5.10 pm

Lord Smith of Leigh (Lab): My Lords, first, I declare my interests as the leader of Wigan Council and chairman of the Greater Manchester Combined Authority. I am also a vice-president of the LGA and vice-chairman of SIGOMA. I congratulate the two maiden speakers on their contributions. The right reverend Prelate showed his experience of urban affairs and I agree with him entirely about prevention work, which can save lots of money downstream. The noble Baroness, Lady Pinnock, has a lot of experience in local government. No doubt her contribution was aided by her treasurer from Kirklees, David Smith, who was pinched from Wigan. Not only did he move from Wigan to Kirklees, he changed allegiance from Wigan Warriors to Huddersfield Giants.

My noble friend Lord Beecham showed the fantastic record of knowledge, passion and care for local government that he has built up but I thought that he was a bit unfair on himself. I will give him that he may be short but I do not think that anyone would ever describe him as nasty and brutish. He outlined the scale of the loss of moneys to local government and the fact that it has not been distributed by any means fairly. Like the noble Lord, Lord Shipley, we should congratulate local authorities. Despite all the cuts that many of them have had to make, their financial stability has remained very good. Whether that can continue, as he suggests, may not be the case. We have also managed public expectations quite well. Some of us thought that if we were to make the reductions that we have been making to a number of services, there could

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be riots on the streets. However, that has not happened, although it may have contributed to the alienation mentioned by the right reverend Prelate the Bishop of Derby.

One of the disadvantages of speaking towards the end of the debate is that everyone has used your language, so I want to move on. Faced with loss of funding as we have, local authorities have a limited number of options. There are efficiencies in local government but we have taken all the low-hanging fruit and there is not a lot left. We can work to transform services but the DCLG unfortunately does not seem to understand. It is not an instant solution and one needs to work hard on that. There has been reluctance to increase council tax, although I see from reports in the media today that in the next year council tax might go up by more in most places. But no one will challenge the referendum. We always said that that was the case.

The real option is making cuts in services. Yesterday, Age UK showed that £1 billion had been taken out of care services. One-third of adults who were receiving home care visits no longer have them. That is the scale of the impact of the cuts to care. It cannot be said that care services must not be cut at all because, given the scale of cuts needed, care services must take a share. However, we hear daily about the crisis in the NHS, particularly in A&E. The contribution of local authorities is a return to the state of bed-blocking. Because we cannot get care packages for people who are in hospital, they are blocking beds and preventing those beds being used for people coming in at the front door in A&E. We need to recognise that.

Being in local government for this period has been a bit depressing. It has been a bit difficult to make the cuts, but we in Wigan have always believed that we would not let Eric Pickles decide our budget. There would always be something in our budget that reflected the values that we have in Wigan, not the values—whatever they are—of the Secretary of State. We have introduced new services that benefit local people. We introduced the living wage, got rid of zero-hours contracts and invested in the community. We have a programme which gives disadvantaged youngsters a chance to get a job. A cost-benefit analysis showed that that scheme saved £4 to the public sector for every £1 we invested. More than that, its impact on vulnerable young people is quite remarkable.

However, we need to think about the future. This settlement is for one year only, and the concern in local government is about what will happen in future years. I remember that in 2010 we suddenly had to face in-year cuts, which was very difficult indeed. I hope we do not have more of those. Everybody I know in local government is revising their forecasts downwards. We have to do better on transformation; this is the only way forward. We can do more in terms of devolution but, as was noted by the noble Baroness, Lady Williams of Trafford, there is more to collaboration among local authorities than sitting down in a room. It takes a lot of work. We have to do that in partnership, with local authorities and central government recognising the problem and working on it.

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5.16 pm

Baroness Jones of Whitchurch (Lab): My Lords, I am extremely grateful to my noble friend Lord Beecham for tabling this Motion today. Like others, I pay tribute to his formidable record of representing local government over many years, as well as the demolition job he has done on the Government’s record today. He quite rightly points out that the scale of the cuts now being demanded of councils will inevitably have a devastating effect on core services and vulnerable residents. What is truly shocking is the unfairness of the distribution of the cuts, with the 10 most deprived areas having their spending power cut by 16 times the amount of the 10 least deprived areas. It is not difficult to see whose side the Government are really on. I also welcome the noble Baroness, Lady Pinnock, and the right reverend Prelate the Bishop of Southwark, and congratulate them on their excellent maiden speeches. I look forward to working with them in the future.

In the short time I have, I would like to focus on two examples of the consequences of the Government’s short-sighted policies for disadvantaged children and young people. A couple of weeks ago, we had a very good debate in this Chamber on the importance of early intervention for child development. There was widespread support for the notion that intervention and family support for the very youngest children, those between the ages of nought and three, could make the biggest difference to a child’s life chances and their opportunities for social mobility. This was particularly so for children from the most deprived families, with increasing evidence that this could lead to fewer demands on public services at a later date.

Of course, this was the very notion that led the previous Government to develop the network of Sure Start centres. This policy was so popular that it forced David Cameron to pledge that the centres would be safe under a Tory Government in his hands. Sadly, we now know that this was not the case. The ring-fenced funding was removed and already 600 centres have closed, with councils now forced to consider further closures to meet the new budget reductions.

The last Department for Education figures show that spending by councils on early years services was slashed by some £400 million over three years. In 2013-14 alone, spending on children’s centres and associated early years activities fell by 8.5%. This is despite all the evidence that investment in parenting and support services for very young people can reap enormous rewards later, both for individuals and, indeed, for the state. Does the Minister agree that there is an urgent need to revitalise the Sure Start network, perhaps as a basis for co-located family services, and with secure funding reinstated?

Secondly, I want to refer to the decline in youth services. Again, the Department for Education estimates that these budgets fell by more than 12% in just one year, compounding year-on-year decreases. This too represents a very short-sighted approach. For example, last week I had the pleasure of visiting the Hangleton and Knoll youth project in Hove, along with my honourable friend Tristram Hunt and our Labour candidate, Peter Kyle. We heard about the fantastic work the project is

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doing to turn around the lives of young people, particularly those who are alienated from the school system and would otherwise be facing poverty and unemployment. But, like many other youth centres around the country, it faces a precarious future. What these young people clearly need is a route into full-time training or quality paid apprenticeships, and it was heartening to hear the leader of the Labour group pledging, if elected, to end youth unemployment in the city by the 2019 election.

Given David Cameron’s new-found friendship with the Green Party, I wonder if the Minister could ask him to have a word with the Green-run council in Brighton and Hove about recognising the value of its youth services and to do something about the hundreds of young people in the city who have been unemployed for more than a year. While he is at it, please could he also have a word with the council about the appallingly low levels of recycling in the city, which have actually fallen by 16% since the incompetent Green Party took office? That highlights its abject failure to deliver on what should be a basic issue for any party that cares about the environment. Finally, will the Minister join me in congratulating the Labour-run Welsh Government, who are already achieving 54% recycling rates and are well on their way to their zero-waste goal? I look forward to hearing his response.

5.22 pm

Baroness Farrington of Ribbleton (Lab): My Lords, with the leave of the House, I should like to speak in the gap. Lancashire County Council found itself, with the Social Fund transfer from DWP, with less than had been spent—a cut. The Local Government Association states that the core funding budget for Lancashire County Council has fallen by 38.79% over the life of this Parliament, while the net budget for Preston City Council will have fallen by 31% over the same period.

I, too, declare a former interest of being involved in local government. There have always been discussions at what were called local government consultative finance meetings. What has changed is the ability of local authorities to initiate new projects because of the tight grip on spending levels, which are based on an assessment of grant distribution and may in no way at all recognise a genuine local assessment of need. There will never be a perfect funding formula for grant because there will always be disputes about weighting levels—how much this or that particular factor ought to be taken into account. However, once you have a vicious system that prevents a local authority from being able to move away from a target set by Whitehall, that is the beginning of the end of local government.

Whitehall does not know best what is needed in Preston and the county of Lancashire, just as it does not in other areas. There could be an argument about how much grant is deserved, whether it is in my noble friend’s Newcastle or in Preston or Surbiton. If one looks at everything that has advanced human life over the past century and a half, a whole range of issues—including public education for all, nursery education and youth services—began as local government initiatives. To me, the real tragedy is that if we have a system that prevents local authorities from experimenting and innovating, we will all suffer.

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It is extremely important that we take at face value what people say about their satisfaction with local government, or indeed with the Government or politics. I remember a constituent speaking to me about a reduction in a particular service. I said that the alternative was worsening primary school staff/pupil ratios. His reply was: “I don’t want you to start confusing me with the facts”.

5.26 pm

Lord McKenzie of Luton (Lab): My Lords, I offer my congratulations to our two maiden speakers today. I have no doubt that the noble Baroness, Lady Pinnock, will have much to contribute to our deliberations in the future, and it will be a privilege to have the right reverend Prelate the Bishop of Southwark involved in our deliberations. Like others, I thank my noble friend Lord Beecham for securing this debate, for his typically robust, incisive and passionate introduction and for making a veteran of our noble friend Lady Donaghy.

The settlement under consideration heralds another year of cuts in funding and restrictions in services, another year with unfairness at its heart and doubtless another year of heroic efforts by many councils up and down the country to deliver vital services to their communities in the face of these challenges. My noble friend rightly berates the Government for the manner in which they have represented the settlement, suggesting that the damage is not serious, and the lack of transparency in how some of the numbers are presented.

Indeed, we have heard from most noble Lords this afternoon about the particular challenges for their areas and their authorities. We have had Cumbria from my noble friend Lord Liddle; Bradford from the noble Baroness, Lady Eaton; the London perspective from the noble Lord, Lord Tope; Newcastle from my noble friend Lord Beecham; Birmingham from my noble friend Lord Rooker and the noble Lord, Lord Whitby; Kirklees from the noble Baroness, Lady Pinnock; and Durham from my noble friend Lady Armstrong. We have heard from my noble friend Lord Smith of Leigh, who, in his roles for the combined authority of Wigan and Greater Manchester, is on the front line in endeavouring to cope with the consequences of earlier settlements but has also been at the forefront of trying to work with the grain of government on innovative city deals.

As we have heard, the settlement funding assessment is to reduce by 13.9% on average in 2015-16. This comprises the local share of business rates and the revenue support grant, which itself is to reduce by 27%. This means a real-terms cut of £2.6 billion next year, contributing to £20 billion of savings required of councils by the end of next year. It amounts, as we have heard, to a staggering 40% reduction in core government funding since 2010. Local government has taken a larger share of austerity adjustments than any other part of government and is scheduled to take more.

