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House of Lords

Tuesday, 25 November 2014.

2.30 pm

Prayers—read by the Lord Bishop of Birmingham.

Domestic Violence: Refuges


2.36 pm

Asked by Baroness Thornton

To ask Her Majesty’s Government what assessment they have made of the adequacy of provision of refuges for women and children fleeing domestic violence.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con): My Lords, on this the International Day for the Elimination of Violence Against Women, I am pleased to announce that the Government are launching a £10 million fund to support women’s refuge provision. This is not just about short-term funding. We will also be publishing strengthened statutory guidance setting out clear standards for the support that victims can expect to receive. The guidance will also make it clear that support in refuges should be extended to all victims, not just those living locally.

Baroness Thornton (Lab): I thank the Minister for that Answer. Today is indeed White Ribbon Day, which, apart from anything else, is about men committing to working for the end of violence against women, and I trust that all noble Lords will have taken the pledge to do so.

I return for the third time to the Question that I put to the Minister previously. In a way, he may have answered it, so perhaps he can be specific. It concerns women and children who seek refuge from violence but whose local authorities, like those of Gloucester, the Forest of Dean, Stroud, Cheshire West and Chester, have closed or dramatically reduced access to refuges. That is not consistent with the Government’s policy. Are the Government monitoring the effects on those families of not being able to access a refuge? Does the fund being launched represent new money, and will it be used to make up the deficits of the cuts in those local authorities that have closed refuges?

Lord Ahmad of Wimbledon: I pay tribute to the noble Baroness’s work in this area. I can assure her that this is indeed new money. It underlines the Government’s priority of this issue and follows on from the international summits that my right honourable friend William Hague led, the Prime Minister’s speech at the Girl Summit and the Home Secretary’s cross-ministerial leadership on issues relating to violence against women. This is a specifically new set of funding that will be available to local authorities to tackle those issues. The Government are acutely aware of the specific issues

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that the noble Baroness has raised, and safeguards in legislation recognise the inherent risks of domestic abuse. This means that victims can apply to any local authority in the country and cannot be referred back to their home authority if they are at risk of violence.

Baroness Hussein-Ece (LD): My Lords, is my noble friend the Minister satisfied that there is sufficient consistency of provision across local authorities and across regions? As has been pointed out, local authorities cannot send women back in those instances where they have suffered domestic violence and abuse. Is he satisfied that there is enough provision wherever they may go and whichever local authority then takes responsibility for them?

Lord Ahmad of Wimbledon: My noble friend raises an important point. As with anything, there are examples of good practice and there are other local authorities that need to do more. The Government’s commitment of £10 million will ensure a maximum of new moneys of up to £100,000. Within that, as I have already said, there is statutory guidance now to make clear that support in refuges should be extended to all women, linking up with other support networks in the local area.

Baroness Uddin (Non-Afl): My Lords, is the Minister aware that recently the all-party parliamentary group on violence against women and sexual exploitation took evidence from a number of groups, including the national Women’s Aid and Rape Crisis England & Wales? Is he aware that many of the organisations are expressing deep concern about the extensive cuts to their services over a prolonged period? Is he also aware that particularly suffering are the specialist organisations, including those dealing with the effects of domestic violence, forced marriage and so-called honour killing? Will he ensure that they also have funding equally distributed to them?

Lord Ahmad of Wimbledon: The noble Baroness raises an important point. I have met with Women’s Aid, which does an incredible amount of work, and I am sure that it will acknowledge the support that the Government are extending, not just with this new funding, which will help local authorities, but to deal with these issues of domestic abuse. Noble Lords should know that 77 women were killed last year from domestic abuse in the UK; I am sure that, for all of us, that is 77 women too many.

Lord Laming (CB): My Lords—

Lord McColl of Dulwich (Con): My Lords—

Noble Lords: Cross-Bench!

Lord Laming: What wonderful support, my Lords. Can the Minister assure the House that steps are being taken to equip police forces and accident and emergency units to make sure that adults and children at risk are identified at the earliest possible stage and given the right kind of protection that they need, rather than be sent back into these dangerous situations?

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Lord Ahmad of Wimbledon: It is always a pleasure to take a question from the noble Lord, who raises an important point about joined-up thinking. The Government are investing a great deal more—whether, for example, through our Troubled Families programme, on which the DWP and the DCLG are working together, or through recent announcements about local health provision. The noble Lord will recall that my honourable friend Jane Ellison made an announcement on how hospitals and doctors’ practices will be encouraged to identify such cases. On policing, my right honourable friend the Home Secretary has written to each PCC to ensure that our policy is reflected as a key priority in their programmes.

Lord McColl of Dulwich: My Lords, will the Minister acknowledge that one of the problems in this field is that large numbers of people in public life refuse to admit the size of the problem, which is that millions of men are smashing up millions of women? Their reply is: “I like to think the best of people and I cannot believe the size of this problem”. We all like to think the best of people, but that does not preclude accurate diagnosis.

Lord Ahmad of Wimbledon: My noble friend again raises an important concern that has been relayed to us. Women who are abused in this way sometimes blame themselves, and it is important that we have local experts working at a local level. One of the things that we can perhaps take some comfort from is that, after a slight dip this year, we have seen an increase in referrals to the CPS on this issue. More importantly, there has been an increase of 21% in the last calendar year in prosecutions for this heinous crime committed against women and, on occasions, against children. It needs to be stamped out.

Baroness Scotland of Asthal (Lab): Can I say to the noble Lord how welcome this news is? Can he tell us what efforts, if any, will be made to enhance the opportunity for these women to take advantage of legal aid? He will know that there has been a dramatic reduction in access to legal aid, which is trapping many women in dangerous, life-threatening circumstances.

Lord Ahmad of Wimbledon: This funding is on top of the £6.5 billion that we have invested to help vulnerable people, including those suffering from domestic violence. The whole essence of this aid is to focus on those most acutely in need of assistance—to provide, first, a safe refuge and then whatever assistance they may need to overcome being victims of crime. The noble and learned Baroness raised an important issue on assistance through the courts. Of course, extensive advice will be offered. On the specific issue of legal aid, I will write to her.

Transport: Women’s Safety


2.44 pm

Asked by Lord Berkeley

To ask Her Majesty’s Government what action they are currently taking to improve women’s safety on transport.

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The Minister of State, Department for Transport (Baroness Kramer) (LD): My Lords, we work on a number of fronts to improve safety and security for all passengers and staff. In particular, the Government are supporting a British Transport Police-led academic literature and tactical review on reducing sexual offending and improving perceptions of safety on transport. This research will be delivered for February 2015 and will support an international expert session to debate the findings.

Lord Berkeley (Lab): I am grateful to the Minister for that reply. Is she aware of a study recently done in the UK and Canada that found that,

“women passengers generally prefer staffing to technological solutions and are very skeptical of the tendency of”—

transport operators—

“to replace staff from trains or buses with automated machines”.

Will she encourage operators to have more staff and fewer machines and CCTV and to recruit more women to the front line, which women also prefer in many instances?

Baroness Kramer: My Lords, I completely agree with recruiting women to the front line. It is also important to have a staff presence where that is feasible. I am very encouraged, for example, by Transport for London’s commitment to take staff out of the ticket offices and put them out on the platforms and places where the passengers are. However, if we were to man every station at all hours at all times, we would unfortunately have to close stations because of the inherent cost.

Baroness Scott of Needham Market (LD): Does the Minister share my concerns about the cycle rickshaws or pedicabs that operate in parts of central London? Unlicensed, the drivers are not required to be trained or insured; nor do they undergo CRB checks. Do the Government intend to take up the recommendation of the Law Commission and create local authority licensing for them?

Baroness Kramer: My noble friend is absolutely right: the Law Commission has provided some instructive direction on this. We received the Law Commission’s report in May. We will be following up on that and providing our response shortly. As she knows, the situation on licensing is somewhat different in London from elsewhere.

Lord Davies of Oldham (Lab): My Lords, why are the Government pressing ahead with Clause 12 of the Deregulation Bill? It supposedly frees us from red tape but actually reduces the safety checks on minicabs. Will the Minister review the Government’s approach—there is still time in the legislation—in the light of the recent case reported by the Daily Mail this weekend of a young woman who was taken from Leeds to Bradford where she was attacked and raped? Will the Minister accept that this is not just a triviality about red tape; it is about reducing the chances of gang rape? The criminals involved got sentences totalling 68 years.

Baroness Kramer: My Lords, as the noble Lord, Lord Davies, knows, even under the deregulated mechanisms, whenever a taxi or private car licence is issued there will be a CRB check every three years. I have also written to all the authorities to remind them

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that they should be working with their local police so that wherever there is an accusation or a crime they are immediately informed and can take appropriate action—and I do not just mean in a taxi cab, but where someone is accused.

Lord Borwick (Con): My Lords, I first declare an interest in the register that my wife is a Deputy Mayor of London and a member of the GLA. Will the Minister encourage the London Tube unions to allow Tube drivers who are not needed to drive the new automatic trains to walk along the carriages in the evening to improve the safety of women passengers rather than sitting in their cabins with nothing to do except open the doors?

Baroness Kramer: My Lords, I hope that all staff are totally aware of the priority that we must give safety for passengers. In any situation where it is safe, I would encourage staff to use an opportunity to make sure that safety is enhanced.

Baroness Farrington of Ribbleton (Lab): My Lords, would the Minister care to expand a little on her reply to my noble friend Lord Davies about the deregulation proposals? How can people be assured of safety without reference to anyone? Someone who has a minicab licence in place A can go to place B. It is not a safety or security issue. Will she please get the Government to reconsider their policy on this? I declare an interest in that the noble Baroness, Lady Gardner of Parkes, and I were involved in getting licensing for minicabs, and this—to mix a metaphor—drives a coach and horses through that.

Baroness Kramer: My Lords, the licensing of minicabs absolutely remains in place. It means that an operator can call a cab not just from within their own fleet but from a neighbouring area. That also has to be a licensed cab driver. The operator remains responsible for the journey.

Domestic Violence


2.50 pm

Asked by Baroness Gale

To ask Her Majesty’s Government what progress has been made since March, when the Domestic Violence Disclosure Scheme, known as “Clare’s Law”, was implemented in all police forces in England and Wales.

Baroness Williams of Trafford (Con): My Lords, the domestic violence disclosure scheme is an important tool that can prevent tragic deaths from occurring by enabling potential victims to receive information about previous violent offending committed by their partner. The Government are committed to reviewing in the new year how the scheme has been implemented nationally.

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Baroness Gale (Lab): I thank the Minister for her reply. Can she say what measures are being taken to train front-line police, in line with the recommendations of the pilot scheme that was held last year in four police areas? There were three recommendations: training on “Clare’s law” for front-line staff; developing ways of raising awareness of “Clare’s law” locally; and working with voluntary and community sector organisations to ensure that an information pack is available for the women who seek a right to ask. No information was available, but they obviously had concerns. What back-up will be given to those women who need additional support?

Baroness Williams of Trafford: My Lords, the noble Baroness raises an important point about the change in culture that is needed to deal with women who are terribly vulnerable and who seek an empathetic response from the police. I know that the Home Secretary is chairing a national oversight group to respond to some of HMIC’s findings from earlier last year. That group will report on its findings in December. The culture in which a woman can feel confident in going to the police and in having her concerns dealt with in an empathetic and sympathetic way is certainly important.

Baroness Brinton (LD): My Lords, I understand that under “Clare’s law” third parties may also inquire about a suspected assailant on behalf of a family member whom they are concerned about. How many such third parties asked the police for information during the pilots? Are there more data since the scheme went nationwide earlier this year?

Baroness Williams of Trafford: I do not have information on third parties, but I can give my noble friend the headline figures. There were 386 applications and 111 disclosures were made. I can write to my noble friend on third parties.

Baroness Afshar (CB): My Lords, has the noble Baroness taken note that minority women, particularly Muslim women, would prefer to have a Muslim woman available—someone whom they can talk to openly? Are there any provisions for women who prefer to speak to people like themselves to report such activities?

Baroness Williams of Trafford: My Lords, I can think of examples where that does happen, but to go back to the question asked by the noble Baroness, Lady Gale, that whole change in approach to make the police environment a far more comfortable one for a vulnerable lady is what we are seeking. I will write to the noble Baroness on her point about the specific needs of specific types of ladies.

Baroness King of Bow (Lab): My Lords, “Clare’s law” is most welcome, but does the Minister agree that prevention should start much earlier? If so, will the Government ensure that all young people learn that no form of violence in relationships is acceptable through the introduction of compulsory sex and relationship education, which 86% of British adults support and which Labour is committed to? Lastly, does the Minister recognise the irony of using “Clare’s

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law” to, for example, tell a woman that she is at risk from a convicted rapist but then denying her a place at a refuge because so many have already closed due to lack of sustainable funding?

Baroness Williams of Trafford: My Lords, my noble friend Lord Ahmad has already answered the point about the additional funding that will be made available. In April this year, the Department for Education issued Keeping Children Safe in Education, which is statutory guidance on the roles and responsibilities of schools and their staff in safeguarding children. I totally agree with the noble Baroness that we need to stop these problems before they happen and to keep children aware of what is acceptable as they grow up.

