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House of Lords

Tuesday, 22 July 2014.

2.30 pm

Prayers—read by the Lord Bishop of Coventry.

United Nations: Secretary-General


2.36 pm

Asked by Lord Judd

To ask Her Majesty’s Government what criteria they are putting forward for the selection of the next Secretary-General of the United Nations; and what arrangements they are advocating to ensure maximum support for the new Secretary-General.

The Senior Minister of State, Department for Communities and Local Government & Foreign and Commonwealth Office (Baroness Warsi) (Con): My Lords, Her Majesty’s Government do not put forward the criteria for candidates for the UN Secretary-General role. However, we would want to see a proven leader fully committed to the values of the UN, with sufficient political authority and expertise to lead and manage such a large and complex organisation. The current system whereby the Security Council nominates a single candidate for the General Assembly continues to ensure that the candidates receive maximum support.

Lord Judd (Lab): My Lords, does the Minister agree that we should all send a message of solidarity to the present Secretary-General for the immense burdens that he is carrying on behalf of all the people of the world? Do not the events of Ukraine and the Middle East illustrate how vital this appointment is and that it is not too soon to prepare for his successor? In preparing for his successor, is not transparency essential in order to have the good will and support of the world community, and therefore should not a specification of the terms of reference be published? Should there not be a process open to candidates from every region of the world, and is it not essential that the General Assembly, for final approval, should be able to see a shortlist with, if need be, the recommended candidate of the Security Council?

Baroness Warsi: Of course, I join the noble Lord and this House in paying tribute to the work of the Secretary-General, and I acknowledge the immense pressure of work that he currently faces as international events unfold. I also pay tribute to the work of the noble Lord, who through the United Nations Association has over many years raised the issue of reform in the selection and election of the Secretary-General. However, I go back to what I think is an essential element. The General Assembly and the United Nations generally have to approach these matters through a principle of consensus. The job is difficult enough without making sure that you have enough member state support

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behind you. It is therefore important that the support of the Security Council and the General Assembly is maintained during the selection process.

Baroness Falkner of Margravine (LD): My Lords, does my noble friend accept that, by 2016, 71 years will have passed without there being a female Secretary-General and that it will be 35 years since there was a European Secretary-General? When she says that the United Kingdom Government have no specific criteria at this point, will she at least recognise that the 2006 Canadian non-paper had very clear specifications and recommendations? Finally, will she agree that the United Kingdom will at least not discourage—in other words, rule out—a suitable female candidate, should one come up in the final selection?

Baroness Warsi: My Lords, I think we all agree that, first and foremost, it is important that we find the best candidate to do this incredibly important job, and we have the pick of the world. I agree with my noble friend to this extent: we have now had eight Secretaries-General and not one of them has been female. I know that there is much discussion about a female Secretary-General being put forward, and I understand my noble friend’s position in relation to Europe having a potential candidate. I assure her that the UK will in no way try to discourage a female candidate and will get behind the best candidate, but I think she would acknowledge that the P5 would not have a candidate in that list.

Baroness Morgan of Ely (Lab): My Lords, what is being done to ensure that the UN is being structurally strengthened to support the new Secretary-General, and to reflect the modern, varied and challenging new responsibilities of that office?

Baroness Warsi: I have the enviable task of being responsible for UN reform, among other things, and it is an area of my work that I find difficult. I am trying to find international consensus in an organisation that is now established as the organisation which responds to international affairs but with member states each putting forward their national interests. It is therefore important that reform is done in a way that makes the United Nations much more effective and efficient. The United Kingdom’s priority is to contain the UN budget, focus less on staff and more on delivery, link funding to results, prioritise countries and mandates, make better use of IT and streamline back-office work.

Lord Hannay of Chiswick (CB): My Lords, would the Minister perhaps come back to the point of the original Question and address it slightly more specifically? Are we opposed to regional pre-emption before the process even starts? If we are not, should we not be, because is that not what narrows down the gene pool quite undesirably before we have even looked at all the possible candidates?

Baroness Warsi: The noble Lord, with his expertise, will be aware that the United Kingdom has never formally endorsed the process of regional selection in

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the appointment of the United Nations Secretary-General. Like many practices, it has developed over time, through non-binding resolutions at the UN, but it is important that member states around the world should feel that the whole world has an opportunity to put forward a potential candidate.

Lord Anderson of Swansea (Lab): It is claimed that the UN Secretary-General should be either a secretary—perhaps there have been too many of those of late—or a general, like Dag Hammarskjöld. Into which category, given the current challenges facing the UN, do the Government think the new Secretary-General should fall?

Baroness Warsi: I shall not comment on potential candidates, some of whom have been named in the public domain, while others may wish to put themselves forward. I am clear that, despite the mandate of the Secretary-General, it is apparent that those with clear leadership and an ability to add their personal perspective to the issues at the UN General Assembly are those who seem to achieve real results.

Lord Dubs (Lab): I wonder whether the Minister is aware of what happened when Kurt Waldheim became Secretary-General of the United Nations. Is she aware that at that time there were six candidates on the shortlist, five of whom were good? The Russians vetoed the five good ones and that is why Waldheim got the job. Can we be sure that that sort of shenanigans do not happen again?

Baroness Warsi: Of course, that Secretary-General was appointed in 1972 when I was one year old but I will try to recall that period. The noble Lord makes an important point. The P5 has a veto in relation to these matters. Even when we end up with nine approved votes at the UN Security Council, the P5 can still come along and cut across it. That is why it is important that we achieve some consensus before we get to that point.

Lord Hylton (CB): Does the noble Baroness agree that transparency would be much better than a system of Buggins’s turn, which appears to have prevailed in the past? Is not problem-solving a very important criterion?

Baroness Warsi: Transparency is important, but agreement and consensus are also essential in getting off on the right foot.

Health: Midwives


2.44 pm

Asked by Lord Harrison

To ask Her Majesty’s Government what is their assessment of the sufficiency of midwives in the United Kingdom.

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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, we are committed to improving maternity care and have charged Health Education England with ensuring that staff with the right skills are being trained and developed to meet future needs. Between May 2010 and March 2014, the numbers of full-time equivalent midwives increased by more than 1,700 and over 6,000 are in training. Health and social care is a devolved matter and the responsibility of individual devolved Administrations.

Lord Harrison (Lab): My Lords, what are the Government actively doing to retain experienced, longer-serving midwives at a time of recruitment shortages? Why is it that, according to the National Federation of Women’s Institutes, only one in eight mothers giving birth is helped by a midwife known to her?

Earl Howe: My Lords, we attach great importance to choice in maternity care and, in particular, to each mother having a named midwife throughout the care pathway. That is what we are aiming at and what NHS England and Health Education England are charged with delivering. As regards the age profile of midwives, my advice is that there is not a particular age bulge, although we are keen to ensure that we do not lose qualified midwives who, clearly, we can ill afford to lose. However, we have made a commitment to ensure that the number of midwives in training is matched to the birth rate and, so far at least, we have been successful in that.

Baroness Manzoor (LD): My Lords, continuity in care is very important, particularly when you consider that one in 10 women suffers from postnatal depression, and that number increases to four in 10 for teenage mothers. Can my noble friend reassure the House that, first, there is good identification of health needs for mothers during the prenatal stage; and, secondly, that there is one-to-one care during labour and postnatal so that these women are helped and supported?

Earl Howe: My noble friend makes two important points. As I said, we attach great importance to each mother being able to have throughout the care pathway a named midwife. Improving diagnosis and services for women with pregnancy-related mental health problems is one of our objectives for maternity care. The mandate from the Government to NHS England includes an objective for NHS England to work with partner organisations to reduce the incidence and impact of postnatal depression through earlier diagnosis and better intervention and support. We are clear that midwives have a key role to play in that.

Baroness Pitkeathley (Lab): My Lords, what have we done to address demographic inequalities in the experience of childbirth, particularly for black and minority ethnic women, who often express a great lack of satisfaction with the treatment they receive during labour?

Earl Howe: My Lords, helping commissioners to reduce unwarranted variation in service delivery is one of the key roles of maternity and children strategic

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clinical networks, which are being established and supported by NHS England. We know from experience that these networks have a tremendously beneficial effect in ironing out inequalities in access.

Baroness Cumberlege (Con): My Lords, will my noble friend rejoice with me that independent midwives now have professional indemnity? Does he agree that they make a very valuable contribution to maternity services, especially for vulnerable women?

Earl Howe: My Lords, we naturally applaud the professionalism of independent midwives. I agree with my noble friend that it is a positive step forward that all healthcare professionals in this country have professional indemnity insurance. We must think of the patient always and, should something go wrong, it is right that every patient is protected by indemnity or insurance.

Lord Christopher (Lab): My Lords, is the Minister content that the measure of training, related only to the birth rate, is adequate? Should we not build in wastage?

Earl Howe: I am not sure that I completely heard the noble Lord’s question. Could he please repeat it?

Lord Christopher: Is a measure of the numbers training which is related only to the birth rate adequate, unless you also build in the wastage rate?

Earl Howe: The noble Lord makes a good point about building in a wastage rate. Since 2010, the number of midwives has increased by 5.75% and the number of births has decreased by 3.3%. This is why I indicated in my earlier answer that we were, in that sense, ahead of the curve. There is a great deal of work going on to ensure that there is no attrition or wastage during the training period, as this is a waste of the person’s skills and taxpayers’ money.

Baroness Tonge (Ind LD): My Lords, what progress has been made in implementing the top 10 recommendations in the Eighth Report of the Confidential Enquiries into Maternal Deaths in the United Kingdom, especially those relating to the 19 women who died from pre-eclampsia between 2006 and 2008, which are the latest figures we have? Can the Minister also tell us when we will get a more up-to-date report on maternal deaths?

Earl Howe: My Lords, I do not have information on the confidential enquiry in my brief but, according to international statistics, the NHS remains one of the safest places in the world to give birth. The latest independent CQC survey found that maternity care in England has improved, with women reporting a high level of trust and confidence in the staff caring for them. I shall gladly let my noble friend know the latest that my department has on the issues she has raised.

Lord Hunt of Kings Heath (Lab): My Lords, did the noble Earl see the report in the Times this morning that the Nottingham University Hospitals NHS Trust

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maternity unit closed 97 times in a period of 12 months due to pressure? Freedom of information requests have shown that some 62 maternity units were forced to close because of pressures in 2013. Is that not a firm indication of a shortage of midwives? Does it not show that the Government are less than active in seeking to put this right?

Earl Howe: It is up to commissioners to ensure that facilities are available to meet the needs of women who are due to give birth. There may be limited occasions when a maternity unit cannot safely accept more women into their care. That is why we have seen some temporary closures of units. Any decision to redirect women is made by a clinician as part of a carefully managed process. It is not something that suddenly happens. However, commissioners need to be alert to the risks for provider facilities that a bulge in births can create.

Learning Disabilities: Community-Based Support


2.53 pm

Asked by Lord Hunt of Kings Heath

To ask Her Majesty’s Government what action they are taking in the light of the events at Winterbourne View hospital to ensure that people with learning disabilities inappropriately placed in hospital are able to move to community-based support.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, the Government are working with health and care system partners, self-advocates, family carers and other stakeholders to improve safety, quality of care and outcomes for people with learning disabilities, including reducing significantly reliance on in-patient care, by reviewing people’s care and moving them to alternative, community-based support where appropriate.

Lord Hunt of Kings Heath (Lab): My Lords, I am grateful to the noble Earl for that. Can he confirm that the Government set a deadline of 1 June for the transfer of thousands of people with learning disabilities out of institutions such as Winterbourne View? The latest figures show that only one in 10 such residents has actually been so moved. Will the noble Earl accept responsibility for this and tell the House what the Government intend to do about it?

Earl Howe: My Lords, the Government’s mandate for NHS England in the current year includes an objective which covers Winterbourne View concordat commitments. He is right that the deadline was missed. We are not satisfied with that and we are working very hard with NHS England to set out our expectations for progress and improved rates of discharge from in-patient settings. NHS England is going to produce an action plan this August but, in the mean time, it is doing three things. It is complying with the transforming

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care and Winterbourne View concordat commitments, which we have tasked it to do. It will set out what progress it expects to make and by when, with milestones, and it will provide real clarity on what success looks like—an important issue if we are trying to hold it to account—and how progress will be measured.

Baroness Hollins (CB): My Lords, is the Minister aware that in the first six months of this year, 544 new people were admitted to assessment and treatment units and only 338 were transferred? Does he agree, therefore, that prevention is as important as discharge, and that in order to achieve both of these, skilled community support and skilled specialist support in the community are urgently needed and need to be funded?

Earl Howe: I do agree with the noble Baroness. For people who, with the right support, could and should be living in community-based settings, there is a variety of reasons why sometimes that does not happen. The lack of appropriate housing can be a barrier. For others, we know that clinical decisions are preventing discharge. NHS England is looking very carefully at how to strengthen second opinion to support people in in-patient settings to challenge the reasons for their placement as and when they need to. We are looking at making some capital funding available to support the transfer of people from in-patient care to community-based support.

Baroness Tyler of Enfield (LD): My Lords, given the figures we have just heard about the number of people with learning disabilities being admitted to costly assessment and treatment units rather than leaving them, will my noble friend the Minister say what action the Government are taking to ensure that local commissioners—in both local government and the NHS—have the necessary skills and competence to deliver the high-quality local services that are needed to allow as many people as possible to return to their communities?