Noble Lords will know that the settlement reflects the business rate retention scheme. Under this, the central share of business rates—£11.3 billion for next year—should be returned by the Government to local government in full; that was the deal. However, some

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£0.9 billion is missing at present, so perhaps the Minister will specifically take this opportunity to say how and when this sum is to be channelled back to councils. As the NAO points out, there have also been real-terms cuts in council tax income because of the encouragement to freeze, and the referendum hurdle. Perhaps we are entering a time when more will test the democratic process through that referendum. I will resist the temptations of my noble friend Lord Hanworth to go down the path of a local income tax. Of course, not all councils have frozen council tax, including some Tory councils.

As many noble Lords have said, we know that the Government’s favourite measure of the settlement is to quote spending power, which includes not only estimates of council tax plus the SFA but the new homes bonus, the public health grant, some other grants and the better care fund. Such a metric produces a reduction for councils of just 1.8% next year. Of course, we understand politically why the Government would wish to promulgate this figure in the court of public opinion, but we join the LGA—and, I think, other noble Lords—in asking them to come clean on the impact of this by including it in the grant settlement. In particular, will the Minister confirm that not all BCF spending is on social care services or commissioned by local authorities? The LGA estimates £2 billion of the £3.4 billion to be of this nature. What is the Government’s assessment?

We know that whatever happens in May, resources in the next Parliament will be constrained. That makes it all the more important that what is available is distributed fairly, and on this score the Government fail lamentably. We will doubtless hear from the Minister that the 10% most deprived authorities receive 40% more than the least deprived areas. If true, that is still not an answer to why, when applying cuts and adopting the Government’s preferred measure of spending power per head, they are reducing—and have in the past reduced—the spending power of the most deprived areas and actually increasing the spending power of the least deprived areas. Noble Lords have heard the statistics: for Hackney, a loss per head of £109.50; for Wokingham, a gain of £49.47. Will the Minister confirm that this is the position and let us have the Government’s specific justification for this outcome? In the words of my noble friends Lord Liddle and Lady Jones, why is this fair?

Indeed, if we look into the Government’s approach to fairness, other aspects of the settlement give cause for concern. First, there will no longer be a separate element for council tax support schemes in the settlement, and funding for council tax support schemes is estimated to have fallen by £1 billion since they were localised. LGA research suggests that household bills are rising for some of the poorest households in the country as councils struggle to maintain their schemes—sadly, an outcome that we predicted. This will eventually feed through in higher levels of debt, lower levels of council tax collection and more costs for local authorities. Of course, the fact that council tax support funding is no longer separately identified contrasts with the treatment of council tax freeze funding, which has been specifically protected.

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A number of noble Lords have commented that the Government have now determined to separately identify what is in the settlement for local welfare assistance, which is at a lower level than the current year. There is no new money attached to this, and this is a matter that we would wish to review in government. The Government’s approach is illustrative of their short-term thinking. Most of us will have heard from Crisis and the Children’s Society, and we heard from the right reverend Prelate the Bishop of Portsmouth this afternoon, about the importance of this funding stream as a safety net of last resort to protect the most vulnerable. They express fears about emerging evidence that the cuts will mean more and more councils will not be able to provide this welfare assistance, with consequential impacts on services such as homelessness and support for children leaving care, with the resultant higher costs in the longer term.

The treatment of some other significant numbers in the settlement also raises issues of fairness. The top-slicing of most of the new homes bonus means less being distributed by the RSG and more through the NHB mechanisms. This is disadvantageous to those authorities that face inherently more difficulties in stimulating growth or which may lack development land.

Where is all this leading the local authorities? The NAO’s findings are that councils’ focus has changed over the period of the 2010 spending review, with statutory services such as adult social care services contributing a higher percentage of savings in the latter period than in the former. The reverse is true for discretionary services such as planning and development, although the Federation of Master Builders has pointed out the folly of further reduction in planning departments where there is a housing crisis that needs addressing. CIPFA’s annual survey of chief finance officers showed nearly half of them less confident of being able to deliver services next year. The NAO’s report on the sustainability of local authority finances predicted that 55% of metropolitan district councils are in danger of missing savings targets. CIPFA refers to a “perfect storm” of demographic pressures bringing increasing demand for adult and children’s services at a time of continuing cuts and an erosion of the local tax base.

The evidence from adult social care is that savings have been made through both efficiencies and cuts in service levels, but the scope of the efficiency savings is diminishing. The LGA reports that adult social care is facing a funding gap of £1.6 billion next year, which could rise to £4.5 billion by 2019-20. It highlights that savings of £3.5 billion have been delivered over the past four years, but its research showed that 60% of councils were considering stopping at least some services in 2015.

What reassurance will the Minister give today to councils that remain very concerned about the affordability of the Care Act and, indeed, the timetable for implementation? This settlement follows the pattern of others under this Government. It cuts the budgets of local authorities in the most deprived areas significantly more than those in the better-off areas, leaving councils facing a huge funding gap that will only increase by 2020 unless we take another course.

With regard to the question from the noble Lord, Lord True: given a chance at government, we would implement a fairer system to ensure that those

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communities that need the most support did not have to bear the brunt of the cuts. We would also devolve power and resources currently held by central government to city and council regions to enable local authorities to reshape and integrate services to more effectively support local people. We would put a stop to making the poorest bear the biggest burdens.

5.37 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con): My Lords, I join other noble Lords in acknowledging the excellent contributions and two maiden speeches. I congratulate my noble friend Lady Pinnock on her maiden speech and reassure her somewhat. Her sense of getting lost in the House is something that perhaps those who have been here slightly longer and much longer still experience. That is not an individual experience. From her maiden speech, we have seen that she is going to be an incredible asset, to the party, to the Government and, indeed, to your Lordships’ House.

I turn to the excellent and reflective speech of the right reverend Prelate the Bishop of Southwark. Everyone has laid claim to the diocese of Southwark. I suppose that, being Lord Ahmad of Wimbledon, I can also lay claim to being part of the diocese of Southwark. I look forward to working with the right reverend Prelate as another representative voice of the town of Wimbledon. I welcome his contribution today. We look forward to the contributions of both noble Lords in future debates.

It would be remiss of me not to pay tribute to the noble Lord, Lord Beecham. I was listening very attentively to all the contributions and I want to single out the description that the noble Baroness, Lady Armstrong, gave. She said that she described her relationship with him, when she was Local Government Minister, as one of deep respect, at times friendship as well—I would add to that—and she did not always agree with the noble Lord. I think that sums up my relationship with the noble Lord as well, although I was a bit concerned when the noble Lord, Lord Liddle, said that he would pose a challenge. He then talked about the 47 years of experience of the noble Lord, Lord Beecham, in public life. I must admit I have not been around for 47 years, so I thought he was going to pose the challenge that I would have to account for every year. I am sure that when he writes his autobiography we will all reflect on those worthwhile years. In thanking him, he will not be surprised to hear that I cannot agree with most of what he said about the challenges of the settlement.

The Government have inherited the largest deficit in post-war history. Thanks to the actions that we have taken as part of our long term economic plan, the deficit is falling, the economy is growing and employment is at a record high. The Government are putting our public finances back on track. Of course, we could not have done this alone, and I fully acknowledge the incredible effort and significant contribution that local government, like every part of the public sector, has made. Councils all over England have responded strongly to the challenge of delivering public services in this new context. I thank my noble friends Lord True and Lady Eaton for their words of support and for highlighting some of the challenges that remain.

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Of course, there is much still to do. English local government accounts for about a quarter of all public expenditure, more than £114 billion this year. So the Government still need to take difficult decisions on local government funding to ensure that the public finances are on a sustainable path. Local councils will continue to play their part in this.

Much has been made of the delivery of a fair settlement. The noble Lords, Lord McKenzie, Lord Liddle and Lord Rooker, and the noble Baroness, Lady Jones, all mentioned it. We announced the provisional local government finance settlement on 18 December, as many noble Lords acknowledged. With this settlement, we have kept the overall reduction in local authorities’ spending power to 1.8%, one of the lowest levels of reduction under this Government. If we include the funds that the Government have provided to support local transformation, the overall reduction is even lower, at 1.6%.

I acknowledge that councils are facing the highest demand for services. They continue to receive substantially more funding and we are continuing to ensure that no council will face a loss of more than 6.4% in their spending power in 2015-16, which is the lowest level in this Parliament. The noble Baronesses, Lady Armstrong and Lady Farrington, talked of relative needs. These were reflected in the funding baselines at the outset of the new system of business rates retention in 2013-14.

Growth is also a key part of this Government’s agenda. Throughout this Parliament, we have deliberately shifted the emphasis from keeping authorities dependent on grant to providing councils with the tools they need to grow and shape their local economies.

The noble Lord, Lord Beecham, asked about the LGA and the NAO figures. The NAO estimates a 37% reduction in spending power, but the Government’s spending power figures are transparent and allow others to calculate their own figures. The NAO does not include the better care fund or public health, which are two important policy initiatives worth more than £6 billion. Various figures for settlements and spending power were cited—we could have this debate all evening and further into the night. There is no doubt that some authorities have had reductions, but, when we look, for example, at the new homes bonus, we see that Leeds has seen an increase of £1.92 million, Salford £27.94 million, Warrington £22.67 million, Ryedale £40.59 million, East Riding of Yorkshire £5.02 million and Kirklees £3.86 million. Those are positive figures.

We have also given councils a real stake in stimulating local growth. Authorities up and down the country are benefiting from the greater powers and incentives that we have provided to invest in growth. These include Newcastle. I am delighted that the noble Lord’s council has also benefited and has frozen its council tax for the past four years in response to the challenge laid down by the Government. The noble Lord shakes his head. Is it not true?

Lord Beecham: Not next year.

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Lord Ahmad of Wimbledon: Of course I said for the four years up to where we are now. I am sure that, under his direction, the council will respond to future challenges.

My noble friend Lady Janke asked about devolution, which is a subject high on the Government’s agenda. I would assure her that Newcastle, Sunderland and Northampton have seen the greatest growth in the amount of business rates retained in 2013 as a result of enterprise zones and new development deals. We have done city deals with Manchester and Sheffield. Additionally, we have provided £730 million in Growing Places funds. We have also emphasised a close working association with local enterprise partnerships—that is part of my ministerial responsibility when it comes to European funding. Local priorities have been reflected in ERDF funding up to 95%, and also in European social funding. For 2014-15, authorities’ own estimates show that 91% are expecting a growth in their business rates—a total of £414 million.

The noble Lord, Lord Rooker, talked about issues to do with cities. He mentioned Birmingham. I trust that my noble friend Lord Whitby addressed some of his concerns. Looking at some of the figures, for example, during the period 2010 to 2014, the reserves in Birmingham increased by £221 million, or 396%—and that was from a relatively low base—notwithstanding some of the serious challenges the city has had.

Councils benefit directly from the new homes bonus as well, bringing long-term empty homes back into use. We have provisionally allocated £1.2 billion of new homes bonus funding to local authorities in England for 2015-16, and this brings the total to almost £3.4 billion since the scheme began.

