem. A Labour Government would take action to correct that and drive us towards the sort of higher skill, higher wage economy we need.
This Parliament unfortunately has seen a rising tide of insecurity. A record number of people are on zero-hours contracts. I am delighted the Government have woken up to the issue—slightly late, despite the best efforts of my noble friend Lady Hollis, who pushed the Minister very much on this during the passage of the Pensions Bill. What is being offered is not enough. As well as ensuring that those employees have greater clarity on their terms and conditions and can work for other employers, Labour would give them the right to demand a fixed-hours contract if, in practice, they had been working regular hours for the preceding six months. After a year they would have an automatic right to a fixed-hours contract. Labour would also ensure that employees on zero-hours contracts are not obliged to make themselves available outside their contracted hours and that they have the right to compensation if shifts are cancelled at short notice.
A Labour Government would then tackle the scandal of low pay in Britain. The Government have previously dangled the possibility of a £7 minimum wage, but nothing has ever materialised. Labour would set an ambitious target to increase the value of the national minimum wage and would drive up much more robust enforcement, including penalties of £50,000 for failing to pay the minimum wage, and new powers for local authorities. We would incentivise employers to pay the living wage through “make work pay” contracts. This makes straightforward economic sense. For every extra pound employers pay to raise a worker from the minimum wage to the living wage, the Treasury saves 49p in lower social security payments and higher tax revenues. It is win-win.
Thirdly, Labour will tackle the problem of youth and long-term unemployment. I disagree with the Minister. I accept that he cares about youth employment—however, the Government’s record has not been good at all. The youth contract has been an absolute disaster. Labour, by contrast, has pledged to create jobs for six months for all young people who have been out of work for more than a year—proper jobs—and for every other person after two years.
Finally, Labour will address the failures of our social security system, on which there is nothing in detail in the Queen’s Speech. We will make the system fit for purpose by reforming the tests for disability benefits, by abolishing the disastrous bedroom tax and by introducing a basic skills test for the newly unemployed, so we intervene early to avoid further long-term unemployment.
We will get serious about housebuilding. By 2020 we pledge to be building another 200,000 houses a year at least. We will protect renters by legislating for longer-term tenancies and by stopping letting agents charging them fees. The lack of housing supply is causing so many problems, from asset bubbles to huge housing benefit bills, overpriced and poor quality rented accommodation, and the inability of so many first-time buyers to get on the ladder. What does the Queen’s Speech offer? I am sorry to say it offers nothing at all for families renting, and a plan for a one-off new town with 15,000 homes, when we need at least 10 or 12 times that.
There is so much more I could say: about the need for reform of banking, finance for SMEs, but most of all a recognition that we need serious action to get the British economy fit for purpose. We are at a point in this extraordinary economic cycle where we have a chance to think about what kind of economy we really want and what kind of country we want to be. I want to live in a country where the economy works for everybody—not just the gilded few at the top—where the welfare state functions properly and where people who are working all the hours God sends can feed their kids without having to resort to food banks. That is the kind of country Labour wants; that is what we will build, and that is what the Queen’s Speech should have done.
3.38 pm
Lord Stoneham of Droxford (LD): My Lords, in 2010 the Governor of the Bank of England warned the negotiators of the coalition Government that anybody who was going to be in government for the next five years was likely not to be in government for another generation. Anybody coming into government in that situation knew it was very serious. I am too modest to predict now what this will mean for my party, but at least I can take comfort from my noble friend Lord Ashcroft’s poll today, which shows the Conservatives and Labour neck and neck, fighting for 60% of the electorate. That suggests that the governor’s prediction was too pessimistic and that, in reality, hope springs eternal for everyone.
It is easy to forget just how severe the problems were in 2010. I think that some of the solutions for the future put forward by the preceding speaker should be put in the context of the crisis in business confidence and the shattered financial economy that we found in 2010. The coalition has provided—and provided at the time—much needed stability and certainty. It is important that we recognise that it has retained its determination to get the deficit under control. It has also provided a fixed-term Parliament, which means that we have five years to do the job. It is worth recalling how things were at a similar stage four years ago. We spent most of the last year of the preceding Parliament trying to anticipate when the general election would come. Now, if we did not have a fixed-term Parliament, we would undoubtedly be trying to predict whether the election would be in the autumn or next May. At least we now have the certainty of knowing that we will not have an election until a year’s time, which is good for the economy.
We have also had continuity in ministerial appointments. I note that the Business Secretary has now served for the second longest time in that position since the war. He has just beaten the three years and 11 months of Patricia Hewitt but has yet to beat the record of Peter Thorneycroft, the longest-serving DTI Minister in the 1950s, who served for five years and three months. In 13 years, Labour had eight appointees. In the previous Conservative Government of 18 years, there were 11 appointees, averaging 1.6 years for each appointment to the equivalent Business Secretary position. At least longer, more stable appointments and better experience provide for consistency, determination and the time to bring about real achievements in office.
Today, I cannot talk about the whole range of matters covered by the debate. I should like to talk about this Government’s radical proposals for pensions under the leadership of my honourable friend Steve Webb, the Minister for Pensions. However, in the short time available to me, I want to concentrate on the business area. When we look back on the coalition, there have been two real achievements in that area. The first has been predominantly in apprenticeships, of which we have created 1.6 million. We built on the foundations left by the Labour Government and have doubled the number of apprenticeships being created each year throughout the coalition Government. Certainly, we hope that by the end of this Government we will have created more than 2 million apprenticeships. These have been linked to a renewed interest in the whole area of technical education to perhaps counter- balance an overemphasis in the recent past on academic success and investing in universities.
The second area where there has been great achievement is jobs and the role played by business in creating jobs. Back in 2010, everybody thought that unemployment was going to go through the roof. That is what the Governor of the Bank of England almost certainly expected as the economy restructured and public spending had to be cut. After four years, we are now seeing the lowest level of unemployment since 2009 at 6.8%, or 2.2 million, plus a reduction in youth unemployment. It has to be said—I say this to the opposition Benches—that all recessions are painful: unemployment hits disproportionately the less skilled, the more vulnerable and the poor in the labour market. If the predictions had been forthcoming in actuality, I am sure that there would have been a threat to social cohesion in this country. What we have done in the employment field has at least relieved some of the pressures on the poorest in society, who would have suffered if the real ravages of the recession had taken hold.
One of the outstanding contributors to jobs growth has been the role of small businesses, and I will say something in a moment about how they are going to be very important to the ongoing recovery of the economy. However, although there are encouraging signs that good economic growth will come, in the final year of this coalition we have to ensure that it becomes sustainable growth which lasts and that it does not just lead to an overheated economy and a return to the renowned stop-go situation.
Two indicators need to pick up in the economy. The first is business investment and the second is labour productivity, which has performed poorly. Since 2007
it does not compare well with our competitors: the USA, France and Germany. There are signs of a pick-up in business investment and certainly surveys have shown that bigger companies are now beginning to use their cash reserves to invest as confidence returns.
The Government have put in place a number of welcome schemes to counter the reluctance of banks to lend to small businesses, which I hope will now play a crucial role in stepping up our capacity to innovate and develop new markets, and will support growth in the economy. There are encouraging signs in pharmaceuticals, aerospace and the motor industry, but we have to recognise that although manufacturing has to play a major part in recovery, it is not sufficiently broadly based in this economy now as it is in Germany. Therefore, we have to look for other areas to provide growth and jobs.
There are good opportunities still to strengthen links between universities and small businesses and to build on their research innovation and scientific developments. For a nation that is the second biggest exporter of services in the world—behind the USA—there remains huge potential for export growth. Services exports are still restricted by national regulation and competition imperfections. Stepping up our initiatives on trade liberalisation, not least in the European Union, will open up huge opportunities for service companies.
There are three further important considerations for growth. We must not be satisfied with just making improvements in our education system. We are not just in the business of catching up, which we are trying hard to do; we need to strengthen our technical education and battle hard to do better so that we are ahead of other countries in improving competitive advantage. We have to be vigilant on the supply side of business and we also need a stable outlook for the economy and consistent government policy towards business which strengthens confidence and encourages investment in facilities, jobs and apprenticeships in the UK. That will be the task for the coalition Government in the coming year.
3.47 pm
Lord Tugendhat (Con): My Lords, I believe that every so often an event occurs that should lead Governments to reconsider well established attitudes and policies. Recently one such event has occurred in the area of responsibility covered by the Minister and his department. In fact, there have been two: one is the annexation of Crimea and all that Mr Putin has done in Ukraine and said about how Russian policy in its near abroad is likely to develop; and the other is the Pfizer bid for AstraZeneca.