Earl Howe: My noble friend is absolutely right to focus on the role of commissioners. The Winterbourne View joint improvement programme has already stepped up its activity in working with local areas, including identifying 35 areas for in-depth review. NHS England is engaging with commissioners to reinforce the importance of ensuring appropriate services for people with learning disabilities close to their homes and families. That includes looking at how funding streams can be shared with local authorities so that there is no procedural blockage in the way that money moves across the system.

Lord Wigley (PC): My Lords, on that very point of funding, how will the Government ensure that funding in fact follows the individual and does not, as so often currently occurs, remain locked into the funding of the wrong kind of provision? In asking this, I draw attention to my registered interest as vice-president of Mencap.

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Earl Howe: Lessons are being learnt almost by the day by the NHS and local government on how to pool funding and share responsibility in areas of this kind. Admittedly, most of the effort at the moment is on the vulnerable elderly but the lessons apply equally to those with learning disabilities and to ensuring that we do not have any artificial walls forming between the NHS and local government as regards the flow of money. I can tell the noble Lord that this is a major area of focus for both NHS England and the Local Government Association at the moment.

Baroness Warwick of Undercliffe (Lab): My Lords, given the recent resignation of the director of the joint improvement programme, which was tasked with delivering the Winterbourne View action plan only 18 months ago, will the Minister let us know what the future of the programme holds and how it will work with the new group, also tasked in a similar way, led by Sir Stephen Bubb?

Earl Howe: My Lords, I have every confidence that the programme will continue as we had hoped it would, and indeed with a renewed momentum. The noble Baroness is right that NHS England has asked Sir Stephen Bubb, the chief executive of the charity leaders’ network ACEVO, to head a new group of experts and advisers to develop a national guide on how we provide health and care for those with learning disabilities. We have every confidence that Sir Stephen, with his immense experience in these areas, will be able to bring everybody together to a good result.

Lord Laming (CB): My Lords, will the Minister assure the House that the only criteria that will be used in making these arrangements is the way to improve the quality of life of the user of the services rather than any bureaucratic processes set by NHS England?

Earl Howe: The fundamental principle that must underpin and inform all decisions in this area is about ensuring that we respect people with learning disabilities as individuals who have the same rights as everyone else, including the opportunities to make informed choices about where and with whom they live. The noble Lord is absolutely right.

Housing: Underoccupancy Charge


3 pm

Asked by Baroness Hollis of Heigham

To ask Her Majesty’s Government whether they have any plans to change their policy following the publication of their report Evaluation of the Removal of the Spare Room Subsidy: Interim Report.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): We inherited a housing benefit system with costs spiralling and took steps to bring expenditure under control. This remains

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our policy. The interim report establishes an early baseline. Since the field work was completed, the numbers affected by the policy have continued to fall month on month, reported levels of arrears experienced by English housing associations have fallen, and there is emerging evidence that many landlords are adapting their building plans in response to this policy.

Baroness Hollis of Heigham (Lab): My Lords, everything we feared about the bedroom tax has been confirmed by this research—everything. Two-thirds of affected families are disabled. As there are no small homes, only 4% have been able to downsize. They cannot move but as most cannot get discretionary housing payments, they cannot pay and stay either. So 60% are in arrears; one-third face eviction; meals are forgone; debts are mounting; grandparents are cutting back on grandchildren’s visits because they cannot afford to feed them; people cannot stay; people cannot move. Does the Minister agree and accept that the bedroom tax—the coalition bedroom tax—is profoundly wrong?

Lord Freud: This report was based on evidence from last autumn and we have had data since then that show that people are adapting. The numbers affected are falling and are now down 70,000 people; arrears have fallen in the past two quarters and rent collection remains for the Homes and Communities Agency for the social sector at 99%; homelessness numbers are reducing and are down 7% on the year. As for DHPs, we had a quarter of a million payments last year to people affected by this policy and we had £20 million returned to us unallocated. Finally, the Court of Appeal has upheld the Government’s position that DHPs are the proportionate remedy for looking after people with problems from this policy.

Earl Cathcart (Con): My Lords, as a landlord I recall that the last Labour Government brought in this very same measure for the private rented sector. So why is Labour making such a fuss now—with the Liberals apparently jumping on the bandwagon—when all this Government are doing is rolling out to the public sector what Labour did in government to the private sector?

Lord Freud: My Lords, the private sector had the LHA introduced, as my noble friend pointed out, by the previous Government. We had to take steps to constrain the spending on that. We have taken £2 billion out of that benefit for savings. The results of that also came out last week. The final report was dramatically less in its impact than the predictions that we had. Instead of landlords pulling out of the market, they have increased their supply by 7%. There has been very little evidence of displacement; a very marginal probability of moving home; and again we have had homelessness acceptances coming down. We are on the same trajectory with the spare room changes as with the LHA changes.

Baroness Sherlock (Lab): I am starting to wonder whether the Minister and I have read the same report—

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Lord Best (CB): My Lords, I am grateful to the noble Baroness for giving way. I thank the Minister for putting this research in hand, as he promised when the ping-ponging on this measure stopped between us and the other place. I am afraid that one cannot take very much comfort from the figures. The Minister said that the figures are pretty bad; they are, in fact, awful: 60% of people getting into arrears with only 4.5% of people making a move as a result of the measure. He said that there are some more recent figures that are better; I fear that they are not very much so. Five hundred thousand families are affected by the measure and the position remains dire, with a third of landlords—

Noble Lords: Question!

Lord Best: Will the Minister confirm that when the space standards were introduced in the private sector, the measure was not retrospective and did not apply to all people already occupying the properties? Does he accept that it is quite different in this case, where it was applied to the lettings of existing tenants, which is why it has been so harmful and so hurtful?

Lord Freud: My Lords, I have told the House on previous occasions that the difference here is that there is very little changeover or moving within this particular group, so there is no way in which one could introduce this kind of policy on that kind of basis. It therefore has to apply to stock. I remind noble Lords that the impact assessment for this measure envisaged moving or downsizing on the part of about 50,000 people. Nineteen thousand people have moved during the first eight months, which is on the trajectory of our expectations.

Baroness Sherlock: My Lords, the Minister has read the report. The House will be aware that he has previously reassured us not to worry about the hundreds of thousands of people affected because of all the things that they can do. This report shows that every one of those has failed: they are not taking in lodgers; they cannot move; they cannot find additional hours; and they cannot downsize because there are no properties out there. This week, Chambers put “bedroom tax” into its dictionary. Is it not time for the Government to accept that they have got it wrong and make that term archaic for ever?

Lord Freud: The report was an early look at the policy. As the research says, it provides a baseline. There is evidence of people looking for work—18% of those affected are looking to earn more in work and 50% of the unemployed are doing so. As I told the House last week, the number of people in workless households in social housing is dropping dramatically. People are moving, as I just said. Nineteen thousand people have moved in the early months of the policy, which is in line with our expectation of 50,000. It is clearly stated in the report that, over two years, one might expect to see 20%.

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Gangmasters (Licensing Authority) Regulations 2014

Local Audit (Delegation of Functions) and Statutory Audit (Delegation of Functions) Order 2014

Redress Schemes for Lettings Agency Work and Property Management Work (Requirement to Belong to a Scheme etc) (England) Order 2014

Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) (No. 2) Regulations 2014

Motions to Approve

3.07 pm

Moved by Baroness Williams of Trafford

That the draft regulations and draft orders laid before the House on 9, 16 and 23 June be approved.

Relevant documents: 3rd, 4th and 5th Reports from the Joint Committee on Statutory Instruments.Considered in Grand Committee on 16 July.

Motions agreed.

Public Bodies (Marine Management Organisation) (Fees) Order 2014

Motion to Approve

Moved by Lord De Mauley

That the draft order laid before the House on 13 May be approved.

Relevant documents: 1st Report from the Joint Committee on Statutory Instruments, 2nd Report from the Secondary Legislation Scrutiny Committee.Considered in Grand Committee on 16 July.

Motion agreed.

Birmingham Schools


3.08 pm

The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con): My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend the Secretary of State for Education in the other place earlier today. The Statement is as follows:

“With permission, Mr Speaker, I should like to make a Statement about the report into allegations concerning Birmingham schools arising from the so-called Trojan Horse letter. That report by Peter Clarke has been laid before the House this morning.

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The abiding principle of this Government’s education policy is that schools should prepare children for life in modern Britain and, indeed, the modern world. Schools should open doors for children, not close them. That is what parents want and expect. We should be clear that this is as true for the overwhelming majority of British Muslims as it is for everyone else.

As a Government, we strongly support the right of Muslim parents to be involved in their children’s schools and their commitment to take leading roles in public life. What has been so upsetting about the history in this small handful of schools is that the success of efforts to encourage more British Muslims to take up governing roles has been damaged by the actions of a few. I sincerely hope that parents will continue to come forward to serve as governors and take leadership roles in schools.

But what Peter Clarke found is disturbing. His report sets out compelling evidence of a determined effort by people with a shared ideology to gain control of the governing bodies of a small number of schools in Birmingham. Teachers have said they fear children are learning to be intolerant of difference and diversity. Instead of enjoying a broadening and enriching experience in school, young people are having their horizons narrowed and are being denied the opportunity to flourish in a modern multicultural Britain.

There has been no evidence of direct radicalisation or violent extremism. But there is a clear account in the report of people in positions of influence in these schools, with a restricted and narrow interpretation of their faith, who have not promoted fundamental British values and who have failed to challenge the extremist views of others.

Individuals associated with the Park View Educational Trust, in particular, have destabilised head teachers, sometimes leading to their resignation or removal. Particularly shocking is the evidence of the social media discussions of the Park View Brotherhood group, whose actions,

‘betray a collective mind-set that can fairly be described as an intolerant Islamist approach that denies the validity of alternative beliefs’.

Evidence collected by Peter Clarke shows that Birmingham City Council was aware of the practices that were subsequently outlined in the Trojan Horse letter long before it surfaced.

The council published on Friday its own report by Ian Kershaw into the problems. He concluded that in some cases the council was actually a vehicle for promoting some of these problems, with head teachers being eased out through profligate use of compromise agreements rather than being supported. The council’s inability to address these problems had been exacerbated, the report found, by a culture of not wanting to address difficult problems where there is a risk of accusations of racism or Islamophobia.

We are all in the debt of Peter Clarke for the rigour that he brought to his investigation and for the forensic clarity of his findings. And we are in the debt of my predecessor, now the Chief Whip on this side of the House, for his determination in the face of criticism to invite Mr Clarke to take on this task. No Government and no Home Secretary have done more to tackle

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extremism than this Government and this Home Secretary. In the conclusions of the Government’s extremism task force last year, the Prime Minister made it clear that we need to deal with the dangers posed by extremism well before it becomes violent. Peter Clarke’s report offers us important recommendations to address this challenge in schools.

Our first priority after Ofsted reported its findings last month was to take action over the schools in special measures. The members at the Park View Educational Trust have now resigned, enabling outstanding head teachers from the wider Birmingham community to take on the governance of the trust and ensure a strong future for its three academies. My noble friend Lord Nash has today written to the Oldknow Trust notifying it that I will terminate its funding agreement in the light of the trust’s manifest breaches. And a new interim executive board has replaced the failing governing body of Saltley school. I pay tribute to the right honourable Member for Birmingham, Hodge Hill, and the honourable Member for Birmingham, Yardley, for their work with these schools.

The second priority is the progress which must be made by Birmingham City Council. I have spoken to Sir Albert Bore and we have agreed that I will appoint a new education commissioner within the council to oversee its actions, to address the fundamental criticisms in the Kershaw and Clarke reports, while building resilience in the system as a whole. The commissioner will report jointly to Birmingham’s chief executive and to me. If we are unable to make rapid progress with these new arrangements, I will not hesitate to use my powers to intervene further.

My right honourable friend the Secretary of State for Communities and Local Government has also spoken to Sir Albert Bore about the need to address the wider weaknesses that these events have highlighted in the governance culture of the council. It has agreed that Sir Bob Kerslake will lead a review of governance in the city council, reporting with recommendations for both the short and medium term by the end of 2014.

I want also to ensure that our system of standards and accountability for all schools should better withstand the threats of extremism of all kinds. The National College for Teaching and Leadership will take the extensive evidence provided by Peter Clarke so that its misconduct panel can consider whether any teachers involved should be barred from the profession. Advice to the panel already provides that actions which undermine fundamental British values should be viewed as misconduct. I will strengthen that advice to make clear that exposing pupils to extremist speakers should be regarded as a failure to protect pupils and promote British values. I will also strengthen the advice to make it clear that prohibition from teaching should be imposed while such cases are investigated and a prohibition without review made where misconduct is proved.

We have already published a consultation on strengthening independent school standards, which apply also to academies and free schools, including a requirement actively to promote British values. Ofsted will inspect how well all schools are actively promoting fundamental British values through their curriculum. We will provide further guidance on how to improve

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the social, moral, spiritual and cultural development of pupils, which is also inspected by Ofsted. We will strengthen our regulations to bar unsuitable persons from running independent schools, including academies and free schools. Anyone barred in this way will also be prohibited from being a governor in any maintained school.