The Lord Bishop of Birmingham: My Lords, I am grateful to the noble Baroness for her response to some of the questions. I would like to press her a little further on the deep need for culture change, specifically in the area of training for the police and the Crown Prosecution Service. Is she minded to enable the Government to make that mandatory?

Baroness Williams of Trafford: My Lords, I cannot give that assurance from the Dispatch Box at the moment, but I hope that a change in culture will lead to a culture of what is and is not acceptable practice in terms of how the police deal with vulnerable people.

Baroness Scotland of Asthal (Lab): My Lords, under the previous Administration, we had dedicated teams, both in the Crown Prosecution Service and in the police, which specifically focused on ending violence against women and responding appropriately. Are those teams still in existence at the same level or has there been a reduction? Secondly, can she give the House an assurance that every police authority across the country has implemented “Clare’s Law” so that those who wish to report or make a request of this sort are able to do so locally?

Baroness Williams of Trafford: My Lords, answering the second question first, I understand that there will be reports in the new year detailing the success of the rollout of “Clare’s law”. Certain fundings for different types of support for women and men in domestic abuse situations are committed until 2015 but I hope that, post the Autumn Statement, these will be rolled over until at least 2016.

Lord Laming (CB): My Lords, in the light of the questions put today, do the Government accept that we all have a responsibility to help very young people understand that there is no place for violence in normal relationships, and certainly not in close family relationships?

Baroness Williams of Trafford: My Lords, I totally agree with the noble Lord. We all lead by example, whether we are parents or people in public life, and schools also have a duty so that children in those environments are somehow engaged with and led to know that what is happening is wrong.

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Baroness Walmsley (LD): Would the Minister include footballers in that group of people who should be showing an example?

Baroness Williams of Trafford: My Lords, I would say that especially footballers have a duty to reflect good behaviour to young adults.

Lord Avebury (LD): My Lords, in answer to a previous question, the noble Lord, Lord Ahmad, referred to the Government’s Troubled Families programme. Has there been any increase in the disclosure of cases of domestic violence as a result of that scheme?

Baroness Williams of Trafford: My Lords, referrals are up by almost 15,500 to 103,000 in 2013-14. I am very pleased to say that 70% of those have been convicted. Convictions are up by 15% between 2005 and 2014.

Hong Kong


2.59 pm

Asked by Baroness Falkner of Margravine

To ask Her Majesty’s Government what is their assessment of the impact of recent events in Hong Kong on the prospects for democracy in that region.

Lord Wallace of Saltaire (LD): My Lords, Hong Kong’s future is best served through a transition to universal suffrage in line with the Basic Law that meets the aspirations of the people of Hong Kong. As noted in our repeated statements, we call for rights and freedoms to be respected, and we urge all sides to engage in constructive dialogue and to work to build a consensus that allows a meaningful advance for democracy.

Baroness Falkner of Margravine (LD): My Lords, does my noble friend agree that the pro-democracy protesters in Hong Kong have very genuine concerns about the pushback from the joint declaration of 1984, particularly with regard to judicial independence and elections? He will be aware that the chair of the All-Party Parliamentary China Group has just been denied a visa for China for the mere act of instigating a debate in the other place on the Hong Kong situation. Does my noble friend agree that the actions of the Chinese Government are imperilling Hong Kong’s status and stability, as well as destabilising the whole region?

Lord Wallace of Saltaire: My Lords, there were several questions there and I shall try to answer at least two of them. Hong Kong plays a very important part in Britain’s relations with China. It is also one of the most sensitive issues in Britain’s relationship with China. We regret the Chinese Government’s refusal to allow Richard Graham, the chair of the All-Party Parliamentary China Group, to take part in what would have been a very valuable exchange between Members of both Houses of Parliament and their Chinese equivalents, and we have made that clear to the Chinese Government at a very senior level.

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Lord Luce (CB): My Lords, since it is in China’s, Britain’s and Hong Kong’s interests to do nothing to undermine the 1984 declaration, which the noble and learned Lord, Lord Howe, helped to negotiate, and since universal suffrage is on offer for the first time, is not the most important thing that the people of Hong Kong should engage in constructive dialogue with the Chief Executive of Hong Kong to ensure that the next time there is an election for Chief Executive, there is a reasonable and wide range of choice of candidates?

Lord Wallace of Saltaire: I thank the noble Lord for that detailed and constructive question. We are talking about the Basic Law of 1997 and not the joint declaration of 1984, and we are talking about the commitment to universal suffrage. The issue at stake regarding the demonstrations is how open the nomination of the Chief Executive should be. The question of judicial independence came up with regard to a Chinese Government White Paper of June 2014. It is the British Government’s view that judicial independence in Hong Kong has not been compromised by that White Paper.

Lord Bach (Lab): My Lords, the Basic Law of Hong Kong, which the Minister has already referred to, dealing with the introduction of universal suffrage, also affirms rights to freedom of speech, press freedom and freedom of association. I am sure that the Minister will agree that the Basic Law of Hong Kong is crucial in the present circumstances and that it must continue to be pursued in practice.

Lord Wallace of Saltaire: My Lords, I entirely agree with that. On the whole, the demonstrations in Hong Kong have been handled well and they have continued peacefully. Recently, some of the student leaders of the demonstrations conducted discussions with the executives of Hong Kong on television. There are not that many countries in the world where that would be possible on quite such a peaceful basis. Therefore, there are aspects of the joint declaration and the Basic Law that are very fully observed.

Baroness Falkner of Margravine: My Lords, I think I understood my noble friend to say that he believed that the British Government did not feel that judicial independence had been jeopardised through the White Paper. Would he like to tell the House how requiring judges to be patriotic without defining patriotism is upholding judicial independence?

Lord Wallace of Saltaire: My Lords, there may be people inside the Chinese Government whose sense of the importance of the distinction between the different aspects of government—legislature, Executive and judiciary—is a little less highly developed than it is in the UK. However, I suspect that in some aspects of British politics, and possibly some newspapers, there are those who would think that judges who could not describe themselves at patriotic were not appropriate judges, even in the UK. I am not at all saying that Her Majesty’s Government are pleased with that.

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Lord Howarth of Newport (Lab): My Lords, is there not a striking contrast between the passion for democracy among the people of Hong Kong and the democratic inertia and cynicism of so many people in this country who are entitled to vote and do not do so?

Lord Wallace of Saltaire: My Lords, I can only agree, but it is up to all of us and the Members of the other place, as well as all those involved in democratic politics, to re-enthuse the British public with democratic politics as far as we can and, in particular, in the next five months.

Lord Faulkner of Worcester (Lab): My Lords, bearing in mind that the noble Baroness’s question refers to democracy in the region, will the Minister take the opportunity to pay tribute to the people of Taiwan, who change their Governments regularly through the ballot box, and whose parliamentary system is very close to our own, unlike that of mainland China? I declare an interest as co-chair of the British-Taiwanese All-Party Parliamentary Group.

Lord Wallace of Saltaire: My Lords, there are a number of states across east, south-east and southern Asia that have made successful transitions to democracy. There are others that have some way to go. We welcome the evidence in a range of Governments there of the rule of law, open elections and the transition from one head of Government to another, all of which are fundamental. These are principles to which good Governments and well run economies should adhere.

Lord Roberts of Llandudno (LD): My Lords, we must welcome the statement in the Wales Bill last week that the electoral registration officers in Wales—all 22 of them—are to encourage new ways of registering young voters. Can we ask whether this might also apply to all electoral registration officers throughout the United Kingdom?

Lord Wallace of Saltaire: My Lords, I hesitate to suggest that Her Majesty’s Government should bring that to the attention of the Chinese Government. I accept the noble Lord’s point that all of us, in every way, including the many Members of this House who go out on school visits, should be doing our utmost to raise the level of interest of people of all ages in the democratic process.

Recall of MPs Bill

First Reading

3.07 pm

The Bill was brought from the Commons, read a first time and ordered to be printed.

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Business of the House

Timing of Debates

3.07 pm

Moved by Baroness Stowell of Beeston

That the debate on the Motion in the name of Lord Liddle set down for today shall be limited to three hours and that in the name of Baroness Kingsmill to two hours.

Motion agreed.

House Committee

Motion to Agree

3.08 pm

Moved by The Chairman of Committees

That the 2nd Report from the Select Committee (Access and the use of facilities by retired members) (HL Paper 59) be agreed to.

The Chairman of Committees (Lord Sewel): My Lords, the House Committee has considered access privileges for those Members retiring under the provisions of the House of Lords Reform Act 2014. The House has previously agreed the procedure for marking those retirements.

In the interests of simplicity and striking a balance between acknowledging the contribution of retiring Members and avoiding unreasonable burden on the taxpayer, the House Committee has agreed that Members retiring under the Act should be entitled to a photo identity pass, may sit on the steps of the Throne, may use the Library—but not its research facilities—and have limited access to catering facilities.

These are the same modest privileges currently afforded to retired bishops, and I suggest to your Lordships on this occasion that what is good enough for the bishops is good enough for the rest of us. Those Members who cease to be Members as a consequence of non-attendance would not be entitled to any such access rights.

Lord Steel of Aikwood (LD): My Lords, I hate to press the Chairman of Committees on this matter, but, since the passage of the Act, the committee has not done anything to encourage retirement and get the numbers in this House down. Is the committee going to look at the various suggestions that have been made, or will we have a special Select Committee to do that?

The Chairman of Committees: I think that I can give some comfort to the noble Lord. What is going on may not necessarily show above the waterline, but quite a lot of friendly, informal activity is taking place underneath.

Motion agreed.

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Economic Affairs Committee

Membership Motion

3.10 pm

Moved by The Chairman of Committees

That Baroness Wheatcroft be appointed a member of the Select Committee in place of Baroness Noakes, resigned.

Motion agreed.

Insurance Bill [HL]

Motion to Approve

3.10 pm

Moved by The Chairman of Committees

Further to the resolution of the House of 19 November 2014 appointing a Special Public Bill Committee to consider the Bill, that the Committee have the power to appoint a specialist adviser.

The Chairman of Committees (Lord Sewel): My Lords, last week, the House appointed a Special Public Bill Committee to consider the Insurance Bill. That committee has since met and has agreed that it would be desirable to appoint a specialist adviser. While it is unusual for a Special Public Bill Committee, I consider the technical nature of this particular Bill a good and sufficient reason to grant the committee the power to appoint a specialist adviser. I beg to move.

Motion agreed.

Modern Slavery Bill

Order of Consideration Motion

3.11 pm

Moved by Lord Bates

That it be an instruction to the Committee of the Whole House to which the Modern Slavery Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 14, Schedule 1, Clauses 15 to 37, Schedule 2, Clauses 38 to 45, Schedule 3, Clauses 46 to 53, Schedule 4, Clauses 54 to 58.

Motion agreed.

Intelligence and Security Committee of Parliament Report: Fusilier Lee Rigby


3.11 pm

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows.

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“Mr Speaker, today the House of Commons Intelligence and Security Committee has published its report into the murder of Fusilier Lee Rigby. He was a British soldier who stood for our country and for our way of life, and he was killed in broad daylight on the streets of our capital city. It was an appalling, sickening act and it was a stark reminder of the threat we face from home-grown terrorists and extremists plotting to murder our people. But at the same time we should be clear that it was a betrayal of Islam and of the Muslim communities in Britain who give so much to our country. I am sure that the thoughts of the whole House are with Lee Rigby’s friends and family at this time.

When I spoke in the House in the aftermath of the attack, I said that we would bring those responsible to justice and that we would learn the lessons of what happened in Woolwich. The two murderers, Michael Adebowale and Michael Adebolajo, have since been convicted and sentenced to life in prison. And today this report answers the questions we had about what our security services knew about these murderers and the lessons we can learn to help prevent similar attacks in the future. I am grateful to my right honourable friend the Member for Kensington and his committee for their comprehensive report. It contains an unprecedented degree of detail on the current workings of MI5, the Secret Intelligence Service and GCHQ. I wanted us to get to the truth as quickly as possible, without a prolonged judicial process, and I think that is exactly what has been done with this exceptional report. Few countries in the world would publish this degree of detail about the activities of their security services. It reflects the way we have strengthened this Committee with new powers to hold our security services to account. And for this report, the agencies have carried out the same searches they would for proceedings in the law courts.

Before I turn to the key findings, let me be clear that this is a very serious report and there are significant areas of concern within it. I do not want anyone to be in any doubt that there are lessons to be learnt and that things need to change. But on the key findings, I am sure the House will welcome that the Committee does, and I quote,

‘not consider that, given what the Agencies knew at the time, they were in a position to prevent the murder of Fusilier Lee Rigby’.

Furthermore, as the Committee says,

‘it is greatly to the Agencies’ credit that they have protected the UK from a number of terrorist plots in recent years’.

As the Commissioner of the Metropolitan Police says, at least four serious plots have been foiled this year alone. So much of what our agencies do necessarily goes unreported. They are Britain’s silent heroes and the whole country owes them an enormous debt of gratitude. But there are four broad areas where things need to change: in dealing with the delays in the process of investigating potential terrorists; in dealing with low-priority cases and so-called self-starting terrorists; on the role and responsibilities of internet companies in helping to keep us safe; and tackling foreign fighters travelling abroad for terrorist purposes. I want to take each in turn.