Let me take Russia first. In recent years, all EU member states have done business with Russia as if it is a country much like ours and becoming more so. Little or no thought has been given to the extent to which deals and relationships that EU member states regard as part of the normal course of business may become hostages to fortune in diplomatic, strategic and even military disputes. The most obvious example of this vulnerability is the massive dependence of Germany and some other member states on Russian gas supplies. It is hard not to conclude that this plus of
course Germany’s massive industrial exports to Russia have not played a part in determining German responses to recent Russian actions in Ukraine. However, Germany is only the most obvious, as distinct from the only, major EU member state in this position. Has not the French contract to supply warships to Russia, including one aptly named “Sevastopol” influenced French attitudes? Has not the British attitude to possible financial sanctions been influenced by the massive Russian involvement in London’s financial and other markets?
In the time available to me I cannot deal at length with these issues but in the light of recent Russian actions and statements, our own policy and that of the European Union as a whole should change. A set of criteria within which economic and commercial relations with Russia should be conducted must be developed. Whether in relation to imports and exports or inward and outward investments, account must be taken of our political and strategic interests and the possible risks as well as purely business considerations. With vital imports, such as gas, this means not becoming overdependent on Russian supplies and ensuring that there are alternatives available. With exports, it again means avoiding overdependence and not supporting Russia’s armed forces. With financial investments, it means ensuring that sufficient is known about them to enable whatever action might be required in an emergency to be taken with the minimum disruption to other market operations.
We, the EU in general and Britain in particular, should also bear in mind our experience with Russia in our dealings with that other great autocratic power, China. As it has demonstrated on many occasions, China does not hesitate to use whatever leverage it has in relations with other countries in pursuit of its diplomatic and strategic aims. Her Majesty’s Government have had experience of that when they were frozen out by Beijing after the Dalai Lama incident. Now I am very much in favour of doing more trade with China and encouraging Chinese investments in the United Kingdom. We are a long way behind our EU partners, notably Germany, in developing economic links with China and we should try to catch up. However, we must also be aware that in China commercial and financial relations are always subordinate to diplomatic and strategic considerations and that Chinese companies are instruments of the Chinese state, not free-standing, independent entities.
So, as with Russia, and in conjunction with our EU partners, we need to develop a framework of rules and criteria within which to conduct our economic relations with China. As with Russia, the aim must be to ensure that we do not lay ourselves open to pressure and blackmail. Unfortunately, I feel that we are at the moment tilting in the wrong direction. I refer in particular to the bending of the rules to enable Chinese banks to set up branches rather than subsidiaries in the City of London. We have offered Chinese nuclear power station suppliers the inducement of high, guaranteed returns. It is difficult to think of an industry more sensitive than the supply of nuclear power stations and it seems strange that we should particularly invite investment into that area by a state with the characteristics of the Chinese People’s Republic.
I conclude with some thoughts arising from Pfizer’s abortive approach to AstraZeneca. Over the years, Britain has derived great benefits from foreign direct investment—the auto industry being the classic example. However, we have also seen too many great and successful British companies disappear—including two with which I was once connected, BOC and Blue Circle—because the German and French companies that took them over wanted them for their long-term value whereas the shareholders were more interested in short-term gains. Both those companies were world leaders, they were not bailouts, and they were bought precisely because they were world leaders. Since then, I am afraid, with the rise of hedge funds, shareholders have become even more short-termist. Other factors unrelated to the underlying soundness and long-term interests of the target company and its employees, suppliers and customers have also arisen.
The Pfizer/AstraZeneca incident illustrates this very well. Whereas the companies that took over BOC and Blue Circle were driven by long-term industrial goals, Pfizer was, above all, driven by tax planning—or, should I rather say, by plans to minimise taxation. In these circumstances, the Government need to take a much broader view rather than simply letting the market decide. They must recognise that the interests of shareholders who trade shares are not, and cannot be, coterminous with the interests of the target company’s employees, suppliers, customers, research programmes and all the rest of it. The long-term national interest needs to be taken into account in a very important way.
The Government should also recognise that, given shareholder pressure on managements, and the fact that this year’s predator can very well be next year’s victim, no assurances, however well meant, about future employment and research can be binding for more than a very short time. I must say that the way in which government Ministers appeared to react to the assurances that Pfizer was making showed a certain unawareness of contemporary industrial realities. As a representative of the Government, will the Minister look again at the public interest test in relation to takeovers of all kinds, with a view to strengthening it as necessary?
3.56 pm
Baroness Drake (Lab): My Lords, employment is up, the growth rate is up but, still, too many ordinary people are not getting fair access to the benefits. Regional imbalances have increased, household debt is rising and income uncertainty abounds. The real- life experience for too many is declining labour productivity, increasing casualisation, growing low-wage self-employment, zero-hours contracts, part-time working and low pay.
Self-employment accounts for 44% of all employment growth since 2010. Between March 2013 and March 2014, the number of employees increased by 351,000 and the number of self-employed by 375,000. Of the active workforce, 15% is self-employed, twice as much as in the US. The Resolution Foundation concluded that self-employment growth is not correlated with strengthening labour markets—rather, the link is between self-employment growth, a falling number of employee
jobs and rising unemployment at the regional level. London has experienced the lowest proportionate growth in self-employment, while the highest has been in the north-east and the West Midlands, where unemployment is highest. In January, there were some 2.7 million zero-hours contracts, of which 1.4 million provided work to people and 1.3 million did not. The problems go beyond the exclusivity clauses that are the focus of the Government’s consultation, to low pay and changes without adequate warning. ACAS chief executive Anne Sharp said about zero-hours contracts that,
“we know from calls to the Acas Helpline that … Employee callers in particular identified strong concerns about their terms being changed at short notice”.
Insecure employment brings insecurity of income, no pension savings, restricted access to the national insurance system and difficulties with mortgages, tenancies, personal credit and debt. The Resolution Foundation found that 15% of self-employed people were prevented from accessing credit or loans because of their status and one in five were prevented from getting a mortgage—difficulties echoed in the Bank of England’s NMG survey. The Council of Mortgage Lenders stated that it is,
“difficult to determine how lenders will be able to continue to lend”,
The employment rights of those on casualised contracts can be ambiguous. Do they have continuity of employment? Should they be paid for being on standby? Are they employees, or workers with no rights to notice periods or protection against unfair dismissal and so on? The single-tier pension will improve the position of the self-employed but not of those in mini-jobs. Auto-enrolment will widen the gap in private pensions between the self-employed and employees.
There is a need for a far greater focus on how public policy on welfare, pensions, employment protection, the minimum wage and access to finance is responding to these fundamental labour market changes. There are still too many British businesses operating on the basis of low wages and low productivity, whose wage bills are subsidised by the taxpayer through the benefits system. People want economic growth but most of all they want a vision that makes them feel hopeful about their family’s future and their employment.
The Government introduced fees for access to unemployment tribunals. In the debate in this House on 8 July 2013, the noble Lord, Lord McNally, said:
“It is important that noble Lords understand that introducing fees into these tribunals is not an attempt to deter individuals from bringing claims … we do not believe the provisions of this order will do so”.—[Official Report, 8/7/13; col. 74.]
It took just six months for the Government to be proved wrong. The number of claims received in employment tribunals between October and December 2013 was 79% fewer than in the same period in 2012. This massive drop will have contained many meritorious claims and bad employers will witness that workers have been deterred from claiming.
When the Chancellor announced that people could access their defined contribution pension savings as they saw fit, it was met with acclamation in the media, not least because savers were not getting a fair
deal on annuities. As the Treasury has not published an analysis of the impact of these reforms, there are many unanswered questions. The Government are simultaneously introducing freedom for people to withdraw their savings as they see fit while promoting the principle of pooled risk through collective DC schemes, where workers’ savings are pooled with those of others and accessing savings will be subject to rules and restrictions. Is it not possible that the individual freedoms in the former reforms will undermine building the collective schemes?
The tripartite relationship in private pension provision between the Government, the worker and the employer appears subtly to be changing. Historically—and integral to the original auto-enrolment reforms—the deal was that workers saved and the employer contributed, supported by state tax and national insurance relief, because pensions delivered an income stream for the pensioner that benefited the pensioner and society. If we are now building a national savings scheme rather than a pension scheme—and we hear calls to go even further, such as integrating ISAs and pensions—successive Chancellors will take a very different approach not simply to the distribution of relief but to the principle of tax incentives, and employers will feel increasingly remote from any tripartite responsibility to pensioners. Yet for many millions, who are the future generations of pensioners, choice is important but the biggest—and huge—challenge remains building up a pot of pension saving in the first instance.
The consensus now seems less clear. Giving greater choice to pension savers has been applauded but has protecting ordinary savers been sufficiently addressed? People need to know that they can trust the industry and those looking after their money. People will now have a combination of choices: take the cash and pay the tax; stay invested; draw down income; or buy an annuity. The gracious Speech says:
“My Government’s pension reforms will also allow for innovation in the private pensions market”—
the same dysfunctional market that delivered poor-value annuities, hidden charges, complexities and conflicts of interest. What will be the nature and quality of the new products? Will they be subject to the new quality standards and transparency requirements? Will people understand what they are buying? Will there be new presentations of the pensions liberation abuse? Unrestricted choice may change the potential for savers to make better decisions about their retirement lump sum but it also increases the potential to make worse decisions.