Peter Clarke recommends that Ofsted should be more sensitive to the signs of emerging problems. I believe that key evidence can be hidden from inspectors, and the inspection regime needs to be strengthened further. My predecessor asked Her Majesty’s Chief Inspector, Sir Michael Wilshaw, to look at the feasibility and practicalities of introducing no-notice inspections for schools. I am pleased that Her Majesty’s Chief Inspector has already decided—and notified schools earlier this month—that he will be broadening next term the criteria that Ofsted uses to judge whether unannounced inspection is required for a particular school. HMCI believes there are advantages to extending no-notice inspection to all schools and will use his consultation in the autumn on changes to the 2015 inspection regime to consult on whether universal no-notice or a different change to the no-notice regime should be made.

HMCI has also highlighted the need to ensure that all state-funded schools meet the requirement to teach a broad and balanced curriculum. The chief inspector is clear that this is an area where inspectors will pay more attention, and the autumn consultation will seek views on whether Ofsted needs to do more to ensure that all schools meet their requirement to teach a broad and balanced curriculum.

My predecessor commissioned a review by the Permanent Secretary on whether the department missed historical warnings in Birmingham, and he will report to me later in the summer. The department has already ensured increased scrutiny of new academy sponsors and of the governance arrangements for schools seeking to convert to academy status. We have appointed regional schools commissioners, backed by boards of local outstanding head teachers, who will bring local intelligence to decision-making on academies, but I will now improve the department’s due diligence and counterextremism division’s capacity as Peter Clarke recommends, and I will ensure that the department works in partnership with the Home Office, the Department for Communities and Local Government and other agencies to improve the intelligence available to us on whether other parts of the country are similarly vulnerable to the threats that have been exposed in Birmingham.

The report also raises questions and makes specific recommendations about other important areas including: the role of the Association of Muslim Schools UK; further action on improving school governance; how to communicate better the role of local authorities with all schools—maintained, academies and independent —over safeguarding and extremism; and how we can be sure that all schools are meeting their statutory duties. I want to reflect further on these issues, as well as all specific recommendations made in the report published today, and return to this House in the autumn on steps to be taken on these matters.

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Peter Clarke’s report confirms the pattern of serious failing found by Ofsted inspection reports and identifies how the actions of a small number of individuals in some schools represented a serious risk to the safeguarding of children and the quality of education being provided. We are taking action to put things right and I will not hesitate to act in any schools where serious concerns come to light in future.

However, I want to be clear that those who seek to use this case to undermine this Government’s reform agenda will be disappointed. Today there are more than 4,000 academies and free schools serving pupils and parents up and down the country. They are helping thousands of young people, regardless of their background, to unlock their potential and become valuable and rounded members of society. The expansion of the academy programme has been one of the great success stories of this Government and the actions of a small number of individuals will not divert us from this path. The programme of reform goes on. I commend the report to the House”.

My Lords, that concludes the Statement.

3.20 pm

Baroness Jones of Whitchurch (Lab): My Lords, I thank the noble Lord for repeating the Statement. The contents of the two reports that have led to the Statement clearly make for sobering reading. Failures in oversight and supervision go back years, to a time when the Conservative-run Birmingham City Council failed to hear the concerns of local head teachers and a delegation brought a dossier of complaints to the then Education Minister in the Lords, the noble Lord, Lord Hill, in 2010. Those complaints were registered with promises of action, only to disappear into the bowels of the Department for Education, never to be heard of again. Since then, despite repeated concerns being raised about the consequences of a lack of scrutiny of schools, we have been reassured that processes are in place to guarantee standards. However, the fact that these latest allegations came to light not through the diligence of Ofsted inspectors but from whistleblowers clearly demonstrates that these provisions were not sufficient. Does the Minister recognise that, in retrospect, the Government should have heeded the warning messages at a much earlier stage and introduced a much more robust system of oversight? Is he now in a position to share with us what exactly happened to the complaints that were raised with the noble Lord, Lord Hill, back in 2010?

I am aware of the similarities between the two reports published today, but also aware of the different tones of their conclusions. Clearly, when dealing with matters of potential community sensitivity we need to be confident in the strength of evidence before us. So we need to acknowledge that actual evidence of incitement to violent extremism or radicalism appears to be relatively weak. This does not mean that there is not serious cause for concern about the conclusions of both Peter Clarke and Ian Kershaw.

First, it is clear that all agencies involved, including the department, Ofsted and Birmingham City Council bear some responsibility for the poor governance of

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these schools. There are lessons here for the appointment and training of governors, as well as for the focus of future Ofsted inspections. Does the Minister welcome the recommendations on training and accountability of governors, and does he accept the case for them to be rolled out across all schools in future?

Secondly, there are concerns that secular schools are able to focus on a narrow, single-faith doctrine that rejects and denigrates other faiths, including teaching a very narrow interpretation of the curriculum. What advice do the Government propose to give in the future about the teaching of religious tolerance in both faith and non-faith schools?

Thirdly, there are concerns that girls are being segregated and given restricted access to subjects such as sport, biology and PSHE education. Will the Minister clarify how the Equality Act sits with these practices; whether girls are entitled to be treated equally and to mix with students of the opposite sex on equal terms; and how we can be assured that these rights will be protected in all schools in the future?

Finally, is it not now time for the Government to face up to the failures of their own policies for school oversight, so aptly described by Peter Clarke as “benign neglect”? Sir Albert Bore, Labour leader of Birmingham City Council, has apologised, even though his party was in power for only a short time over this period. Should the Secretary of State not also take responsibility and apologise for the failings of the Government’s education policy to monitor effectively what was happening on their watch? Does the Minister accept that what parents, teachers and communities want is an authoritative local body that can be trusted to take up their concerns and with the power to intervene to guarantee standards? This view is shared by the Local Government Association. Our policy of having local directors of school standards to support and challenge schools to improve, and to root out problems before they set in, is exactly what is needed now.

Both reports today identified systematic failure in the current structures so, while we welcome today’s announcement that there will be a new education commissioner in Birmingham, how can we be sure that these problems are confined to Birmingham? Is there not a case for rolling out this model of supervision across the country? I hope that the Minister will accept that the Government’s schools policy is no longer fit for purpose, and that he will work with us on developing a model for proper local oversight in which everyone can have faith for the future.

3.25 pm

Lord Nash: This is not a matter for bipartisan point-scoring but one for serious reflection on the issues that have arisen. The noble Baroness is quite right that some of the evidence suggested that these issues go back 15 years, including under a previous Government and while these schools were all maintained schools. Within a few weeks of becoming aware that issues were apparent with the academy trust described by Peter Clarke in his report as the incubator, Park View Educational Trust, we had removed the members of that trust. Clearly, that shows swift and firm action.

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We, too, expect all schools to teach tolerance and we have set that out in the independent schools standards. As I say, we will be improving the social, moral, spiritual and cultural guidance on this. We do not mandate training for governors. We have 300,000 governors in this country and we are extremely grateful to them for the work that they do. We expect governors to be trained where appropriate but at this time we do not think it appropriate to mandate them. The Equality Act of course applies to all schools.

As far as our policies are concerned, there is no doubt now that the academies programme, started under the previous Government and dramatically rolled out under this Government, is an outstanding success up and down the country. Schools that have been failing for years—hundreds of them—are being dramatically transformed under academy sponsorship. The Labour Party’s solution to such issues is to have 50 to 100 new directors of school standards, all with their own bureaucracies. As far as I am concerned, I know who I would rather trust to give me advice on local issues such as the ones we have seen in Birmingham. It would be head teachers, every time, ahead of local bureaucrats. That is why we have set up our eight regional schools commissioners.

I pay tribute today to the three outstanding head teachers who have come forward to take over as the new members of the Park View Educational Trust and the speed with which they are getting to grips with the issues in those three schools, to ensure that they are safe and appropriately staffed when they open again in September. I also pay tribute here to those officials in the Department for Education who have worked so tirelessly with me over the past few months to ensure that the former members of the Park View Educational Trust have stood down.

3.27 pm

The Lord Bishop of Birmingham: My Lords, I am grateful to the Minister for bringing the Secretary of State’s Statement to the House and for the publication of Peter Clarke’s report. As he mentioned, this goes alongside Ian Kershaw’s report, which was published on Friday, about Birmingham City Council and it has the support of the Birmingham Trojan horse review group, of which I am a member. That group has published its own, wider recommendations in this complex and troubling period. Does the Minister agree that both reports are thorough and hard-hitting, and that there is much in common in their findings?

Will he also affirm that it is vital now that we have a co-ordinated effort across all interested parties and responsible bodies, not only to rectify wrongdoing and implement the welcome recommendations of both reports but to ensure that every child in Birmingham has an excellent education, preparing her or him to flourish in our liberal 21st-century democracy, so that they can start the new academic year in September confident that the proper structures, monitoring and support are in place? Can he also reassure the House that, given the arrangements he is proposing, with these rapid and responsible responses to new structures and influences in Birmingham, we will be absolutely clear by September who is responsible for what in this revolutionary period in our education system? Will

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sufficient resource be directed to enable local authorities and their partners, new and old, to achieve this safeguarding, which is the responsibility for all children, in whatever form of education or schools they are, and can he reassure the House that they will receive that?

May I also make a wider point about this complex matter? Faith, in a city such as Birmingham, is of great importance to a huge number of the population, which is perhaps unusual across the population of the country. The issues that we face in these reports are wider than just education and, of course, the Prevent strategy, such as making sure that proper arrangements are in place for the safety of all. Will the Secretary of State’s department consider taking responsibility for developing a new awareness and experience among all professionals, of whatever responsibility, of what lived faith looks like in a 21st century city and enable a wider conversation about faith, not only in education but throughout civil society?

Lord Nash: I welcome the right reverend Prelate’s “look forward” approach to this matter and am grateful to the diocese of Birmingham for its support for the schools and academies programme and its collaborative approach to working both with the department and with other dioceses. As the right reverend Prelate says, both reports are hard-hitting. We should all take stock and analyse all the recommendations.

As for being clear by September who is responsible for what in these schools, it is clear now today that we have changed the members of the Park View Educational Trust, which was responsible for three academies, Park View, Golden Hillock and Nansen Primary. They will become trustees of the trust. We will bring in further outstanding heads as trustees, who will be responsible between now and the beginning of September for securing the schools and analysing which teachers may have behaved inappropriately. They will not hesitate to take the right action against any teachers who have behaved unprofessionally and will make sure the schools are safe and ready for opening in September. Probably during August, we will work with potential sponsors for these schools to ensure their long-term future. This has invited a wider discussion about faith, which is very welcome.

Lord Storey (LD): My Lords, I am grateful for the Minister’s Statement. Sometimes good can come out of a difficult situation. I have four questions to ask the Minister.

Noble Lords: Two!

Lord Storey: I have two questions to ask him. First, does he think that there is a need for Ofsted to inspect academy chains, and that the curriculum proposals should be for all schools? Secondly, he mentioned in his Statement that a number of head teachers were eased out through compromise agreements. These compromise agreements often come with confidentiality clauses. We currently know that up to £3 million of education money is being spent on these compromise agreements. Does he not think that we ought to look at this situation? Had those confidentiality issues not

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been linked to the compromise agreements, perhaps we would have got to the truth of what head teachers felt sooner.

Lord Nash: To answer my noble friend’s two questions, we have so far felt that, given that Ofsted is capable of conducting batch inspections on a number of schools in a chain, as it did in Birmingham and has done on many occasions, that gives it plenty of opportunity to examine the support that those schools get from the centre. Visiting the head office—when Ofsted probably would not see very much except the office—would not tell it any more. However, we keep that constantly under review.

On the compromise agreements, when I came to work in education I was pretty shocked by the lack of due diligence that was often taken over referencing people in teaching. Of course, what can happen as a result of compromise agreements is that bad teachers just pop up elsewhere, which is described in America as the dance of the lemons. That is something that we need to look at.

Lord Sutherland of Houndwood (CB): My Lords, there is much to welcome and to ponder in today’s report. There is an underlying issue of knowing what is going on in schools to which I will draw attention by asking two related questions. I suggest that one of the key sources will always be responsible teachers and head teachers. Is there any way of devising a route that they can follow to raise questions about serious difficulties within the school, knowing that they will be taken seriously?

Secondly, there is an issue of governance and governors. I welcome what is recommended in the report, but it is a much broader issue than that. Could a broader look be taken? I could take the Minister to schools within a mile or two of here that struggle to find enough good governors. We have to find ways of improving that situation, and that will not happen reactively in situations like this.

Lord Nash: I pay tribute to the experience of the noble Lord, Lord Sutherland, in the area of HMCI. We have whistleblowing procedures in place in the department and in the EFA. We have been discussing with Ofsted how we can improve them, and we will look at doing so.

On page 90 of Peter Clarke’s report, he says that he does not see that there is an issue with governance generally, merely an issue with governance in these particular schools. In the last 18 months, as Minister with responsibility for governors, we have dramatically beefed up our focus on governance to focus governors on three core skills, to focus governance on skills rather than representation and to view governing bodies more as non-executive director bodies. I was delighted to hear in the other place earlier this afternoon the shadow Secretary of State support the non-executive director approach. Ofsted is far more focused on governance than it was and we are increasingly working with it to make it more so.

The noble Lord is quite right about recruiting more governors. We have recently launched the Inspiring Governors Alliance to work with the CBI and other business groups to recruit more governors.