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First, the report identifies a number of serious delays and potential missed opportunities. The committee expressed concern over the four-month delay in opening an investigation into Michael Adebolajo following his return from Kenya in 2010 and the eight-month delay before Michael Adebowale was first actively investigated in 2012. The report concludes that an application for intrusive surveillance on Michael Adebowale in 2013 took,

‘nearly twice as long as it should have,

and that had the original target been met,

‘these further intrusive techniques would have been in place during the week before, and on the day of the attack’.

But crucially the report goes on to say that,

‘there is no indication that this would have provided advance warning of the attack: retrospective analysis of all the information now available to the agencies has not provided any such evidence’.

The report also finds that the two murderers were in contact 39 times between 11 April and 22 May, including seven attempted calls and 16 text messages on the day before the murder. But again we should be clear that post-event analysis shows:

‘None of these text messages revealed any indication of attack planning or indeed anything of significance’.

So while the committee accepts that these delays and missed opportunities did not affect the outcome in this case, it is, however, absolutely clear that processes need to be substantially improved. MI5 are improving guidance and training for investigators for its online teams and it is looking at new automated processes to act on extremist material online.

The MI5 initial lessons learnt document has already been published in today’s report, and I have asked the Security Service to provide a further detailed report to the Home Secretary and to me in the new year setting out progress on implementing each and every one of the lessons learnt. In all of this we need to remember the extreme pressure our agencies are under. As the Director-General of MI5 put it in his evidence to the committee:

‘We are not an army that has battalions waiting in barracks for deployment’.

Everyone they have is always out there working.

Secondly, one of the most challenging tasks facing our agencies is how to prioritise the many and various potential threats to our security. This is incredibly difficult and it is not an exact science. During the weeks prior to the Woolwich attack, MI5 were running several hundred counterterrorism investigations and, as the committee notes, they are monitoring at any one time several thousand subjects of interest.

It is obviously essential to focus on the highest-priority cases and especially those where there is specific intelligence that terrorists are planning an attack in the UK. But the report details how Michael Adebolajo and Michael Adebowale were both known to the security services for some time. Michael Adebolajo had featured in five separate Security Service investigations since 2008 and MI5 had put significant effort into investigating him as part of several of these investigations. Michael Adebowale featured in two lower-priority investigations. Now, while none of these investigations revealed any intelligence of an attack, the committee does recommend improvements to the processes for dealing with recurring subjects of interest, with low-priority cases and with so-called self-starting terrorists.

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This Government have protected budgets for counterterrorism and the security services and they have been clear with me that they have always had the resources they need. But the increasing threat we face, including from these so-called self-starting terrorists, means that we should now go further in strengthening our capabilities. So my right honourable friend the Chancellor of the Exchequer will make an additional £130 million available over the next two years, including new funding to enhance our ability to monitor and disrupt these self-starting terrorists.

The report also makes clear the important role of all public bodies in dealing with the threat of self-starting terrorists and extremists. The Counter-Terrorism and Security Bill being introduced tomorrow will include for the first time a clear legal obligation on our universities, prisons, councils and schools to play their part in tackling this poisonous extremism. The new funding being made available today will include additional resources for programmes to prevent radicalisation.

Thirdly, turning to the role of internet companies, the committee is clear that it did find,

‘one issue which could have been decisive’.

In December 2012, five months before the attack, Michael Adebowale had a crucial online exchange in which he wrote about his desire to kill a soldier, but the automated systems in the internet company concerned did not identify this exchange. Further, when it automatically shut down other accounts used by Michael Adebowale on grounds of terrorism, there was no mechanism to notify the authorities. So this information only came to light several weeks after the attack as a result of a retrospective review by the company.

The committee concludes that,

‘This is the single issue which—had it been known at the time—might have enabled MI5 to prevent the attack’.

This is a very serious finding. The report does not name the company and it would not be appropriate for me to give a running commentary on the level of co-operation from different internet companies. But the committee is clear, and I agree, that it has serious concerns about the approach of a number of communications service providers based overseas.

This summer, the Government introduced emergency legislation to put beyond doubt in UK law that the Regulation of Investigatory Powers Act applies to companies based overseas but that deliver services in this country, and I appointed Sir Nigel Sheinwald as a special envoy in intelligence and law enforcement data-sharing to address concerns that there could be a conflict between UK and US law in this area.

Since then, a number of companies have improved their co-operation. But as I said in my speech to the Australian Parliament earlier this month, there is much further to go. We are already having detailed discussions with internet companies on the new steps they can take, and we expect the companies to report back on progress in the New Year. But the truth is this: terrorists are using the internet to communicate with each other, and we must not accept that these communications are beyond the reach of the authorities or the internet companies themselves. We have taken action. We have passed emergency legislation. We will continue to do

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everything we can. But, crucially, we expect the internet companies, too, to do all they can. Their networks are being used to plot murder and mayhem. It is their social responsibility to act on this, and we expect them to live up to that responsibility.

Fourthly, the report also raises a series of issues directly relevant to the increased threat in recent months from British citizens travelling to fight abroad—so-called foreign fighters. The committee expresses concern about what it describes as a ‘deeply unsatisfactory’ response to Michael Adebolajo’s arrest in Kenya. It highlights the importance of tackling British citizens travelling to fight with terrorists groups in Syria and Iraq, and the report recommends further powers, including considering whether existing proscription powers should be amended to enable further prosecutions.

Tackling foreign fighters is an absolute priority for our agencies. To be fair to the agencies and police, in the case of Michael Adebolajo, he was interviewed on his return from Kenya to the UK. Their operational effort has been stepped up, with more than 120 arrests this year for Syria-related offences, compared to just 27 in the whole of 2013. However, the committee is right to ask whether we need to give our agencies stronger powers to tackle extremists, so our Counter-Terrorism and Security Bill—being introduced in Parliament tomorrow—will include essential new powers to seize passports to prevent travel; to stop suspects returning unless they do so on our terms; and to relocate suspected terrorists to other parts of the country and away from their extremist networks. I very much hope that we can take this Bill forward on a cross-party basis so our agencies are able to start using these vital powers as soon as possible.

Finally, the committee criticises the Secret Intelligence Service for the handling of allegations of Michael Adebolajo’s mistreatment in Kenya. This Government took the important step of publishing the consolidated guidance in 2010 on the obligations of our agencies and the Ministry of Defence in relation to detainees who are being held overseas. Of course, however, there are cases which fall outside the scope of this guidance: for instance, where people are entirely dealt with by overseas agencies, but where the Secret Intelligence Service clearly still has an operational interest. In these cases, the agencies are clear that they always seek assurances about the treatment of detainees and that in future, they will record the outcome of their investigations and inform Ministers if mistreatment has in any way occurred.

Of course, it is right that there is vigorous oversight of this issue, so the Government will put the oversight role of the Intelligence Services Commissioner on a statutory footing. I will issue a direction under the Regulation of Investigatory Powers Act in the coming days to formalise Sir Mark Waller’s role in overseeing the guidance on detainees. Sir Mark will have full access to all the material referred to in the report and will be able to examine the concerns raised by the committee about the Government’s responsibilities in relation to partner counter-terrorism units overseas.

Today’s report contains a number of very detailed recommendations. We will publish a full response to all the points that are raised in the new year. We will

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not shrink from doing what is necessary to keep our people safe. The terrorist threat we face cannot be ignored or contained: we have to confront it. We have to equip our security services with the powers and the information they need to track down these terrorists and stop them attacking our people. We have to confront the extremist ideology that drives this terrorism by defeating the ideas that warp so many young minds. Of course, none of this will be easy: we will need stamina, patience and endurance, but we will in the end defeat this extremism and protect our people and our way of life for generations to come. I commend this Statement to the House”.

That concludes the Statement.

3.27 pm

Baroness Royall of Blaisdon (Lab): My Lords, I am grateful to the Leader of the House for repeating the Statement made by the Prime Minister. Fusilier Lee Rigby served his country with courage. He was a brave soldier and his murder was an appalling act—an atrocity. Our thoughts today are with his family and friends, for whom reading this report will mean the pain of reliving his brutal killing. I also thank the members of the Intelligence and Security Committee for their investigation. It is right that this investigation took place; the report was the most detailed account of the agencies’ work ever published.

The security services and the police play a vital role in keeping us safe, often in challenging circumstances. They do a hugely difficult job of seeking to identify those who pose a risk to our country. We should remember that, while the perpetrators of terror need succeed only once to achieve their dreadful aims, our agencies and others need to be successful every time to keep us secure. In so far as there are criticisms in the ISC’s report, they need to be understood in that light. The ISC’s report outlines in detail how the two men who killed Lee Rigby—Michael Adebolajo and Michael Adebowale—were under investigation at various times before the murder.

We welcome the announcement of additional resources, but will the Leader of the House tell us whether it is simply a question of resources or whether she thinks a better strategy is needed for dealing with those, like Adebolajo, who are recurring subjects of interest on the periphery of several investigations? In addition, the report points to the fact that at times there is a lack of co-ordination between MI5 and the police. Can the noble Baroness outline the steps that will be put in place to strengthen the working relationship between the different agencies—MI5, SIS, GCHQ and the police?

The report also highlights the issue of returning foreign fighters. We will engage constructively with the forthcoming Bill and welcome the decision to reinstate relocation powers, which were removed three years ago. As the Leader of the House said, Michael Adebolajo was arrested, but the report states that his case was not then followed up. This is not simply about the powers but the way in which cases are followed up. Can she assure us that there will be a more systematic and rigorous response to returning foreign fighters, including mandatory referrals to deradicalisation programmes?

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The report underlines the fact that these two individuals, and in particular Michael Adebowale, were radicalised over a number of years, including by accessing extremist material online. Thus it makes a compelling case for an expansion of the Prevent programme. The report says:

“The scale of the problem indicates that the Government’s counter-radicalisation programmes are not working”.

Noble Lords will recall that we raised this important issue in the House before. How will the Government ensure that Prevent will receive the priority and resources it needs? Would the noble Baroness agree that we should consider widening the scope of Prevent so that in future people like Michael Adebowale would be included, and to ensure that local communities are engaged in the prevention of radicalisation?

The role of internet companies is clearly of crucial importance. This raises two vital issues: whether the companies have a responsibility to draw authorities’ attention to issues of national security and whether the major US companies regard themselves as compelled to comply with UK warrants legally authorised by Ministers in cases of national security. Can more be done to encourage companies to flag up issues of concern where matters of national security are raised? The report says that companies may sometimes decide to pass on information to the authorities when they close accounts because of links to terrorism, but in this case they did not.

Part of the problem in this area is that there are different practices by different companies and no agreed set of procedures. In the case of images of child abuse, there is a procedure in place for companies to take action and refer abuse allegations to the authorities. There should be much stronger procedures in place and a much stronger responsibility placed on companies when it comes to terrorism as well. Does the Leader of the House agree? Further, can the Leader update the House on work being done to improve our ability to get information, with a warrant, from companies based in the US?

Lastly, on the issue of detention, we welcome the Government’s announcement that oversight will be strengthened but urge them to go further. For some time we have said that the framework of commissioners needs strengthening and this report demonstrates the value of thorough scrutiny and the ability to learn lessons. Can the noble Baroness confirm whether David Anderson’s review also covers strengthening oversight and the role of commissioners?

This report is a stark reminder of the threats we face in keeping our country safe. The murder of Fusilier Lee Rigby was an appalling act of cruelty and depravity. We must learn the right lessons—and that is what the ISC report seeks to do. It does so thoroughly and with diligence. In seeking to put those lessons into practice, the Government will have our full support.

Baroness Stowell of Beeston: I am very grateful to the noble Baroness for her response and the manner in which she made her remarks on the Statement by the Prime Minister that I repeated. I certainly join her in paying tribute to Lee Rigby’s family and in recognising that this must be a very difficult day for them indeed. I also agree with the noble Baroness about the good

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work the committee has done in its investigation and the thoroughness of its report. Of course, she is absolutely right to restate that the security services and the police do a very difficult job in keeping us safe. We very much acknowledge that.

On the questions that she asked, first she asked about increased resources and whether the security and intelligence services had sufficient funding. It is worth explaining to the House that funding for the security and intelligence services has increased in cash terms now by 5% compared with 2010 and they had a good funding settlement compared with other departments, including in the 2013 spending round where they saw an increase when other departments saw a reduction in their funding.

The noble Baroness asked about the way in which MI5 and the security services are responding to some of the identified persons who might be described as peripheral risks or operating on the periphery. MI5 responds to this point in its initial response to the report and says how it has already started to take steps to improve in this area. We will come back again with more detail on this in the new year. She also asked about how connections could be improved between the different agencies and the police service. They are continuing to improve all the time and they are working well and seeking always to address any issue that should be strengthened.

The noble Baroness asked about returning foreign fighters and the approach being taken to them. In its report, the committee criticised the way in which the particular person concerned was examined when he returned. The committee is right to say that we should look at this case by case and, indeed, one of the measures being introduced in the new counterterrorism Bill is to make sure that there is an improvement in this area and a more systematic approach.

The noble Baroness also asked about the improved arrangements for deradicalisation. Again, in the new counterterrorism Bill, which will be introduced tomorrow, the measures we have already in place, including those under the Prevent scheme referred to as Channel, will be put on a statutory footing.