The Government intend achieving engagement with the saver by providing everyone accessing their savings with free, impartial, face-to-face guaranteed guidance, but we have yet to see how realistic that is and to understand what is proposed. We do not have a definition of what the guidance will be, the detail of the requirements, who will receive it—whether it will be everyone aged over 55 or 65—who will deliver it, how it will be paid for and the extent of provider involvement, but a delivery system must be built in time for the April 2015 changes.
My further concern is that many people with modest pension pots cannot afford regulated financial advice. I hope that, in trying to engage consumers, the
Government will not push thousands of ordinary people into inappropriate, expensive advice, so depleting their modest pension savings.
4.05 pm
Lord Holmes of Richmond (Con): My Lords:
“And this our life, exempt from public haunt,
Finds tongues in trees, books in the running brooks,
Sermons in stones, and good in every thing”.
That perhaps gives a somewhat overstated sense of the pastoral idyll, but may give some glimpse of what retirement can be. And yet, how little and how often do any of us think about our pensions—how much, when and in what product to save—in our 50s, never mind in our teens and 20s?
I must confess at this stage that before joining your Lordships’ House not only was I a lawyer, I was a pensions lawyer. I understand people’s problems with pensions: they are complicated, they make your head hurt a lot. Generally, there is a cycle of disinterest, boredom, trying to grapple with it, confusion, disappointment and panic—and then you go round the track again. But it matters. It matters now and it has always mattered—particularly, as has been mentioned, as we enter what could certainly be seen as a post-defined benefits world.
Before turning to the measures in the gracious Speech, I should like to say how much I am looking forward to the maiden speech of my noble friend Lord Bamford. As a six year-old, coming from the Midlands, I was lucky enough to drive one of those iconic diggers and not crash it. The memory will certainly stay with me for the rest of my life. What a fantastic brand that is: what a fantastic British success story built by my noble friend and his father before him.
The gracious Speech contained two Bills concerning pensions: two opportunities to create increased focus, involvement and potential engagement with the whole issue of pensions. To take the pensions tax Bill first, it is about liberation, not Lamborghinis—other makes of sports car are also available on the market. I do not believe that it is about whether somebody takes all of their pension in one slug; it is more about whether people will understand the tax implications of their actions, because this is not a free hit. If someone goes above the 25% tax-free lump sum, the additional income will be taxed at the marginal rate. For many people, that may well not be in any sense the most efficient way to access their pension pot. A year by year, drip-drip release may well be better. Some form of annuity product may well be the best bet for an individual. I certainly think that the much talked of death of the annuity has been dramatically overstated to date.
Now to the advice. It is likely to be generic, with 300,000 people a year potentially requiring it. I believe we will need to do more than that. Pre-2014, the majority of people indulging in significant drawdown at retirement would have had more significant pension pots and taken bespoke, paid-for advice. Alongside that generic advice, no matter how good it will be, we should consider an obligation on providers to at least try to gain some assurance from the member that they understand the tax implications of the decision that
they may be proposing to take. What plans do the Government have to consider such an obligation on the provider in that respect?
I turn to the second Bill, the private pensions Bill. Much has already been said on CDCs. I will not go into that issue in detail, as others will no doubt unpack it later in the debate. The key there will really be about scale and levels of interest, both of which are largely unknown at the moment. However, it is the beginning of the process and is a useful vehicle to provoke and further open the debate about kinds of provision and types of scheme, and about whether there is the potential to drive efficiencies and secure better returns for scheme members. On that point, all we can say at the moment is that collective DC schemes may do that.
All the issues within the Queen’s Speech are to be analysed in incredible amounts of detail—which is why pensions hurt our heads so much. There is a lot more to be laid out but it is opening up the debate. That has to be a good thing for such an important aspect of what it is to live in a western liberal democracy and have a level of retirement that enables people to live for years with some sense of comfort and dignity, once their working life has come to an end.
This is a post-defined benefit era, but I would like to look at the provisions in the private pensions Bill concerning defined benefits and the proposal to ban transfers out of private-funded and unfunded public sector defined-benefit schemes. On the face of it, this seems a sound move, but is it coherent or consistent to have a ban on DB transfers out at the same time as we are liberalising the market for DCs? Nobody wants to see a mis-selling scandal or anything of that nature and people may well determine, in conclusion, that their DB benefits are better. They may decide to stay with the DB pension promise. But should we ban those transfers as a matter of law? Consider, for example, someone who may have built up a tiny DB provision and a number of DC schemes but who wants to consolidate all their pension provision into one block. That surely makes sense, so what plans do the Government have to consider how that will be taken account of in their current plans?
In short, anything which provokes more discussion in the pensions arena has to be a good thing. In the words of Robert Frost:
“The afternoon knows what the morning never suspected”.
In terms of pensions, perhaps some pre-lunch if not breakfast conversations around the whole issue would be gratefully received across the country from the earliest possible age at which someone enters the labour market—because pensions matter, and grey matters.
4.14 pm
Lord Liddle (Lab): My Lords, I cannot possibly match the knowledge of the noble Lord, Lord Holmes of Richmond, on the subject of pensions, nor that of my noble friend Lady Drake in her wonderful speech. I would like to talk about what I see as the central problem in the Queen’s Speech and the Government’s policy, which is a woeful inadequacy in addressing what I think is the central challenge facing Britain: how our nation earns a living in this harshly competitive
global age. Unless you answer that question there can be no decent jobs, no fairness at work and no opportunity for the many.
The gracious Speech had a few glancing nods in this direction—we are promised a small business and enterprise Bill, and we wait with interest to see what it contains—but to my mind it is a disparate group of nods on the competitiveness agenda: a deregulation target here, an infrastructure initiative there and a bit of licence for fracking as long as it is not in too many people’s back gardens in Sussex. What is lacking in the Speech and in the coalition’s policy is a comprehensive agenda for partnership between Government and business, a partnership that would address the major problems of stagnant productivity and the quite terrible balance of payments deficit that the nation now faces, that would pursue the rebalancing of our economy, which was promised in 2010 but on which we have yet to see any significant result, and that would build a new progressive capitalism that tackled the fundamental flaws in our economic model that were exposed in the 2008 crisis.
I believe that the coalition had a huge opportunity to build such a partnership in 2010. It could have done more to develop the agenda of industrial activism that, in a lowly capacity, I worked with my noble friend Lord Mandelson to develop. The coalition could have taken advantage of the widespread consensus in business that fundamental reform of our economic model was necessary, not least to rebuild public confidence and trust in business itself. The speech of the noble Lord, Lord Tugendhat, was an example of how we need to think again about many of the assumptions that we have taken for granted in the past three decades.
Yet despite the best efforts of the Business Secretary, the Chancellor never seems to have been very serious about this bigger agenda. Yes, he made some speeches, but essentially Mr Osborne took a bet on a “business as usual” recovery, created by a quite unprecedented monetary stimulus and supported by a fiscal deficit that remains unsustainably high. What we are seeing is a lifting of the economic boats that have run aground on a rising tide of mortgage, household and public debt, and that will not go on. I remember that Mr Osborne used to make great fun of Gordon Brown’s hubristic boast that he had abolished boom and bust; my fear is that the coalition is creating the conditions for a return of boom and bust on an epic scale, which will once again weaken the productive base of our economy.
I hope that on this side of the House we can develop this kind of critique of the coalition in the coming year. In my view, Labour now has a great opportunity to restore its reputation as the party of business. Part of that is because of politics. In the recent elections UKIP did well, but not so well as all that; it may have reached its ceiling in Newark, and I suspect that it may be downhill all the way for UKIP now. However, the impact of UKIP will be to push the Conservative Party in a UKIP direction, both on immigration and on Europe. On both of these issues, that is contrary to the vital interests of both business and our nation.
With business and the Conservatives drifting apart, Labour has now to show that it has credible policies to back up the call for a more responsible capitalism that
Ed Miliband made in 2011. I emphasise the word “capitalism” there. We need flesh on the bones of how we are going to reform corporate governance. What are going to be the new rules for mergers and takeovers? How are we going to get greater transparency in the way our savings are managed, less extravagant fees extracted and more responsibilities of ownership exercised? How are we going to rethink our financial system, because there is a real problem of finance for growing companies when banks struggle to satisfy capital adequacy requirements and to meet prudential limits on their operations? Labour has got to have answers to these questions and put them forward.
We have also got to build on the many positive initiatives that the coalition has taken, such as the Catapult centres, which actually come from the Mandelson era, to help research discoveries turn into marketable products and services. I also believe that the expansion of higher-level apprenticeships should enable us to create a non-conventional ladder of opportunity to technician status and university degrees. Labour has to demonstrate how it can break the terrible confusion and deadlock at present holding back essential infra- structure investment.
