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Grand Committee

Tuesday, 3 February 2015.

3.30 pm

Arrangement of Business


The Deputy Chairman of Committees (Lord Geddes) (Con): My Lords, it is now 3.30 pm. It will not surprise your Lordships when I start by saying that if there is a Division in the House, the Committee will adjourn for 10 minutes.

Care and Support (Business Failure) Regulations 2014

Motion to Consider

3.30 pm

Moved by Earl Howe

That the Grand Committee do consider the Care and Support (Business Failure) Regulations 2014.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, I come before the Committee today to introduce the draft affirmative regulations under Part 1 of the Care Act 2014. The regulations before us relate to some of the most important elements of the Care Act, which consolidated 60 years of fragmented legislation into a single modern statute built around the needs and outcomes of a person.

Following Royal Assent for the Care Act in May 2014, the Government published final statutory guidance and laid those regulations subject to the negative procedure before Parliament in October and November, as well as laying these regulations in draft. In keeping with the collaborative approach that we have sought to maintain through the development of these reforms, over the summer the Government conducted an extensive public consultation on the guidance and regulations, including draft versions of the regulations that we will consider today.

The consultation engaged the full spectrum of stakeholders including: people receiving care and support and their carers; social workers and other front-line practitioners; local authority commissioners; social care providers; national representative groups; and NHS bodies. In total, the consultation drew more than 4,000 responses from many different sources. Responses were carefully analysed and, where appropriate, changes were made to regulations.

I will briefly introduce each of the four statutory instruments. I turn first to the Care and Support (Business Failure) Regulations 2014 and the Care and Support (Market Oversight Criteria) Regulations 2014. I will address these together as they form the two pillars of our broader strategy to protect people from

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provider failure. There is a diverse provider market in adult social care where entry and exit is a regular occurrence. Local authorities are currently able to intervene to meet needs in relatively rare cases where services are closed at short notice and individuals are put at risk—and historically they have done so effectively.

The Care Act places specific duties on local authorities in Wales and England, and their broad equivalents in Northern Ireland, to temporarily step in and meet needs where a provider is no longer able to carry on because of business failure. The business failure regulations set out the meaning of “business failure” generally by reference to different types of insolvency, for example administration and winding up. This approach ensures that people receiving services are protected in the event that their provider enters insolvency, without diluting the core responsibility of providers to deliver care services under normal circumstances.

The social care market includes large care providers, operating across much of England, whose financial failure, were it to happen, would cause local authorities considerable difficulty in carrying out their business failure duties without early warning. One such recent example was in 2011 when Southern Cross, then the largest provider of residential services in England, was threatened with insolvency. Local authorities had no prior warning of its financial position. While few people eventually had to change care home, the Government recognised that the degree of worry for people receiving care and their families was unacceptable.

The Care Act accordingly places new duties on the Care Quality Commission to assess the financial sustainability of certain registered care providers. The CQC will do this by collecting and analysing financial information. The CQC may respond to significant risks identified to the financial sustainability of a provider by requiring it to develop a plan to mitigate any risks identified, or ordering an independent review of the business. Should the CQC be satisfied that a provider is likely to fail, it will provide relevant local authorities with an early warning and the information that they need to prepare adequately to protect the continuity of care for individuals. Where the CQC is not satisfied that the provider is taking all the necessary steps to return to financial health, or it feels that it has not been given the necessary information to assess financial sustainability, it is able to take a range of regulatory actions, up to and including the deregistration of the provider in question.

The Care and Support (Market Oversight Criteria) Regulations set the entry criteria for the CQC’s financial oversight regime. Any provider meeting those criteria will be subject to the CQC’s regulatory activities that I have described. They have been designed to capture those providers that—because they are particularly large, geographically concentrated or operate in a large number of local authority areas—would be “difficult to replace” were they to fail financially. It is important to note that inclusion in the regime is a comment not on the likelihood of failure but rather on the risks that would be posed should the provider get into difficulties.

The Care and Support (Children’s Carers) Regulations 2014 relate to the power in the Act for local authorities to support carers of children in a similar way to that in

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which they support carers of adults, setting out how the rest of Part 1 of the Act applies in this situation. It is important to note that this power applies only in the limited circumstances where carers of children have received a transition assessment in preparation for beginning to receive support under the adult statute, but the transition has not yet actually taken place.

The broad principle at work will be that adult carers of children are supported under children’s legislation, while adults caring for adults will be supported under the Care Act. This instrument is merely an acknowledgement that some flexibility in this regard may be desirable around the time of transition. The instrument has been carefully drafted to ensure that it does not replicate the support for carers of children under other legislation, so ensuring that there remains a clear division of responsibility. These regulations allow for flexible and personalised approaches to support, without forcing local authorities into unnecessary changes to different, broader policies for carers of children and of adults, which exist for good reasons.