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Lord Rooker (Lab): It has been 13 years since I ceased to represent part of my city in the other place. My former constituents would not thank me if I started to play a party-political game here, so I have only one question. Will Sir Bob Kerslake’s review of governance look at the splitting of the city into three boroughs? London is no less London for having 32 boroughs dealing with social services and education. Last autumn I advised the then Secretary of State not to send in commissioners for social services and education necessarily, but to send in the boundary commissioners. With wards with an electorate of 20,000 for three councillors in that city compared to 6,000 electors for three councillors in London, there is a disconnect in democratic accountability. The elected councillors cannot possibly be in touch with things that happen on their patch. It is the only place in the country that has such a democratic dislocation at ward level between councillors and the electorate.

Change is long overdue. I even raised it when Tim Brighouse came to Birmingham. With more than 400 schools in one city, it is just not possible to manage it properly. I am not calling for the dismemberment of the city, but for the boroughing of the city in that same way that London is boroughed, so that there will be more accountability and more people will know what is going on. It is not just the governors but the elected councillors as well. Bob Kerslake seriously has to have a look at this, because although it is not the entire solution it is part of it.

Lord Nash: I assure the noble Lord that all possible solutions to this are under review.

Baroness Hussein-Ece (LD): My Lords, I, too, thank my noble friend for the Statement. It is a relief that this applies to a very small number of schools, however important it is, and to note that there are serious problems of governance. It is important to underline that there is no evidence, as we saw in the lurid headlines, of a “plot” or of violent extremism.

We know that there is a difference between religious conservatism and extremism. That has not really come out in a lot of the narrative from these schools. It has been quite damaging. Can the Minister comment on that? Does he agree with me that when we talk about values, we need a shared level of standards, values and accountability for all schools, be they faith schools, free schools, academies or private schools? Would he also agree that we need to refrain from the generalisation that we have seen that stigmatises whole communities and faiths? This has been very damaging and will make it more difficult for moderate people in Muslim and other communities who want to get engaged in public life to become school governors and councillors, and to play a full role in British civic society.

Lord Nash: My noble friend is quite right about the difference between religious conservatism and extremism. We are dealing with some extremely difficult issues. We must respect all faiths, but all schools should be places where pupils start to learn about inclusivity and tolerance, not where they are excluded from society. We are focused on our pupils being adequately prepared for life in modern Britain, and the noble Baroness raises some very important points.

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Lord Pearson of Rannoch (UKIP): My Lords, do the Government agree that this scandal, like Muslim segregation and Islamist violence more generally, is a problem that arises from within Islam and can be cured only from within Islam? Given all that is happening in Africa as well, why do the Government go on intoning that Islam is a religion of peace?

Lord Nash: I think that what has happened in Birmingham is unacceptable to all the communities there, including most of the Muslim parents and teachers. I do not recognise the noble Lord’s analysis of the religion of Islam, which I see as a religion of peace. I do think that there are issues in relation to developing counter-narratives to extremism, but I do not think that there is time to go into that here.

Baroness Armstrong of Hill Top (Lab): Does the Minister recognise that the department has to take its fair share of the blame and be accountable? It is not possible to put all the responsibility on to Ofsted for knowing what is going on in schools day in and day out. With academies, the department has the responsibility through its newly imposed regulatory system. How could it miss what was happening to girls in those schools, when many women were being dismissed from schools as cleaners, dinner ladies and so on, as well as teachers? Many of us feel very let down in this respect by the Government, with their centralised control of academies. I declare my interest as a member of Northern Education Trust and as a governor of Castle View Academy in Sunderland—so I am not against academies by a long way, but the Government have neglected these schools and have not now got the infrastructure to know when things are going wrong. What are they going to do to change that?

Lord Nash: The noble Baroness is quite right that everybody needs to take their fair share of the blame in this. Nobody comes out of this particularly well. One could say, “How did the local authority miss these issues for years?”. It was only when Ofsted did a batch inspection of 21 schools and saw a common pattern of behaviour which had accelerated dramatically in terms of threatening behaviour in recent years that it became absolutely clear what was happening. As I said in relation to the actions we have taken with Park View Educational Trust, we dealt with these matters extremely speedily. We have now substantially tightened our procedures in relation to schools becoming academies and we will, as a result of events in Birmingham, look further at that.

Lord Bew (CB): My Lords, does the Minister acknowledge that we owe a great debt to Peter Clarke for this report and that its modulated contents disprove many of the concerns in the media at the time of his appointment? It is a modulated, precise report. As to its content, after the Minister’s Statement, I am much clearer about the Government’s thinking on the governance of these schools. However, the report also criticises the conduct of a number of teachers. I am not sure how the discussion is going to develop on the point of the teachers—as opposed to governors—whose conduct is discussed in the Clarke report.

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Lord Nash: I agree entirely with the noble Lord about the great debt that we owe to Peter Clarke, one of the great investigative policemen of our time. At this precise time I cannot comment on the detail of the noble Lord’s point about the conduct of the teachers. However, I can assure noble Lords that the new trustees of Park View Educational Trust will take all appropriate action, and the National College for Teaching and Leadership will take the extensive evidence provided by Peter Clarke so that its misconduct panel can consider which individuals, if any, should be barred from the profession.

Baroness Crawley (Lab): My Lords, as a former MEP for Birmingham for 15 years, and as a feminist, I have taken a great deal of interest in this matter. Can the Minister say what his department will do to ensure that the Equality Act is implemented in faith schools, free schools, academies and maintained schools from now on?

Lord Nash: I can assure the noble Baroness that we are extremely focused on that. We make sure that all schools, particularly when we are approving them as free schools, are thoroughly inclusive. We visit the schools, and if we see any practices that we think are inappropriate, we are very quick to draw them to the attention of the schools and make sure they are rectified. We are extremely focused on that. The noble Baroness makes a very good point.

Lord Reid of Cardowan (Lab): My Lords, first, I thank the Minister for repeating the Statement, and I thank the authors of the two reports. I do not know the author of one of them, but I know Peter Clarke, and I have long appreciated his judgment and analysis, which come through in this report. It is obvious that there were problems in the schools, the local communities and the local authorities, and we have concentrated on that. However, without in any way laying particular personal blame or being party political, it is equally obvious that there were failings at the centre of government, and in more than one department. To put it at the minimum, someone somewhere, or a number of people, took their eye off the ball. The Minister said that procedures had been “tightened up”—I think that that was his phrase. Could he elaborate a little more on that? Can he say—if we are reviewing everything that is happening in Birmingham, in the local authorities, the schools, regarding the teachers and so on—what is the nature of the review being carried out in the Home Office and/or the Department for Education, and whether any conclusions have already been reached?

Lord Nash: I am grateful to the noble Lord for his comments, particularly given his vast experience in this area, and particularly his comments about Peter Clarke. We have dramatically beefed up our due diligence and counterextremism division in the department, and will further strengthen it. We were the first department outside the Home Office to set up such a unit. I cannot comment on the Home Office, but we will look carefully at all the issues arising out of this. I can assure the

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noble Lord that, in terms of analysing the individuals involved in any schools in which the department is involved in any approvals, we will use our due diligence unit very rigorously.

Police Reform


3.48 pm

The Parliamentary Under-Secretary of State, Home Office (Lord Taylor of Holbeach) (Con): My Lords, with the leave of the House I will now repeat a Statement on police reform that was given earlier today in the House of Commons by my right honourable friend Theresa May, the Home Secretary. The Statement is as follows.

“With permission, Mr Speaker, I would like to make a statement about our ongoing work to ensure the highest standards of integrity in the police. I have always been clear that I believe the vast majority of police officers in this country do their job honestly, and with integrity. They fight crime in our villages, towns and cities. They deal with dangerous criminals, strive to protect the vulnerable, keep our streets safe and have shown that they can cut crime even as we cut spending. Under this Government, crime is down by more than 10% since the election, proving that it is possible to do more with less. But as I have said before, the good work of the majority threatens to be damaged by a continuing series of events and revelations relating to police conduct.

That is why, over the last 18 months, the Government have been implementing a series of changes to improve standards of police integrity. The College of Policing has published a new code of ethics, which makes clear the high standards of behaviour that are expected from all police officers. A national list of police officers’ pay and rewards, gifts and hospitality is now published online, and their final list of business interests will be published for the first time later this summer. A national register of officers struck off from the police has been produced and made available to vetting and anti-corruption officers in police forces. The Government will legislate later this year to ensure that officers cannot resign or retire to avoid dismissal in misconduct hearings. We have beefed up the Independent Police Complaints Commission so that, in future, it can take on all serious and sensitive cases involving the police. In addition to these specific measures, many of our other police reforms—the creation of the College of Policing; direct entry into the senior ranks; the election of police and crime commissioners; the changes to Her Majesty’s Inspectorate of Constabulary—will make a positive difference when it comes to police integrity.

Since I began the Government’s programme of work to improve public confidence in the police, further events and revelations have reinforced the need for reform. We have had reports on the misuse of stop and search, and the poor police response to domestic violence. We have had the findings of the Ellison review, which examined allegations of corruption during the initial deeply flawed investigation of the murder of

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Stephen Lawrence. We have had Sir David Normington’s review into the Police Federation, which recommended change ‘from top to bottom’.

The measures we have introduced are vital, but we cannot stop there, so I want to tell the House about my plans for further change. I want to open up policing to the brightest and best recruits. The Government have already introduced direct entry to open up the senior ranks of the police and bring in people with new perspectives and expertise. In London, the Metropolitan Police received 595 applications for between five and 10 direct-entry superintendent posts. Some 26% of the applicants were from a black or minority ethnic background, compared with 8.6% of traditional recruits, and 27% were female. In addition, using seed funding that I announced at the Police Federation conference in May, the Metropolitan Police is setting up “Police Now”, the policing equivalent of Teach First, which will attract the brightest graduates into policing. However, I want to go further. The College of Policing will undertake a fundamental review of police leadership. The review will look at: how we can go further and faster with direct entry; how we can encourage officers to gain experience outside policing before returning later in life; and how we can open up the senior ranks to candidates from different backgrounds. The review will start immediately.

In addition to these reforms, I also want to ensure that the systems and processes that deal with misconduct by police officers are robust. That means, where there are cases of wrongdoing, they must be dealt with effectively, and, where necessary, appropriate disciplinary action must be taken. In March I announced I would be creating a new offence of police corruption through the Criminal Justice and Courts Bill, but this alone is not enough. The police disciplinary system is complex. It has developed organically rather than been structured to fit its purpose. It lacks transparency for the public, it is bureaucratic and it lacks independence.

So today I can tell the House that we will be reviewing the whole police disciplinary system from beginning to end. This review will be chaired by Major-General Clive Chapman, an experienced, independent and respected former Army officer, and I want it to draw on best practice from the private and public sectors. I have asked Major-General Chapman to look for ways to ensure that the disciplinary system is clearer, more independent and public focused. I intend to consult publicly on the policies that emerge from the review later this year. In addition to the review, I want to make some specific changes to the police disciplinary system. In particular, I want to hold disciplinary hearings in public to improve transparency and justice. I will launch a public consultation on these proposals later this year.

In my Statement on the Ellison review on 6 March, I said I would return to the House with proposals to strengthen protections for police whistleblowers. Police officers and police staff need to know that they can come forward in complete confidence to report wrongdoing by their colleagues. So the Government will create a single national policy for police forces on whistleblowing to replace the current patchwork approach. This will set out the best principles and practices on whistleblowing, and ensure consistency of approach

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across all forces. Following the publication of HMIC’s integrity inspection, I am prepared to consider putting the whistleblowers’ code on a statutory basis. We will also require forces to publish more information on the number of conduct issues raised by officers and the action taken as a result. From 2015 onwards, the Home Office will collect and publish data about conduct and complaints brought by police officers and police staff about their colleagues. But I still want to go further, so in the autumn I will launch a public consultation on police whistleblowing. The consultation will look at a range of new proposals to protect police whistleblowers. For example, I want to consider how we can introduce sealed investigations—which prevent both the force and suspects learning that an investigation is taking place—into serious misconduct and corruption by police officers.

I also want to take an in-depth look at the police complaints system. Last year, I announced reforms to the IPCC to ensure that all serious and sensitive cases are dealt with by the IPCC. This included the transfer of resources from the police to the IPCC and measures to ensure that the IPCC has the right capacity to deal with demand. As I told the College of Policing conference in October, this work is on track and the IPCC will begin to take on additional cases this year. But now is the time to build on those reforms. Public satisfaction surveys on the handling of complaints show that satisfaction levels remain consistently low. According to the Crime Survey for England and Wales, less than a quarter of those who complain to the police are satisfied with the outcome of their complaint. The overall number of complaints being handled independently is still far too low. This year, a review undertaken by Deborah Glass, the former deputy chair of the Independent Police Complaints Commission, found that 94% of cases referred to the IPCC in 2012 were referred back to be dealt with by the police.

Police and crime commissioners are locally developing new and innovative approaches to police complaints. In Thames Valley, Anthony Stansfeld has announced a complaints, integrity and ethics committee to provide scrutiny on how the force handles complaints. In Greater Manchester, Tony Lloyd has appointed an independent complaints ombudsman to resolve complaints before they become part of the complaints system. We need the police complaints system to keep up with the changes we have seen in police structures, to reflect the changes made locally by PCCs and chief constables, and to meet public expectations. So today I will launch a review of the entire police complaints system, including the role, powers and funding of the IPCC and the local role played by police and crime commissioners. The review will look at the complaints system from end to end, examining the process every step of the way and for all complaints from the most minor to the most serious. The review will commence immediately and conclude in the autumn this year. It will include a public consultation on proposals for a system that is more independent of the police, easier for the public to follow, more focused on resolving complaints locally, and has a simpler system of appeals.