So there is a golden opportunity to build a partnership with business, but Labour has to show that it understands the world in which business leaders operate, how their survival depends on making a profit, where often the bulk of those profits are not made in Britain, and where the world is awash with alternative investment opportunities to investing here. Of course, business cannot escape criticism where its actions are contrary to the public interest, and it is right that it should be so criticised, but Governments cannot force private businesses to invest. They can only create the framework conditions in which business can respond.
I see this as a great opportunity, a great moment. All my political life, I have believed in a Britain that works together, in a party of the centre left that reaches beyond the confines—now outdated, I think—of class in order to work with business and construct a social and industrial partnership for the good of the whole country. That sense of urgency and partnership is totally absent from the coalition’s policies, and it is the ground on which I dearly hope Labour will stand in the 2015 election and beyond.
4.22 pm
Baroness Parminter (LD): My Lords, as someone who has campaigned on the issue of plastic bags for many years, I strongly welcome the commitment in the gracious Speech to reduce their use. Discarded plastic bags are iconic symbols of waste, be they catching the wind in high streets or flapping in rural hedgerows. However, the issue is bigger than just the visible litter on our streets and in our countryside; it is about the dangers that plastic bags pose to our wildlife—if they are discarded on the beach and into the sea they can choke or poison fish, animals and birds—and about the contribution that they make to our carbon emissions. Their creation and transportation consumes non-renewable resources, including oil, and their disposal contributes to our greenhouse gas emissions, taking 500 to 1,000 years to degrade.
As the Minister reminded us in his opening remarks, supermarkets in England gave out 7 billion single-use carrier bags in 2012 alone, and that figure has been rising here year on year, but not elsewhere in the United Kingdom. In the Republic of Ireland, plastic bag use fell by 90% following the introduction of a plastic bag charge in 2002. An equally dramatic drop in usage of 76% came after Wales introduced a charge for single-use plastic bags in 2011, and a charge of 5p in Northern Ireland introduced last year resulted in £1 million going to local environmental projects.
The coalition Government are therefore to be applauded that next year a 5p charge on single-use plastic carrier bags will be introduced in England. Given that Scotland is bringing in a minimum 5p charge this October, shoppers will have an incentive not to use plastic bags wherever they shop in our—we hope—still United Kingdom.
There have been mutterings about this initiative outlined in the gracious Speech. At a time of tight budgets, should we really be asking people to pay more when they go shopping? If shoppers take their own bags, however, they do not have to pay—and they are already paying in their council tax the huge hidden costs of disposing of these bags in household waste. That is not even counting the cost of cleaning up littered carrier bags on our beaches, which Keep Britain Tidy estimates costs us taxpayers in England around £10 million every year.
What is really good news is that our Government’s plans to charge 5p for our carrier bags will result in vital funds going to local good causes. The proceeds of this charge will stay with the organisations that collect them and not come back to the Treasury. To that end, I make a plea today to fellow Peers who sit on the boards of supermarkets, or who have influence within them, to challenge them to think now about how they can donate the profits of these schemes to local good causes.
Politics and legislation are sometimes about big-picture, sweeping changes which revolutionise our country, like the same-sex marriage Act. However, politics is also about changing everyday life in small ways that actually make a big difference. I firmly believe that a charge on plastic bags has the potential to make all of us think a bit more about our impact on the planet, raising the national consciousness about the role that each of us can and must play if we are to tackle collectively the problems of a wasteful society and respond to the challenges of climate change.
4.26 pm
Baroness Wilcox (Con): My Lords, following the gracious Speech, it is a privilege for me to take part in the debate today. I am delighted to start by congratulating our Government on the measures they have taken to bring our economy firmly back on course, and delighted to have heard those measures so well outlined by the Minister, my noble friend Lord Livingston.
We now know that education, training, business and the industries and services of the future are what will provide the wealth that is so necessary for the safety, social provision and happiness of our people. It
was therefore a disappointment to me that our space industry was not mentioned at all in the gracious Speech. I shall take this opportunity to encourage the Government to press forward with their work of identifying space as one of Britain’s great eight technologies.
Those eight great technologies are—as I am sure your Lordships know, but I will name them—big data, synthetic biology, regenerative medicine, agriscience, advanced materials, energy and space. By supporting the British capacity for brilliance and invention, and by encouraging our vibrant small businesses to develop their ideas much further and drive into this new sector, in which we are already enjoying great success, there will be a great opportunity for our country. Our space industries already support 95,000 full-time jobs and generate over £9 billion for the economy each and every year. The Government are planning to achieve a £40-billion UK space industry by 2030, a coherent approach to protecting the UK’s space assets and—I must add, because it is an area in which I am very interested—to look carefully at protecting our intellectual property, our field of gold.
The outlook for the UK space industry is extremely positive for us, a fact which cannot be better illustrated than by the recent achievements of two UK companies: Astrium and Surrey Satellite Technology Ltd. Astrium was selected by the European Space Agency as the prime contactor for the Solar Orbiter mission in its close-up observations of the sun. Astrium UK will lead the European companies making the spacecraft parts; it is one of the largest ever contracts between ESA and a UK company. Surrey Satellite Technology Ltd, with OHB System, will work on the construction of eight navigation payloads for the European Galileo programme. Those two companies will co-operate to build the 14 satellites under the supervision of the ESA.
Britain is surely open for business. Space is a global market, international collaboration is the norm, and we must encourage inward investment, creating jobs and opportunities for the wider UK supply chain. Here lies excitement and adventure for our next generation of apprentices and graduates, to fire their imaginations, to lead them to wonder and dream, to work, think and discover. I am with the Royal Society of Chemistry, which urged that we must have qualified science subject leaders in our schools, particularly for the young.
We all have and need our heroes. We are remembering those of D-day even now. Andy Green is preparing to drive the Bloodhound, a jet- and rocket-powered car designed to travel at 1,000 miles per hour, which his team hope to do in South Africa in 2016. I have promised my seven year-old grandson, who is a supporter of that great venture, that he and I will go there to see it happen. It is time for people like Tim Peake, who will be the first British ESA astronaut on a mission to the international space station in November 2015. I am with David Willetts, the Minister for Universities and Science, in encouraging businesses and schools to follow these space heroes and to find other heroes where they can.
In recent times we have so often heard that British industry is in trouble, that it is finished, that we do not make anything any more and there is nothing for us to
do. Here in this short speech, however, are new horizons. We should embrace them and rebuild our confidence as manufacturers again, reaching for the skies.
4.31 pm
Lord Northbourne (CB): My Lords, I will speak briefly this afternoon about one very important aspect of employment: employability. Today too many of the nation’s young people are failing to develop, as they grow up, the social skills they will need. Those are the soft skills—self-confidence, social and interpersonal communication skills and character capabilities—which in today’s labour market are very important indeed. That the Government are proposing a new law to make emotional abuse of children a punishable offence is symptomatic of the problem which our society is experiencing as regards children growing up in the family.
I have a letter from Sir Michael Wilshaw, head of Ofsted, in which he says that it is almost impossible to overstate the importance of a child’s early years in setting the pattern of their education, achievement and success in later life. Of course, who looks after those children in their early years? In most cases it is their parents. So many of those parents who are emotionally damaging their child today are, unfortunately, themselves emotionally damaged; often they have been overwhelmed by drug or alcohol addiction, domestic violence or other emotional challenges, or by poverty or lack of hope. Many have themselves been abused as children, which is a major problem.
I suggest to the Government that another, perhaps more effective way of protecting children from emotional abuse might be to prepare their parents better, while they are still teenagers in school, for the parental responsibilities which may lie ahead of them. There is much evidence that, as they grow up, young people and teenagers are very keen to learn about what adult life means. That is the moment when we have to take advantage, to help them. Should we not be doing more to help those future parents during their teenage years in school to develop the self-confidence, the social and emotional skills and the character they will need as they grow up into adulthood, both in the workplace and as they become parents? Incidentally, those skills are essential for social mobility.
In many of the best secondary schools today these soft skills are being learnt through a wide variety of extracurricular activities such as team games, music and drama, adventure journeys, challenges such as the Duke of Edinburgh’s Award scheme, appropriate involvement in school discipline, debates, visits and guided reading. The best schools are doing these things already but too many schools are not, and the role of schools in preparing their pupils for the challenges of adult life is not clearly set down in law. Today secondary schools are required by law only to teach the national curriculum, which involves a small core of academic subjects, and to promote the spiritual, moral, social and cultural development of pupils. Noble Lords will notice there is no mention of building pupils’ self-confidence, developing personal and social skills, or character development, yet these soft skills are the qualities and capabilities which are so important today, in the workplace and in raising a family.