Lastly, the Care and Support (Eligibility Criteria) Regulations 2014 set out the national eligibility criteria for adult care and support and carer support. All local authorities will at a minimum have to meet this threshold and cannot tighten their criteria beyond it, although they will have a power to meet needs that were not considered eligible. The national eligibility threshold has been set at a level where the person’s care and support needs, and their inability to achieve certain outcomes as a result, have or are likely to have a “significant impact on their well-being”. This is intended to have a similar effect to the eligibility level that the vast majority of local authorities operate at present. Together with funding announced in the 2013 spending round, this will allow local authorities to maintain the level of access to care and support when the new system is introduced in April 2015.

Given the critical importance of the eligibility criteria, the Government have been especially careful to ensure that they have taken account of the full views of all relevant stakeholders. The Department of Health carried out an extensive engagement to gather views on an initial version of the regulations from June to December 2013, and engaged the Personal Social Services Research Unit at the London School of Economics to evaluate the draft regulations against current practice. These findings informed the second version of the eligibility regulations that were consulted upon in summer 2014.

Alongside the consultation, the department asked PSSRU to evaluate the second draft of the regulations, working with 27 local authorities to compare the draft regulations with recent cases. We made a number of changes to refine the criteria on the basis of feedback and independent research. We have also worked closely with stakeholders to test the approach. I am confident that the final version before us fulfils the Government’s commitment to replicate the current access to care and support in setting the national criteria.

These regulations are required to meet fully some of the central aims of the Care Act: protecting people from the reality of provider failure and the extreme worry caused by its spectre; providing flexible and

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appropriate support for carers; and ensuring more consistency in people’s rights to care and support. I commend these statutory instruments to the Committee.

Baroness Wheeler (Lab): I thank the Minister for his comprehensive introduction to these four important affirmative regulations. As he knows, I also have a take note Motion tabled for next week on the negative regulations on implementing the Care Act. Inevitably, there will be overlaps between today’s debate and next week’s but I hope that we can clear off some of the major issues today. The four SIs cover a number of important issues so, while we were happy to have them taken together to expedite the business of the Committee, I hope that the Committee will bear with me since there are a number of areas to cover in relation to implementation of the Care Act and the individual SIs. I also thank the Minister for the very helpful briefing meetings that he has had with Opposition Front Bench health team members on the regulations. He will know that both the Opposition’s health and local government teams are keeping a close watch on how the Care Act is being implemented, so we were grateful for the time that he took on this.

We believe strongly that this first phase of implementation has to be viewed across both the local government and health departments, and considered in the context of the huge funding pressures on local authorities, with a 40% cut in their funding since this Government took office. The Minister, of course, disputes this figure and others from independent bodies on the scale of local government cuts cross the piece and their devastating knock-on impact on social care. Whether the figures are from the King’s Fund, the Nuffield Trust or Age UK, they all put the scale of cuts to social care budgets in terms of billions of pounds.

Recent figures from the Association of Directors of Adult Social Services, with which the Department of Health has worked closely on the Care Act’s implementation, point to this year being the third year of continuing cash reductions and the fifth of real-terms reductions in spending on social care. It points out that, since 2010, social care spending has fallen by 12% while the number of those looking for support has increased by 14%. Social services departments have been forced to make savings of 26% in their budgets—the equivalent of £3.53 billion over the last four years. Compared to 2009-10, almost 300,000 fewer people over the age of 65 are receiving state-funded care.

On many previous occasions, the Minister has set out the additional funding being made available for Care Act implementation—and, despite the challenges, the recent DH stock-take shows encouraging overall progress in local authorities’ readiness for the phase 1 implementation from April 2015. Like the department, we commend the role of the joint LGA/ADASS/Department of Health programme management office. We fully recognise the scale and extent of the work that has gone into consultation exercises with stakeholders, the drafting of the regulations and guidance and the joint working on implementation with local authorities.

However, the same stock-take also makes clear councils’ continuing concerns about the adequacy of funding in the face of modelling which shows increasing

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support needs for local authorities around IT, workforce, information advice, carers and market shaping. Workforce capacity is a particular concern. The LGA view is that these aspects of implementation of the 2015-16 reforms may be underfunded by as much as £50 million.