The measures that I have announced today will ensure that we are able to examine the entire approach to cases of misconduct, improper behaviour and

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corruption. But in working to ensure the highest standards of police integrity, I want to leave no stone unturned. This year, I commissioned Her Majesty’s Inspectorate of Constabulary to carry out a review of anti-corruption capability in police forces. HMIC is also carrying out an inspection of police integrity as part of its planned programme of inspections for 2014-2015. In addition, I have agreed with the chief inspector that HMIC’s new programme of annual inspections of all police forces, which will begin later this year, will look not only at a force’s effectiveness and efficiency but at its legitimacy in the eyes of the public. Every annual inspection will therefore include an examination as to whether each force’s officers and staff act with integrity.

Together these measures represent a substantial overhaul of the systems that hold police officers to account. They will build on our radical programme of police reform and they will help to ensure that police honesty and integrity are protected, and that corruption and misconduct are rooted out. That is what the public and the many thousands of decent, dedicated and hardworking police officers of this country deserve. I commend this Statement to the House”.

My Lords, that concludes the Statement.

4.03 pm

Baroness Smith of Basildon (Lab): My Lords, I am grateful to the Minister for repeating the Statement. Most of us at some point in our lives have contact with the police: as witnesses—not as victims, we hope—reporting a crime; and in their community role, which at its best is excellent and at its worst is minimal. At their best the British police are rightly held in national and international high regard. They are praised by communities and they encourage and justify public confidence.

However, we have also seen evidence of policing going wrong, when its integrity cannot be relied on and public confidence is not justified. Issues such as the Hillsborough disaster and the investigation into Stephen Lawrence’s murder—and the appalling police actions following those shocking events—make it clear that a new framework is needed. The IPCC has too often done too little too late.

From talking to police officers, it is clear that they themselves feel the criticism of their profession more acutely than anyone else, because all the professionalism and integrity on which they pride themselves is undermined by the actions of a minority. We have already initiated a review of ensuring stronger actions on standards in policing. The noble Lord, Lord Stevens, led the independent commission that made a number of recommendations: a new stronger police standards authority, replacing the IPCC and HMIC with the power to initiate investigations; chartered registration for all police; the ability to strike officers from the register; and high professional and ethical standards for all officers.

I had hoped that we would have seen some of those issues incorporated in today’s Statement and an indication that some action is taking place. Instead we are going to have a review of the police disciplinary system and a public consultation on disciplinary hearings; as well as the existing Ellison review we are going to have

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another consultation on whistleblowing; we have got a review on police leadership; and we have a review on the police complaints system, including a review of the IPCC and the role of the police and crime commissioners. Just to confirm in case I have got it wrong, I count that as three reviews and four consultations. I am not necessarily against these reviews in areas in which we want to see progress, but so many reviews and consultations are a poor excuse for little or delayed action. How many reviews do the Government need to tell them that the IPCC is not working and that a piecemeal, sticking-plaster approach to reform is not what is needed?

The Statement begs far more questions than it gives answers. We shall come to some of them today but I hope that at some point we can have a longer debate on this issue. I am sorry that I find the Statement disappointing. It does not give me confidence that the Government will tackle the failures in the system with any sense of urgency or understand the scale of reform that is needed. So many reviews seem to indicate that the plan is to kick reform into the long grass well beyond the next election. The public and the police deserve better.

Yesterday in the Moses Room we debated the Government’s proposals relating to the by-election following the tragic and untimely death of Bob Jones, the police and crime commissioner in the West Midlands. Despite some worthy candidates and officeholders, there is little interest in and support for the role of the PCCs, with humiliating turnouts—just 14% across the country—in the 2012 elections. The cost of those elections, and the by-election in August, would have paid for hundreds of police officers at a time when every police force is facing swingeing cuts. One has to ask whether this is value for money.

I am sure the noble Lord has spoken to police officers, as I have. They have told me that the thin blue line is getting thinner and thinner. They feel they are unable to do their job as they want to and should be able to. The reforms that we and they expect seem no nearer with so many reviews and consultations. Those delays hit their morale, especially when they see convictions falling.

For example, in my home county of Essex, the investigation into the Colchester murders is drawing officers away from other parts of the country. They are having to leave the policing and investigations in their areas to undertake mutual assistance in Essex to ensure that they can effectively investigate these dreadful murders and police the area in Colchester. I have been told that this has meant that some officers have been on permanent 12-hour shifts for three weeks. That has taken its toll.

I do not know whether the Minister has seen the sickness figures for Essex but, in 2009-10, Essex Police lost 27,654 days to sickness. In the last year to April 2014, with fewer officers in Essex Police, that has risen to a staggering 41,251 days. Is the Minister as shocked and as worried as I am that the sickness levels in the Essex Police—and I have no reason to expect that Essex is different to anywhere else—have risen so dramatically since this Government have been in office?

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We are right to expect the highest standards from the police, but does the Minister agree that the police also have a right to expect the highest standards from the Government in tackling police reform issues more quickly and in making effective use of resources?

4.08 pm

Lord Taylor of Holbeach: The noble Baroness has picked up from where we were talking yesterday. I challenged her on how she viewed the role of the PCCs under a future Government headed by the Labour Party. She had no answer then—and it would appear that she has no answer now—as to what role they might have.

I agree with her about Bob Jones. He played an important role in the policing of the West Midlands area. I am sure she agrees with me on the role that Nick Alston plays in Essex and the important and innovative way in which he has undertaken his responsibilities there. Accountability to local communities, through the PCC, is at the heart of policing and I agree with the noble Baroness that it would be very useful to discuss these issues at a future date. I would like to hear how she plans to deal with police accountability to local communities.

The noble Baroness is right about how much we depend on the police and that they are held in high regard by all of us. She pointed to a couple of cases—Hillsborough and the tragic murder of Stephen Lawrence and the investigations thereafter—which raised questions for all of us who are interested in police integrity. I agree with her that professionalism is undermined by misconduct. I am sorry the noble Lord, Lord Stevens, is not in his place today and it is a pity that he has not participated in police debates recently, because his report was a genuine effort to look at ways of dealing with this matter. However, the Government are responsible and must take their own view of how to deal with these matters. They quite rightly chose not to merge the Independent Police Complaints Commission with HMIC but to look at the role of these bodies separately, through reviews which will report quickly, in the early or late autumn. These will find ways of making sure that the pattern of accountability which we set for the police and the ability to inquire into police misconduct effectively can be set in place promptly. It would be reckless to do that sort of thing without proper review and consultation. I make no apology on behalf of the Home Secretary for her announcement of those reviews. They are a way of making sure that in future we have a structure which is capable of satisfying demands for the highest standards of policing.

4.12 pm

Lord Dear (CB): My Lords, I welcome the Statement. I endorse its subject matter and I am delighted to see leadership mentioned. It does not get a bold headline but it is in there and Members of your Lordships’ House will know that I have pressed that subject before. The fact that leadership needs ventilation by attachment to outside bodies is well taken. I have two questions for the Minister: one on leadership and one on another matter. Does he agree that, with good-quality, robust, visible leadership, all the issues of probity,

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ethics, due process, professionalism and so on are almost superfluous because they would flow naturally from it? Without good-quality leadership, any of the things I have enumerated would struggle to succeed. Leadership, therefore, needs not only to be endorsed, as it is in the report, but lifted to the top of the list, together with a proper career path for those who are recruited into the service with those attributes. Will leadership be one of a number of issues or is it going to be one of the prime issues that will lead the rest through?

Secondly, if leadership is a key to the door, this is surely a door with at least two locks. We have talked about the first metaphorically. The second key to the door is the structure of the police service. There is nothing in the list we have heard today on structure. There is a balance to be struck which is, sadly, out of kilter at the moment. Wherever I go in the police service or whenever I talk to the many people who are outside the service but interested in it, the question is always why we do not have a national force or a regional force; there are too many forces. I take no view on that other than it needs addressing. I am a great believer in loyalty to cap-badge and locality but the fact that we have the National Crime Agency at one end and police and crime commissioners at the other means there is a great gulf in the middle. So my question to the Minister is: will there additionally be an in-depth review, perhaps along the lines of what has been mentioned in the Stevens report, of the whole structure of the British police service, in which leadership and everything else can flourish?

Lord Taylor of Holbeach: I am grateful for the support of the noble Lord, Lord Dear, who speaks with a great deal of authority on this whole issue.

The question of leadership is at the heart of the Statement because, as the noble Lord will know, the Home Secretary recognises that leadership is the key to achieving police reform. The noble Lord will share that view. It is therefore very much a key feature of this Statement. Probity is important and the noble Lord will understand that the reinforcement of the professionalism of the police by having proper measures for probity as part and parcel of this package is a very important thing. I hope the noble Lord will also acknowledge that the establishment of the College of Policing has led to a remarkable transformation of policing. Indeed, the leadership that it is providing to the force through the code of ethics and the many other aspects of policing that it is addressing is very important.

I agree with the noble Lord that in the long term we perhaps need to look at the structure and the balance of resources. There will always be arguments. I come from a very rural part of the country, where it is very easy for people to feel almost overlooked. But there are also places where the pressures on policing are much greater than they are where I live. Those issues will not go away. What the Government have done with the formation of the National Crime Agency is facilitate the ability to deal effectively with those things that operate across borders while at the same time enabling local policing to take place, governed by local police and crime commissioners.

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Lord Tebbit (Con): My Lords, does my noble friend not agree that this report is a tale not so much of poor structures—although there are poor structures—but primarily of a failure of leadership in the police force, as the noble Lord, Lord Dear, suggested? Therefore, will he accept that I welcome the concept of more direct entrants into the police force, and I hope that special priority will be given to members of the Armed Forces who are being made redundant despite their fine records, who could come into the police force and do great good work? If there is a structure that needs changing, it is that we should re-establish a proper college for the senior officers of the police force to be induced into the police force and to take the leadership role in it.

Lord Taylor of Holbeach: I agree with my noble friend. It is certainly the case that many people who have been active in the Armed Forces have qualities that could be important in policing. I do not know that I would go as far as to say that they should be given priority but they should clearly be encouraged to apply for those posts.

Lord Paddick (LD): My Lords, while I welcome the Statement by the Home Secretary—and clearly there are serious issues with the current investigation of police complaints and the police’s disciplinary procedures—is the Home Secretary aware of the dangers of articulating direct entry at a senior level and changes to the inspectorate of constabulary, where we now have for the first time a Chief Inspector of Constabulary who has no experience of policing and a majority of inspectors who have no experience of policing? Is she also aware of the impact on senior officers of the utmost integrity who have spent their whole careers in the police service of saying that those changes are a positive difference to police integrity, and the impression that she appears to be giving to the public about the integrity of the police service at the moment? Is the Home Secretary aware that every time she runs down the police service in this way it makes the police service less effective because the police service relies on public confidence and trust to ensure that the public give information and support the police in their work?

Lord Taylor of Holbeach: I refer my noble friend to the second paragraph of the Statement that I have just read, in which the Home Secretary pays tribute to individual police officers and the way in which they conduct themselves, “honestly and with integrity”.

If I am honest with my noble friend—and I think I owe it to him to be honest—the way in which he presented his question shows all the problems that policing has: it is the notion that only the police can know how to manage the police. What the Home Secretary has done with this series of reforms is to say to the police service, “There are better ways of doing these things. Other people will be able to get you to the place you want to be”. It is very important that we back those changes. At the heart of it all, the degree to which the police have seen themselves and their problems as being something for them alone is something that the public are no longer prepared to tolerate.

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Lord Blair of Boughton (CB): My Lords, I agree with, and congratulate, the Home Secretary and the Home Office team on a great deal of this Statement. A clear wind of change needs to blow through the police service and it is to be welcomed. A great deal, but not all—I will not tire the House with a view on PCCs; the Minister and I have discussed that enough. My question refers to an odd phrasing in the Statement that I have never come across before. The phrase of “sealed investigations”—I use that term in inverted commas—into police corruption. The police service, especially the Met, has for years carried out secret and successful investigations into police corruption.

I was talking about the Statement to the noble Baroness, Lady Manningham-Buller. We agreed that her officers had assisted the Met in some of those inquiries. I carried out an overt inquiry into police corruption which led to prosecution and convictions at the Old Bailey. The idea that I would have withheld the information I was receiving from the man in charge of running the police service from the top, who at the time was the noble Lord, Lord Condon, would be unthinkable. I ask the noble Lord to ensure that those charged with this initiative seek to learn from the previous experience of those who have spent most of their lives investigating police and other corruption, including some of those who sit in your Lordships’ House.

Lord Taylor of Holbeach: I am very happy to take the noble Lord’s advice on that matter. What he had to say was very interesting.

Lord Elystan-Morgan (CB): Does the noble Lord recollect, and indeed agree with, the historic words of the late Lord Callaghan in relation to the police when he said that our police are not a gendarmerie, they are not a corps d’élite, they are citizens in uniform? Does he accept that, although sophisticated systems may well assist the police, the essence of being a police officer is very much encapsulated in the words of James Callaghan? While accepting—indeed, the noble Lord will remember that I raised on many occasions the need for a comprehensive inquiry on the lines of that conducted by Sir Henry Willink in the early 1960s. There were so many problems that coalesced and it was the only way of dealing with them.