As to the noble Baroness’s comments on Prevent funding and on how Prevent operates, it is worth reminding noble Lords that in 2011 this Government asked my noble friend Lord Carlile to carry out a review of Prevent. His conclusion was that Prevent should be split, with the money for integration—the more community-based measures to improve cohesion in communities—moving to DCLG, where that money now sits with the programme for cohesion, and the remainder of the money being specifically focused on guiding people away from extremism and terrorism. The money spent on Prevent has increased from £35 million in 2012 to £40 million in 2014. It is worth adding that in my noble friend Lord Carlile’s report he said there were cases under the previous Prevent regime where groups which we now consider to support an extremist ideology had received funding. Changing the Prevent regime by moving the cohesion aspect of it into DCLG and making Prevent more focused on tackling extremism and preventing terrorism was, we believe, the right approach.

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As to the questions that the noble Baroness raised about internet companies, I agree with her that comparisons can be made between the way in which the internet companies have improved the way in which they remove from the internet sites and images that relate to despicable crimes of child abuse. That was at the prompting of government. We think that the same approach needs to be taken by the internet companies towards terrorism. We are very clear that these internet companies have a social responsibility to take the necessary action that should prevent any kind of terrorism activity occurring. We introduced new emergency legislation in the summer, which I referred to in repeating the Prime Minister’s Statement. We are working very hard to ensure that that legislation is properly applied to US companies which operate in the United Kingdom. As I said in the Statement, Sir Nigel Sheinwald is doing much in that area to see that there can be progress. That is something that we will pursue with vigour.

The oversight role of the Government’s adviser on counterterrorism measures, David Anderson QC, is very broad, and he is able to look at the threat response, the capabilities and important safeguards. He has done excellent work so far, and clearly we look forward to him continuing in his role and supporting us and helping us further in the weeks and months ahead.

3.41 pm

Lord Dholakia (LD): My Lords, I endorse the sentiments that have been expressed by both sides of this House about the death of Lee Rigby. The report talks about the introduction of the Counter-Terrorism and Security Bill tomorrow. We are told that for the first time it will include a clear legal obligation on universities, prisons, councils and schools to play their full part in tackling this poisonous extremism. Why are religious bodies excluded from this provision?

This is a serious report about significant areas of concern, yet we are told that the government response will not be available until January. What mechanism exists to ensure that the Government’s comments on the report will be available at the time the counterterrorism Bill goes through this House?

Baroness Stowell of Beeston: Religious bodies are excluded from the list of groups that will be bound by the Prevent measure that we are going to put on a statutory footing in the counterterrorism Bill because we are focusing on public bodies, and clearly religious faiths do not qualify in that area. That does not mean that all religious faiths do not have a responsibility to support us in preventing extremism and terrorism. Indeed, there is a wide range of different programmes, some of which are supported though the Department for Communities and Local Government. There is a lot of work going on in that area.

My noble friend asked about the Government’s response to the report being provided in January. Today, the Prime Minister’s Statement provided our initial response. The measures in the counterterrorism Bill being introduced tomorrow stem from two things: JTAC’s change of the security status earlier in the summer to the increased level that it is now and the creation of the extremism task force, which the Prime

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Minister put together following Lee Rigby’s death. The counterterrorism Bill contains measures that have been put together after careful thought and consideration. They are most definitely not a knee-jerk reaction to the ISC report published today.

The Marquess of Lothian (Con): As one of your Lordships’ two representatives on the Intelligence and Security Committee, I welcome the commendation of our report by both the Government and the Opposition. I also welcome the announcement of further resources in this area, which is an important measure—although it is important to stress that such is the extent and pressure of the terrorist threat in this country at the moment that the prioritisation of threats to be dealt with by the agencies will have to continue.

I also make the point that despite the criticisms in this report of the agencies in regard to this particular case, on behalf of the committee I would like to commend our intelligence agencies for the sterling and tireless work they do in protecting all of us in this country from the threat of terrorism.

Finally, I raise a subject which has been raised before, which is what I call the capability gap in the agencies accessing communications from overseas communications service providers. Along with the measures that she has mentioned, I wonder whether the Minister would agree with me that in the end the United Kingdom has to use its influence with the United States through the exceptional co-operation on security between our two countries to find a final and lasting way to resolve this situation. Perhaps the Minister could say a word about what steps are being taken in that regard.

Baroness Stowell of Beeston: I am certainly grateful to my noble friend for echoing the support for the security services and the work that they do to keep all of us safe in this country. I would also like to take this opportunity to thank my noble friend for his work as a member of that committee. I know that the noble Lord, Lord Butler, from this House is also a member of the committee, and there are other Members of this House who have been previous members of that committee.

On my noble friend’s point about prioritisation still being necessary even in light of increased funding, that is right and will always be the case. There is a need for balancing prioritisation with not delaying the necessary steps. I quoted from the statement of the MI5 Director General in the Statement by the Prime Minister that I repeated. The security services do not have an army of people waiting to deploy; they have to use their resources all the time as best they see fit, and they are doing a very good job.

On the capability gap regarding communications service providers, which my noble friend mentioned, he is right that we have to use our influence at all levels and I can confirm to him and the House that that is happening right up to the highest level, including the Prime Minister with the President of the United States.

Lord West of Spithead (Lab): The Minister will be aware that since the revelations of the traitor Snowden, terrorist groups—in particular ISIL—have changed their methods of communications, and have shifted to

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other ways of talking to each other. Consequently there are people dying who would otherwise be alive. Does the Minister agree that it is now critical that we move forward the Communications Data Bill, which was paused so unreasonably, because there is a very real danger that unless we do—and I am not exaggerating in saying this—people in this country will die who would have been safe if it was in place?

Baroness Stowell of Beeston: The noble Lord is right to say that the leaking by Snowden and the reporting of his leaks have had a serious effect on intelligence gathering. That is unquestionable. There is evidence that some of the terrorists and terrorist groups, in the light of that knowledge, are now moving their exchanges to different places, where the intelligence services are not operating, because they now know where they do and where they do not.

As far as introducing the Communications Data Bill is concerned, in the summer we introduced the emergency legislation which addressed some gaps there. The counterterrorism Bill that will be introduced tomorrow will close another gap. This is an area where I believe we will continue to have to keep making progress. We are not ready to move as far as the noble Lord suggests at this moment. To be successful in introducing a Communications Data Bill, we will need a consensus, and we do not have that yet.

Lord King of Bridgwater (Con): Does my noble friend accept that this report, which I think is the most substantial one I have seen from the ISC, marks a very important stage in the development of its role of parliamentary oversight of the intelligence agencies? I hope that, on reading it, one will be able to reinforce one’s confidence in the capabilities of that committee. It is very important to this country that it carries high credibility in the world and among our people generally.

Having said that, the Prime Minister claims in his Statement that the committee had unprecedented access to detail that might not previously have been available to such an inquiry. Certainly, it seems to hold the world record for asterisks, deletions and redactions, indicating the amount of totally secret information that was available to the committee. Will my noble friend confirm that the report coincides with the announcement by the Home Secretary of the further Bill that will be introduced tomorrow—in the Commons, I assume. Will the government response be available to this House before we approach Second Reading, as I understand there is to be an accelerated procedure? Can she give any indication of when she would expect the Bill to come to this House? There is no question that it raises extraordinarily difficult issues. As the noble Lord, Lord West, indicated, the challenges faced by the intelligence and security agencies are massive and growing enormously. Some of the challenges will be revealed in the government response and we need the opportunity to consider it very carefully in this House.

Baroness Stowell of Beeston: My noble friend is a former chairman of the ISC and I pay tribute to his knowledge and assessment of the committee’s report published today. I share his view that it is a very substantial and unprecedented piece of work on the

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part of the committee. It shows that we were right to put the ISC on a stronger footing through the Justice and Security Act. The redactions in the report are in line with the process in that Act for redacting material and we have very much followed that process. I cannot confirm that the Government’s detailed response to today’s report will be available before Second Reading as I do not yet have the date when we will respond or, indeed, when the Bill will be introduced in your Lordships’ House. However, I will reflect on the point that my noble friend makes.

Lord Pearson of Rannoch (UKIP): My Lords, are the Government aware that Fusilier Rigby’s murderers quoted 22 verses of the Koran to justify their atrocity? Therefore, is the Prime Minister accurate or helpful when he describes it as a betrayal of Islam? Since the vast majority of Muslims are our peace-loving friends, should we not encourage them to address the violence in the Koran—and, indeed, in the life and the example of Muhammad?

Baroness Stowell of Beeston: My Lords, British Muslims want strong counterterrorism measures in this country so that everybody in this country who shares British values, whatever their faith, is safe. That is basically all I need to say to the noble Lord.

Lord Elystan-Morgan (CB): My Lords, may I raise with the noble Baroness the question of people leaving these shores to join armed formations abroad—and, indeed, in the event of their return, what they might do? Is it or is it not the case that the Foreign Enlistment Act 1870 is still in force? If I am correct with regard to that, has any use been made of it in the last half century? Furthermore, have the Government given any thought at all to the question of incorporating any of its provisions in the new legislation now before the House? I regret that I did not give notice of these rather technical matters but it was only when she mentioned foreign enlistment that it rang a distant bell with me.

Baroness Stowell of Beeston: I regret that I am not able to provide the noble Lord with a comprehensive answer to that question. Probably the best thing would be for me to write to him.

Lord Harris of Haringey (Lab): My Lords, this is an important report and that importance is not diminished by the fact that the committee has only two Members of your Lordships’ House sitting on it. I would like some clarity from the Leader of the House on the extra resources that have been put in. The Statement mentions £130 million to combat the current threat over two years—I assume that is £65 million per annum. I had heard that the requirement to enhance the policing component of the response to the enhanced threat was of the order of £50 million per annum. What is the balance between the various security agencies and the police in terms of the £130 million? How much will go to funding for additional programmes to prevent radicalisation? In the case of the latter, who will be distributing those resources?

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Baroness Stowell of Beeston: The overall funding for the security and intelligence agencies has increased from £2 billion in 2010 to £2.1 billion now. We do not give a breakdown of how the different agencies are funded for security reasons. The majority of the £130 million of new money announced today over the next two years will go to our agencies to give them new capabilities to monitor and disrupt terrorists—to deal with the new kind of threat that we are now facing from the so-called “self-starter” terrorists. Further funding will go to support counterterrorism policing and Prevent programmes to tackle radicalisation. My right honourable friend the Chancellor will set out more details of the breakdown of all the funding in the Autumn Statement. I would just add that we have protected £500 million of annual counterterrorism policing grant in real terms. There is quite a lot of information there, but the Chancellor will provide more in the Autumn Statement.

Baroness Falkner of Margravine (LD): My Lords, my noble friend mentioned the Counter-Terrorism and Security Bill to be introduced in the other place tomorrow. Can she give the House an assurance that we will not use fast-track legislative procedures to take it through this House? I declare that I am a member of the Constitution Committee. She will know that the Constitution Committee believes that fast-track legislation should be used only in the most extreme circumstances. We still have parliamentary time and this Bill will need careful scrutiny by all Members of the House.

Baroness Stowell of Beeston: We ought to draw a distinction between fast-track legislation and emergency legislation. Fast-track does not mean that the time devoted to scrutiny would be diminished in any way; it means that the time between stages would be shortened. Having identified that these are important measures to address gaps that currently exist and that by addressing them we will put ourselves on a stronger footing to deal with a very serious threat, I would say to my noble friend and to the House as a whole that we should not delay doing so. I hope very much that we are able to agree that we will follow a fast-track process, but, as I said, that does not mean that the Bill will not receive the normal length of time it needs for debate in this House.

Lord Selkirk of Douglas (Con): The Statement today is extremely welcome. Will the Leader of the House give an assurance that servicemen and servicewomen will be given advice and guidance if that should become necessary in the circumstances?

Baroness Stowell of Beeston: My noble friend is right. I can only imagine how members of the Armed Forces must feel, knowing that one of them has been attacked and murdered in cold blood on the streets of London. Our advice to the Armed Forces remains very relevant and will be reviewed should it ever be necessary to change it.

Lord Reid of Cardowan (Lab): My Lords, can the Minister respond to the points arising from the imperative she mentioned—not to delay in doing that which is

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necessary to assure the country? Without being in the least bit churlish about this, what is now being admitted is that which was denied by the Government prior to, and from, 2010: first, we are fighting an international struggle against terrorism; secondly, the measures necessary for surveillance by improving GCHQ are less than adequate, for reasons connected with the coalition’s internal politics; and, thirdly, control orders, which were weakened down to TPIMs, are now being strengthened back up to become virtual control orders. If we are going to be honest and realistic about this, we have to answer the question that the public will ask. How is it that over the past four or five years, when we have had a high threat level in this country, we have diminished security and it is only now that the Government are thinking of increasing it again?

Baroness Stowell of Beeston: What I would say to the noble Lord is that what we have done and will continue to do is to take the advice of David Anderson QC on the measures that we introduce. We have responded to the increasing threat. We have listened to the security services and the police service. They have requested additional measures and we are bringing those additional measures in. Clearly, an appalling and tragic event happened, and this report focuses on that. We all wish that it had not happened. What the report tells us today is that, sadly, nothing could have been done to prevent it happening and the two men who were guilty of that crime are currently in prison serving life.