The noble Lord, Lord McKenzie, raised issues of business rate retention and excesses. The excess of central business rates over revenue support grant will be returned to local government through specific grants, of which there are many across government, thus complying with the statute. I shall write to him with specific examples if he so desires.

The noble Lord, Lord Tope, talked about the direction of travel when it came to the retention of business rates. I can assure him that my right honourable friend the Secretary of State, whom he, too, knows well, has indicated his personal commitment to see business rates retained locally—perhaps to a level of 90% from the current 50% by 2020, if financial circumstances allow.

The noble Lord, Lord Rooker, also talked about the rural economy. We continue to recognise the challenges faced by rural communities. The Government have a clear commitment to rural areas, and consecutive settlements have helped to address the gap in urban/rural spending power. The gap is closing and has already benefited rural authorities to the tune of £208 million over the last four years. I assure the noble Lord that we expect this gap to continue to close. In the mean time, the settlement confirms another year of additional resources for most rural authorities, to recognise the challenges they may face in delivering their services. In 2015-16, this grant has been increased to £15.5 million.

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The noble Lord also rightly raised the issue of broadband. I will share with him a personal experience. I went to Cornwall and the Isles of Scilly to launch a broadband service with senior management and the chief executive. The only hitch was that we were unable to land on the Isles of Scilly because it was clouded over. I have never been, but I saw an aerial view and hope that I shall return one day. We are investing a great deal more—£780 million has been allocated to roll out broadband—with priority given, exactly as the noble Lord suggested, to the hard-to-reach areas.

My noble friend Lord Shipley talked with great aplomb about the need for transformation and for local authorities to lead. I was heartened by the contribution of the noble Lord, Lord Smith of Leigh, most of which I can relate to and agree with. As well as growing their economies, the best authorities are transforming the way they do business. This includes places such as Devon, where libraries are being expanded into community hubs, providing a greater range of services, including those designed to tackle digital exclusion and improve employability skills.

The Government are also supporting councils to demonstrate innovation, achieve real savings and, most importantly, improve outcomes for the people who use local services. In November we announced 73 projects that had successfully bid for the Transformation Challenge Award. These projects will receive about £90 million to improve services, and will ultimately save the public sector more than £900 million.

I turn to the better care fund and refer briefly to the Troubled Families programme. That programme has illustrated how together, government departments working closely with local authorities can achieve the best results for our residents—indeed, the citizens of our country. We have therefore created the better care fund. It has a £3.8 billion pooled budget for health and social care in 2015-16. My noble friend Lady Eaton spoke with great eloquence about that initiative, which will help drive further and faster integration between those services.

Local partnerships have chosen to pool an extra £1.5 billion, and this will help to achieve significant change in services that will benefit some of the most vulnerable in society. That was a specific concern expressed by the right reverend Prelate the Bishop of Derby. We are looking to prioritise those areas where there is greater partnership working. As the right reverend Prelate will know, on a wider scale we have looked to the community directly, and the Near Neighbour scheme, so ably chaired by my noble friend, has shown dividends from communities working on the ground together to provide the best services and the best initiatives to create the more cohesive communities that we all desire.

As noble Lords have said, and I fully acknowledge, the challenge for local government over the next few years is substantial, as it is for everyone managing public services. I fully acknowledge that there is huge energy and commitment in the sector to deliver the best possible public services for our local communities. I know that members and officers up and down the country are already thinking radically and creatively about the years ahead, and we will continue to support

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them. I assure the noble Lord, Lord Liddle, among others, that we will work with them directly to ensure that we get the best service provision at a local level.

Local welfare provision was raised by several noble Lords, including the noble Baroness, Lady Donaghy. We will work closely with colleagues in the Treasury and the Department for Work and Pensions. We have been analysing the responses to our consultation. I have met two or three councils directly, along with my honourable friend Kris Hopkins. This concern has come up consistently among local authorities’ priorities. We have been looking at how local welfare assistance should be funded in 2015-16 and, as I said, working with the Department for Work and Pensions on it. The Government believe that local authorities will continue to be able to offer local welfare assistance for 2015 from within existing budgets, alongside a range of other services if they judge it to be a priority in their area.

The right reverend Prelate the Bishop of Portsmouth talked about earmarking certain funding. There are demands for greater devolution and for local authorities to judge their priorities. It is our view that this is what should prevail in this area. We have consulted on having a separately identified amount relating to local welfare provision in each upper tier authority’s general grant, totalling £129.6 million nationally. This will not be ring-fenced and we will not be placing any new duties, expectations or monitoring requirements on its use. The Government have also been very clear that councils should choose how best to support local welfare needs, because what is right for Croydon will not be right for Cumbria. In relating that, I hope that I address some of the concerns expressed by, among others, the noble Lord, Lord Whitty.

The right reverend Prelate the Bishop of Portsmouth raised the issue of vulnerable women, particularly those who suffer domestic violence. Recently I announced from this Dispatch Box an additional £10 million of funding for women’s refuges up and down the country, which will benefit more than 100 local areas.

I assure your Lordships that the Government will consider all responses to the consultation on the settlement, including those which relate to the provision for local welfare over existing budgets, and will take these into consideration when announcing the final settlement.

All councils should be freezing their council tax in 2015-16 to help people with the cost of funding. The noble Viscount, Lord Hanworth, and the noble Lords, Lord Smith and Lord McKenzie, raised the issue of referendums. A referendum in 2015-16 can be held at reduced cost when combined with the general election. If a council has a good case for an increase above the 2% threshold, we believe that it should trust its electorate.

There were other points covering some of the areas that I look after, such as tackling fraud, but time does not permit me to go into them. If specific questions have been raised, I shall of course review Hansardto ensure that we answer them.

Finally, I wish to put on record the thanks of the Secretary of State, as well as other ministerial and governmental thanks, and mine, to all councils that are working tremendously hard in ensuring the best local services. I believe that anyone who goes into

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public life does so with the right intent. As we have heard from several noble Lords today who have represented electorates at a local level, it is for the right reasons: to serve their electorate to the best of their abilities.

Finally, it falls upon me to thank once again all noble Lords for their contributions, which have again provided a very informed and deep insight into the debate over local government finance. I am sure that I am accurate in saying that it is not the last time we shall discuss it. Nevertheless, the quality of the debate that we have had has again demonstrably shown the best of this House.

5.55 pm

Lord Beecham: My Lords, I will say three things very briefly, given the time. First, I think the Minister for his usual courteous response—actually there are four things, because that was the first. Secondly, I congratulate again the maiden speakers, from whom we will hear a great deal to our benefit in future. Thirdly, the noble Baroness, Lady Eaton, referred to surveys showing that people have not noticed a particular difference in services. I remind her that a year or so ago, Conservative councils and the Conservative-led Local Government Association warned that with these present policies, councils would be curtailing services except those which are statutory duties by the end of this decade, with nothing else being provided.

Finally, I note the call of the right reverend Prelate the Bishop of Derby for an increase in local democracy. I would certainly endorse that, but it is not really consistent with what has been happening. The Minister has just called upon councils to freeze council tax or have a referendum. This is a bit odd, coming from a Government who came into office with, Mr Cameron said, no plans to increase VAT. They increased VAT by 2.5% within six months of taking office. That raises £13 billion a year—and, oddly enough, they did not hold a referendum.

Motion agreed.

Scotland: Draft Legislation


5.57 pm

The Advocate-General for Scotland (Lord Wallace of Tankerness) (LD): My Lords, with the permission of the House I will repeat a Statement made by my right honourable friend the Parliamentary Under-Secretary of State for Scotland in the House of Commons. The Statement is as follows.

“With permission, Mr Speaker, I wish to make a statement to the House about the further devolution process in Scotland and the publication of draft clauses to implement the Smith commission agreement. The draft clauses published today deliver a substantial package of new powers to the Scottish Parliament. We are publishing ahead of the Burns Night deadline, demonstrating this Government’s commitment to honouring the vow made to the people of Scotland during the referendum, and meeting the timetable we set out during the referendum to deliver further powers to Scotland.

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The referendum on independence held on 18 September 2014 saw Scotland vote decisively to remain within our United Kingdom family of nations, retaining the strength, security and stability of being part of the UK. But the Scottish people did not vote for no change. During the referendum campaign the Prime Minister, the Deputy Prime Minister and the leader of the Opposition made a joint commitment to deliver more powers to the Scottish Parliament. The Smith commission, chaired by Lord Smith of Kelvin, was the result of that commitment. All five main parties in Scotland came to the table and reached agreement on the proposals for further devolution to Scotland within the United Kingdom. The Government welcomed the fact that this was the first time that all of Scotland’s main parties have taken part in a process to decide the future of devolution, and this landmark agreement was signed by all five parties. I am grateful to Lord Smith and the members of the commission for their work.

The commission’s heads of agreement were published on 27 November and the Government committed to bringing forward draft clauses to implement the agreement by Burns Night, 25 January. This was a challenging timetable, but by publishing a Command Paper and draft clauses today I am pleased to say that the Government have delivered on their commitment in advance of that deadline.

The clauses published today will make it possible to quickly translate the Smith commission agreement into law at the beginning of the next Parliament. The draft clauses provide for an already powerful Scottish Parliament to become further empowered and more accountable to those who elect it. As a result, the Scottish Parliament will become one of the most powerful devolved Parliaments in the world.

I will begin with the constitutional measures. The biggest transfer of powers to the Scottish Parliament and Scottish Minsters since the start of devolution comes with greater flexibility for the Scottish Parliament and the Scottish Government to manage their own arrangements, with statutory recognition of the enduring place of a Scottish Parliament in the UK’s constitutional arrangements. Our commitment to the process has already been evidenced by the steps the Government have taken to enable the Scottish Parliament to extend the franchise to 16 and 17 year-olds in time for the 2016 Scottish Parliament elections, with an order now laid before both Parliaments.

Turning to the fiscal framework, the package gives greater financial responsibility to the Scottish Parliament with an updated fiscal framework for Scotland that is consistent with the overall UK fiscal framework. As the Smith commission agreement set out, the new fiscal framework will be agreed and implemented jointly by the UK Government and the Scottish Government through the Joint Exchequer Committee, with suitable engagement with both the UK and Scottish Parliaments.

For the first time, more than 50% of the money spent by the Scottish Parliament will be funded by the Scottish Parliament. This is an important step, which builds on the measures brought forward by this Government in the Scotland Act 2012 and further increases the financial accountability of the Scottish Parliament to the people of Scotland.

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Under the tax clauses Scotland will receive extensive new tax powers without losing the essential elements of our unified tax system that support the single market and make the United Kingdom such an attractive place to do business. The Scottish Parliament will be given the power to set the rates of income tax and the thresholds at which these are paid for the non-savings and non-dividend income of Scottish taxpayers. This is the most significant tax in Scotland and a powerful redistributive tool.