It seems to me, respectfully, that the inquiries that are now being considered are indeed wide-ranging and deep-seated. A great deal will depend on the collation of the evidence. I would ask for one matter, which has already been raised by my noble friend, to be considered in addition. We should ask ourselves the question whether, in the 21st century, we can carry on for very much longer with 43 police forces without considering a process of rationalised amalgamation.

Lord Taylor of Holbeach: That takes us back to a point made by the noble Lord, Lord Dear. I think that I explained that the issue appears different from different points of view. I am not sure that a change in size or relocating a responsibility to a regional level or whatever would necessarily lead to more effective policing—in fact, my own prejudice suggests that it would not.

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However, I agree with the noble Lord’s dictum. It goes back further than Jim Callaghan to Peel himself, who said that the people are the police and the police should be the people. That is the concept that lies behind the British police force, which certainly differs from police forces in other parts of the world.

Lord Harris of Haringey (Lab): My Lords, we are grateful to the Minister for repeating the Statement and for telling us of this blizzard of inquiries that the Home Secretary is setting up—I see him shaking his hand as though he feels that that is being pejorative. The point to which I hope the Minister will respond is that these are all interrelated issues; they have an impact on each other. Single, separate inquiries are not necessarily the best way to resolve all these matters. There is a question of how all this will be made to cohere and to be effective in delivering the sort of police service that I am sure all noble Lords want.

The Minister also referred to requirements that would be placed on the police to report—I think that it was in relation to whistleblowers and what happens to the issues that they report. Does the Minister agree with me, with those in Her Majesty’s Inspectorate of Constabulary and with those in the Independent Police Complaints Commission who think that one aid to transparency would be the proper recording by the police of those instances in which they use restraint or force against members of the public, and for those statistics to be publicly available so as to be measured against any complaints that may be received?

Lord Taylor of Holbeach: When I was waving my hand, I was not making an offensive or hostile gesture to the noble Lord, Lord Harris; I just wanted to explain that they are not inquiries but reviews. They are reviews that are taking place with the Home Office. He wanted to know how the reviews would work together. They are all short term and are designed to report within the next six months, with some even shorter, in order to bring together, as the noble Lord quite rightly pointed out, the parallel policy formation that will be necessary to make sure that we have coherence.

On the accountability of restraint, I will suggest that that is something that the College of Policing could consider. It is the sort of issue on which it quite rightly makes recommendations and issues guidelines. I am sure that it will be interested in the noble Lord’s comments, but I cannot comment today.

Lord Marlesford (Con): My Lords, the “Plebgate” incident at the gates of Downing Street took place on 17 September 2012. At that time, the commissioner of the Met decided to investigate himself. Does my noble friend recollect that, when he answered a Question from me on 1 April this year, 18 months after the incident had happened, he said, first, that HMG had no role in deciding who should investigate it? Therefore, I ask him whether in future it would be possible for the Commissioner of the Met to decide to investigate such an incident rather than having it independently investigated.

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Secondly, my noble friend told me in his Answer that although the IPCC had requested that the Metropolitan Police should publish its report once the misconduct proceedings had been concluded, it would be for the Metropolitan Police to decide whether to publish the report. Does that example not reveal a very unsatisfactory state of affairs? And, incidentally, when will we get the final report on that incident?

Lord Taylor of Holbeach: I cannot answer my noble friend on the latter point. All I can say is that the events surrounding my right honourable friend Andrew Mitchell and the process that followed are among a number of issues informing the present debate about policing and the way in which the police deal with complaints. It is good that my noble friend has had the opportunity of raising the matter again today; it belongs to a whole collection of matters, including Hillsborough and the Stephen Lawrence murder, that have led us to believe that it is right for us to undertake these reviews.

Wales Bill

Second Reading

4.31 pm

Moved by Baroness Randerson

That the Bill be read a second time.

The Parliamentary Under-Secretary of State, Wales Office (Baroness Randerson) (LD): My Lords, the Bill before us today continues this coalition’s ambitious programme of reforms to devolved governance in Wales. We have already achieved the commitments in our programme for government relating to Wales, including delivering the 2011 referendum on full law-making powers for the Assembly and establishing the Commission on Devolution in Wales—the Silk commission—which has since published two detailed reports.

I pay tribute to Paul Silk and his commissioners, including my noble friend Lord Bourne, for their two excellent reports. The commission included representatives from all four political parties in the Assembly, and reached unanimous agreement on its recommendations. I hope that a similar spirit of broad consensus will exist in this House in respect of this legislation.

The Bill implements the vast majority of the recommendations that the Silk commission made in its first report, devolving an exciting package of tax and borrowing powers to the Assembly and Welsh Ministers. These reforms provide the tools and incentives for the Welsh Government to grow the Welsh economy; make the Welsh Government more accountable for raising some of the money they spend; and deliver borrowing powers that will enable Welsh Ministers to invest further in Welsh infrastructure.

I now turn to the detail of the legislation. The Bill provides for the introduction of a Welsh rate of income tax. As the Silk commission recommended, the devolution of income tax powers would be subject to a referendum, should the Assembly decide to trigger one. The devolution of income tax powers to Scotland was subject to a

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separate referendum question in 1997, and it is only right that people in Wales should decide whether income tax powers should be devolved to the Assembly.

Should the Welsh people vote for an element of income tax to be devolved—and I sincerely hope they will—it would provide a significant incentive for the Welsh Government to grow the Welsh economy and deliver a real-terms boost in revenue—money that the Welsh Government could then spend on key services such as health and education.

In the event of an element of income tax being devolved, the UK rates would all be reduced by 10p for Welsh taxpayers and the Assembly would set a single Welsh rate of income tax for all three income tax bands that would be paid alongside the reduced UK rates; this is the so-called lock-step mechanism. Noble Lords will no doubt be aware that the proposal has generated some intense debate, not least as the Silk commission recommended that the Assembly should be able to set separate Welsh rates of income tax for each of the three income tax bands.

The Government recognise that there are arguments for and against the lock-step mechanism, but we continue to believe that the approach set out in the Bill is appropriate for Wales. Given the porous border with England—almost half of the Welsh population and 10% of the English population live within 25 miles of the border—the changes to individual income tax rates in Wales could have wider effects than similar changes in Scotland.

It would not be logical to provide more flexible rate-setting powers in Wales than in Scotland. The Government have therefore decided that the lock-step is the best system for encouraging the Welsh Government to grow the overall tax base in Wales while safeguarding against the risks of damaging cross-border tax competition and increased tax avoidance.

We are now less than two months away from what I consider to be one of the most fundamental decisions in the history of the United Kingdom. I, along with almost every other noble Lord present, sincerely hope that the people of Scotland choose to remain united with the peoples of Wales, Northern Ireland and England. Nevertheless, the Government recognise that even a clear no vote may well lead to further income tax devolution to Scotland.

Having said that, we are not there yet, and I would not wish to pre-empt that debate. The Government remain open to revisiting the arrangements for income tax devolution in Wales as any changes are brought forward in Scotland; but, as I explained, there are differences between Wales and Scotland, particularly in the nature of their borders with England.

The Bill also devolves powers over stamp duty land tax and landfill tax to the Assembly, giving it the ability to devise a system of tax on land transactions and landfill specific to Welsh needs. That will provide an independent revenue stream for the Welsh Government to borrow against and give them additional tools to manage housing and waste management policy in Wales, both of which are already devolved.

The devolution of tax powers is intrinsically linked to the devolution of borrowing powers. In addition to powers relating to current borrowing, the Bill provides

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the Welsh Government with the ability to borrow up to £500 million to invest further in capital infrastructure in Wales. That is a generous limit, which reflects the independent income generated through the two devolved taxes, and which can be increased if additional taxes, such as an element of income tax, are devolved. Crucially, it will allow the Welsh Government to move on with much needed infrastructure investment, including improvements to the M4 around Newport.

The Government have been criticised for linking the borrowing limit to the income from devolved taxes. However, we have been clear that any borrowing must be contingent on the Welsh Government’s ability to pay that money back. You or I would not get a reputable loan without a means of repaying it, and Governments should be no different.

Finally with regard to fiscal reforms, the Bill devolves responsibility to the Assembly for its own budgetary arrangements, enabling it to decide how it wishes to scrutinise and approve its annual budget.

I now turn to Part 1, which includes a number of important electoral and constitutional reforms for Wales. Clause 1 deals with the move to permanent five-year Assembly terms. Noble Lords will recall that the scheduled 2015 Assembly election was moved to 2016 by the Fixed-term Parliaments Act 2011 in order to avoid it coinciding with the UK general election. The Bill makes the change to five-year terms permanent, following the Government’s 2012 consultation on future electoral arrangements for the National Assembly. This change will make it less likely that Assembly and parliamentary general elections will occur on the same day in future. I hope that we would all agree that it is important that Assembly elections are contested, wherever possible, on issues specific to Wales and are not overshadowed by wider issues that often dominate parliamentary elections.

The Bill also overturns the ban on candidates standing for election in both a constituency seat and on a regional list in an Assembly election. We are restoring the position to that set out in the Government of Wales Act 1998 and reversing the ban imposed by the then Labour Government in the 2006 Act. That change was made against the wishes of all the other major political parties in Wales and against the advice of the Electoral Commission and electoral experts in Wales. Noble Lords will be aware that, for Welsh Members of the Labour Party in the other place, judging by column inches in Hansard, this is seemingly the most important issue in the entire Bill. Important though this issue is, the Bill simply reverses a change that should not have been made in the first place. It restores fairness to Assembly elections, which the ban on dual candidacy took away.

The Bill also prohibits dual mandates between the Assembly and the House of Commons. The Government do not believe that it is possible for an Assembly Member to represent their constituents effectively and to devote their full attention to their role as an Assembly Member if they must also spend a significant portion of their time in Westminster. From now on, politicians elected to both legislatures will need to make a clear choice whether they wish to serve as a Member of

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Parliament or an AM. The Bill does not impose a similar prohibition on your Lordships, as we do not have the same constituency commitments or the requirement to attend this place regularly. At the request of the Welsh Government, this legislation also formally enshrines that name in statute. This title has been common parlance for the Welsh Assembly Government since the advent of full lawmaking powers in 2011 and it makes sense for legislation to catch up with the reality on the ground.

Finally, I would like to say a little about the second Silk report. The commission has made some crucially important recommendations about the future governance of Wales within the United Kingdom, most notably by recommending a move to a reserved-powers model similar to that in Scotland. The move would involve a fundamental, top-to-bottom change to the Welsh settlement and is not something which could be entered into lightly or done quickly.

In responding to the report’s publication in March, and while welcoming the report, the Government made clear that the Bill is not the right vehicle for implementing its recommendations. Let us implement the commission’s first report before we turn our minds to the second. Including a whole raft of additional powers in the Bill would serve merely to delay its progress and jeopardise its enactment in this Parliament. Much better that these matters be left for the next Government to take forward, giving all political parties the opportunity to seek the endorsement of the electorate through party manifesto commitments.

This Government believe that devolution should be used to give Wales a competitive edge. It should give its politicians the ability to make decisions for the people they serve, becoming increasingly accountable to them as a result. The Bill delivers on that. I commend it to the House and beg to move.

4.44 pm

Baroness Morgan of Ely (Lab): My Lords, I thank the Minister for outlining the shape and clauses of the Bill. The timing of the Bill is extremely sensitive, as the noble Baroness hinted, with this Second Reading taking place before the Scottish referendum and the Committee stage coming after that referendum. The Bill will therefore be a moving feast. The constitutional implications and the political response in Scotland, and in the rest of the United Kingdom, will need to be carefully considered after the referendum vote, irrespective of the outcome in September. It was interesting to note that the Minister stated that further discussion following the referendum will be possible on certain aspects of the Bill.

We also have a new Secretary of State for Wales in Stephen Crabb, and it was lovely to see him at the opening of this debate. While the previous Secretary of State, David Jones, seemed to have a rather ambivalent attitude towards devolution and despite the fact that the new incumbent has proclaimed himself in the past to be a self-confessed devo-sceptic, pleasingly he appears to have seen the light in recent weeks and has promised to develop a better relationship between the Government and the Welsh Assembly. We shall give him the benefit of the doubt and look forward to this being the case.

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We are also entering a pre-election period where manifestos are being drawn up and there is an increasing awareness of the overcentralisation of the state in London. In addition, we are dealing in the Bill with recommendations that have been largely taken up as a result of the Silk 1 commission. Since then, however, Silk 2 has been published and it would seem strange not to take the opportunity to discuss some of the suggestions of that report. On the whole, I shall desist from that temptation although there is one notable exception, to which I shall allude later.

Before I start, however, it is worth pointing out what my motivation is and always has been in relation to devolution in Wales. As a founder member of the cross-party Yes for Wales campaign in 1997 and having then been on the team, along with the noble Lord, Lord Bourne, to draw up the initial standing orders for the Assembly, I was and am a lifelong supporter of devolution. I even remember wearing a sticker to school as a 12 year-old in 1979 in support of that doomed campaign when it took place. However, my motivation has never been rooted in any romantic, nationalist or even patriotic ideals. Neither is it controlled by a fixation on limiting the role of the state. Some would argue that this has been attempted in the Bill through the promotion of competitive taxation, which will inevitably lead to lower taxation across the United Kingdom and therefore a reduction in the size of the state. My motivation has always been to do what is best for Wales: making decisions close to the people, taking local circumstances into account and, crucially, ensuring that the people of Wales, particularly the poorest, are not left worse off.