Before moving on to the regulations, perhaps I may refer quickly to the Government’s plans to close down the Independent Living Fund in June 2015. We seek reassurances from the Minister that the funds transferred to local authorities from that fund will continue to be used to provide vital support for the disabled people who currently depend on it to be able to live independently in the community and have the same rights, choices and chances as any other citizen. My understanding is that it will be for individual authorities to make decisions on how the resources from the fund will be applied. Will the Government issue guidance to help protect the thousands of disabled people currently receiving ILF support who are affected by this decision? How will they ensure that the money is not just diverted into helping to fund the Care Act implementation or into general funding support for social care services?

The care and support regulations on the market oversight criteria, the interlinking negative regulation on market oversight information—covered by my take note Motion next week—and the business failure regulations are about trying to prevent the sort of problems witnessed in 2011 with the collapse of Southern Cross Healthcare, as set out by the Minister, by empowering the Care Quality Commission to monitor and obtain financial information from providers to check their financial stability and spot the early warning signs of potential difficulties and failure. The aim is to protect vulnerable people and their families if there is provider failure, to ensure that local councils have both early warning and support to be able to maintain vital continuity of support and to ensure that no one depending on the service will suffer.

3.45 pm

We all agree that, to do that, the CQC has to have the right powers, resources and expertise to scrutinise the very complicated company financial structures and accounts of care providers, which are often multi-company set-ups both here and abroad, making financial assessment and monitoring a huge and complex task. My honourable friend Liz Kendall questioned the Health Minister, Norman Lamb, closely on this when the regulations were dealt with in the Commons. The Minister expressed his full confidence in the CQC powers across the range of the provisions in the Act and the regulations, including, as the Minister pointed out, assessing finances, requiring organisations to take steps to return to financial health if there are problems, requiring the provider to undertake an independent review and producing a plan to mitigate financial risk.

Those are complex expert tasks indeed, and in the light of that I am sure that the Government now regret saying in the consultation that they expected CQC information-gathering to be “light touch”. I ask the Minister to reassure the Committee that he recognises the scale and extent of the task facing the CQC, involving detailed monitoring, scrutiny and assessment under the criteria set out in the regulations, equating

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to 400 registered providers across about 4,000 locations. Will he commit to ensuring that the CQC is effectively resourced to undertake this work?

Under the Care Act, local authorities are required to step in and provide care where a provider is no longer able to carry on because of business failure. I also ask the Minister what guidance, support and funding will be given to local authorities to help them cope with ensuring that there is continuity of care and that they are given the concrete practical advice they need. There is concern that the current focus is on the duties faced by local authorities rather than on the vital support to be provided when a major failure occurs.

Finally on these regulations, I note that the Joint Committee on Statutory Instruments has drawn the attention of the House to the market oversight information regulations being “defectively drafted”. I assume that we will be covering this next week but I ask the Minister to provide for noble Lords—prior to the debate, if possible—information on the department’s response to the Joint Committee’s comments and notice of any proposed changes that need to be made as a result of the committee’s findings on this and the two other SIs to which the committee refers.

Next, I turn to the children’s carers regulations. We now hear that we have an important interface between the Care Act and the Children and Families Act concerning the extent to which the arrangements for the carers of disabled children fall under either Act. Many hours and days were spent during the passage of both pieces of legislation on trying to address the concerns of parent carers. The provisions in these regulations deal with the preparation of carers of disabled children for the child’s transition to adult care and support. I understand that there has been considerable discussion with carers’ organisations over these transitional arrangements and that progress has been made, but there is still strong concern that carers in this situation have weaker rights than carers caring for adults.

As I understand it, under these regulations someone caring for a child in transition who is eligible for support would be able to receive services for the child, such as replacement care, only if this were provided by children’s social services. However, under the children legislation, there are no nationally set eligibility criteria for carers, which means that the carer of a child in transition who needs support as a carer will not have as clear a right to this support as an adult caring for another adult covered by the Care Act. The important interlink here is the need for regulations or statutory guidance setting out the operation of the new duties to carry out parent carers’ assessments for local authorities. There is no sign of these coming, and only belatedly have draft regulations on assessments for young carers been issued for consultation. Can the Minister comment further and update the Committee on this? Does he acknowledge that, without these, local authorities will be left without clarity about implementing the new rights? What plans do the Government have to support local authorities in implementing the new rights for parents and young carers?

There is also strong concern about the rights of carers of disabled children under the age of 16 who do not have legal parental responsibilities, such as siblings,

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grandparents and other family members or friends who are not covered by either the care or the families legislation. Can the Minister confirm that the relevant parts of the Carers (Recognition and Services) Act 1995 will be retained to ensure that such carers do not lose any existing rights to a carer’s assessment?