Many recent statements by the Government suggest that they are interested only in raising academic standards to the same level as, or to be superior to, those in Hong Kong, Tokyo or wherever it may be. Surely education is about more than that. I accept that the Government’s early years programme is a good start, but it kicks in only when the baby is born, which is far too late to build the social and emotional skills of the parents. For genuine change to happen, the Government will have to make it absolutely clear to all secondary schools that they are responsible for developing the self-confidence and the social and emotional skills of their pupils. I recognise that this would cost money.
The Centre for Social Justice—I do not know how it did it—quite recently brought out a very carefully calculated figure to show that the cost today of family breakdown to the taxpayer is £46 billion a year, which is more than the defence budget. I cannot guarantee this; I have not seen how it was worked out, but it is a figure that has been widely accepted. A very small percentage of that reinvested in schools could make a great difference.
Ofsted should have to factor the dimension of emotional and social development into its inspection reports when it inspects schools.
4.38 pm
Lord Bamford (Con) (Maiden): My Lords, I am an engineer and a manufacturer—a manufacturer of construction and agricultural machinery. I have spent my whole life making things—things that enable other people to make still more things. On this occasion, I am happy to be making a speech, my maiden speech to your Lordships’ House. I am happy for many reasons, not least because it gives me an opportunity to thank publicly my sponsors, the noble Lord, Lord Lloyd-Webber, of Sydmonton, and the noble Lord, Lord Tebbit, of Chingford, for their support, advice and friendship during my introduction to this House. They deserve all our thanks for their contribution to the national fabric, to British industry, to British culture, to British business, to British exports and to British life. They are an example to us all. To my great and noble friend Lord Shrewsbury and Waterford I extend my heartfelt thanks, not just for our lifelong friendship, but for his wise counsel as I enter this noble House. Indeed, I am looking forward very much to contributing to the work of this great House on behalf of the country whose success and well-being matter so profoundly to me.
Membership of this House is an extraordinary opportunity and a great privilege. My sense of gratitude is equalled only by my sense of responsibility. It reminds me of how I felt when, nearly 40 years ago, I had the good fortune to take over the reins of the company, JCB, to which I owe my presence here today, and so much else. That was in 1975. I was 30 years old and, as it happens, so, too, was JCB. It was founded on the day that I was born, in 1945, just after the war, by an engineer and inventor of genius—my father—in a 12 foot by 15 foot garage, in Uttoxeter, Staffordshire. The Bamfords were blacksmiths in Uttoxeter in the 1820s; two centuries on, we are still there, only we do not shoe horses any more. We make diggers—lots of diggers.
Britain has changed since 1975. It has changed for the better in countless ways. It is a freer, happier and more prosperous country. However, some changes sadden me, and would indeed sadden and disturb any lifelong manufacturer. In 1975, manufacturing represented over 27% of our GDP; today, it represents just 11%. In 1975, manufacturing employed over 7 million people, more than 30% of the total workforce; today, it employs 2.5 million, less than 8%. In 1975, manufacturing contributed to a healthy balance of payments; sadly, this has been in deficit since 1984. These are concerning numbers for those of us who want a strong, vibrant, stable and balanced economy.
But I believe that there is much to celebrate about UK manufacturing. Britain has many world-class manufacturers, making innovative, high-quality and high value-added products. We have companies, in other words, that make products that the world wants to buy—small, specialist and world-class businesses, as well as much larger industry leaders, such as Rolls-Royce, GKN, BAE, Jaguar Land Rover and, yes, JCB, which exports 80% of its UK-manufactured products. So manufacturing still matters to the British economy. In fact, it matters a great deal. Financial services account for just 12% of UK exports; the figure for manufacturing is 46%. So manufacturing is neither dead nor dying. On the contrary, it is showing every sign of life, with clear potential in value-added industries.
I applaud the fact that manufacturing and engineering are back in favour with Ministers. I would simply emphasise that the support needs to be far-reaching and substantial. The Government are right to set their sights high; they are right to seek to double exports to £1 trillion by 2020. We must reverse the trade deficit that we have been carrying for over 30 years, but we will not get there without manufacturing or without a coherent, long-term industrial strategy.
The year 1945 was not just the year of my birth and that of JCB. It was also the year of Germany’s rebirth. Today, Germany is the world’s largest net exporter—not China, as you might expect. Is it any wonder that Germany has enjoyed a healthy balance of payments for many years? How did they do it? They did it in part by having a coherent, long-term industrial strategy and by focusing on high value-added products. They did it by spending more on R&D than we do—70% more. And they did it by backing their exporters. Over the past 10 years, Germany’s export credit agency backed 10 times as much export business as ours did. Germany did it by supporting family businesses under its Mittelstand model. We should do likewise in Britain, where family businesses provide more than 9 million jobs—far more than public companies.
Finally, and crucially, Germany did it by showing a real commitment to technical education. Technical education is a subject especially dear to my heart. I believe that we have a duty to identify and nurture young talent. That is why, in 2010, we opened the JCB Academy in Staffordshire. The academy is now giving 500 14 to 19 year-olds a hands-on technical education: 40% of their curriculum is devoted to engineering. They spend half the day in overalls working with state-of-the-art equipment, not just for the benefit of JCB but for British industry as a whole. Many of our
leavers are now choosing higher apprenticeships as a sensible and practical alternative to university. We are creating real opportunities in industry for our young people. In recent years there has been much progress in the field of technical education. We need, however, to do more—much, much more.
I started my career as an engineering apprentice at Massey Ferguson in France. It was then that it first hit me that behind every product there is an army of talented creators, makers and engineers. Somebody somewhere designed, engineered and made these red Benches on which we sit, the lights by which we see each other, the microphones which help us to hear each other and the telephones in our pockets which keep us in touch with each other. We need more such people. We need more people like my father—more inventors and makers. We need their brains, hands, knowledge, creativity, design and technical skills and, most importantly, we need them to know that they are valued by society as a whole.
As a young man at JCB I came to realise how deeply rewarding it is to turn an idea into something that you can touch, something with form and texture which works and does things, and to use the best of yourself—your energy, know-how and talent—to make things that shape the world in which we live and, yes, even to contribute to human progress. Fifty years on, I am as excited by the making of things as I was at the very beginning of my career. I end where I began. It has been, and continues to be, a real privilege to call myself an engineer and a manufacturer and to be heard in this House.
4.48 pm
Lord Macdonald of Tradeston (Lab): My Lords, it is my privilege to congratulate the noble Lord, Lord Bamford, on such an attractive and authoritative maiden speech. His mastery of business is evident in the outstanding global success of his family business, JCB, which I think is now the world’s third largest construction equipment manufacturer. His expert report, commissioned by the Prime Minister in 2012, argued persuasively for improvements in the Government’s engagement with business. One recommendation was for a better system of training and education for young people in technical fields, which I shall advocate today, although not so eloquently as the noble Lord. Like him, I was an engineering apprentice, so I particularly look forward to him championing the cause of manufacturing in future debates in your Lordships’ House.
The Queen’s Speech stated that the Government would increase the total number of apprenticeship places to 2 million by the end of this Parliament. Provisional figures show that under the coalition there has already been a total of 1.7 million apprenticeship starts in the past four years. However, with the annual number of starts now running at half a million a year, getting from 1.7 million to the target of 2 million in the next year should not be too challenging.
That said, I welcome the cross-party consensus we now have on the need to improve vocational training and revive apprenticeships. From the 1970s, under successive Governments, traditional craft apprenticeships
collapsed. When New Labour took office in 1997, the number of apprenticeship starts had fallen to only 65,000 a year. Although priority was given to boosting student numbers, the Labour Government also worked to improve vocational training including apprenticeships. By the time Labour left office in 2010, new starts had risen from 65,000 to 280,000 a year. However, the unsatisfied demand for vocational training was highlighted in a recent debate in your Lordships’ House. My noble friend Lord Layard said that in 2012-13 some 800,000 young people between 16 and 18 registered as applicants for apprenticeships and only one in seven was successful. Surely priority should be given to putting school-leavers into jobs, especially into apprenticeships.
The concern is that the coalition has for the past four years markedly increased apprenticeships but for the over-25s, in part perhaps to boost annual totals. The Local Government Association worries that more than 80% of the recent increases in apprenticeships has been in sectors generally associated with low skills while starts in key engineering sectors remain low. Indeed, the Institution of Mechanical Engineers said in response to the gracious Speech that hitting the 2 million target was not enough when the UK needs to double its intake of engineering apprentices to keep pace with demand.
There is real concern, too, about skills in the construction sector. Recently, a group of cross-party parliamentarians published some alarming figures in their report, No More Lost Generations: Creating Construction Jobs for Young People. The report said that this £100 billion industry would create 180,000 extra jobs and need to hire 400,000 building workers to replace those retiring over the next four years. By contrast, the number of completed apprenticeships in construction last year was 7,000. That was half the number of the year before. Can the Minister tell us if construction training will get the urgent attention it clearly needs in the last year of the coalition Government?