Iran Nuclear Talks


4.02 pm

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Foreign Secretary. The Statement is as follows:

“With permission, Mr Speaker, I will make a Statement on the negotiations between the E3+3 and Iran regarding the future of Iran’s nuclear programme.

In November 2013 the E3+3 signed an interim agreement with Iran, which came into force on 20 January 2014 for an initial period of six months. Under this agreement, Iran committed to freezing areas of its nuclear programme of greatest concern to the international community. In return, Iran received limited sanctions relief and the repatriation of $4.2 billion in oil revenues. Crucially, this interim agreement gave us the time and space to build confidence and begin negotiations on a comprehensive deal to ensure the peaceful nature of Iran’s nuclear programme.

Since February, we have engaged in extensive negotiations with Iran at both official and ministerial level. We always knew these negotiations would be difficult and complex, and they have been—even more so than negotiating the Geneva interim agreement. At their heart is the need to reconcile Iran’s aspirations for a peaceful civil nuclear programme with our insistence on ensuring Iran cannot develop a nuclear weapons capability. By July 2014, after several rounds of talks with Iran, we had deepened our understanding of the positions of both sides and made progress on areas of the negotiations. But we were still far short of reaching

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agreement on core issues. The E3+3 and Iran therefore decided to extend the negotiations until 24 November—yesterday.

Since July, negotiations between the E3+3 and Iran have intensified and we have closed the gap between the parties on a number of important issues. But significant differences remain. I and other Foreign Ministers from the E3+3 met in Vienna last Friday, and again yesterday, to evaluate the prospects of reaching agreement on a political framework for a comprehensive deal within the deadline.

The discussions in Vienna highlighted the need for further movement on some big issues by the Iranians and the need for flexibility on both sides. Despite the efforts of all parties, it was clear yesterday morning that we need more time to close the gaps between the E3+3 and Iran, particularly regarding the issue of Iran’s enrichment capacity, which remains at the heart of this negotiation. But based on the significant progress that we have made to date, I remain of the view—a view shared by my fellow E3+3 Ministers and Iranian Foreign Minister Zarif—that a comprehensive deal remains possible. We must capitalise on the momentum that we have gathered and push forward to achieve this prize.

Iran and the E3+3 have therefore agreed to extend the interim agreement again until the end of June to allow more time to bridge remaining gaps and tie down technical details. We will continue negotiations in December with the shared aim of securing an outline agreement within four months. We would, of course, have preferred to reach a comprehensive deal by yesterday’s deadline, but only if it was the right deal. As we continue to work towards such a deal, we have an interim agreement in place which maintains important constraints on Iran’s programme and the vast majority of nuclear-related sanctions. Under this arrangement, Iran will continue to be able to repatriate oil revenues on a similar basis to the current arrangements.

Successive Governments have enjoyed cross-party support in the House for the twin-track approach of sanctions and negotiations. I remain convinced that this approach is the right one and that it is yielding progress. The negotiations with Iran are tough and complex, but a comprehensive agreement would bring enormous benefits to all parties. For Iran, it would herald the beginning of reintegration into the international community and open the door to an easing of sanctions and access to significant frozen assets. For the international community, it would mark a considerable advance for regional and global security. We cannot and will not succumb to the temptation of sealing a deal at any price, but will remain steadfast in pursuit of a comprehensive agreement that respects the clear principle that Iran must not be able to develop a nuclear weapons capability”.

My Lords, that concludes the Statement.

4.07 pm

Lord Bach (Lab): My Lords, I thank the Minister for repeating the Statement made by her right honourable friend the Foreign Secretary in another place earlier today. It is an especial thanks to the noble Baroness, and I think she will know why I say that.

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I agree with the comment in the Statement that there has long been cross-party support for a twin-track approach—sanctions and negotiations—and I confirm today in the House that that cross-party support exists.

Before asking the Minister a few questions, I am sure she will want to acknowledge the work of the EU’s outgoing High Representative for Foreign Affairs and Security Policy, my noble friend Lady Ashton of Upholland. All sides of the House will be very proud of the role that she has played. Over the past five years, she has played a decisive and constructive role on the world stage and her commitment and determination on the Iran nuclear issue in recent months have been very widely recognised. As Secretary Kerry said yesterday in his press conference,

“I want to thank … especially my good friend Baroness Cathy Ashton, whose partnership has been absolutely invaluable throughout this process and who has done a terrific job of helping to bring people together and define the process”.

We should be very proud of the role that our fellow Member has played.

Turning to events yesterday in Vienna, the fact that it was not possible to reach agreement by the already extended deadline of yesterday is, of course, a regrettable setback, but in our view it need not be an irretrievable one. The June 2015 extension could allow for a further opportunity for progress to be made towards the vital comprehensive deal.

For some years now, Iran has chosen to exploit regional sectarian tensions through supporting terrorist groups in other parts of the region, but today and in the next few months Iran has the capability to play a much more positive role. But that has to start with a clear commitment by Iran to address concerns about its nuclear programme, which have been unresolved for too long now. There should be no doubt that in an already very volatile region and at a particularly perilous period, a nuclear-armed Iran poses a threat not only to Israel and its neighbours but to wider global security. The interim agreement that the Statement talked of was a significant step forward, but it was only ever intended to freeze Iran’s nuclear programme. A final deal must focus on seeing that nuclear programme rolled back.

I seek a number of assurances from the Minister on the content, extension and negotiation of the potential deal. First, on the content of any final agreement, reports suggest that one of the main obstacles to securing a deal remains the crucial issue of the number of centrifuges Iran could operate. The Statement did not mention that matter, so can the noble Baroness say in her response what the Government’s assessment is of the appropriate number of centrifuges that Iran can retain, while still offering sufficient protections around the so-called break-out time?

Secondly, the extension of negotiations must be agreed only alongside sufficient guarantees that it will not allow Iran to gain by running down the clock. The terms of the now extended agreement explicitly forbid Iran from adding new enrichment capacity and accumulating more enriched uranium, and ban 20% enrichment altogether. Can the Minister confirm that these restrictions

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will remain in place and will continue to be monitored, and that any sign of breach will warrant a strong response?

Thirdly, on finance, can the Minister confirm that Iran will not enjoy any net financial gain through this extension? The Foreign Secretary said yesterday that:

“The expectation is that there will be a rollover of the current arrangements for Iran to access around $700 million per month of frozen assets”.

In the Statement, which the noble Baroness has been kind enough to read to this House, the Foreign Secretary said that Iran will continue to repatriate oil revenues on “a similar basis” to before. Can the Minister confirm that this does not allow for any further extension of sanctions relief without anything in return from Iran?

Briefly, on a separate but connected subject, we welcomed the announcement in June that the embassy in Tehran will be reopened. The Foreign Secretary’s recent answer to my right honourable friend the shadow Foreign Secretary stated that issues around getting the embassy back to a functional level and re-establishing a visa service are still under discussion. Can the Minister offer us today any timescale for when she thinks those matters will be resolved? It is important—and I hope this is a common view across the House—that that embassy is reopened as soon as possible.

Secretary of State Kerry was surely right to say that these talks will not get easier just because they go on longer. An extension is not a success in itself and must not be seen as such. The only successful outcome is a full and comprehensive deal being reached, upheld and effectively implemented. We very much hope that that is what happens as soon as possible.

4.14 pm

Baroness Anelay of St Johns: My Lords, I thank the noble Lord, Lord Bach, for reconfirming the Opposition’s long-held view that this is a cross-party matter where both the Government and the Opposition support the policies of the twin-track approach. He quite rightly drew attention to the importance of ensuring that these talks progress in a way that achieves a fully implemented deal that can be properly monitored and to the fragility of security in the area. Against that background, he is absolutely right that we should address all these matters cautiously but firmly to achieve that full, successful outcome. I am also very glad to recognise the significant role played by the noble Baroness, Lady Ashton, and was delighted to be able to draw attention to that when I answered a Question at the Dispatch Box from the noble Baroness, Lady Deech, at the end of last month. The noble Baroness, Lady Ashton, showed, on the national stage, the skills of negotiation which she deployed so well in this Chamber.

I will address myself to the noble Lord’s questions. First, he asked about the precise number of centrifuges that the Iranians might wish to escalate to and the exact number that we might consider appropriate. This will certainly be the crux of the matter in the discussions that proceed and the noble Lord will understand that one does not necessarily go into the details of something that sensitive. However, I can say very clearly that, in all the negotiations considering how many centrifuges would be acceptable, at any stage, to a final agreement,

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we are very carefully balancing two facts. Whereas the Iranians might wish to increase the number of centrifuges to a level that might easily make it possible for them to move to a nuclear programme, we are determined that will not happen. The crucial part of any successful deal must be that the centrifuge numbers—and all the other technical matters, as the noble Lord will be perfectly well aware from the work he has done on this—are considered in such a way that the civilian needs of the Iranian Government can legitimately be met. However, such a deal does not allow for a number of centrifuges, or an escalation to a number of centrifuges, which would give the opportunity for any nuclear weaponry to be developed. It is the civilian use that we see as legitimate.

I come to the questions that the noble Lord properly asked about what happens now. I can certainly confirm that the restrictions on sanctions remain firmly in place, as they were before midnight last night. As the clock ticked over from midnight to one second past midnight, exactly the same restrictions as before remained in place and they will be monitored. He asked whether it means there is no net financial gain for Iran and that there will be no further extension of sanctions relief. I can reassure him on both those matters. To assist him a little more, I can say that, under the extension, Iran’s obligations under the joint plan of action continue exactly as before. This means that the most concerning elements of Iran’s nuclear programme remain frozen. In return, but just as before midnight last night, Iran receives instalments of oil revenues that had previously been restricted. The E3+3 will continue suspension of the same specific sanctions that were suspended under the joint plan of action. The EU Council decision was updated this very morning when the technical, legal provisions were put in place. This means that the Iranian Government can draw down a maximum of $700 million from oil revenues which is exactly the same position as at the beginning of the year and there will be no softening at all of any of the proliferation sanctions. I hope that reassurance satisfies the noble Lord.

He also asked whether I could give an undertaking that we would not provide further relief to the Government in Iran unless there were further concessions from that Government. That will indeed form part of the further negotiations; otherwise, existing sanctions remain in place.

The noble Lord then asked practical questions about the embassy in Tehran. As my right honourable friend in another place explained, we face two technical issues to be resolved. The first is the fact that the embassy, having been sacked, literally has to be resupplied. It is a case of getting agreements physically to take in and set up all the material that is required, and that is a matter for negotiation with the Government of Iran. Secondly, we, like the noble Lord, wish to see a visa service reinstated as soon as possible for the convenience of all—not only for Iranians travelling here but for British citizens who travel to Iran. I know that all those negotiations will be tackled in a very forthright but very careful manner. We all know that it is important for our embassies to be in position. I certainly know from talking to noble Lords that they, like me, have a great regard for our consular services.

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4.21 pm

Baroness Falkner of Margravine (LD): My Lords, given where we were a few days ago, the extension of the talks is indeed very welcome news. I say from this side of the House that we are completely supportive of our Government’s endeavours in that regard. My noble friend will appreciate the importance of sequencing. It is really important that we have managed to hang on to the status quo at the moment. Of course there will be presidential elections in the United States in 2016, but people sometimes forget that there will also be Iranian elections, and it is terribly important that the reforming Government, such that they are, have something to show for their efforts in engaging with the E3+3 process. Will my noble friend bear that in mind as she goes back? It should be kept in mind as we go into negotiations, because this may well be our last chance.

I, too, pay tribute to the noble Baroness, Lady Ashton of Upholland, for her sterling work in this regard. However, it is slightly unclear who will now take over the principal EU negotiating role. Can my noble friend tell us whether the new high representative, Mrs Mogherini, will be doing that or whether the noble Baroness, Lady Ashton, will continue?

Baroness Anelay of St Johns: I am grateful to my noble friend for reiterating the support that I know she has expressed from her Benches before for the way in which these matters are taken forward. She asked me to bear in mind the pattern of elections. I can certainly assure her that those matters are borne in mind. I also ought to say that all those who are taking part in the negotiations bear in mind more technical details, too, regarding religious festivals in Iran, here and in the rest of Europe. That is why the next stage of the negotiations is beginning this very month. There will be no hesitation. The negotiations will begin before Christmas so that after four months we can have a framework of political agreement and we will then have the technical work that will provide the final result by the end of June.

My noble friend asked what will happen now that the noble Baroness, Lady Ashton, has completed the period for which she was “signed up”, if I may use that expression. She has given more of her time than she was due to give, so we express all thanks to her for that. This is a matter for the new Commissioner, Mrs Mogherini, to decide, and I am sure that she will be in discussions over that.

Lord Campbell-Savours (Lab): My Lords, in terms of the debate going on inside Iran—the debate on television, on the radio and in the rest of the media—about developments in Vienna, is not one of the complicating issues of this whole affair the fact that the state of Israel refuses to give up its nuclear weapons and that many people on the streets in Iran simply cannot understand the position being taken by the western powers?

Baroness Anelay of St Johns: My Lords, I say to the noble Lord, who I know has great experience in foreign affairs matters—we have discussed them—that I think that the question is a lot more complicated than that.