The first 10 percentage points of the standard rate and the first 2.5 percentage points of the reduced rate of value added tax will be assigned to the Scottish Government—which means the Scottish Government will retain half the VAT revenue generated in Scotland. The clauses also give the Scottish Parliament the power to charge a tax on air passengers departing from Scottish airports and on commercial exploitation of aggregates in Scotland.

Turning to the welfare clauses, these provide for key welfare measures to be designed by and delivered in Scotland. The Scottish Government will be responsible for a number of benefits, including those for disabled people and carers. Issues relating to long-term unemployment will be tackled with specific consideration of local circumstances. As set out by the Smith commission, universal credit will remain reserved but the Scottish Government will have certain flexibilities, including the power to vary the housing cost element. Scotland will also continue to share the benefits and strengths of the UK-wide system for pensions, labour market benefits and Jobcentre Plus.

Additional clauses build on the already significant powers of the Scottish Parliament and Government in a range of other policy areas. To give a few examples, there are new powers for the licensing of onshore oil and gas extraction, powers to introduce gender quotas in respect of public bodies in Scotland, and powers to police the railways. Together, these clauses give greater responsibility for more decisions affecting Scotland to be made in the Scottish Parliament and paid for by revenue raised by the Scottish Parliament.

Later today, ministerial colleagues will host an event in Edinburgh to present the Command Paper and clauses to representatives of civic Scotland. This will signal the next phase in the work. The clauses are presented today in draft. They will require further preparation to make them ready for introduction in a Scotland Bill in the next Queen’s Speech, and it has been made clear that this will be taken forward by whoever leads the Government after the next general election.

To get the clauses fully ready the Government wish to engage with experts from civic Scotland, and we are committed to engaging with the Scottish Government and Her Majesty’s Opposition ahead of finalising the clauses for introduction. Questions of commencement and implementation will need to be answered, and in order to do this we will need to understand what the Scottish Government intend to do with the new powers.

It will be necessary for the fiscal framework to be agreed alongside the introduction of the Scotland Bill, and of course Lord Smith made further observations to

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which we need to pay heed. In some areas he recommends further devolution from the Scottish Parliament to local authorities in Scotland. He also recommended better working between the two Governments and the two Parliaments.

The Command Paper and draft clauses provide for a more responsible and accountable Scottish Parliament inside a strong United Kingdom. By publishing ahead of time, the Government are demonstrating that they are meeting their guarantee to the people of Scotland. The clauses ensure a set of proposals that do not cause detriment to the UK as a whole or any of its constituent parts. The Government remain committed to ensuring that Scotland and the whole of the United Kingdom continue to prosper from our single domestic market, our social union and the strength that comes from the pooling and sharing of risks.

People in Scotland made it clear that they want to keep the advantages of a UK pound, UK pensions, UK Armed Forces and a strong UK voice in the world. The clauses allow that to happen. This is what Scotland voted for. It is what all parties in the Smith commission process signed up to. And it is what we are delivering today. I commend this Statement to the House.”

6.05 pm

Lord McAvoy (Lab): My Lords, I thank the Minister for advance sight of his Statement. Today we again mark another milestone in the delivery of the vow made to the people of Scotland before the independence referendum. The timetable set out by my right honourable friend the Member for Kirkcaldy and Cowdenbeath during the referendum campaign has now been exceeded at every stage. A Command Paper on the process towards further powers appeared just 25 days after the referendum. The conclusion of the Smith commission and agreement by all five of Scotland’s political parties happened before St Andrew’s Day, just 10 weeks after the referendum. And today, ahead of schedule, as the Minister said, we see the draft clauses which will form the basis of the next Scotland Bill.

Before I turn to our response to the draft clauses and the Command Paper laid before the House today, I want to provide an absolute guarantee from these Benches. As my right honourable friend the leader of the Opposition has now made clear on a number of occasions, the powers agreed by the Smith commission will be delivered, and the next Labour Government will include a new Scotland Bill in our first Queen’s Speech. Labour created the Scottish Parliament in 1999, we supported more powers for the Parliament in 2012, and we will create a powerhouse Parliament with these new powers when we are in government.

Labour made it clear at the outset of the Smith commission process that we wanted a settlement that: first, respected the decisive outcome of the referendum, with a strong Scotland inside a UK where we pooled and shared risk; secondly, moved the maximum possible power from Westminster to the Scottish Parliament; and finally, did not make Scotland worse off. We are satisfied that the Smith commission delivered this outcome, and we can say with confidence that with these clauses we will be delivering home rule—the full powers Scotland needs.

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As the Command Paper notes, the powers that these clauses will confer on the Scottish Parliament mean that it will control around 60% of spending in Scotland and retain around 40% of Scottish tax. This will make it the third most powerful devolved assembly in the OECD.

Before I turn to the detail of the clauses I wish to press the Minister—in a friendly way—on two areas that I hope he can address in his reply. The Command Paper makes explicit reference to the Barnett formula, and the agreement of all five parties during the Smith commission to the continuation of the formula. Can he provide just a bit more clarity about how the adjustment to the block grant will take place, and how discussions with the Scottish Government to agree this are progressing?

I also wish to press the Minister on an item on page 40 of the Command Paper, which reproduces the commitment in Smith that:

“MPs representing constituencies across the whole of the UK will continue to decide the UK’s Budget, including Income Tax”.

Given the Chancellor’s comments at the Treasury Select Committee on Tuesday, can the Minister provide an absolute reassurance that this part of the Smith agreement will be respected, as it is not addressed in the Command Paper?

I now wish to turn to the detail and the precise powers that the clauses will confer, specifically over job creation, tax and social security. The clauses confer full power over income tax and a number of other taxes. We welcome the clarity provided by the Command Paper on the areas to be devolved.

We welcome the extension of powers over VAT going further than the Smith commission, but will the Minister explain why this change was made? On welfare, the clauses have the effect of transferring extensive new powers to the Scottish Parliament, in the region of £2.5 billion of welfare spending, in addition to the powers to create new benefits. Will the Minister confirm that the clauses as drafted respect the spirit and letter of the Smith agreement and allow the Scottish Government to create new benefits? Will he also explain the process that will now be taken forward to examine in more detail the consequential arrangements to adjust the Scottish block grant to reflect what will now be devolved to the Scottish Parliament?

My honourable friend the Member for Glasgow East has already raised with the Secretary of State, and at Scottish Questions, our desire to see the job-creating powers of the Work Programme passed to Scotland at the earliest opportunity. It continues to be our view that this could be achieved using a Section 106 order to transfer responsibility to the Scottish Government immediately. This would reduce any uncertainty about the effect of continuing contracts in Scotland and would allow others to start to remedy what we regard as a failure of this Government’s Work Programme in Scotland, which sees only one in five people into a job. Will the Minister again consider bringing forward these powers now?

Finally, I would welcome more clarity from the Minister on the devolution of the Crown Estate. Will he clarify the process that will be followed to determine

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the transfer scheme, and how long this process might take? Will he also explain to the House how the Government will ensure that the Smith commission’s recommendation that the powers are further devolved to our island communities will be seen through? Many in our rural and island communities will want guarantees about the devolution of the Crown Estate and that powers will be passed to the islands, as both the UK and Scottish Governments promised during the referendum.

This is another milestone in Scotland’s home rule journey. Today, we on this side of the House welcome the Command Paper and the draft clauses. I am pleased that the Government have stated their commitment to further consultation with us and with Civic Scotland. There is still work to be done, and we commit to carry this work through if it is not concluded by the election and we form the next Government. On 18 September 2014, the clear will of the people of Scotland was expressed. The Smith agreement was the response to that call for change that we heard. Today, one thing is clear—Scotland will have a powerhouse Parliament.

Lord Wallace of Tankerness: My Lords, I thank the noble Lord very much for his comments and for his welcome of these clauses, which, as I think he acknowledged, implement ahead of time the spirit and letter of the Smith commission agreement. It is also particularly welcome that he indicated that any future Labour Government would take these clauses forward in the Queen’s Speech. It is important to note that that has been said today by all three parties which signed the pledge prior to the referendum, so those who might try to cast doubt on the commitment are just mischief-making. There is a very clear commitment on the part of all the parties that that should be done.

The noble Lord asked about the Barnett formula and the adjustment to the block grant. There is within the Command Paper, in the section dealing with the fiscal framework, an indication as to how the block grant will develop. As tax will be the responsibility of the Scottish Parliament, the amount of tax generated will be deducted from the block grant. The Smith commission said that there had to be some means of indexation; it was quite good at saying that, but did not actually set it out. However, this will be discussed. The Command Paper sets out how it is intended to be done with regard to the devolution of income tax agreed in the Scotland Act 2012. There clearly will have to be discussions and I am pleased that the Deputy First Minister, Mr John Swinney, has already indicated to my right honourable friend the Secretary of State a willingness on the part of the Scottish Government to engage in these discussions on the fiscal framework. Whereas at the moment roughly 90% of the Scottish Parliament’s funding comes from the Barnett formula, once the 2012 Act arrangements and the Smith proposals are implemented it will reduce to 35%.

The noble Lord also asked about MPs’ voting and accurately quoted the passage from the Smith commission. There clearly is an issue, which has been raised, not only in regard to tax but on a number of issues. He is

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aware that the Government published a Command Paper on 16 December that looks at those issues. It is very difficult sometimes to disentangle what is devolved and what is not devolved. I certainly remember when—I was the Minister responsible for higher education in Scotland—this Parliament passed laws in relation to tuition fees in England and Wales, which had very direct consequences for Scotland. Sometimes it is too simplistic to say that just because it is not devolved it does not have implications for Scotland. But there is a legitimate debate to be had.

The White Paper sets up a number of options that the Conservative Party put forward and ones that my own party put forward. I am sure that the noble Lord’s party has its own view on this. The important point to make on this, however, is that the proposals that we are discussing today stand alone. They are not contingent—as we have made abundantly clear on a number of occasions—on any arrangement or Motions that might come forward with regard to “English votes for English laws”, as it is sometimes referred to.

With regard to VAT, the noble Lord asked why we went beyond the Smith commission—as well as the first 10% of the standard rate we will also assign 2.5% of the reduced rate of VAT. The answer is that, obviously, if the reduced rate is 5% one cannot assign 10%. We did, however, think it was in keeping with the spirit that we would assign half the revenue that comes from the reduced rate of VAT.

The noble Lord asked about welfare and it is certainly our belief that we have honoured the spirit of the Smith commission. In this, he is quite right to say that some £2.5 billion of welfare spending will be devolved to the Scottish Parliament. He asked about the detail of that, which is clearly considerable; none of us shies away from that. A ministerial working group on welfare has been established, which will be jointly chaired by my right honourable friend Mr David Mundell, Parliamentary Under-Secretary of State, and Mr Alex Neil, who is the Scottish Government’s Cabinet Secretary with responsibilities in this area.