There is also concern about the estimated 30% of apprentices who are not paid the minimum wage to which they are entitled. The welcome news is the legislation promised in the gracious Speech to impose higher penalties on employers who fail to pay staff the minimum wage.
Since 90% of employers do not train any apprentices, popularising apprenticeships with employers is surely our biggest challenge. The Labour Party has an independent skills task force whose reports reinforce the view that employer groups must take more control over how public funding for apprenticeships is deployed and how skills standards are set. Another key taskforce recommendation is to increase further the number of higher apprenticeships with progression to degree-level status—a policy that also deserves to be embraced in cross-party consensus.
The fact that almost 50% of young people are now in higher education generally is to the credit of successive UK Governments. A challenge for schools, though, is, through better career advice and curricular reform, to make the study of science, technology, engineering and mathematics—the STEM subjects—more attractive to more pupils. However, it should also be emphasised that the UK benefits greatly from the more popular subjects in the arts and humanities, which attract the
talent driving the growth of our world-class creative industries. These are expanding at an encouraging rate and offer exciting career prospects. Despite that, the number of apprenticeships in arts and culture jobs seems strangely stunted. If I read the figures correctly, only 1,000 of that total of 500,000 apprenticeship starts per year are in the arts and culture subset of the creative industries. Does the Minister agree that employers in the creative sectors should, as a priority, create more apprenticeships, so that those from less privileged backgrounds can better compete with well connected graduates and those able to work on unpaid internships while also opening up entry to a range of craft roles?
Finally, it is surely regrettable that half the UK’s large companies do not offer apprenticeships. We can no doubt change that if we sustain the cross-party consensus and support for vocational training. We should also look again at the proposal that the Government use the leverage of their billions of pounds spent in public procurement of goods and services to boost apprenticeship opportunities by requiring companies bidding for larger contracts to offer apprenticeships. Regulators could also be asked to assess what scope there is to add apprenticeship training to the contractual obligations of their large companies. Does the Minister agree that that approach deserves further consideration as parties prepare their manifestos for next year’s general election?
4.55 pm
Baroness Greengross (CB): My Lords, as chair of the all-party group on responsible business practice, I look forward to being involved in legislation related to business and enterprise. However, today I will confine my remarks to the two Bills related to pensions. I welcome any changes designed to improve the circumstances of people in later life. However, I am not sure that these two Bills will achieve exactly what the Government want, as they are rather contradictory in their aspirations: one seeks to bring flexibility, the other certainty. It can be very difficult to provide both.
The pensions tax Bill will let older people with defined contribution pensions withdraw their savings and spend them as they wish. No one will be required to buy an annuity. We all hope that any funds so withdrawn will not be included in the means test for publicly funded care provision. Can the Minister clarify the position regarding the non-inclusion of any cash withdrawn in the care fees means test?
The private pensions Bill will encourage people into new defined ambition group schemes, where members’ contributions are pooled and, rather than any form of annuitisation, the pension will be paid as income from the collective fund. These schemes are still a long way from the defined benefit guaranteed gold standard, as the payout on retirement remains uncertain. Critics complain of a loss of control for the individual investor. Others have warned that with DA schemes the benefits of scale are rather exaggerated. What is certain is that there are no guarantees—not even the certainty of a fixed income you get with an annuity.
How does such a scheme decide how much pension to pay each member? It would be obliged to maintain records of each individual entitlement, just as it would
for conventional DC schemes. I hope the Government will be able to tell us where they anticipate any DA scheme operational savings will be made. Also, how do the Government propose to ensure take-up of the DA schemes, given the support for DC schemes implicit in auto-enrolment? DA relies on scale, but achieving scale may be challenging, given that DC schemes are now the main vehicle for the occupational pensions market. Who will provide the DA schemes? Perhaps we can also learn about that from the Government.
Bearing in mind the low level of financial capability in the UK, many commentators might argue that, for individuals to benefit from these new freedoms and minimise their exposure to risk, the degree of advice surrounding DA and DC schemes and pension fund transactions may need to be very extensive. If the Government agree, do they have any proposals as to who will provide and pay for such provision?
On this contradictory point, and underpinning the major emphasis on DC schemes, under the pensions tax Bill the Government want pension savers to have unrestricted access to the money in their DC schemes. This could not work with defined ambition pooled funds because no set sum of money is assigned to each member, who has no personal pot. Can the Minister clarify remarks attributed to the Government which imply that significant cash sums can indeed be withdrawn from DA schemes?
Finally, there is no mention of the coherence of DA schemes with care fees funding, which is very important, and the absence of a personal pot could make such compatibility difficult to achieve. How are the Government going to achieve that compatibility? I hope that the Minister can enlighten us.
5 pm
Baroness Hollis of Heigham (Lab): My Lords, the Queen’s Speech promises Bills on pensions and on zero-hours contracts, or ZHCs. With regard to pensions, I favour a lifetime savings account, combining ISAs and pensions. Many people want and need some limited early access to their savings—a 25% slice perhaps, equivalent to the tax-free lump sum—for divorce, disability or debt. However, in my view, allowing full access at 55 is not about pensions but about easy wins for HMT. Why? As the noble Lord, Lord Holmes, said, proceeds are taxed as income. The standard rate taxpayer with an annuitised £100,000 pot may pay no tax in retirement, but cashing it in he donates £30,000 to HMT. That is justified as the right to do what you want with your own money—making a donation to the Treasury.
Yet we have just abolished the identical right of someone who deferred their state pension for two years to take it as a lump sum of £14,000. Now, they can take it only as an annuitised addition to their state pension, and that was justified because people could not be trusted with their own money. What is the real reason? HMT has paid out that £14,000 lump sum up front but it no longer has to.
With a private pension, you are trusted and HMT gets the extra income tax; with a state pension, you are not trusted and HMT keeps the extra money following the abolition of the up-front lump sum. I suggest that
that has nothing to do with pensions policy but everything to do with short-term and, in my view, cynical gains for HMT.
More generally, however, the Queen’s Speech poses wider questions of how we harmonise a flexible labour market with an inflexible social security system. The daughter of a good friend works for McDonald’s. She does not know until the previous Friday what her hours on Monday may be. She cannot plan her life, budget or study, and she cannot in practice take a second job. She cannot rent a flat as she has no reliable income and she cannot plan childcare. She is on a zero-hours contract. A call centre worker told Unite that she has worked for a multinational firm for five years. Her hours range from 48 to 0. She worries,
“whether I will be able to pay the rent and put food on the table”.
She is paid nothing while she waits for the phone to ring. She is on a ZHC. A cinema attendant works 30 hours one week, 10 the next. She, too, is on a ZHC.
In a 24/7 economy, we need people working non-standard hours: shift work, agency jobs and part-time jobs. The flexibility suits both employer and employee. However, what are new and too often exploitative are zero-hours contracts—those ZHCs that guarantee no hours and no income. As my noble friend Lady Drake said, the ONS calculates that 1.4 million or even 2 million workers in cleaning, retail, fast food, hotel work, domiciliary care, construction, call centres and customer service are on ZHCs, often at or around the minimum wage. More than half earn less than £500 a month—below the NI level—with no right to a state pension, or their employer avoids paying his NI. These are not entry-level jobs—two-thirds of the people who hold them are over 25—and they do not lead to better jobs. Half stay for two years or more and more than a quarter stay for five years or more. They are low skilled, low paid and dead end, and 75% find that their hours vary every week. Two-fifths of ZHC staff—40%—are not allowed to work for anyone else. They are on call and unpaid until required at perhaps one hour’s notice. Labour—that is, people; my friend’s daughter—is hoarded, not used or employed, so not paid. A sort of just-in-time stock control is applied not only to tinned tomatoes but to staff as well.
Inevitably, debt smooths their income. The Resolution Foundation reports that 870,000 households are spending more than half of their disposable budgets on debt repayment. Three and a half million are spending more than a quarter of theirs. When interest rates rise those numbers will soar. Social security is 15 years behind the new labour market. It assumes you are in work or not—either/or.
The lone parent on a ZHC who works for Boots, Cineworld, Sports Direct or Burger King may in a month work for 20 hours in her first week, 15 in her second, 10 in her third and 22 in the final week. In weeks one and four she will get working tax credit—WTC—to top up her wages; in the middle weeks, working for fewer than 16 hours, she may get JSA. Each week she has different earnings to report to HMT for her WTC and to DWP for her JSA. Benefits are, of course, paid in arrears, so the money does not come when she actually needs it. Each month she has different earnings to report to her council for her
housing benefit and for her council tax reduction. Those take weeks to process and payments are made in arrears. Her rent arrears grow and her fear of eviction deepens.