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As we know, Israel is a signatory to the Non-Proliferation Treaty, while Iran is not. There are meetings with regard to the treaty next year, when a lot of these matters will be under discussion. I was interested to note last night that Mr Netanyahu made it clear that no deal is better than a bad deal. I think that that was an important thing for him to say, because it reflects exactly our view that, in order to achieve security there, we need a good deal for all.

Lord Hannay of Chiswick (CB): My Lords, first, will the Minister accept support from these Benches for the reaching of a decision that was far better than breaking off negotiations or doing a bad deal? I add my voice to those who praise the noble Baroness, Lady Ashton, for a remarkable performance over the years. However, does the Minister recognise that, on the banks of the Potomac, there may be less all-party support for this prolongation than there is in this House? Will the British Government use the contacts that the embassy in Washington has with the Hill to explain why we think that this is the best outcome? Secondly, I express slight doubt as to whether the division of the next seven months into two periods as clearly as it has been done will bear the stress that time puts on it. Can she confirm, therefore, that the whole of the seven-month period will be available for negotiations and will not be artificially divided into two parts, which, if the first cannot be fulfilled in the time available, renders nugatory the second?

Baroness Anelay of St Johns: My Lords, I am grateful for the support from the noble Lord. He asks us to ensure that our colleagues across the Atlantic—perhaps all other colleagues involved in these negotiations—remain firm. In the meetings that were held last week by the Foreign Ministers, as the noble Lord will be aware, my noble friend the Foreign Secretary went twice to Vienna, on Friday and yesterday, in order to try to make sure that we got as close as possible to a result and, we hope, to a full result. All those taking part are showing an absolute resolve, so the E3+3 plus Iran have ended in a position where all have a determination to continue. I can give an assurance that our determination will be relayed to all our colleagues who are taking part in these negotiations. The noble Lord refers to the 4+3. Clearly we want to drive momentum. There must be no thought that there is time available to let anything drift and leave any nailing-down of the political framework until too late. That is why we have proposed 4+3 as a structure. If, at the end of four months, we have not got to the most perfect position on the political framework, I suspect that a huge amount of work will be going on to make sure that we do, but behind that there is a determination by all parties that we do not let this opportunity slip.

Lord Lamont of Lerwick (Con): My Lords, I refer to my entry in the Register of Lords’ Interests as chairman of the British Iranian Chamber of Commerce. I agree with my noble friend that no deal is a lot better than a bad deal. It must be an effective deal, but it is good that the habit of dialogue, which increases understanding of each other’s position, is continuing. One hopes that that will lead to wider things. First, can the Minister say whether the Russian offer to build

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nuclear power stations in Iran and to convert the enriched uranium into fuel rods outside Russia has in any way contributed towards a narrowing of the gap on the scale of the programme and the scale of the centrifuges issue? Secondly, let me ask the Minister about sanctions relief for humanitarian goods. There have been reports that medicines and other humanitarian goods needed for hospitals are not getting through, despite the sanctions relief. The American banking boycott, which is not in its entirety part of British law but is imposed extraterritorially, is frustrating the supplies of humanitarian goods. We have always made it clear that we do not want the sanctions to hit ordinary people or vulnerable people.

Baroness Anelay of St Johns: My Lords, perhaps I may address that matter first. My noble friend is absolutely right to point out that humanitarian relief was never part of the sanctions regime. We have made it clear that we do not wish the sanctions to impact directly on the needs of Iranian people; they should be directed firmly at the Iranian Government. I appreciate that banks can make commercial decisions, but with regard to humanitarian relief efforts it is clear that there should not be any let or hindrance in their delivery. I have had discussions with humanitarian organisations which are firm in their belief on how to take their work forward effectively.

My noble friend also raised the issue of Russia and what it may have agreed to do. I appreciate that there was a story in the New York Times and elsewhere that Russia had agreed to take on responsibility for Iran’s stockpile of uranium and that that might have been a bit of a signal of a breakthrough in the talks. What I can say is that identifying areas for civil nuclear co-operation will be an important part of the final deal, but clearly it would not be appropriate for me to comment on the detail, let alone because it is something that Russia may or may not be involved in. I will say that a deal can be reached only if Iran addresses international proliferation concerns by simply—perhaps it is not so simple—reducing the size of its nuclear programme. That is the core of our negotiations.

Lord Reid of Cardowan (Lab): My Lords, I thank the noble Baroness for a very well balanced Statement, which balances a degree of realism and circumspection with the political will to resolve this issue. That is something that the whole House will want. We were right to engage and we are right to endure as long as there is a prospect of achieving success. The reward, quite frankly, is staggering in its implications. Perhaps I may make a couple of points. First, in congratulating the noble Baroness, Lady Ashton, we are of course congratulating the European Union in an era when that is perhaps not fashionable in all quarters. While we all have our criticisms of the EU, I think that we should put that on the record. Secondly, this is important precisely because, as the noble Lord, Lord Hannay, said, there are more sceptical political voices on the other side of the Atlantic, so the British and European bearing could encourage a more positive approach among the politicians, if not among those who are engaged in this, although I do not doubt for a moment their bona fides. Finally, the last paragraph of the noble

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Baroness’s contribution is hugely important in its implications. Are we making it absolutely plain in everything that we do that, while achieving a resolution of the nuclear question as an end in itself is of course important, what is even more important in some ways is an entry through that gateway into the potential normalisation of Iran’s place and position in the world? Iran is a great and important nation with a proud history and it has a huge influence over large areas of the world which are at present unstable. If we can use these negotiations as a gateway through to normalising Iran’s role in the world, that would indeed be a prize worth winning.

Baroness Anelay of St Johns: My Lords, I agree entirely with the noble Lord, Lord Reid, and the emphasis that he places on the prize that is to be gained by having Iran return to normalisation in its relationships. The very fact of Iran being received back into the family of nations is also the prize to be seized by the rest of the world, not only in the region but elsewhere. Of course I also recognise what the noble Lord says about the noble Baroness, Lady Ashton, who has performed a great role within the EU and on the international stage. Perhaps I may take the opportunity, in answering his question, to say that in my enthusiasm when referring to the appearance on television of Mr Netanyahu last night, I suddenly signed Israel up as a signatory to the Non-Proliferation Treaty. That would certainly have surprised Israel, as it should have surprised me. Israel is not a signatory to the treaty.

Lord Howell of Guildford (Con): My Lords, the Statement inevitably focuses somewhat narrowly on the nuclear deal, but there are those—I am one of them and I think that the noble Lord, Lord Reid of Cardowan, may be another—who believe that the more that future negotiations can open up the wider issues, including Iran’s possibly more constructive role in stabilising the chaos across the whole region and in general in the international landscape, the more likely it is that the development of those negotiations will proceed and succeed. Can my noble friend give a hint as to whether the future negotiations will go a bit wider than just “the deal”, as it seems to be called?

Baroness Anelay of St Johns: My Lords, we are not in a position where we can call it “the deal”, because we are working towards it. In a sense, the gap has been narrowed because we have been able to identify some areas where we may be able to resolve matters, but there still remains a core area that has not been resolved. It is a prize worth seeking and it can be sought —indeed, with encouragement we may get there—but I would not wish to say that we are at the stage where it is so resolved that we can think of next steps. My noble friend is absolutely right to draw attention to the role currently played by Iran in the region—it has been alluded to in this House and elsewhere—and the role for peace that it might play in the future. It could indeed play a constructive role. We welcome the support that the Iranian Government have given to the new Government of Iraq and their efforts to promote a more inclusive governance for all Iraqis, but a similar approach is needed in Syria, where Iran can and must play a constructive role. All these discussions will

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continue in tandem, I am sure, with what for us is the core issue today, which is to proceed with negotiations so that we can be in a position to achieve a political framework by the end of four months and by the end of seven to have a deal that is good for all.

Lord Beecham (Lab): My Lords, is not a critical element of a settlement of this issue the existence of a robust inspection system? Could the Minister advise us on the present state of play on that important matter?

Baroness Anelay of St Johns: The noble Lord is absolutely right. It is essential that the International Atomic Energy Agency has access in Iran in order to make sure that the supervision of these matters is carried forward. That has to be an integral part of any deal so that the IAEA is able to scrutinise it. When matters have progressed and we hopefully get to agreement on a deal, at that stage the undertakings to achieve scrutiny will be included.

Lord Stoddart of Swindon (Ind Lab): My Lords, I return to the point raised by the noble Lord, Lord Campbell-Savours, on Israel. Many people raise the point that Israel has nuclear weapons and the capacity to enrich uranium and produce more, so that is very relevant indeed. Could the Minister confirm that she said that Israel was a party to—she is shaking her head before I have asked the question—the Non-Proliferation Treaty and Iran is not? I understood that Iran was party to the treaty and Israel was not. Perhaps she could confirm or deny what I am saying.

Baroness Anelay of St Johns: My Lords, in answering the noble Lord, Lord Reid, I took the opportunity to make it clear that it is indeed that way round and that it is Iran that is a signatory to the Non-Proliferation Treaty and Israel is not. In an answer to the noble Baroness, Lady Deech, on 30 October I made that clear. This is what makes it a different type of discussion with Iran about how it fulfils its obligations under the Non-Proliferation Treaty. We know that the area has its security difficulties at the moment. All our efforts as parliamentarians are concentrated on trying to ensure security there and consequently security for a wider Europe and wider international stage. What we are doing today is discussing that part of the negotiations with Iran that focus on ensuring that we can resolve the outstanding issue, which is to prevent the acceleration and movement of Iran towards the capacity to have a nuclear weaponry system.

Lord Phillips of Sudbury (LD): My Lords, like virtually every other speaker, I welcome strongly the Statement repeated by the noble Baroness, which represents a signal moment in the whole complex and difficult issue between Iran and the rest of the world. I do not want to labour the point, but does my noble friend accept that the fact that Israel is not a member of the IAEA or the various treaties gives a great deal of concern to the Iranians? I absolutely accept that Israel is desperate to preserve its safety by preventing Iran from obtaining nuclear weaponry. That is perfectly understandable. What is not so well understood is that within Iran there is genuine terror of an Israel with

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nuclear weaponry. I declare my interest as president of the British Iranian Chamber of Commerce. Does my noble friend accept that it is about time that we in the West exerted friendly pressure on Israel for it to come into the fold, so to speak, in terms of the world’s attempts at controlling nuclear power? Is that something that the Government will consider? In Iran, President Rouhani is currently taking considerable risks with his public opinion, knowing as it does that Israel sits there with weaponry and that we in the West do not even accept that it should be part of any of these arrangements. It really would be a positive step all round if something were to be done along those lines.

Baroness Anelay of St Johns: My Lords, clearly there are security issues in the area that go far beyond the discussion of whether or not Iran develops nuclear weapons. Clearly, though, the way in which the Iranian Government have sought to increase their capacity to obtain nuclear weapons has contributed to the destabilisation of the area. It is important that we continue our work with Iran in order to enable it, as the noble Lord, Lord Reid, said, to come back into the international world. That in itself would reduce instability and uncertainty in the area. Clearly, negotiations go on with all countries in the whole area of the Middle East and the Gulf with regard to security matters. There is no easy answer, let alone an easy answer for Israel or any other country there to find peace tomorrow. But what is clear is that each country needs to consider carefully what steps it takes to maintain its own security and whether those are reasonable or undermine the security of the area. Our attention is focused on the clear problem that has been caused by Iran working towards the development of nuclear weapons and that is where we should focus our attention, because we have the opportunity now to move forward in a constructive way. We need to seize that and not be diverted from it.

National Insurance Contributions Bill

Second Reading

4.44 pm

Moved by Lord Newby

That the Bill be read a second time.

Lord Newby (LD): My Lords, the Bill before us today takes forward the Government’s commitment to simplify taxes and make avoiding tax harder. The Bill contains four measures: first, simplifying NICs paid by the self-employed; secondly, accelerating the payment to the Exchequer of NICs in dispute in avoidance cases, and providing for the issue of follower notices where the scheme or arrangement has been shown to fail in another party’s litigation; thirdly, applying new information powers and penalties to promoters of avoidance schemes; and, fourthly, introducing a targeted anti-avoidance rule—TAAR—to prevent people from circumventing new legislation tackling avoidance involving employment intermediaries. I will explain each of these four measures in more detail, starting with simplifying NICs paid by the self-employed.

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In Budget 2014, the Chancellor announced that the Government intended to simplify the NICs collection process for the self-employed, who currently have to operate two different processes for two separate classes of NICs. This followed a 2012 recommendation by the Office of Tax Simplification and a consultation paper published in July 2013. As noble Lords may be aware, having two separate collection methods for class 2 and class 4 NICs causes confusion and extra work for both the self-employed and HMRC. Class 2 NICs are currently collected via a flat-rate charge paid through six- monthly billing or by direct debit, while class 4 NICs are a percentage charge on profits paid through self-assessment alongside income tax. This measure will move the collection of class 2 NICs into self-assessment, making the system simpler and more straightforward, while reducing administrative burdens on the self-employed by allowing them to deal with their tax and NICs in one go.