The noble Lord asked about the Work Programme. There have been discussions between his honourable friend the shadow Secretary of State for Scotland and my right honourable friend the Secretary of State on this. We take the view that this is a package. The only measure we have accelerated is the Section 30 order in relation to votes for 16 and 17 year-olds because of the necessity of getting that on the statute book in good time for the 2016 election. The Government support the devolution of the Work Programme but it must be done in a way that reflects the fact that Smith will mean that we have a shared welfare and unemployment support system between Scotland and the rest of the United Kingdom. That is why we believe it has to be taken forward as a package. We do not know what the Scottish Government would do, and therefore do not think it would be right to take the risk that there would be no alternative programme or adequate transitional arrangements if we were to do it in very quick order. That is why we believe it should go forward as a package.

Finally, we have tried to devise a way in which we can devolve the Crown Estate, as the Smith commission recommended. I certainly share the noble Lord’s view

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that devolution does not stop in Edinburgh. He might expect me to say that, as I am a former parliamentary representative for the Northern Isles, which had very strong views on the Crown Estate. But, of course, further devolution is a matter for the Scottish Parliament. It is important, however, to put on record and remind the House that in his report the noble Lord, Lord Smith of Kelvin, as well as talking about further powers to the Scottish Parliament, made the point that it was important that the Scottish Parliament looked at ways in which it could devolve further powers to Scotland’s many communities.

6.19 pm

Lord Forsyth of Drumlean (Con): My Lords, I thank my noble and learned friend for repeating the Statement. He said that this is what the people of Scotland voted for, but it is certainly not what I voted for. I regard it less as a milestone; it is probably more likely to be a tombstone for the United Kingdom if we continue in this way by making piecemeal constitutional reform.

I wish to ask my and learned noble friend about the draft clauses in a constructive manner. Clause 4 introduces the extraordinary new concept of a “super-majority”, whereby matters can be passed by the Scottish Parliament only by a two-thirds majority. That includes, according to the draft clause,

“the persons entitled to vote as electors at an election for membership of the Parliament”.

As I understand it, we have just given the Scottish Parliament the power to alter the election franchise for 16 year-olds. Before the ink is even dry on this, we are already changing it. Why are we introducing this concept of a two-thirds majority being required to alter,

“the number of constituencies … the number of regions …the number of regional members”,


“the systems by which members of the Parliament”,

are to be introduced? Is that going to apply to Westminster and the Welsh Assembly? This is a huge constitutional innovation. What is the justification for it?

To reflect the points made by the noble Lord, Lord McAvoy, why is there nothing in these draft clauses that sets out how the Barnett formula funding will be affected by the implementation of these powers? Surely that has to be there in primary legislation so that there is no question about how that will operate. As to the narrative on the paper, all that it says about funding is that,

“the Scottish Government’s Barnett-based block grant will be reduced to reflect the tax revenues that the UK Government will forgo as a result of devolution”.

What on earth does that mean?

Lord Wallace of Tankerness: My Lords, picking up on that final point, it means what it says: if there is devolution of income tax, which we are proposing to implement, the UK Government—the Revenue and the Treasury—will not receive the income tax receipts from Scotland on earned income and therefore the block grant will be reduced accordingly. That will be indexed. Box 1 on page 29 of the Command Paper describes how this is intended to work in terms of what we have already passed with regard to the Scottish rate of income tax under the 2012 Act. The noble Lord will

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see how it is intended to work with regard to the proposal that Parliament has already passed, one that can proceed for income tax as a whole and, indeed, for other taxes.

With regard to the two-thirds majority, it is not such a novel procedure as my noble friend suggests, because, although I suspect that he opposes it, it was nevertheless passed by this House when it introduced the Fixed-term Parliaments Act early in this Parliament with regard to any early general elections that might be called in the other place. We are actually implementing what the noble Lord, Lord Smith of Kelvin, recommended, which is that for matters as fundamental as the franchise, the number of constituencies and the electoral system we will provide “an adequate check”, as he put it in his commission’s report, on the Scottish Parliament. After all, it is a unicameral Parliament and a Government of a single party should not ride roughshod over the interests of other parties on a simple majority and completely change the electoral system. That is why the commission believed that on matters as fundamental as that, given that that power is being transferred from this Parliament to the Scottish Parliament, there ought be an adequate safeguard—and that safeguard is a two-thirds super-majority.

Lord McConnell of Glenscorrodale (Lab): My Lords, first, I welcome very much the announcement that a joint arrangement has been put in place between the UK Government and Scottish Government on the implementation of the welfare provisions because that is an area in which there could be real trouble ahead. I wonder whether a similar mechanism is already in place, or is likely to be in place soon, for the recommendations on improved working between the Scottish Government and the UK Government and between the Scottish Parliament and the UK Parliament. I should be interested to hear the Government’s response on that. Secondly, the power to vary taxation—not the power to retain it—falls quite far short of the spending power of the Scottish Parliament under these proposals. Given the current expectations and instability that exist in Scotland and throughout the union, do the Government really believe that this is a recipe for stability in the medium term?

Lord Wallace of Tankerness: My Lords, the noble Lord raises an important point about the other recommendations in the Smith commission report on better intergovernmental and interparliamentary relationships. This is something which the Calman commission looked at although, regrettably, nothing much seemed to come of it. At the meeting of the joint ministerial committee which took place in December, the Prime Minister and the First Minister discussed these matters and there was an agreement, as a start, on looking at how to improve the current memorandums of understanding to address that issue. On parliamentary matters, there was a recommendation that the Presiding Officer of the Scottish Parliament should have an early meeting, after these clauses were produced, with Mr Speaker. I am not sure whether that is in place but I endorse the view that there ought to be better parliamentary relationships, at least for better understanding and for less of the misunderstanding that can sometimes arise.

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In answer to the second part of the question, this is an enduring settlement. As was reflected in the comments of the noble Lord, Lord McAvoy, from the Opposition Front Bench, 60% of government spending in Scotland will be the responsibility of the Parliament and 40% of the tax raised in Scotland will contribute to that spending. In each case, that is twice the OECD average for devolved administrations. We are building and creating an enduring settlement, but the noble Lord is right to say that it will require a lot of work and engagement between the respective Governments in terms of both the fiscal framework and the welfare provisions.

Lord Stephen (LD): My Lords, despite the low-key nature of the title of today’s Statement, does my noble and learned friend agree that these detailed clauses are of crucial importance to the future constitutional arrangements for the whole of the United Kingdom? They not only deliver on the vow of the party leaders, but they deliver, for Scotland, the most radical home rule measures ever seen in this country. These measures are now supported, quite remarkably, by the leaders—and the vast majority of the membership—of the major parties in all the Parliaments of the United Kingdom. Does he agree that it is vital that these measures must now be delivered, not only in the Queen’s Speech in May of this year but also in an Act of this Parliament in a new Scotland Act that should be delivered, if at all possible, by the end of 2015? I wonder whether my noble and learned friend can comment on the timetable for the shortest possible time for delivery of these proposals into legislation. Finally, does my noble and learned friend accept that, after home rule for Scotland, the next challenge is to deliver real devolution of powers, right across our regions and nations, in a federal United Kingdom?

Lord Wallace of Tankerness: My Lords, I am sure my noble friend would expect me to agree and I do, as my own party aspires to a federal United Kingdom. He rightly used the words “home rule”. This has been a campaigning issue for our party for more than 100 years. I am sure that Mr Gladstone would be very proud of what we have delivered today. He is right that we need to move on from here. There is a lot of work still to be done and we will ensure that today is not the end of the process. At official and ministerial level there is recognition of what more must be done so that a Bill is in preparation and ready to be brought forward after the Queen’s Speech following the election. The legislative timetable is not entirely in my hands, but it must be feasible to deliver this by the end of this year or, if not, in the early months of 2016. Having done it, I think all of us would want the issue to be about how the Scottish Parliament is going to use these powers. For so long we have had debates about what the powers are, whereas many people are asking how the powers can be used to improve the lot, and the social and economic well-being, of the people of Scotland.

Finally, I agree that the devolution of power is something which my noble friend and I in our party aspire to. But, as I have already said, the comments coming from some leading members of the Scottish National Party MSPs in recent weeks about centralising power and the attacks that there have been on local

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government in Scotland are very alarming. We have seen too much centralisation in the last two or three years in Scotland. I very much hope that a fresh wind of decentralisation will sweep through Scotland.

Baroness Adams of Craigielea (Lab): My Lords, I also welcome the Statement that the noble and learned Lord has made today. I am glad to hear him say once more that all five parties signed up to this. But he will forgive me a little wobble because, on the day after the Smith commission reported, four SNP councillors in Renfrewshire burned that report outside the council offices. I have to wonder just what the commitment of the SNP is to this agreement. Will he clarify further what discussions have been made on further devolution to local Government? As he has already said, the Scottish Parliament has already sucked much of the power from local government to the centre. How far have the talks got on devolving some of that power back?

Lord Wallace of Tankerness: Any of us following the Scottish media, and probably even further than the boundaries of Scotland, saw that appalling scene when the report was burned. In fact, I have an instinctive gut horror at people burning any literature or writing and I find it very insidious. The SNP members of the commission signed that report and should be held to that. If they start complaining, they should be reminded of that. Nor was it signed at a low level: the Deputy First Minister signed on behalf of the SNP, along with Miss Fabiani. Therefore, it was signed at a high level and backsliding will be exposed.

What can be done about local government is a matter for the Scottish Parliament, which we can pursue within our respective parties. I do not think that it is really a matter for this Parliament to start legislating for local government in Scotland but we can create some of the mood music. I know from debates we have had in your Lordships’ House that from all parts of the United Kingdom and all parts of the House there has been a strong view of the need to decentralise more power in this country.

Lord Cormack (Con): My Lords, if we are to have stability and if this is going to be an enduring settlement, would it not be reasonable, particularly bearing in mind what the noble Baroness said a few moments ago, to have within the final Bill a clause which rules out a referendum for at least 10 years?

Lord Wallace of Tankerness: My Lords, my noble friend will recall that the referendum required a Section 30 order to be passed by this House. It was certainly the view of the United Kingdom Government that there was no legal competence within the Scottish Parliament to do so and there is nothing in these draft clauses that would change that. It would still be a matter for this House and the other place to pass a Section 30 order if there were to be a further referendum.

Lord Maxton (Lab): My Lords, unlike the noble Lord, Lord Forsyth, I am a supporter of devolution and have been for a very long time. I also want to make it clear that, like the noble Lord, Lord Forsyth, I voted by post; I voted before the vow; and I did not vote necessarily for further change or devolution to

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Scotland. I voted no to the simple question of whether Scotland should be an independent country. That is my first point.