It gets worse. If she works for one of the 40% of exclusive employers who tie her into working only for them, she may that week get six hours pay from him, but cannot work in any other job and cannot get JSA either as she does not meet work conditionality. What does she live on? More debt. She is carrying all the risks of the flexible labour market without a social security system able to help her and to underpin it. It is a nail-biting struggle that we should not ask of her. Understandably many lone parents prefer the security of a low but reliable benefit income to the snakes and ladders—mainly snakes—of ZHCs.
In a 24/7 economy we need a flexible labour market, but fluctuating demand, according to the Pickavance report, can be largely predicted. Why does Lloyds apparently need ZHCs but not Barclays? Why Boots but not Marks & Spencer? Why Sports Direct but not Halfords? Why Cineworld, I am told, but not Center Parcs? Why McDonald’s and Burger King but not Pret a Manger?
Leaving aside the need for occasional cover, or in arts or education, permanent ZHCs are lazy management at best and exploitative management at worst. How then can an inflexible social security system support this flexible labour market? To put it another way, how can we use social security to de-risk the dangers and difficulties of this just-in-time labour market to suppress its snakes and strengthen its ladders? UC which integrates in and out-of-work benefit could and should help. It has real-time information and is owned by just one department. But it will not de-risk this labour market as it should unless it changes its processes. Why not? UC pays a month in arrears. The Minister says that is to prepare people for the real world of work—steady, monthly paid jobs. I wish. Twenty-seven per cent of the jobs advertised in Jobcentre Plus offices are for ZHCs.
UC must, on request, therefore pay fortnightly, otherwise she will always be needing loans to smooth her income in the middle of the month. Currently, if she refuses a ZHC she may be leaned on but not officially sanctioned. Under UC, she will be sanctioned if she refuses. Yet a ZHC with unpredictable hours cannot allow her to sustain childcare arrangements as the child carer, in turn, cannot afford unreliable income either. It is like dominoes tumbling. No sanctions should happen.
UC pays HB to the tenant. It must, on request, be paid direct to the landlord, otherwise delays caused by constant changing of claims lead her to arrears and risk of eviction. Council tax reductions must be brought into UC to reduce parallel means testing.
UC is digital. Many in your Lordships’ House do not even want that to pay utilities. Her entire income will depend on her not making any mistakes in assessments which vary in almost every respect every week. Forty per cent of tenants affected by welfare reform have no access to the internet. How can she be sure she gets it right? I know I could not. There has to be parallel paper systems until the computer is secure and digital is inclusive. DWP has ditched the Social Fund. It must expand to offer budgetary loans for safer credit.
The flexible labour market is here to stay and we, as customers and consumers, want it. However, none of us wants a low pay, low skills, low productivity economy—and yet that is what ZHCs’ fluctuating hours and earnings offer and what social security finds so difficult to support. Unless we eradicate the abuses of ZHCs and reform the processes of UC, unless we read across and work across the shared landscape of BIS and DWP, we will still be making the call centre worker, the McDonald’s cook, the domiciliary care worker carry all the risks of both the flexible labour market and an inflexible benefits system so that we can enjoy their services. BIS and DWP have to get their act together. They are not doing so and your Lordships must help to ensure that they do.
5.12 pm
Lord Patten (Con): My Lords, sometimes the socially and economically desirable clash head on with the environmentally undesirable. Today’s debate links business and the environment, explicitly and implicitly, whose activities are intertwined with and crystallised by the effects of housebuilding or, for that matter, road and rail building. This is because such construction activity is, by definition, indelible; it is pretty irreversible in most cases. By comparison, some changes in the natural world as opposed to the built world are reversible—happily, as we now see, for example, in the population explosion of the otter, once thought 50 years ago in the United Kingdom to be heading straight for extinction. Once built, however, changes to urban and rural land are permanent. I can think of very few examples in which the clock has been turned back to some silvan or rural idyll, outside of the airfields of East Anglia where the nissen huts have vanished and the concrete airstrips have reverted to the ploughland of pre-World War II times.
One of the ways that more housing, more building, will be made more acceptable—this is a great political challenge for the age—and less prone to protest and thus delay, is if those concerned with the social need for more roofs over heads and the economic need for more growth contributed to by the building industry pause to reflect that these rightful ends make indelible marks on the landscape of our country—“No turning back”, to borrow a phrase. It is critical, therefore, that the irreversible is well designed, well landscaped and well lit in the interests of those who are to live there and of those who live nearby and perhaps have a new housing estate in their view. It should also, for example, inform the mind of a passing motorist, whose rapid glance produces a “Dearie me, look at those brick boxes—that blot on the landscape over there” reaction.
The reverse should be the case in order to promote a new consensus that new housing is needed just as much on some greenfield sites as on some brownfield sites. Good design is not a matter for limp-wristed aesthetes but a matter for political concern. It is practical politics, as we are going to find in the run-up to the next election. It is a vacuous cop-out by those who—like me, I have to admit—wish to see brownfield built on first, and greenfield sites only when necessary, to say that everything will be solved if only all new housing is on brownfield sites. We see this most tellingly when we look at the new building that surrounds us in the
capital, which is going so slowly, in an area where brownfield or renewal and rebuilding are the only options. That is the case for London itself, but certainly not for the rest of the country.
Land is owned by central government—noble Lords will know the old refrain—and by the NHS and local government that is at least brownish-tinged and could be built on. There is a mass of sites that must be called brownfield in other forms of ownership. However, I have absolutely no idea, as there is an information blackout, of exactly how much brownfield land there is in this country. The debate on “brownfield building” would be so much better informed and so much more realistic if we had, à la William the Conqueror, a Domesday Book of brownfield land. I do not know whether that exists in some ministerial cupboard or other, but if the Minister responding to the debate—my noble friend Lord Freud—has any idea of the amount of such land, and whether there is a definitive map of it, might he kindly let your Lordships know? It would better inform our debates and, unless we have it, nimbyish arguments about there being no need to build on greenfield sites because there is so much brownfield land will continue to dominate the debate. That said, because of such arguments and the need to build more houses—which I of course recognise—I strongly support proposals in the new Infrastructure Bill contained in the gracious Speech to end the unfortunate delays caused by local authorities blocking progress on projects already granted planning permission.
However, the argument about building seems to be a competitive bidding war now between the major political parties. My own has made a pledge to have so many more houses built as soon as possible. The noble Baroness, Lady Sherlock, in her feisty speech, gave a clear commitment to see that 200,000 houses a year will be built by 2020 if there were a Liberal Government—
Lord Patten: A Labour Government. That was a deliberate mistake—you never know how these coalitions will be formed. As for their possible coalition partner, the noble Lord, Lord Stoneham of Droxford, did not give quite such a ringing endorsement of his leader’s new pledge yesterday that 300,000 houses would be built per year. What fun it will be in Liberal party meetings when they discuss the implications of, “Vote Liberal, vote concrete”. I am sure that shortly after that has sunk in, we will see our fun-filled Nigel Farage produce a pledge of probably 500,000 a year. We are all in this together.
The noble Lord, Lord Macdonald of Tradeston, who is not in the Chamber at the moment, called for a new consensus on getting more people into higher forms of apprenticeship. I agree with him entirely. Equally, I think that we all have to speak honestly and outwardly about the effects that new building can have and about our determination to have new-build houses and flats of a high quality. I am afraid to say that sometimes the quality is very poor. It is legendary in my area of the south-west. In a housing estate that has just sprung up quite close to me, one of the new house owners put a three-pin plug into a socket and nothing
happened. She asked the builder, who came round to the freshly built and quite expensive house and said, “We seem to have forgotten to put any wires up to the socket” into which the plug went.
I also think that builders themselves sometimes pay scant attention, and local authorities even less, to high-quality design. It tends to be the rolling out, in this housing bonanza that we have, of four or five different sorts of houses, which they stick a porch on the front of—if it is in a half-timbered area, the porch is half-timbered; if it is in a stone area, it is built in stone; and if it is in a plaster area, it is covered in plastering—but we get the same low-quality, very often cramped housing across the land. I remember someone in the building industry telling me some years ago, “One of the best ways, son, to sell a house is to make quite sure that in your show house you take all the doors off inside so it looks much bigger”. The dimensions, we have to say, are rather limited.
None of us in the political world, including my noble friends in government, can get away from the fact that we need to use our bully pulpit to promote among the building industry and others involved the need to build the sorts of houses that improve the landscape and do not diminish landscape quality. The newly built can be landscape enhancing, not destroying, as it all too often is, whether it is on a brownfield or greenfield site.
In his introductory speech, my noble friend Lord Livingston of Parkhead, when referring to the role of government in job creation, said quite rightly that it is not the state’s task to create new jobs; it is the state’s task to provide the framework and the environment in which more jobs are created. I urge my noble friends and noble Lords in all the other political parties represented here to be absolutely clear that one of the critical ways of persuading people to accept new housing is if it is well built, environmentally responsible and nothing more than that.