The aims of Clauses 1 and 2 and of Schedule 1 to the Bill are: to change the way in which class 2 NICs are structured; to change the means by which class 2 NICs are collected by moving their collection into self-assessment, so that they can be collected alongside class 4 NICs and income tax; to change the means by which class 2 NICs are enforced, with changes to associated appeal rights to broadly mirror those for class 4 NICs and income tax; and to make consequential changes to legislation relating to maternity allowance to allow women to continue to become eligible for it post-reform. It is proposed that these changes will take effect for the 2015-16 tax year onwards, so that the collection of class 2 NICs under self-assessment will be from 6 April 2016.

One of the key changes that will be made by this reform is that there will no longer be a need for customers with low profits who want to opt out of paying class 2 NICs to apply for a small earnings exception in advance. HMRC is aware that the self-employed find this confusing and burdensome. Under the reform, customers with profits below the new small profits threshold will not be liable to pay class 2 NICs but will be able to choose to pay on a voluntary basis. Those with low profits who want to opt out of paying class 2 NICs will not need to do anything except to confirm this when completing their self-assessment return, while those who still choose to pay—in order to protect their benefits entitlement—will be able to do so quickly and easily. Rather than requiring a separate process, this decision will be built into the self-assessment return. There is a small proportion of HMRC customers who pay class 2 NICs but are not in self-assessment. These individuals will continue to get a separate class 2 NICs payment request. They will receive this once a year instead of twice a year, as they currently do.

I will now mention some specific points on this measure that attracted interest in the other place. The Financial Secretary provided reassurance that the self-employed will continue to have the option to spread the cost of paying class 2 NICs. The facility already exists in self-assessment to make budget payments to spread the cost of tax and NICs through the year. The Bill makes provision to allow women to continue to become eligible for maternity allowance following the class 2 changes. There was a concern in the other place

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that the process being put in place to allow pregnant women to pay class 2 NICs if they have not yet filed their self-assessment return would be impractical and require a high level of forward planning. I would like to confirm the remarks of the Financial Secretary that this will not be the case. I emphasise that the process does not require any forward planning beyond that which a pregnant woman would routinely undertake under the current process of applying for MA. A self- employed woman who wishes to make a claim for MA and has not already submitted her self-assessment return will be able to pay for any shortfall in contributions at the time of her claim, through the exception process that HMRC and DWP are putting in place.

I turn now to the provisions in the Bill dealing with accelerating the payment to the Exchequer of amounts of NICs in dispute in avoidance cases. This also includes providing for the issue of follower notices where there is a relevant case in which the scheme or arrangement has been shown to fail in another party’s litigation. For NICs, the provisions in the Bill broadly follow new powers included in the Finance Act 2014 that allow HMRC to issue a notice to taxpayers who used avoidance schemes that failed before the courts in another party’s litigation—a so-called follower notice. It is estimated that the provisions in the Bill and the Finance Act 2014 will raise £5 billion in tax and NICs for the Exchequer.

A follower notice sets out HMRC’s view that a judicial decision in another case is directly relevant and that those who receive the notice should settle their disputes. If the taxpayer does not settle in response to this notice, they will face a penalty if they are unable to show that their case is materially different from the other party’s litigation, or if they do not have reasonable grounds to continue the dispute. An accelerated payment may be required from taxpayers in the following circumstances: where a follower notice has been issued and the taxpayer decides not to settle their dispute; where taxpayers are involved in schemes subject to disclosure under the disclosure of tax avoidance schemes, or DOTAS, rules; and where taxpayers have used arrangements that HMRC decides to counteract under the general anti-abuse rule, or GAAR. These measures are expected to lead to the issuing of payment notices to some 43,000 taxpayers involved in avoidance schemes currently under dispute with HMRC over the period to the end of March 2016.

In debates in another place, the issue of HMRC implementation and resourcing of this measure was raised, and assurances were sought that HMRC would be sufficiently resourced to implement the measures. I echo the reassurances provided by the Financial Secretary. Since 2010, this Government have made sure that HMRC has the resources it needs to effectively police the rules, making significant investment of nearly £1 billion to assist it in its work. HMRC’s success demonstrates that it is well resourced and doing a good job. For example, in 2013-14, HMRC brought in £23.9 billion in additional tax revenue—a record amount.

I will now explain the provisions in the Bill that apply new information powers and penalties to the highest-risk promoters of tax avoidance schemes. This measure was announced for tax in Budget 2013 and the Government’s

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intention has been to extend the measure to NICs at the earliest opportunity. A consultation on the tax aspects,

Raising the Stakes on Tax Avoidance

, ran from August until October 2013. The Finance Act 2014 included legislation that allows HMRC to issue conduct notices to promoters of tax avoidance schemes and to monitor promoters who breach a conduct notice. This Bill applies the tax legislation to NICs so that the legislation operates as one unified measure covering both tax and NICs.

Monitored promoters will be subject to new information powers and penalties, which will also apply to intermediaries that continue to represent them after the monitoring commences. The monitored promoter may be named by HMRC and required to inform its clients that it is being monitored by HMRC. Clients of monitored promoters will also be subject to certain obligations and extended time limits for assessments. This measure is part of the Government’s strategic response to avoidance and is to deter the use of avoidance schemes through influencing the behaviour of promoters, their intermediaries and clients. It is aimed at changing the behaviour of promoters of NICs and tax avoidance schemes. Naming a monitored promoter should deter intermediaries from acting for them, and clients and potential clients from using their products.

Finally, I will describe how the provisions in the Bill relating to the new targeted anti-avoidance rule will work to prevent people from circumventing new legislation tackling avoidance involving employment intermediaries. The National Insurance Contributions Act 2014 strengthened existing legislation in respect of offshore employment intermediaries. That measure was effectively intended to address the non-payment of employers’ national insurance in the oil and gas industry involving the placement of the employer of oil and gas workers—who are working on the UK continental shelf—outside the UK.

As noble Lords will be aware, the temporary labour market is quick to react to any legislative changes and to find new convoluted ways to reduce the amount of income tax and NICs they would otherwise be liable to pay. Stakeholders have indicated to HMRC that intermediaries involved in the facilitation of false self-employment may set up avoidance vehicles involving convoluted structures specifically designed to circumvent the legislation introduced in the National Insurance Contributions Act 2014. To dissuade such intermediaries, the Government propose that a TAAR, which would be similar to the tax TAAR included in Finance Act 2014 for the same purpose, is included in NICs legislation to deter such avoidance. It will focus on the motive for setting up the arrangements and what they achieve. Were they set up with the motive of avoiding NICs? Do they result in less national insurance contributions being paid? In order that the tax and NICs TAARs operate as one, both will take effect from 6 April 2014.

In conclusion, the Government have already taken action to reduce significantly the burden of NICs on earnings and employment through previous Bills. This Bill continues that approach and I commend it to the House. I beg to move.

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4.55 pm

Lord Razzall (LD): My Lords, this is clearly an important Bill, bearing in mind the number of people in the workforce in the United Kingdom who are now self- employed. Indeed, there is an ever-increasing percentage in that position and I suspect the Minister will agree with me that, as so often in your Lordships’ House, the importance of this legislation is in inverse proportion to the number of people who want to speak on it.

On these Benches—as indeed, I understand, on the Labour Benches—we welcome this legislation. On the first point of tax simplification, every Government come in saying they are going to simplify the tax code and four years later the tax legislation is even more complicated than it was when they came in. Anything that can be done, even of a minor nature, to simplify tax legislation is clearly desirable. All noble Lords will welcome the attempts to reduce tax avoidance in this area—again, all Governments want to do that and having practical examples there is obviously beneficial.

In supporting the Bill, I will just raise three or four questions. First, the Minister was correct that concerns were expressed in another place regarding the position of self-employed women claiming maternity allowance, which he referred to in his remarks. I understand the answer that the Government have given, which is a combination of responses from the Treasury and the DWP. However, as I understand it, the Chartered Institute of Taxation has suggested that the Government should review these changes at the earliest opportunity—maybe in a couple of years’ time. I would be grateful if the Minister could indicate whether that is a suggestion that the Government welcome. The idea is to ensure that the introduction of these provisions has not resulted in the reduction in the number of claims for the standard rate of maternity allowance, which would obviously be hitting women who wish to claim the allowance.

Secondly, the Chartered Institute of Taxation has pointed out that there will be a gap of 22 months between the collection of class 2 payments for 2014-15 and for 2015-16, as the liability moves from a weekly basis to arising at the end of the tax year. Have the Government considered the cash-flow implications of class 2 NICs coming in up to 10 months after the end of the tax year rather than being paid in-year as they are at the moment? That is clearly quite a significant point in relation to the Government’s finances.

Thirdly, there are significant changes being brought in to the entitlement to contributory benefits. I would be grateful if the Minister could confirm that the Government are satisfied that moving class 2 into self-assessment will not adversely affect entitlement to contributory benefits. In particular, what proposals do the Government have in mind to educate and inform people as to these changes? For example, direct debits will have to be cancelled before the introduction of the programme in 2015.

Finally, I have a general question. As the Minister will well know, a number of people have advocated for some time the merging of the NIC structure with the general income tax structure. Do the Government feel that these proposals, when implemented, will be neutral, negative or positive on that issue?

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5 pm

Lord Davies of Oldham (Lab): My Lords, as the noble Lord, Lord Razzall, indicated, the Opposition support this Bill. In fact, he succeeded in raising most of the critical points that I was going to make in my contribution—a growing sign of just where the Liberal Benches stand as we get closer to the general election, I suppose. It certainly obviates the necessity for me to repeat all those points.

This is a fairly modest Bill, but a constructive one and one that went through without opposition in the other place, although I congratulate my honourable friend Shabana Mahmood on her contribution to the debate there. She raised the points that the noble Lord, Lord Razzall, reiterated today. She was not entirely satisfied with the responses. The noble Lord, Lord Razzall, obviously is not as yet. He thinks that there are still questions, and so do I, but those questions are more on the margin than on the central thrust of the Bill, which we endorse.

It is important that we get this issue right. Some 4.5 million people are now self-employed in this economy, which is one in six people. Of course, in many cases that will be through choice, but in many other cases it will reflect the fact that getting a job that pays remotely adequately remains very difficult for many people and that there are those who are self-employed because the people who organise their work see advantages in doing so on that basis, as tax advantages accrue to the organisers of the work as well as, supposedly, to those who are self-employed. I am therefore glad that the Government have taken up this issue and have addressed their mind to improving the situation.

We are in favour of the simplification contained in the Bill, and we wholeheartedly endorse the other main objective which is the targeted anti-avoidance rule. It means that we can tackle disguised employment made possible through employment intermediaries or offshore employers. We need to make sure that the Exchequer gets its proper receipts from those working in the economy and effectively owing a contribution to the finances of the nation.

We recognise that it is important that the Government get the specifics of this position right. At present, 0.3% of the £102 billion collected in NI contributions engenders 40% of the calls to Her Majesty’s Revenue and Customs. There is something clearly wrong with this distortion, and it all revolves around the category of the self-employed. That is why the Government have acted, and they have acted well in ensuring that the class 2 payers of NICs can now pay at the end of the tax year, and that they have their assessments worked out on the basis of self-assessment. So we are clearly seeing an improvement in the position, which we greatly welcome.

The noble Lord, Lord Razzall, raised the maternity issue. I will therefore not reiterate what he said except to endorse that there are still anxieties. The Chartered Institute of Taxation said that it had enough anxieties and question marks to urge the Government to think in terms of reviewing the situation within two years, and I hope that the Minister can, perhaps, be categorical in his and the Government’s determination to guarantee that this occurs. The maternity allowance affects about

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25,000 women each year who claim for it, and it is absolutely critical that the system should work effectively for them.

I also endorse the point made by the noble Lord, Lord Razzall, to which the Minister made some reference in his opening remarks. It is quite clear that the Government have to be successful in their communication of the benefits of this legislation and the way in which people respond to it. Increasingly, the Inland Revenue, for all the obvious reasons, uses the internet and the computer for communication, and expects people to be online in response. A great number of our fellow citizens are only too delighted that their tax returns and obligations to the Government are met in this much more efficient and effective way. But a great many of the self-employed, for the very reason that I established the categories in the early part of this speech, have limited abilities and understanding of how to use the internet. We have just got to recognise that a substantial percentage of our population are not computer literate. An awful lot of them will be in the category of those who are in the self-employed ranks. That is why we need the assurance of the Government that they are going to carry out an effective programme of communication to all of our citizens, to ensure that there is a fair deal for the less advantaged among them, as well as the more obviously computer literate. I hope that the Minister will give some reassurance on that front.

Of course, people will get a vague perspective that the Government have done something about the NICs situation. But there is a difference between that and being able to implement action which defends their own direct interest, as the NICs payments are clearly of such significance to the substantial number of people who get very little returns in their self-employment statement. If there is any doubt about just how lowly the returns can be to the individual, just look at the Exchequer’s problem in indicating the lower level of receipts it has been getting in certain categories. A great deal needs to be done to make this legislation effective and fair.

Of course, we endorse the targeted anti-avoidance rule. It is clearly important that workers who are self-employed are in that position through their own wishes and are not just badged as self-employed by those people who take advantage of their labour, and organise it, and do it on a self-employed basis for the obvious advantages it gives to the so-called employer, or organiser of the work, in taxation terms. Clearly, if people fail to meet their NICs payment, they will have no provision for holidays or even for sickness, unlike others in the workforce, so this is an important piece of legislation for a substantial section of our population —and a growing section, as we all appreciate.