My second point is that it is all right to say, “It’s a matter for the Scottish Parliament and the Scottish Government to deal with local government” but that was part of the Smith commission report, which the SNP accepted. What guarantees does the Minister have from the Scottish Government that they will implement further devolution to local government rather than just say that it is a matter for the Scottish Government and the Scottish Parliament to do that? It is not enough to say that. It has to be a guarantee before we start legislating on anything else.

Lord Wallace of Tankerness: My Lords, I too voted by post before the vow was made. However, it is also fair to say that the vow raised an expectation, and if a vow which was made was not honoured then that would be a serious destabilisation of the United Kingdom. With regard to the second point on devolution from the Scottish Parliament, in fairness that appears not in the report itself but in the foreword by the noble Lord, Lord Smith. I seem to recall that when he delivered his report he indicated that those were personal reflections, and those reflections have chimed well with many people. That is why it is incumbent on us within our respective parties to try to make sure that the drive for greater decentralisation and devolution within Scotland is carried forward.

Lord Steel of Aikwood (LD): My Lords, the speed with which the Secretary of State for Scotland and others have managed to put together this package is quite remarkable. It is certainly very welcome that the first signs are that the Scottish Government will co-operate in implementing these proposals. In the previous 10 days I have come across a number of people who voted yes in the referendum, who feel now that they had a narrow escape from what could have been a disaster. We could be sitting here discussing an independent Scotland based on oil revenues which are nothing like those anticipated at the time of the referendum. Therefore, is the noble and learned Lord surprised to learn that a lot of people are now realising that we had a very narrow escape? Finally, is there any sign yet that we will get an all-party agreement on a constitutional commission or convention after the election?

Lord Wallace of Tankerness: My Lords, my noble friend is right to say that we had a very narrow escape. I dread to think what kind of discussions we would be having now if the vote had gone the wrong way on 18 September. There have been indications of support across parties with regard to a constitutional convention, although I do not think that there is any concrete proposal in place, or any plans at the moment to set one up prior to the election. I endorse my noble friend’s comments about the speed involved. I pay particular tribute to officials in many departments of government, not least in the Scotland Office and in my own office. They were given 37 working days. When the pledge was made with the deadline of Burns Night no one had worked out that it was a Sunday, so that de facto reduced the number of days that were available.

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They did a tremendous amount of work, and I am very conscious too that there is more work to be done.

Lord McFall of Alcluith (Lab): My Lords, like other noble Lords I voted by post, and I voted for the fiscal integrity of the United Kingdom. I was very pleased to see that the Smith commission unanimously endorsed that fiscal integrity, whereby there would not be two classes of Members of Parliament, and said explicitly that all Members should vote on the Budget. I am asking the Minister a simple question: is that the case? Will all Members vote on the Budget: yes or no?

Lord Wallace of Tankerness: My Lords, I cannot say what will happen in a future Parliament. All Members will vote on the Budget that will take place in this Parliament, for which I have collective responsibility as a member of the Government. I do not know what will happen in a future Parliament. There is a debate, but the noble Lord is right to point out what the Smith commission said on that. The noble Lord knows as well as anyone just how difficult it would be on—for example—income tax. That is a shared tax because, while rates and bands will be devolved, personal allowances will remain a matter for the United Kingdom Parliament. The definition of income and what constitutes a tax base will be a matter for the United Kingdom Parliament, and I do not know how to disentangle that.

Lord Empey (UUP): My Lords, is it not the case that this is the fourth set of constitutional proposals in the past 12 months? Is this therefore not a case of constitutional crazy paving where there is no plan? Each proposal is a different shape and serves a different purpose. The point I want to concentrate on is the first part of these clauses covering the issues of the constitutional composition, and in particular the Sewel convention. When is a devolved Parliament not a devolved Parliament? As a result of these clauses, can the Minister confirm that this Parliament will still be able to vote and decide on devolved matters if and when it felt that that was required?

Lord Wallace of Tankerness: My Lords, what we have done is put the Sewel convention on to a statutory basis. The noble Lord can see how it has been set out, although it may not immediately be clear from the clause. However, it has been added after Section 28(7) of the Scotland Act 1998, which makes it clear that the Westminster Parliament can still legislate.

Lord Lexden (Con): My Lords, is it not obvious that today’s proposals are bound to increase the demand for English votes for English laws, on which the Government have produced no firm proposals at all? As to Mr Gladstone and home rule all round, that was not his plan. It was the brainchild of the great unionist, Joe Chamberlain.

Lord Wallace of Tankerness: I think he changed his mind after that, but I salute my noble friend’s historical knowledge. There is a legitimate issue here. As I have indicated, last December the Government published a Command Paper, but there would not appear to be

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any consensus. Three versions have been produced by the Conservative Party, including one from my noble friend Lord Norton of Louth, and there was one from the Liberal Democrats. It is clear that there is no consensus, but there is consensus on what we are proposing today.

Terrorism Act 2000 (Proscribed Organisations) (Amendment) Order 2015

Motion to Approve

6.40 pm

Moved by Lord Bates

That the draft order laid before the House on 19 January be approved.

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

Lord Bates (Con): My Lords, the appalling attacks in Paris earlier this month resulted in the deaths of 17 people and a number of injuries. In December, we saw deadly and callous attacks in Sydney and Pakistan. There can be no doubt that the terrorist threat we face is grave and relentless. The threat level in the UK, which is set by the independent Joint Terrorism Analysis Centre, remains at “severe”. This means that a terrorist attack in our country is highly likely and could occur without warning.

We can never entirely eliminate the threat from terrorism, but we are determined to do all that we can to minimise that threat in the UK and to our interests abroad. Additionally, it is important that we demonstrate our support for other members of the international community in their efforts to tackle terrorism wherever it occurs. Proscription is an important part of the Government’s strategy to disrupt terrorist activities. The two groups that we propose to add to the list of terrorist organisations, amending Schedule 2 to the Terrorism Act 2000, are Jund al-Aqsa, JAA, also known as the “Soldiers of al-Aqsa”, and Jund al Khalifa-Algeria, JaK-A, also known as the “Soldiers of the Caliphate”. We propose to add these groups to the list of international terrorist organisations, amending Schedule 2 to the Terrorism Act 2000. This is the 17th proscription order under that Act.

As noble Lords will appreciate, I am unable to comment on specific intelligence. However, I can provide a brief summary of each group’s activities in turn. Jund al-Aqsa is a splinter group of the al-Nusra Front, ANF, al-Qaeda’s affiliate in Syria. The group has acted against the Syrian Government since September 2013. JAA is a foreign fighter battalion made up of a variety of nationalities as well as a native Syrian contingent. The group is primarily operating in Idlib and Hama. JAA is believed to be responsible for the attack on 9 February 2014 on the village of Ma’an, killing 40 people, of whom 21 were civilians. In July 2014, JAA supported the Islamic Front in an operation to seize Hama military airport. In August 2014, ANF released a document summarising its operations, which included details of an attack targeting a resort hotel conducted in collaboration with JAA.

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Jund al Khalifa-Algeria is an Islamist militant group believed to be made up of members of dormant al-Qaeda cells. JaK-A announced its allegiance to the Islamic State of Iraq and Levant, ISIL, in a communiqué released on 13 September 2014. In April 2014, JaK-A claimed responsibility for an ambush on a convoy which killed 11 members of the Algerian army. On 24 September 2014, the group beheaded a mountaineering guide, Hervé Gourdel, a French national. The abduction was announced on the same day as a spokesman for ISIL warned that it would target Americans and other Western citizens, especially the French, after French jets joined the US in carrying out strikes in Iraq and on ISIL targets.

Section 3 of the Terrorism Act 2000 provides a power for the Home Secretary to proscribe an organisation if she believes it is currently concerned with terrorism. If the statutory test is met, the Home Secretary may exercise her discretion to proscribe the organisation. In considering whether to exercise this discretion, she takes a number of factors into account, including the nature and scale of the organisation’s activity and the need to support other members of the international community in tackling terrorism. In effect, proscription outlaws a listed organisation and makes it unable to operate within the UK. Proscription can also support other disruptive activity such as the use of immigration powers, including exclusion, prosecutions for other offences, EU asset freezes and messaging to deter fundraising and recruitment. Additionally, assets of a proscribed group are liable to seizure as terrorist assets.

6.45 pm

The Home Secretary exercises her power to proscribe only after a thorough review of the available relevant information and evidence about the organisation. This includes open source material, intelligence material and advice that reflects consultation across government, including with the intelligence and law enforcement agencies. The cross-government proscription review group supports the Home Secretary in her decision-making process. Her decision to proscribe is taken only after great care and consideration of the particular case, and it is appropriate that it must be approved by both Houses. I beg to move this order.

Lord Marlesford (Con): My Lords, I support this order, as I would any measure that will protect us against the serious and growing terrorist threat that we face. The Joint Committee on Statutory Instruments has noted but not commented on the report, but I would like to make one or two points.

I shall refer in particular to the Muslim Brotherhood. It has been well described as the trunk of the tree that represents political Islam. The root is probably the Wahhabi sect. The branches of the tree include buddies such as those named by my noble friend, as well as other terrorist organisations, spreading from al-Qaeda, Boko Haram and, above all, ISIS. Together, these branches form an international fascist movement specialising in spreading terror and even seeking to dominate Europe—as well, of course, as Muslim lands.

In April last year, my right honourable friend the Prime Minister ordered an inquiry into the Muslim Brotherhood by Sir John Jenkins, Her Majesty’s

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ambassador to Saudi Arabia. As my noble friend will know, the Muslim Brotherhood is at present in open armed conflict against the Egyptian Government of President Sisi, particularly in Sinai. The Muslim Brotherhood is also politically active in the UK. Indeed, I understand that a summit has been planned in London on 12 February under the umbrella of an organisation called Cordoba, of which the chair, a Mr Tikrit, is well known to security circles in both Washington and London. I also understand that Cordoba has recently had its bank accounts closed by HSBC.

I hope that my noble friend will be able to give some indication of when we shall be made aware at least of the conclusions of the Jenkins inquiry into the Muslim Brotherhood.

Baroness Smith of Basildon (Lab): My Lords, I thank the Minister for his explanation and for writing to me earlier in the week with further information. I am genuinely grateful; like his predecessor, who is also here tonight, he has always been willing to engage with us and assist us by providing information. He will appreciate that we do not have access to the same security information as the Government and we take the information given by Ministers on trust. We support this order and recognise the need to have such protections in place. The judgment that we make has to be based on our trust in Ministers and the information that they provide to the House. The information given here is quite clear.

I will raise just two issues with the noble Lord, which I have mentioned to him. One is about the Prevent programme. It is quite clear when we hear of cases like this, of extremism and the dangers and fear it brings and the horrific terrorist acts that are inflicted, we must do everything we can to deter young people from becoming radicalised to the extent that they wish to commit such violence in this or any other country. The Counter-Terrorism and Security Bill, which we are currently discussing—it has two days in the Chamber next week—addresses just that issue and how important it is to deter young people from being caught up in extremist views. It is a question of extent: holding views is one thing, but if that leads to terrorism and engagement in terrorist activities, clearly that is extraordinarily serious and has to be tackled.