Wales remains one of the poorest parts of the UK, although the unemployment rates are falling fast thanks to some innovative measures by the Welsh Labour Government. It is absolutely right that Wales continues to benefit from the UK Treasury receipts. The nature of the politics I believe in means that there should be a sense of social solidarity across the whole of the United Kingdom. In Wales, we have more of a sick population due to our industrial heritage, which helped to create the historic wealth of the United Kingdom. We also have a proportionately higher ageing population, many of whom have moved from England—and we happily welcome them to our beautiful country. Nevertheless, there is and has been hitherto a sense that these conditions and historic legacies should be recognised and that there needs to be a redistributive mechanism from the richer centre to the poorer periphery.

However, Wales has seen significant cuts in recent months and years. The IFS has suggested that the total block grant allocated by the UK Government to Wales in 2013-14 is 9.4% lower in real terms than it was in 2010. Further cuts have been announced for 2015-16 which, if implemented, would take the cut to 12%. There has been a 31% cut in the amount earmarked for capital expenditure. That cut in capital expenditure has been a severe handicap to the Welsh Government’s ability to invest in projects and infrastructure that could increase economic activity and grow the economy. Central to the Bill and the key reason why we in the Labour Party are anxious to support it is that, for the first time, the Welsh Government will have the power to borrow.

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Let me underline, however, that it is critical that the ability to borrow should not be used by the Government in Westminster as an excuse to cut funding that should otherwise come to Wales. The focus so far has been on the need to borrow in order to invest this money on improvements to the M4 motorway. That commitment was announced by the Welsh Government last week and has received support, in particular from the business community. I believe that that is crucial, but we need to be sure that a similar project in the north of England, for example, would not have been funded out of this Government’s central pot once the Barnett formula has been taken into account.

The ability to borrow is crucial, but we would like to question in Committee why the level of borrowing allowed for Wales is so low. It has been suggested that the mechanism that determines the borrowing levels in Scotland has been used as a template for Welsh borrowing. However, we on these Benches shall argue that there has been an inconsistent approach, and that both Northern Ireland and Scotland have been allowed to borrow irrespective of the ability to raise the commensurate amount through their revenue-raising at a devolved level. Neither has the amount Wales is allowed to borrow taken into account the fact that Wales, in relative terms, has very little to make in terms of PFI payments compared to Scotland. Ideally we need a mechanism in this Bill to allow the Welsh Government to borrow more in future. We need to be assured that a degree of flexibility is allowed in relation to the conditions of borrowing. The ability to borrow, at least initially, is predicated on the fact that two specific taxes will be devolved to Wales: stamp duty and landfill tax. We can consider the benefits and disbenefits of these taxes in Committee, but it is worth noting that the nature of both these taxes is that they can vary considerably from year to year. There has been an agreement that, due to the nature of the variability, an adjustment can be made, but I would like to probe a little further in Committee on the nature of the adjustment deal and how watertight this agreement is.

The disbenefits are obvious. Being part of a larger group means that hitherto Wales has been pooling the risk with the rest of the UK. Probably the most controversial part of this Bill is the power to raise income tax, subject to a number of criteria. The previous Secretary of State for Wales argued, along with the Liberal Democrats, that he would be pushing for a 1p cut in income tax, suggesting that that would be a stimulant for investment and economic growth. He could well be right. However, reducing the Welsh rate of income tax by 1p, as suggested, would cost £200 million in terms of cuts to services. It will be interesting to see how the new Secretary of State feels about that, especially given that he has said that his,

“opposition to devolution … has been driven by a belief that … devolution would foster and feed an increasingly separatist and socialist discourse in which sensible Conservative policies that could promote national cohesion, economic liberalism and”—


“smaller government would find little oxygen for survival”.

National cohesion is the last thing that we will see as a result of tax competition. Smaller government, however, would inevitably be delivered. Just imagine cutting

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7,700 nurses, which is what £200 million represents, in the hope that the economy would grow. It could happen, but it would be a huge risk at the expense of central public services. It should be noted, however, that £200 million should also be set in the context of an overall budget for Wales of £15 billion. It must be said that that is pretty small change, and probably would have a negligible effect on the efforts to change the economic fortunes of the country.

Even if the economy did grow, much of that growth would return through income tax receipts to the central UK Treasury, and would go only some way to top up the payments to services cut in Wales. Let us not forget that only 4,000 individuals in Wales paid a top income tax rate of 50p in 2010-11, and that more than 90% of the people of Wales pay a basic rate of tax. The Government believe that devolution should be used to give a competitive edge to Wales, and that the powers devolved should be used to grow the economy. My fear with these figures, however, is that if we are to engage in any kind of tax competition with the rest of the UK, Wales will come out the loser. That is great if you are chasing some kind of nationalist dream of self-dependence; it is a disaster if you are poor and do not want your services cut. We want no race to the bottom. This would prove detrimental to all parts of the United Kingdom.

As the Minister has set out, there are cross-border implications of income tax competition. We would like to address the need for a comprehensive, cross-border Treasury impact assessment which takes into account the fact that 48% of Welsh people live within 25 miles of the English border, with 10% of the English population living within 25 miles on the other side; that is, 6.3 million people. It is worth contrasting this with Scotland, where just 4% of the population lives within 25 miles of the English border, with 0.5% of the English population living within 25 miles on the other side; that is just 450,000 people. The complexity associated with different tax rates, therefore, is much higher in Wales, both for employers and for employees.

We are also concerned that not enough has been done to calculate the cost of collecting tax in Wales. Again, we would like to probe further in Committee the indexation aspects of the impact of income tax changes to Wales. It is essential to underline the fact that Labour has a clear triple-lock system, upon which we would insist before embarking upon income tax devolution for Wales. First, there is of course a need to ensure a fair funding mechanism for Wales. Even with the Bill’s proposed devolved tax arrangements, 75% to 80% of the Welsh government budget will still be provided through the Barnett formula. We need to be sure that we are not locked into the current funding system, which would disadvantage the country for ever. Secondly, we would insist upon a period of assignment to ensure that Wales is not worse off as a result of any tax-varying powers. Thirdly, of course, none of this will happen unless the Welsh people vote for tax-raising powers for the Assembly. Having seen the lamentable turnouts for the European and police commissioner elections, and with the idea of a campaign

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on a question containing the word “tax”, I would not be volunteering to lead a referendum to promote this in Wales.

Other aspects of the Bill are also important. In the parts relating to electoral systems and frequency of elections, our principal position is that these should be matters for the Welsh Assembly to decide. The public are confused by a system which allows a candidate to stand on both the constituency ballot paper and the regional list ballot paper. Labour will be submitting an amendment to protect the status quo. The Explanatory Notes make clear that the measure will benefit small parties with a smaller pool of candidates, so there is undoubtedly a highly political angle to this, as there is to much of the Bill; my noble friend Lady Gale, who will be helping me out on the Bill, will elaborate on this point later.

We also believe that a shift to the “reserved powers” model of governance should be introduced at the earliest opportunity. We should not wait for Silk 2 to be implemented in a further Bill, but should address this issue now. Once again, the coalition Government have questioned the authority of the Welsh Government to make decisions in certain areas and, once again, recently, the Supreme Court has found in favour of the Welsh Government, ensuring that the Welsh Government have the right to protect vulnerable farm workers. These are costly, bureaucratic fights, which should be halted as soon as possible. We shall be proposing an amendment to include the reserved powers model for the Assembly.

Extra powers would mean extra responsibility for Assembly Members, particularly in the role of scrutinising expenditure. Although this would obviously be a matter for the Assembly, ideally we need an assurance that the personnel infrastructure and the expertise, both in terms of administration and scrutiny, are in place before handing over these powers. Assembly Members are already extremely stretched with 60 Members and I am sure that some noble Lords will want to pick up on this issue during the debate.

Overall, the Labour Party will be supporting this Bill. However, we will take the opportunity to probe and test various aspects of the proposals which we feel need further thought and consideration.

5.01 pm

Lord Thomas of Gresford (LD): My Lords, this Bill is introduced into the House at a very interesting time, with the Scottish referendum only weeks away. It provides centrally for the introduction of tax powers specifically to permit the Welsh Government to set a rate of income tax, subject to their first obtaining a favourable referendum vote. This is what the First Minister, Carwyn Jones, said about that last November:

“As a Government, we are not pursuing the devolution of income tax, certainly not at this time. The reason for that is we believe that income tax devolution cannot come unless there is reform of the Barnett formula. The funding basis for Wales must be solid first, before we can consider whether income tax devolution will be appropriate and right for the people of Wales”.

I noted that the noble Baroness, Lady Morgan, a moment ago said that she would not lead the campaign for income tax devolution. That continues to be the Welsh Government’s position.

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There is a bit of curious thinking in the Labour Party about this, because the Scottish Labour Party’s commission on devolution report explicitly and repeatedly rejects proposals for a needs-based alternative. In an interview on “Newsnight Scotland” on 18 March last, Labour’s Scottish Leader, Johann Lamont, claimed that:

“The Barnett formula works for the United Kingdom”,

which is very different from what was being said a moment ago. She said it works for the United Kingdom, not for Scotland. Well, Labour received its comeuppance in Scotland in the last Scottish Parliament election.

One of the problems—

Lord Richard (Lab): The noble Lord provokes me slightly, since I chaired the commission on the Barnett formula in this House. Is the noble Lord in favour of the Barnett formula remaining in its present form for Wales? Is the Liberal Party in Wales seriously suggesting that the way in which the Barnett formula is calculated at present should remain in that state?

Lord Thomas of Gresford: The noble Lord knows perfectly well that the Liberal Democrats are for the reform of the Barnett formula and always have been. I can give that assurance. I am just puzzled to hear what is said by the Scottish Labour Party, which obviously prefers the current arrangements.

Lord Anderson of Swansea (Lab): What about the Scottish Liberal Party?

Lord Thomas of Gresford: The Scottish Liberal Party has been merged with the Scottish Liberal Democrats. I am not going to go any further into that.

The problem with devolution in Wales is that a Labour Government continuously in power—either on their own or as the lead party—escape accountability for their failures for a number of reasons. First and fundamentally, the essential link that all democratic Governments should have between raising resources through taxation and spending those resources on policies is missing. This Bill goes some way to dealing with that particular problem.

Labour’s demand for more money from the central government from a reform of the Barnett formula before they dare put these taxing powers to a referendum, is like Oliver Twist’s, “Please sir, can I have some more?”. It is Labour’s excuse for condemning Wales to fall behind in education and health, as it does, not merely judged by UK comparisons but also against international comparisons. Any very proper criticism of those failures is said to be “a war on Wales”—an empty piece of rhetoric first used by Carwyn Jones himself at the Welsh Labour Party conference in Llandudno in March.

Just as Labour seeks to delay the introduction of a Welsh income tax, so in the House of Commons debates on the Bill Labour sought to delay the introduction of the borrowing powers by waiting for a report on the legislative steps necessary to move to a model of reserved powers for the Welsh Assembly. I heard with

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interest the noble Baroness say that an amendment will be proposed to bring in reserved powers as the model in the Bill, and look forward to seeing how that is expressed.

The second matter that concerns me is that the recommendation of the Richard commission 10 years ago that the number of AMs should be increased to 80 to improve scrutiny within the Assembly was not pursued. The recommendations of the Silk 2 report, as the noble Lord will no doubt have noted, are that:

“A range of options should be considered in the short term for increasing the capacity within the existing National Assembly, including greater flexibility on the number and size of committees, increased numbers of research staff and better use of Assembly Members’ time. … The size of the National Assembly should be increased so that it can perform its scrutiny role better. The practical implications, and those for the electoral system, will need further consideration”.

The third matter that concerns me is that the press and media in Wales allow a dominant Labour Government to get away with it. Take the desire and the ability of the press in Westminster to tear Ministers limb from limb on a daily basis—for example the spat between Theresa May and Michael Gove over extremism in schools—and compare it with the deferential approach of the Welsh media over the very recent abject dismissal of Alun Davies, the former Welsh Government Natural Resources and Food Minister, for gross misconduct. One wonders whether the politicians and the Welsh media are too closely aligned and too ready to exchange roles.

I return to the Bill. I welcome the proposal to remove the current restrictions on individuals standing as a candidate for both a constituency seat and a regional seat. Studies by the Electoral Commission have shown that the current prohibition has a disproportionate impact on smaller parties, because they have a smaller pool of potential candidates from which to draw. The proposal to prohibit MPs from sitting as Assembly Members, and vice versa, is also welcome. It has an interesting history. Back in 1998, as the then Welsh spokesman for the Liberal Democrats I was lobbied from the very steps of the Throne by Mr Ron Davies Member of Parliament, the then Secretary of State for Wales, to give our party’s support to an amendment to the Government of Wales Bill which would permit him and others to have a dual mandate. At the time, it seemed reasonable to have some experienced politicians in the new body we were setting up, and so we agreed. However, I think that with the experience of the years that have passed it is time to end that practice.

I will raise another issue during the passage of the Bill. Much was made of the fact that two of the Lib Dem candidates in the last Assembly election were disqualified from being Members because they belonged to various public bodies, one of which was the Care Council for Wales. On the complaint of a Labour Party Member, they were interviewed by the police on an allegation that they had knowingly made a false statement in a document in which they gave their consent to being a regional party list candidate at those elections. That was translated into being disqualified from nomination.