5.21 pm
Baroness Warwick of Undercliffe (Lab): My Lords, it is one of the essential roles of any Government to ensure that the conditions are right not just for economic growth but for economic growth that is sustainable, long-term and provides high-quality jobs for as many as possible. This requires the Government to invest in infrastructure, whether concrete or intangible, because much of that infrastructure would simply not be built if it were not for government investment. Other agents lack either the financial clout or the incentives to ensure that this infrastructure is in place.
The Infrastructure Bill announced by Her Majesty deals in part with one such major project, the second phase of high-speed rail, but as the UK increasingly becomes a knowledge economy, the infrastructure we need is not just rail, bricks and mortar but world-leading research facilities to conduct basic research and conditions to support the conversion of that research into innovative projects and businesses.
I want to talk about the research base but first, in declaring an interest as a non-executive director of the Pension Protection Fund, I want to make a brief comment about pensions and about stable long-term
funding. Pension funds and other long-term institutional investors represent a potentially major source of long-term funding for illiquid assets such as infrastructure. Indeed, the Government have supported initiatives such as the Pensions Infrastructure Platform. However, recent OECD survey results show that there is still a low level of investment in infrastructure, which can only mean that there are considerable barriers and disincentives that limit such investments. There is an opportunity with the Infrastructure Bill to remove some of those challenges and I hope that the Government will do so to make Britain a world leader in this area.
The strength of our science and research base has been responsible for so much of our economic success as a country. In a globalised labour market, a research sector that maintains that strength is surely an essential element of an economy that grows sustainably and provides high-quality jobs. It is essential that the Government bolster that research strength, particularly to provide the infrastructure on which it relies: laboratories and other research facilities, which only government funding can support. They must also ensure that the conditions are right for businesses and universities to collaborate effectively so that the research can benefit the economy as a whole.
We start from a position of strength. The UK is one of the world’s top research nations, second only to the USA on most measures. But although we are rated second in terms of output, when ranked on level of investment we fall to 21st in the world. I hope that the Minister took note of the comments of the noble Lord, Lord Bamford, about Germany’s greater investment in R&D, and I congratulate the noble Lord on an inspiring and wonderfully robust maiden speech.
The Government have made a welcome commitment to an increase in capital spending of just over £1 billion per year for each of the next five years. If well directed, it will make an important contribution towards ensuring that we have the research infrastructure necessary for the decades ahead.
The critical matter now is to ensure that it is well directed. On this point, I suggest that the Haldane principle is still a good one: in other words, that the academic community is best placed to make decisions about research priorities and funding. That means that the Government and Ministers should resist the temptation to fund eye-catching announcements of large-scale trophy projects at the expense of ensuring the quality of our broader research infrastructure.
Indeed, investment in large-scale projects should be modelled on the Crick Institute: targeted, strategic initiatives that add value to the research base but do not divert resources away from wider investment. It is essential that government funds are used to ensure that our wider research infrastructure is up to scratch, because although universities have become increasingly adept at working with charities and businesses to fund research, that is often not an option for capital spending. Quite reasonably, most charities or businesses want to ensure that they get as much for their money as possible. They want to be sure that it is not being spent on merely maintaining the research infrastructure but is directly contributing to research that otherwise would not occur.
The higher education innovation fund, or HEIF, supports universities in working with businesses—in particular, SMEs. That funding leverages additional resources. The Government have recognised that for every pound spent via HEIF, about £6.30 is generated in total. Just as importantly, businesses benefit from their knowledge exchange activities with universities as a result of that funding. That facilitates the development of exactly the kind of innovative products and businesses that will help the UK to compete in future.
The Minister kindly wrote to me when I last talked about HEIF in this House, but only to communicate the decision that HEIF funding would not be increased—despite recommendations in Andrew Witty’s report that the Government should do exactly that. That is short-sighted, and I hope that it will be reconsidered. Whether that happens or not, there is an urgent need for a commitment to the long-term security of the hypothecated HEIF funding stream for, say, at least three to four years, so that universities do not now need to dismantle the infrastructure that they have built, which has delivered substantial economic benefit. I urge the Government to give that commitment today.
Universities are a major UK industry in their own right, directly and indirectly providing employment for more than 600,000 people. Much of that employment relies on the fact that international students can study at our universities. With the public concerned about the level of immigration and its effects on the country, fuelled by UKIP’s rhetoric, it is understandable that the Government are looking at ways of addressing it.
However, let us remember that the largest group of those entering the UK—and also the largest group leaving again—are the students who have come to study at our universities and colleges and, in doing so, support a world-leading export industry. Not only are international students a particularly attractive category of migrant in economic, social and cultural terms, they are also a category of migrant that the public is not generally concerned or alarmed about.
The Prime Minister has a particular responsibility to speak up much more forcefully and show that the UK welcomes well qualified students. The continued ability of our universities to recruit international students, with all the benefits that they bring, must not be sacrificed in an attempt to satisfy a public concern that, in the case of student migrants, does not exist. I therefore hope that the Government will relent, after all the arguments in your Lordships’ House, and at least remove students from the net migration target.
Finally, on the new pensions proposals, I echo the words of so many other commentators and Members of this House: without access to good advice, there can be a real risk of mis-selling or some of the other mistakes of the past being repeated. I welcome innovation to improve pensions outcomes. I am aware that the Minister has been looking at models in the Netherlands and Denmark. Scheme members will need a clear insight into what they are signing up to and, specifically, what guarantees and protections they can expect at the end of their working life. When considering what kind of protection regime is suitable for this new structure, I urge the Government to discuss it not only with the industry but with all those concerned, including the PPF and the Pensions Regulator.
5.29 pm
Lord Addington (LD): My Lords, in a long debate such as this, covering so many subjects, it is probably reassuring if you are the first person to raise a particular area. Before I start this speech, I have one or two interests to declare because I shall talk about the changes to the disabled students allowance proposed by the Minister, David Willetts. I have already raised this once but I think I might have to raise it again, or indeed repeatedly over the next few months, because whenever a Minister grabs at something and says, “We’ll change it”, but has clearly not been that well briefed they will get themselves into a bit of trouble. We have a situation where dyslexics or people with specific learning difficulty—I repeat that I have never been a person with specific learning difficulty but am somebody who is dyslexic, as I do not know why we use four words when one will do, even if it is a long one—get a specific mention here, as we did in the Written Statement that came out.
It is true that this fund has expanded dramatically over the years and has not been reformed since it was created in 1990. However, I find it very worrying to be suddenly stating that we are to get rid of lots of it and make lots of savings, when one clearly does not have a hold of its real function or how it works. That is what has happened here. The first interest, which I should put on the record straightaway, is that I am chairman of a company called Microlink, which was one of the first companies to deal with this back in 1990, if not the first. However, I am not totally against any form of change in this field. I can safely say that this is an increasingly small part of that company’s activity; indeed, we would quite happily get rid of it because what we have left has been loss-making in the past couple of years. There is a degree of knowledge there not wedded to the current system.
We have been taking on dyslexics, who are the biggest disability group in the country. They are 10% of the population, to use our definition, but 20% if you use the American one. They are one in five in the United States. It is stated that this group has expanded and is using a computer as standard to get hold of this technology, which will now run on a standard computer, and that everybody has a computer. Just to pull that apart, it is true that access to the software is the vital bit. Without a computer that functions and can handle that software, you do not have access to the software so you cannot use it. The voice-to-text or text-to-voice technology does not work unless the computer gets down there. People will tell you that it is just about okay. We have all had a computer that can just about handle the program—until it gets a bug or is a little old, or a little overloaded with its memory going down. If the software you are using is slightly updated, it is incompatible. You must have something reliable to get the benefit out of it. I do not think there is any great rocket science involved in that; it is just the way it is.
Now we are being told that the universities will provide the software and support, and that if you cannot afford to have that computer there will be other funds, such as hardship funds or bursaries and so on, to meet it. However, those hardship funds or bursaries were not created for this and do not have the
capacity. If you meet this cost here, you will inconvenience somebody else. It is true that it has expanded in size and has greater recognition, and that there is waste in it. There is the fact that you get X number of hours of non-medical help, if I remember the term correctly, given to you. If the computer works for a dyslexic properly—let us stick to “dyslexics”—they probably do not need 30 hours a year of extra support, as they might have had in 1990 from an amanuensis acting to get them through, because the computer does it for them. There could have been a change there.
Regarding the assessments, which are expensive and take time, if you have identified somebody in the school system whose brain will not radically change between, let us say, the ages of seven and 19, they will still be dyslexic. They will have learning strategies in place and will presumably have learnt to cope, if they have got through, so they do not need another assessment. However, you do under the current system so changes could be made. Something has to be done to allow these students to access the system. Why? Because if you do not, people will fail or underachieve—or, if they succeed, do so at an immensely high personal cost.