One way of doing that is through the Prevent programme, which the Bill places on a statutory footing, and we welcome that. But we need to think long-term on these issues. Over the past few years the funding for Prevent has been cut from £17 million when we were in government to less than £3 million. If we are serious about tackling such issues, we cannot think, “What’s the next issue? What’s the one after? What’s happening next week or next month?”; we have to think long-term. I was appalled that at one point the number of local authorities receiving funding from Prevent fell from 90 to just 23, although I think that is improving now. We support Prevent being on a statutory footing but I urge some longer-term thinking to ensure that we tackle this at source and prevent any more of our young people being caught up in such abuse of their religion.

I told the Minister as we came into the Chamber that I would briefly raise this second matter. I mentioned the issue of trust and us not having access to the same information as the Government. In this case, I think

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we do have information. I was reading the


of the debate last night in the other place and was absolutely horrified to see that there is a Twitter account for JAA, glorifying violence and terrorism and directing readers to other places they can get such information. It is an English Twitter account, in English; there are links to the Arabic site as well. This account has more than 14,000 followers. My honourable friend Diana Johnson, the shadow Minister, raised this last night, and I am appalled that when I looked on Twitter today, just minutes before I came into the Chamber, I saw that that account is still active.

If we are serious about dealing with young people and tackling such terrorism, we have to look at how social media is being used and use all the powers available to us to do something about it. Surely the Government are aware of this. The Minister will probably say the same as the Minister said last night—that it has been reported to the appropriate body, which is dealing with it. However, there are powers in place and we have to look to those who engage with social media and those responsible for it. I do not expect to be able at the click of a button to access a Twitter account glorifying such horrendous terrorist acts.

I make a plea to the Government. The powers are there. Referring this problem to a body that is going to look at it and think about it is not good enough, and I hope that by tomorrow if I look at that account it will be closed down.

Lord Judd (Lab): I very much took my noble friend’s point about looking at this long-term and strategically. Will she re-emphasise that there is no way in which we can look at this effectively in the long term, whatever firm action must be taken now, unless we take very seriously why young people feel attracted to join these movements and what the real causes are in their minds that lead them on to this unfortunate path?

Baroness Smith of Basildon: I entirely agree with my noble Friend. I think the aim of the Prevent programme, which clearly has not been as successful as we would want it to be to date, is to ensure that we engage with young people and with those in positions of authority, to whom young people listen. I do not know whether my noble Friend saw the account that I did last week, of a young woman who went to, I think, Syria with her child. Her family dropped her off at the airport thinking she was flying to Spain. She went out to Syria, and now she is trying to return home, completely disillusioned by what she has seen out there. She thought she was going to support a cause, and she realised what a terrible mistake she had made. We do not want young people making that mistake, and we want to ensure that there are preventive programmes in place.

Part of the Bill, I have to say, is what the Government are trying to achieve, but, as my noble Friend said, we must think longer term and realise how serious this is for the consequences, not only for the security of the nation but also for those young people themselves, who in many cases have been abused and end up disillusioned and disengaged. That is not what we want for young people.

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I say to the noble Lord that we support this order. I repeat my gratitude to him for keeping us informed and writing to me beforehand.

Lord Elton (Con): Does the noble Baroness agree that we should turn our attention to the abuse of freedom of speech? I think that it provokes enormous anger in people otherwise well disposed to a democratic society when they see people they regard as divine slandered and mocked in public media. The noble Baroness looks puzzled, but I am talking about the “Je suis Charlie” episode. I have absolute disgust at the reaction by which the people who were offended by this showed their anger, but I have profound sympathy with their anger. It seems to me that they have been provoked, and are being provoked, over generations, and I think moderation in all things is something that we must try to instil in our people and in our young people.

Baroness Smith of Basildon: My Lords, I think that respect for others and others’ views, including on religion, is very important. I think that respect, regard and politeness—not wanting to offend others—is important. It is very difficult, however, to draw the line, and there can be nothing at all that can justify or excuse the behaviour of those who murdered the journalists. If Paris taught us anything, it taught us that, when the crowds came out in Paris, where you had people from all faiths and none linking arms, walking through the streets, they were standing together against violence, but they were also standing together for freedom and democracy and the right to think and speak as they wish. There is, however, a difference between showing that we stand for freedom and making clear that we abhor such violence in any circumstance, and that there can never be any excuse or reason for it.

I was about to say to the noble Lord before that intervention that I support the order, but he will have heard the comments around your Lordships’ House tonight that this is not just about describing groups; it is a battle for hearts and minds as well.

Lord Bates: My Lords, I am very grateful to all noble Lords who spoke and contributed in the short debate that we have had on this important issue. I am particularly grateful to the noble Baroness, Lady Smith, for her contribution. What we must do is work across parties to address these important issues. I appreciate that so doing requires a degree of trust. That is the reason I want to set out the safeguards that are there—our own checks and balances and also the evidence, as far as we are able—and that are behind the proposals which we are making and debating today.

The noble Baroness referred particularly to the importance of prevention and talked about hearts and minds. We have the Prevent strategy in place. I noted her comments about funding, although the figure that I have in front of me is £40 million for 2014-15. However, the Prime Minister has recognised that, in view of the increased threat, we need to put extra money behind this effort. He pledged a further £130 million. A large element of this will go to the agencies and security services, which are in the front line of keeping us safe, but there will also be an element for working with the Channel programme and Prevent to try to prevent people being drawn into extremism and radicalisation.

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7 pm

The noble Baroness’s points about social media were very fair and we take them on board. Some 72,000 pieces of unlawful, terrorism-related content which encourage or glorify acts of terrorism have been removed in co-operation with the internet service providers and the companies concerned. In this particular case, the proscription has not yet come into effect. If your Lordships agree, it should take effect from tomorrow. Before the noble Baroness intervenes, perhaps I may offer a quick update in case it assists her and addresses the point that she raised.

We recognise that the material is still there. We are the first Government to take this action against these two groups. The Twitter account to which the noble Baroness referred is run by an American corporation. The Twitter and Facebook accounts of both groups, and the YouTube channel, have all been assessed and found to be in breach of the Terrorism Act, as she rightly pointed out. These have been referred to the companies concerned, which is the procedure in the first instance. They have also been sent to the Counter Terrorism Internet Referral Unit, which will monitor the action taken. Some content from both groups is in Arabic and the Counter Terrorism Internet Referral Unit is reviewing translations of that material, but we have made very clear what we think of those organisations and we expect Twitter, Facebook and YouTube to act responsibly in these cases—as, in fairness, they have in others.

Baroness Smith of Basildon: I agree with everything that the Minister has said. My only question is: did he say or hint at the beginning of his comments that the reason that no firm action other than referrals has been taken at this stage was that this order had not gone through? My understanding was that the action which was taken under the Terrorism Act was not dependent on the proscription order.

Lord Bates: The noble Baroness is absolutely right. The content contravenes the Terrorism Act 2000. Action should be taken whether or not proscription has taken place.

My noble friend Lord Marlesford referred to the Muslim Brotherhood. As he said, this issue is under review. The Prime Minister commissioned an internal review of the Muslim Brotherhood. The review considered its philosophies, activities, impact and influence on our national interests at home and abroad. This was an internal review intended to inform government policy. We expect to be able to say something publicly about its conclusions in due course. I appreciate that that may not go quite far enough for my noble friend, but suffice it to say that the work of Sir John Jenkins has been completed and is now being reviewed.

We are conscious of the particular nature of the Muslim Brotherhood, which is a party that is in government in some countries—I think in Morocco, at least. We need an extra level of due diligence in reviewing this, but we certainly take on board my noble friend’s point. If we did not think that there was a problem, we would not have asked Sir John Jenkins, a distinguished diplomat with considerable experience in the Middle East, to undertake a review. We look forward to that review taking place and to being able to say more about it.

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Although the interesting contributions made by my noble friend Lord Elton and by the noble Lord, Lord Judd, were not particularly directed at me, I will say in passing that I think we all feel that respect and courtesy are very important elements. When people make light of the faith that I adhere to, I find it hurtful and not comfortable. However, there is a world of difference between that approach and taking the actions that we saw in Paris. I thought that one of the most heroic—if I may use that term carefully—parts of what happened were the actions of the Muslim personal protection officer to the journalist who had been under threat. He lost his life at the hands of the terrorists. I am sure that he was as offended as any other person of his faith would have been, but he chose to defend their right to speak freely.

We have put forward the arguments for proscription of these groups and demonstrated our condemnation of their activities and our support for the efforts of members of the international community to tackle terrorism. I commend this order to the House.

Lord Judd: I thank the noble Lord for his response to the points that were made; he is always very helpful in that respect. With regard to the Muslim Brotherhood, does he agree that it would be absolutely essential for the Government, in considering their response to the report, to take into account the coup in Israel, what has happened since and, in particular, the acute anxieties about the state of human rights in Egypt?

Lord Bates: Sir John Jenkins is someone who has impeccable credentials in understanding that part of the world. I am sure he will take all those factors into account and will review it.

Motion agreed.

Care of Churches and Ecclesiastical Jurisdiction (Amendment) Measure

Motion to Direct

7.07 pm

Moved by The Lord Bishop of Derby

That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Care of Churches and Ecclesiastical Jurisdiction (Amendment) Measure be presented to Her Majesty for the Royal Assent.

The Lord Bishop of Derby: My Lords, this Measure makes a number of amendments to existing legislation concerned with the care of churches and the exercise of jurisdiction by the ecclesiastical courts. The amendments will simplify the operation known as faculty jurisdiction, the legal framework under which the consistory court of a diocese regulates the carrying out of works and other proposals to its churches and churchyards.

The faculty jurisdiction is a reflection of the Church of England’s understanding that decisions about what happens in and to church buildings and churchyards

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are not simply a matter for local congregation decision. It is important both for the safeguarding of the Church of England’s historic buildings and for maintaining the confidence that the Government place in it in allowing it to operate its own procedures, rather than being subject to the secular consent procedure for listed buildings. It also has a role in ensuring that any proposals concerning the church or churchyard are consistent with the church’s doctrine and take proper account of the interests of all those whom our parish churches exist to serve.

The last major overhaul of faculty jurisdiction was carried out in the 1980s and resulted in the Care of Churches and Ecclesiastical Jurisdiction Measure 1991. In 2012, the Archbishops’ Council established a faculty simplification group to look at the operation of the system. It carried out extensive consultation; there was overwhelming support for the existence of the faculty jurisdiction, but issues were raised about the amount of bureaucracy. It was sometimes felt to be resource-intensive and not easy for some to engage with.