The Bill went thorough the Commons without a Division. It is not customary to divide the House at Second Reading and therefore I have no intention of doing so in any case. However, as the House will recognise, the Opposition are fully behind the Bill. We have a few questions that we want the Minister to answer satisfactorily but we join him in commending the Bill to the House.

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5.10 pm

Lord Newby: My Lords, I thank both noble Lords who have welcomed the Bill. The noble Lord, Lord Davies, said that it was a sign of the times that my noble friend Lord Razzall agreed with him, but surely it is a sign of the times that the noble Lord, Lord Davies, agreed with my noble friend. Whoever is agreeing with whom first, it is an extremely satisfactory position for a Minister at the Dispatch Box to find such a general welcome for a Bill.

Both noble Lords asked about the impact of the changes on the administration of the maternity allowance and whether it would be sensible to have a formal review two years after the Bill comes into force. That timetable does not make any sense, because the first payment of class 2 through self-assessment does not have to be made until the end of January 2017, so a two-year review date is pointless. However, both the DWP and HMRC are committed to ensuring that this group of women is not disadvantaged by the way the reforms work and will be keeping the operation of MA under review on a continuous basis. In response to the specific point that my noble friend Lord Razzall raised, it will be possible to see on an ongoing basis whether the number of claimants falls. I assure noble Lords that if there is any sign of that happening, the Government will act to deal with whatever the administrative problem is that has caused it because, obviously, that is not the intention of the legislation.

My noble friend Lord Razzall asked how there could possibly be no Exchequer impact, particularly when the measure is introduced, with people changing from paying monthly to paying up to eight months after the end of the tax year. National insurance contributions are accounted for on an accruals basis, so the important factor is the time period for which the money is due rather than the date on which it is actually paid. It will therefore continue to be counted in the tax year itself.

My noble friend Lord Razzall asked about the impact of the reforms on entitlements for benefits claimants and how that would work. The contribution conditions for benefits are changing. In addition to the maternity allowance, which we discussed, and in order to ensure that the self-employed are not disadvantaged as a result of the changes, the DWP will modify the relevant legislation to safeguard the position of claimants who pay their class 2 NICs by 31 January—the deadline for paying class 2 NICs through self-assessment. This will be done, first, by treating them as having satisfied the relevant contribution condition at the right time and, secondly, by disapplying the 42-day penalty that normally applies where contributions are not paid until after the start of the benefit year.

Questions were also asked about how the self-employed will learn about these changes and make sure that they comply with them satisfactorily.

HMRC and the DWP are working closely together in communicating the class 2 changes to the people who are going to be affected so that key messages are cascaded in a number of ways and a number of times. The department’s communication strategy includes: undertaking customer research and testing some of the

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products with customers; HMRC writing to all self-employed customers; an updating of existing customer outputs, such as the small earnings exception renewal letter; making HMRC staff and DWP staff aware of the changes and building the relevant information into call scripts and telephony, where appropriate; and using stakeholder partnerships with intermediary groups, agent organisations and forums to ensure that key messages are understood by everyone so that the self-employed hear the messages through a number of channels and in a consistent way.

Finally, the noble Lord, Lord Razzall, asked whether the effect of these changes on any possible future merger of NICs and income tax would be neutral, negative or positive. The whole question of merging income tax and NICs is fraught with difficulty and complexity. To the extent that these changes would have any impact at all, were any future Government to plan such a scheme, I suppose, if anything, it would be very marginally positive, but in the overall scheme of things and in the context of such a wide-ranging review it would be almost lost in the wash.

This is a short Bill, but as all noble Lords who have spoken have recognised, it is important to simplify the way in which we administer the system and to reduce the scope for avoidance. Therefore, I commend the Bill to the House.

Bill read a second time and committed to a Grand Committee.

EU: UK Membership

Motion to Take Note

5.16 pm

Moved by Lord Liddle

That this House takes note of the case for the United Kingdom’s membership of the European Union.

Lord Liddle (Lab): My Lords, it is high time that pro-Europeans made a stronger and more forceful case for Britain’s membership of the European Union, for, as matters now stand, Britain is sleepwalking towards exit. The blame for this situation, in my view —and I say this in no partisan spirit and with great regret—rests fairly and squarely on the shoulders of our Prime Minister. I have come to the sad and rather depressing conclusion that our membership of the European Union is no longer safe in David Cameron's hands.

I admired his Bloomberg speech of January 2013. It presented a well argued case for reform of the European Union that had wide resonance on the continent. While I thought that the commitment to an “in or out” referendum was a mistake, it seemed then that Mr Cameron was committed to a positive result. I remind your Lordships of what he said then:

“And when the referendum comes let me say now that if we can negotiate such an arrangement, I will campaign for it with all my heart and soul. Because I believe something very deeply. That Britain’s national interest is best served in a flexible, adaptable and open European Union and that such a European Union is best with Britain in it. Over the coming weeks, months and years, I will not rest until this debate is won”.

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Yet, since the summer, the Government's European policy has hardened beyond recognition. In a “Today” programme interview in September, Mr Cameron proclaimed that he cared,

“a thousand times more strongly”,

about the break-up of the United Kingdom, had the Scots voted yes, than about Britain's membership of the European Union. I can give him five times, or maybe 10 times, but a thousand times? There is not much room left there for heart and soul commitment.

In his recent conference speech, the man who at Bloomberg had talked with great emotion about an open Europe looked straight into the television camera and declared that limiting immigration would be at the heart of his renegotiation strategy. Let us remind ourselves that in the Bloomberg speech the Prime Minister’s only reference to migration was to warn of the loss of freedom of movement rights for the over 2.2 million British citizens who live on the continent. That comes from a Written Answer from the noble Baroness, Lady Warsi, to the noble Lord, Lord Oakeshott of Seagrove Bay, earlier this year, so 2.2 million is the figure. Now, in the stampede to sound ever tougher on EU migrants, the consequences for our fellow citizens living on the continent are frankly forgotten and never get a mention.

No. 10 has licensed no less a person than the Foreign Secretary, as well as other Ministers, to talk up the possibility that the Government might recommend a no vote if their renegotiation objectives are not met. The whole focus of the Government’s European policy has become not persuading our partners of a credible reform agenda that would receive general backing in Europe but chasing after potential defectors to UKIP. The whole exercise is so pointless, for as your Lordships know there is no way you can “outkip” UKIP.

If we end up leaving, it is not as though there is a great public wave of indignation about our membership of the European Union. The latest Ipsos-MORI poll showed 56% opting in a referendum to stay in and 36% to come out. It is worth underlining that in a poll that YouGov took after the Rochester by-election, only 22% of UKIP supporters actually think that Europe is one of the main issues facing the country. Yet what we have now is a Prime Minister so desperate to win the next general election that he will say anything to win over UKIP votes and prevent further defections by Conservative MPs, and in the process will set renegotiation objectives that are incapable of being achieved. In the next Parliament, if he remains Prime Minister, he will find himself cornered by his own anti-Europeans in the Conservative ranks to recommend a vote to leave Europe because of the consequences of what I can only describe as recklessness and opportunism.

The sleepwalking nightmare will be upon us, and the nation will realise what a disaster its craven leaders have allowed to happen only when it is far, far too late. That is why we need to make a stronger case now to try to prevent the slide to populism, which ends up with parties making promises they will never be able to keep. Of course, as a Labour man, I want to see a Labour Government. As a pro-European, I commend my leader Ed Miliband for resisting the enormous pressure to concede a referendum. However, even if

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there is a Labour-led Government in the next Parliament, there may be in a hung House of Commons a majority for an EU referendum, so we have to start making the case now—and a better case than we have made so far.

The traditional British case for Europe is about growth and jobs. It is a strong one: 3 million jobs dependent on the single market, inward investment coming to Britain because of unimpeded access to that single market, and international companies relying on the scale of Europe’s home market that is the EU single market to win new global markets overseas. But I think we have failed as pro-Europeans to get across to the public the complex nature and full economic significance of the single market.

Many people I meet think, “Why can’t we rid ourselves of the encumbrance of all the EU regulation and cost, and trade freely with our EU partners?”. Pro-Europeans have to start challenging the pullers out—because that is what they are—with hard and difficult questions about their alternatives to our EU membership and the consequences of those alternatives.

Broadly, there are two. The first is to be a Norway: in other words, be outside the EU but accept all its rules, pay up to finance its budget and continue to allow the free movement of people that EU laws require. That Norwegian option gets us out of the EU but denies Britain any say whatever over the key rules that shape our economic future, so that is not much of an option, is it?

The second option is to abandon those EU rules and to say, “We’ll make our own way without them”. What will happen then? We will find that our products and services are discriminated against in EU markets because they do not meet EU approval standards. We will see the flight of foreign banks in the City to Amsterdam or Paris to avoid that discrimination and to be in the single financial area. In the case of the car industry, the most successful manufacturing renaissance that this country has seen, British producers will face a 10% tariff in order to enter the European market, with untold consequences for vital jobs in many of the deprived regions of our country. That option—that dash for the restoration of national economic sovereignty —would inflict an economic wound of massive proportions. We have to spell that out.

Of course we should fight within the EU for EU rules to be proportionate and to see unnecessary regulation abandoned. But again we should always challenge the pullers out who complain about EU regulation. What do they actually want to get out of? Do they want, for example, to get out of and have no UK equivalent of the working time directive, which guarantees British workers four weeks’ paid holiday a year? Do they want out of it or not? Similarly, on environmental laws, do they want out of the regulations that require clean rivers and beaches and not have them in Britain? Or on consumer laws, do they want to end the regulations that provide for cheap air flights and that end rip-offs in mobile roaming charges? Is that what the anti-Europeans want? If they do not want that they are going to have to comply with EU laws and regulations. Pressing the pullers out on their alternatives to EU membership will be the equivalent of the currency question in the Scottish referendum, which the nationalists could never satisfactorily answer.

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Beyond these questions of national self-interest, I believe that pro-Europeans have to make an emotional argument—to use another Scottish parallel—that we are better together. Harold Wilson once dismissed the sovereignty argument against Europe with the quip that he regarded the gradual pooling of sovereignty as part of the advance of human civilisation, and he was right. In a world of interdependence, if we want to tackle problems that reach beyond national borders, we need international co-operation that is effective. For all its many problems and frustrations, there is no better example of this in the world than the EU.

Think of the world that we are now in, with China, the world’s largest economy, pursuing a national strategy of aggressive state capitalism, with the return of nationalism in Russia, barbarism and fanaticism in the Middle East, and chaos and heart-rending human tragedy in north Africa. We in Europe are surrounded by these multiple threats to our contentment and civilisation, and either we hang together in addressing them or we hang separately. Without the co-operative framework of the European Union, we cannot begin to tackle the problems of climate change, energy, migration, disease that crosses borders, terrorism and threats to peace.

But the antis now say that none of this counts for anything, because they are managing to successfully define the greatest challenge of our age as immigration. They are making the claim that as long as we remain EU members we cannot control our borders. I believe profoundly that it is the responsibility of political leaders to lead on this issue. The facts are clear: EU migration has been a huge economic benefit to Britain. The populists blame migration for overcrowded schools, for long waits for GP appointments, for housing shortages. Of course there are areas of stress, and I think that what Labour is putting forward—that there be a migration fund as part of the social and structural funds—is a good idea. But the fact is that without the tax revenues that EU migrants bring to the Exchequer, we would find it much more difficult to tackle these problems and to find the spending to address these stresses than otherwise.

Yes, I agree that exploitation in labour markets has to be tackled and that benefit abuses have to be stopped, but free movement is a fundamental founding principle of the European Union, which successive Governments have solemnly signed up to since we first thought about entry in the 1960s, and from which millions —2.2 million, to be precise—of our citizens benefit. We cannot, with our integrity intact, cross the line into quotas and blatantly discriminatory policies.

Some 16 years ago I attended the ceremony when Helmut Kohl got his freedom of the City of London. At the end of his speech he talked about his boyhood days in Ludwigshafen, when he used to need a pass to go from one zone of the town to another because they were in different zones of Germany. He contrasted that with when he went on summer evenings to the Brandenburg Gate in Berlin, the Spanish Steps in Rome and our own Trafalgar Square, where he met so many young people of different European and other nationalities, mixing together enjoyably and at peace with each other. The miracle of the European Union has contributed to that to a very considerable degree.

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It underpins our prosperity and contentment. As we remember this centenary, the horrors of the First World War and what came after, we cannot cavalierly throw away one of the greatest historic achievements of European civilisation.

5.32 pm

Lord Howell of Guildford (Con): My Lords, although the noble Lord, Lord Liddle, has just launched a number of sharp and critical arrows at the coalition Government and the Prime Minister—indeed, one might say a few howitzer shells—I am, in a strange sense, heartened by the way the debate on the European Union and Britain’s position in it is going. I believe that underneath a great deal of the rhetoric and partisan exchanges there is a clustering of opinion around the concept of reform of the European Union, of which Britain’s relations with the rest of the European Union is a part—it is certainly a part, but it is only a part. Indeed, official policy of the coalition Government is “renegotiation with a reformed Europe”. My question for all of us to ponder is: how is that reformed Europe going to come about that we can negotiate with?