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The confusion arises because, under the Local Government Act 1972, a person is disqualified from being elected as a member of a local authority, whereas Sections 16 to 18 of the Government of Wales Act specifically say that:

“A person is disqualified from being an Assembly member”.

Of course, elections to local government are on the first past the post system; elections to the Welsh Assembly are done on both a constituency and regional basis. The regional election is in accordance with a party list. It is ludicrous to require a person on a list, who might not be first with a chance of election but second, third or fourth, to give up public service on a public body, very often unpaid, just to be a candidate. Although Liberal Democrat candidates were highlighted last time, I am aware that members of other parties stood as candidates, but were not elected, who might have been subjected to the same treatment. A successful candidate in an election ought to have a period in which to resign from any body that would disqualify him from being an Assembly Member—maybe eight days. I shall accordingly seek to amend Section 16 of the Government of Wales Act 2006 to make that position absolutely clear.

The aftermath of the Scottish referendum will, in all likelihood, see changes in Scotland. I was delighted to hear from the Minister that the situation in Wales will be revised; in particular, the lock-step will be looked at again. The structure of Welsh devolution is not yet satisfactorily settled. Once the Bill is passed as a further step, the focus in Wales will turn to the recommendations of Silk 2. The Liberal Democrats, who accept all its recommendations, will be here to return to the fray in the next Parliament. For the moment, I look forward to the fray in the Committee stage of the Bill.

5.12 pm

Lord Wigley (PC): My Lords, this is the third Wales Bill since the 1997 referendum. The second Silk report will no doubt require a fourth Bill and developments in Scotland, as we have just heard, may well trigger even further legislation. Indeed, I feel that the issues in the Bill are ones that I have lived with for most of my life. I was involved in the legislative processes in another place on the ill-fated Wales Bill 1977-78, as were a number of colleagues here today, on which the noble and learned Lord, Lord Morris of Aberavon, and my noble friend Lord Elystan-Morgan worked so very hard. Indeed, I was involved in the Wales Bill 1998, which became the basis of the National Assembly in the present settlement. Back in 1970, I also gave evidence to the Crowther commission, as it then was, which became the basis of the Kilbrandon report of 1973. I gave further evidence, as an elected Member of the National Assembly, to the Richard commission of 2003. That, of course, led to the 2006 Act, which will be amended by the Bill and was the basis of the 2011 referendum and the advanced settlement that we got subsequently. The issues and I go back a long way, and I have the scars to show for it.

I first want to thank, as an individual and on behalf of my party, Plaid Cymru, Paul Silk and his fellow commissioners for their hard work. I pay particular

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tribute not only to my colleague, Dr Eurfyl ap Gwilym, the Plaid Cymru representative on the Silk commission, but to the noble Lord, Lord Bourne, who, as the Conservative voice both on the commission and previously in the National Assembly, managed to bring his party to play a positive role in the new post-devolution Welsh politics.

The Silk commission’s efforts in coming to grips with an immensely complex subject—particularly in its first report, which is the basis for the Bill—deserve to be rewarded by the way we enact consequential legislation. Indeed, I believe that our starting point today should be to accept that the Silk commission worked very hard to reach a consensus involving much give and take, and that, as such, it presented a balanced report that should be accepted and taken forward as a package and not cherry-picked. I say that because all political parties had to compromise on their party programmes and a united, unanimous report was secured only on that basis. Naturally, my party, Plaid Cymru, would have liked to have gone very much further. We aspire to the maximum possible degree of independence for Wales within a framework of a united Europe with its free movement of people, goods and capital, which inevitably imposes some constraints on the degree of independence that any country has.

Unlike the Calman commission in Scotland, our Silk commission succeeded in getting all-party acceptance that there would have to be some compromise so as to get implemented at an early stage those changes that all parties saw as necessary in order to make the Assembly a more effective body and the Government of Wales more transparent and democratically answerable for their actions. That is why, even at this late stage in the Bill’s parliamentary journey, I urge that we look at whether we can implement the entirety of the Silk package. In that regard, I noted the point made by the noble Baroness, Lady Randerson.

Since the publication of the Bill, the Silk commission has brought forward its second report on the legislative powers to strengthen Wales, and in some ways it is difficult to differentiate between the two. Indeed, some have suggested that the reports are in the wrong order. An old saying that I found very apposite in the world of industry as much as in the world of government is that “form follows function”. The function of the National Assembly is dependent on the model of devolution—it would be somewhat different if Wales had a reserve-powers model such as that of Scotland and Northern Ireland—and inevitably that impacts on the transparency and accountability of the Assembly. The range of devolved portfolios will dictate the size of the budget, and the nature of those portfolios and the extent to which they lend themselves to policy variation in Wales compared with England will dictate the degree of budget flexibility that is needed. In addition, the degree of responsibility deemed appropriate for a Welsh Executive in largely non-legislative matters, such as economic stimulus management, will determine the balance between capital and revenue responsibilities.

I have deliberately tried to set my remarks in the context that I have for the very reason that we must formulate the financial powers needed to strengthen Wales with regard to the responsibilities of providing

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adequate enabling resources and ensuring proper answerability. In order to deliver the legislative, executive and administrative agenda that the Welsh Government will have as their responsibility, they need to be clear about the powers that they have. That of course is the agenda that the Welsh people expect to be arranged for their needs and expectations to be answered.

I believe that we shall have to make certain assumptions with regard to those non-financial matters as a basis on which we can reach meaningful conclusions regarding finance and the adequacy of the Bill. For example, the linkage between the budget and expenditure, and hence the resources needed, and the democratic need for the Government’s performance to be judged by the electorate requires both financial transparency and resource flexibility. I shall give a concrete example. If the NHS in England were privatised, as some politicians on the right advocate, and if the Welsh Government, having full legislative responsibility for the NHS in Wales, wanted to follow a different path, they would have to have a significantly different financial and fiscal freedom from the one they have at present for that to be a meaningful policy option.

I turn to some specific aspects of the Bill that will no doubt warrant our attention in Committee. In Part 1, I certainly welcome the removal of the restriction on dual candidacy and a return to the original settlement of the 1998 Act. It was, quite frankly, a piece of naked party-political jiggery-pokery by the Labour Government to have removed it, and they should be ashamed of themselves for having tinkered with the constitution for party-political advantage. I hope that we can have an assurance from the Labour Front Bench that never again will they resort to such unworthy action. If that assurance is not forthcoming, we should build into this Act a provision that any further change to the electoral system of the Assembly should be implemented at Westminster, if indeed it has to be done at Westminster, only if it carries a two-thirds endorsement by Assembly Members.

With regard to the Assembly’s election and membership, I am totally convinced that the Assembly cannot do an effective job with its new, enhanced powers since the 2011 referendum without a larger membership. That becomes an even greater requirement with the additional financial scrutiny that will emanate from the Bill. I believe that there need to be at least 100 Members to do an adequate job. Might I suggest that if we are not to have an STV model of election, which I favour, we should consider each of the current 40 Assembly constituencies having two Members for each seat, with one man and one woman elected in each, thereby largely overcoming the question of gender balance that has been a problem for some parties over the last few years? Primarily I believe that this is something that the Assembly itself might consider as any such initiative should come from Wales and not be imposed by Westminster. I hope that the Government might be amenable to giving the Assembly full powers over the electoral system.

I am, incidentally, aware that in the Commons Report stage, Labour proposed taking steps towards a reserve powers model, to which the noble Baroness, Lady Morgan, referred earlier, and I heartily endorse

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that. But inexplicably, it linked this to a delay in implementing Part 2 taxation powers, which I could not understand. I hope that when this matter comes to Committee we shall be able to consider the pressing need for Wales to have a Parliament based on the same reserve powers as underpins the Scottish Parliament and the Northern Ireland Assembly, without unnecessarily linking it to delaying the taxation powers.

With regard to the taxation powers in Part 2 of the Bill, they are very modest indeed—so much so that I personally had some doubt about whether they warranted a referendum. However, I accept that that was part of the Silk recommendation. In the spirit of accepting Silk as a package, and not cherry picking, I accept that that referendum may be necessary. But, for every small change in relation to the government of Wales, we cannot have referendum after referendum. The House of Commons is elected and this Chamber is appointed to do a job of work, and we have to take that responsibility. In that spirit I urge the Government to reconsider their rejection of the Silk proposal on tax rates being varied in each band, to which reference has already been made and signals given that we are moving in the right direction.

The Government’s insistence on having a straitjacket of lock-step provision in the Bill undermines, at a stroke, the flexibility of the Welsh Government to use the new tax-varying powers in a radical fashion. They could not, for example, reduce the top rate by 5p, say, to make Wales a more entrepreneurial-friendly place, at a modest cost in terms of forgone income without reducing the standard rate proportionately—a totally impossible and unsustainable action. The irony, as I have no doubt the government Front Bench are very much aware, is that in Scotland, where the Calman commission insisted, I believe, in having a lock-step model, the Government in their move towards a devo-max situation as part of buying off the yes vote in the Scottish referendum are now talking about scrapping the lock-step, as recommended by the Strathclyde commission, and indeed personally endorsed by the Prime Minister. I am grateful to the Minister for indicating that the Government will indeed look again at this, and there may be a possibility of doing something about it in Committee or on Report.

I welcome the provisions of new Section 116C to be inserted in the Wales Act, allowing new devolved taxes. Some work needs to be done in the Assembly to see how that can best be used. I shall now say a word about the workings of the borrowing powers, which appear in Clauses 20 and 21 of the Bill. I understand that until a further referendum is held the Assembly’s borrowing powers will be capped at £500 million, which frankly is chickenfeed, and totally inadequate to deal with Wales’s economic problems. This is insufficient even to fund the M4 improvements around Newport, which will cost more than £900 million.

Will the remainder of that capital have to be funded from the already truncated capital budget of the National Assembly, leaving virtually nothing for any other capital projects—hospitals, schools, roads, sea defences—needed around the rest of Wales? It seems, quite frankly, as if the Welsh Government’s hands are being tied by Westminster in order to deliver London’s objectives

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and priorities, not the balanced capital programme needed by Wales. The Assembly should have an accumulated borrowing capacity of £2 billion over and above the M4 costs and we should address that question in Committee.

I have dealt with what is included in the Bill but I cannot let it pass without noting what is not included. In its introduction, on page 3, the Silk report comments that:

“Consideration of the Holtham Commission’s proposals for funding reform in Wales … was excluded from our terms of reference. These issues are being taken forward through a separate bilateral process between the UK and Welsh Governments”.

That is the elephant which cannot speak its name in today’s debate but whose shadow makes a sham of pretending that this Bill deals with the central financial question facing the Welsh Government—that is, the persistent, chronic underfunding as a result of the mindless, myopic adherence to an outdated and discredited Barnett formula, which has left Wales, since 1999, with a cumulative shortfall of £6 billion in its finances. This has led to the underfunding of the NHS, schools and local government in Wales, and neither party of government has had the courage to put that right.

In recommendation 12, Silk stated that if the UK Government were to agree to devolve corporation tax to both Scotland and Northern Ireland, the same powers should be given to Wales. Will the Minister confirm that if corporation tax is indeed devolved to Scotland, it will also be devolved to Wales? If so, why is there no order-making mechanism within the Bill to avoid having to get yet further primary legislation to handle the matter?

The real inadequacy of the Bill will become glaringly obvious after Scotland’s independence referendum in September. If Scotland votes yes—as I and my party hope—the relationships of the residual United Kingdom will have to be fundamentally reassessed. Even if Scotland votes no, partly as a result of the blandishments offered by the parties in Scotland to head off a potential yes vote, those commitments will need to be incorporated into the election manifestos of the UK parties, otherwise we could well see a bitter backlash in Scotland, with perhaps 20 or 30 SNP MPs holding the balance in the new Parliament.

That has a significant implication for Wales and for the adequacy of this Bill. The Bill we are debating today may well be seen, by the time we get to Committee, as a vehicle that must grow into an enabling Act relevant to the post-referendum world we shall then inhabit. It is in that context that I support a Second Reading.

5.27 pm

Lord Morris of Aberavon (Lab): My Lords, I welcome the Bill as a major step forward in the long-running saga of the principle of giving more power to the people of Wales, where it rightly belongs. Depending on the length of this debate, I apologise in advance if I miss one or two speeches as I have to preside at an event of interest to Welsh lawyers at the Supreme Court, regrettably clashing with the change of date for this debate.

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We have come a long way since I introduced the Wales Bill in the Commons in November 1977—I thank the noble Lord, Lord Wigley, for his reference to it—and longer still since the 1950s, when I discussed Jim Griffiths’ remit to Lord Prys-Davies to put on paper a model for an elected council for Wales, the first practical step, a foundation, upon which we developed as a party and delivered—indeed, the only party that can deliver at Westminster.

In 1974 my party was split. We had not sufficiently prepared Wales for the momentous task of choosing the way forward in a referendum. In the past, the Conservative Party has fought resolutely against giving any power to Wales, from the setting up of even a Secretary of State’s office. The last Secretary of State kept a very low profile on the Prime Minister’s last visit to Cardiff. Not a few years ago, he was advocating in the Assembly that no taxation powers should be given. I surmise that the change of heart of many Conservatives in Cardiff owes a great deal to the noble Lord, Lord Bourne of Aberystwyth. I thank him and his fellow commissioners on the Silk commission. We are all devolutionists now: or, should I say, mostly all?