Three key proposals for streamlining the process are the basis of this Measure. The first is the establishment of an agreed national list of minor works not requiring a faculty. The second is the establishment of an agreed national list of routine works which would require some input from the diocesan advisory committee and the approval of the archdeacon, but which would not need to go through the full faculty procedure. The third is a more streamlined application process from early-advice stage through to the formal faculty petition—that is the application to the consistory court—with a more disciplined timeframe for routine cases.

That is the nature of the Measure. Something that does not need to be in the Measure is the development of an online system for applications. The most significant provision, Section 5, implements the proposal that there should be nationally applicable lists of minor and routine works that can, subject to certain conditions, be undertaken without a faculty. We believe that that will significantly reduce the burden on churchwardens and others who volunteer a huge amount of their time to maintain and develop our 16,000 parish churches as living centres of worship and mission.

Deregulation will be accompanied by effective safeguards to ensure that the nation’s heritage continues to be protected as effectively as it is currently. A range of matters are expressly excluded from the deregulation provisions. In particular, any works which would affect the character of a listed building are outside the scope of the regulation and would always have to go through the full faculty procedure—which means that, in those sensitive cases, English Heritage and other national amenity societies will continue to be consulted, and they and other interested parties will continue to have the right to object and to be heard by the consistory court. The Measure, and the rules made under it, will distinguish those cases where no or only light-touch regulation is needed from cases which require careful consideration, including consultation and the right to object. The desire is to move to a more flexible system with proportionate means of proceeding.

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Other provisions of the Measure include, in Section 4, simplifying the consistory court being able to grant faculties allowing free-standing buildings to be put up on disused burial ground, subject to certain conditions. Section 7 tidies up existing provision about appeals and which appeal courts hear which type of appeal. Section 8 provides for the appeal court to intervene in proceedings in the consistory court if there has been an inordinate delay—although it is hoped that the existence of that power will mean that it does not need to be used.

The Measure introduces some practical, balanced and sensible reforms which should mean that the faculty system continues to serve its purpose effectively but, at the same time, does not impose an undue burden on those who we rely on in the parishes to look after our churches. I beg to move.

Lord Marlesford (Con): My Lords, I welcome what has just been described by the right reverend Prelate. I declare two interests. I am a churchwarden of St Andrew’s Church, Marlesford, which is a grade 1 church. Secondly, I am president of the Suffolk Preservation Society. Suffolk is a county which is blessed with an enormous number of extremely beautiful churches.

I am sure that the reform is very sensible and useful but I would just make one or two very small points. Small things can matter greatly. An example that I would give is churchyards and tombstones. If you have an historic, highly listed church and a traditional churchyard, often with very beautiful tombstones with a particular sort of stone generally used, it can be most unfortunate if the wrong sort of stone is put in. I would like the power to intervene, if necessary, to be delegated to the parochial church council and the rector of the church or benefice concerned. I am not suggesting that the consistory court is necessary.

There are other small things. Again, to take my own church, the church wall is made of flint and is in terrible condition. We are hoping to raise some money to repair it. One thing we were told was, “That is going to need a faculty”, and of course getting a faculty is quite an expense. You have to have the diocesan architect and all that, which adds to the cost. I hope that could be an example of where, provided the church wall is repaired in the vernacular style—the same style in which it was built—it could be done without bureaucracy. Having said these things, I welcome what the right reverend Prelate has said.

7.15 pm

Lord Judd (Lab): My Lords, I want to stress my real gratitude to the right reverend Prelate for the clarity and brevity with which he presented these proposals. I am a member of the Ecclesiastical Committee as are other Members of the House present today. I think we would all agree that it was really encouraging to have the complete unanimity of the committee along with the warmth with which it endorsed the proposals. This was under the leadership and chairmanship of the noble and learned Lord, Lord Lloyd of Berwick.

Lord Cormack (Con): My Lords, first, I commend the right reverend Prelate for the manner in which he introduced this Measure, which of course has my support as it has the support of the noble Lord, Lord

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Judd, and my noble friend Lord Marlesford. I declare an interest as the vice-president of the Lincolnshire Churches Trust. I want to refer briefly to a matter which I raised in your Lordships’ House when I introduced a debate in June of last year on the importance of the parish church. I talked about the terrible problem of bats. I am afraid that people sometimes express hilarity when one talks about bats. They go off about bats in belfries, and all the rest of it. Even in another place last Friday, when Mr Christopher Chope introduced a Bill to try to tackle this problem, there was some light-hearted banter which did not recognise the terrible danger to the fabric of our churches from bats. Some of the finest works of medieval art are in our churches: wall paintings, monuments et cetera. The corrosive effect of bat urine and bat droppings is in fact gradually destroying many of these wonderful artefacts. This point was highlighted in a powerful letter in the


only last week signed by Professor Jean Wilson, who is the president of the Church Monuments Society, and a number of other eminent authorities, including the president of my own society, the Society of Antiquaries. It is a real, serious and continuing problem.

I very much hope that it is a problem that will be addressed in a future Measure, which will be presented as elegantly and concisely as the right reverend Prelate has presented this one. I hope that we can tackle this in the very near future because not only is it a real and continuing problem in the way that I have described but it is making it virtually impossible for some churches to be used for proper worship. One has had all manner of disturbing letters, such as that about the couple kneeling to receive the sacrament and receiving bat droppings. The priest administering the sacrament was similarly affected. I cannot stress enough what a problem this is and I would be grateful for a brief, and I hope sympathetic, response from the right reverend Prelate.

Lord Elton (Con): I assured the right reverend Prelate that I would say only “Hear, hear”. In fact, I am going to pinch his “Hear, hear” and say it to my noble friend Lord Cormack because we have suffered with bats, too, and it really is a serious problem. I am not sure whether it is the subject of this Measure or the proper place to raise it but I am very glad that it has been raised.

The Lord Bishop of Derby: I thank noble Lords for their interest and engagement and for their churchwardenship and leadership.

As regards tombstones, authority will in general continue to be delegated to incumbents provided that relevant criteria are met. As noble Lords will know, because the external appearance of the churchyard is so important we have to look at the types of stone used.

On the repairs to walls and so on, quite a lot of those issues will be deregulated but we have to remember that, if they are to change the appearance of the building or its presentation, that is a matter for wider concern and consultation.

I thank the noble Lord, Lord Judd, and the Ecclesiastical Committee for processing this so well and agreeing, so powerfully, to support it. I am grateful for that.

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As regards the bats, at the moment they are—as the noble Lord, Lord Cormack, will know—largely outside the scope of this Measure and subject to the Wildlife and Countryside Act. However, I share his concern from my own experience, and I am glad that he used the word “future”. Beyond this Measure we have to look seriously at the enormous damage being done to our buildings and put preservation and health at the forefront. We have some way to go, but I totally endorse and support what the noble Lord said. I invite the House to approve the Measure.

Motion agreed.

Ecclesiastical Property Measure

Motion to Direct

7.21 pm

Moved by The Lord Bishop of Derby

That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Ecclesiastical Property Measure be presented to Her Majesty for the Royal Assent.

The Lord Bishop of Derby: My Lords, this Measure makes a modest change to the statutory framework for land and property held on permanent trusts by parochial church councils. At present, legal title to all PCC land is vested in the “diocesan authority”—usually the diocesan board of finance—which holds it as trustee for the PCC, by virtue of the Parochial Church Councils (Powers) Measure 1956. The diocesan authority’s consent is required to all kinds of transactions, with the exception of leases for a year or less.

The trigger for the Measure before the House was a private member’s motion at the July 2012 group of sessions of the General Synod, which called for PCCs which are registered with the Charity Commission to be able to hold their own property legally and beneficially. The Archbishops’ Council did not support the change in the form proposed, but acknowledged that the PCC powers Measure is over 50 years old and the regulatory environment has changed very significantly. In view of this, the Archbishops’ Council agreed that a degree of deregulation would be helpful, and brought forward legislation which makes three substantive changes to the 1956 Measure.

First, the Measure removes entirely the requirement for a PCC to obtain the consent of the diocesan authority before bringing legal proceedings; for example, to evict squatters or non-paying tenants from parish property. On the coming into force of this Measure it will be for a PCC to decide, in every case, whether it is in its interests to bring proceedings. That is important, because it puts local knowledge to the forefront.

Secondly, the Measure extends the length of lease that can be granted without reference to the diocesan authority. Under the 1956 Measure as it stands, a “short lease” is defined as a lease for a year or less. The amendments made by this Measure define a “short lease” as a lease for seven years or less. That change aligns this requirement with the controls on dispositions of land under the Charities Act 2011, which apply only to leases of more than seven years.

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Thirdly, the Measure provides that the consent of the diocesan authority is required only for transactions with a value in excess of a figure to be specified in an order made by the Archbishops’ Council, which will be laid before the General Synod and Parliament. The Archbishops’ Council has not yet determined what the figure should be, as it has committed to consult others before setting the figure.

The Measure also makes equivalent provision for ecclesiastical trusts governed by the Incumbents and Churchwardens (Trusts) Measure 1964, which are subject to a statutory regime very similar to that for PCCs. I beg to move.

Lord Judd (Lab): My Lords, may I just say “ditto” to what I said about the previous Measure?

The Lord Bishop of Derby: I thank the noble Lord, Lord Judd, for his support and for the support of the Ecclesiastical Committee. I now invite the House to approve the Motion.

Motion agreed.

Church of England Pensions (Amendment) Measure

Motion to Direct

7.25 pm

Moved by The Lord Bishop of Derby

That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Church of England Pensions (Amendment) Measure be presented to Her Majesty for the Royal Assent.

22 Jan 2015 : Column 1508

The Lord Bishop of Derby: My Lords, this very short Measure makes a single change to the Church of England Pensions Measure 1997. It extends by a further seven years the period during which the Church Commissioners have power to use the capital of their general fund in order to fund their historic pension obligations. The Pensions Measure 1997 conferred the original power on the commissioners to spend capital in order to support their responsibility to pay pensions for clergy service before 1998. The original power came to an end in 2004, and has been extended twice since then, on each occasion for seven years.

The power to spend capital on pensions gives the commissioners the freedom to continue making payments to fund the work of the church. Without it they would have been forced to devote all, or almost all, the income of their general fund to the payment of pensions. Alternatively, they would have had to have invested their funds specifically for high-income returns, potentially eroding the real value of their capital for future generations. The pension payments will continue to increase over the next 20 years or so, especially as clergy and their spouses tend to be long-lived. The power to spend capital for this purpose is therefore likely to be needed for some time to come. I beg to move.

Lord Judd (Lab): My Lords, again ditto.

The Lord Bishop of Derby: I thank the noble Lord, Lord Judd, and the Ecclesiastical Committee for their support. I now invite the House to support the Measure.

Motion agreed.

House adjourned at 7.27 pm.