My final issue on the subject of parent carers concerns those caring for a disabled child as well as an adult with care needs. It is more an issue of practice rather than official guidance. It would be complex for those working with carers to bring together the legal duties and practice from the two pieces of legislation and it is important that practitioners are supported to develop best practice in this area. What are the Government doing to support the workforce to understand how to knit together the two pieces of legislation in more complex family situations such as these?

The final regulations we are discussing today concern the key issue of eligibility criteria for care and support. We cannot consider these without first acknowledging the deep concerns of the organisations that work with older and disabled people that the objectives of the Care Act of early intervention, prevention and promotion of well-being cannot be achieved with the eligibility criteria set at the level in the regulations. The Care and Support Alliance, which represents 75 leading charities, estimates that this will leave 340,000 older and disabled people without the support they need to do things as basic as get up, wash, dress and eat.

The alliance rightly argues that if older people do not get the care and support they need it would be bad for them as well as costing the taxpayer more because their health will suffer and they will need to go into more expensive hospital or residential care. The strong fear is that the mix of the “unable to achieve two or more” of the activities in the list of the 10 outcomes, combined with the caveat that the local authority must deem such an inability as having “a significant impact” on the adult’s well-being, leaves open to interpretation by each local authority what constitutes a significant impact on well-being. Some of the language in these regulations is seen by many as vague and open to misinterpretation.

We support national eligibility criteria which limit postcode lotteries and variations across the country and we do not consider that the current regulations achieve this. How does the Minister consider that the postcode lottery situation will be avoided? The original draft regulations referred to one or more specified outcomes and it would be helpful to hear why the criteria were tightened up following the consultation.

We know that with the current financial pressures councils are deeply concerned about the potential costs of the new eligibility criteria. Their fear, in contrast to the stakeholder concerns, is that the new definition of “substantial” and the wider well-being perspective may in practice turn out to be more generous than the current definition, despite the firm view at the Department of Health that the regulations have been drawn in such a way as to be very similar if not the same. The LGA is calling for financial compensation for councils which are shown, under the monitoring

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framework being developed by ADASS, to have incurred extra costs over and above their 2015-16 allocation. Can the Minister reassure councils that this will be the case? Does he agree with the LGA view that the reality is that the eligibility will continue to be a very subjective process under each council?

On a wider issue, the Secondary Legislation Scrutiny Committee—we have copies of its report here today—has rightly pointed out the huge communications and information challenges ahead for the Government and local authorities in explaining the new system and how it operates to applicants. As it said, the extensive guidance that has been drawn up at 500 pages,

“is going to be beyond the understanding of most applicants”—

an understatement if there ever was one. Can the Minister tell the Committee what strategies and work are in place to address this situation? Will he undertake to have further discussions with stakeholders on this key issue and work closely with them to ensure effective information, communications and support for the applicants, their carers and families as they try to tackle the mound of form-filling and paperwork that is potentially involved?

Finally, on pension pots, is the Minister in a position to update the Committee on any progress that has been made concerning the question of assessments for income-related benefits and the implications for care and support under the Care Act arising from the pensions flexibility provision in the Pension Schemes Bill? My noble friend Lord Hunt raised this matter during the debate on the deferred payments regulations before Christmas, but the subsequent response of the noble Baroness, Lady Jolly, in January did not answer the key question of what happens in the light of the effective breaking down of the distinction between a savings account and a pension under the pensions flexibility arrangement.

During the Pension Schemes Bill debate on this issue there was little evidence of joined-up working and discussion between the DWP and the Treasury, let alone of discussions with the Department of Health on the implications for the pension pots of applicants applying for support under the Care Act. Can the Minister confirm that the DoH is involved in discussions on this and that the Government will respond on this issue to deal with the situation under the Care Act before the Third Reading of the Pension Schemes Bill, which is tomorrow?

Lord Lipsey (Lab): My Lords, it is a great pleasure to follow my noble friend Lady Wheeler, who has achieved the rare feat of matching the Minister in both her knowledge of the subject and the eloquence with which she expressed it. I shall raise one or two points on just two of today’s regulations. The first is the market oversight criteria regulations—which, in principle, I strongly support. A few alarm bells began to ring in my skull when I saw that the body to be responsible for this is the CQC. My mind drifted back nearly a decade, I suppose, when we were in this Room debating the amalgamation of three regulators, proposed by the then Government, into the CQC. I remember speaking with all the eloquence that I could muster to explain why this was going to be disastrous, and the

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noble Lord, Lord Darzi, the then Minister, explaining with great eloquence why I was completely wrong. After that, the noble Lord and I would go outside and he would say, “I totally agree with you, David; this is an act of absolute madness”. I am afraid that for years so it proved.

I regard the CQC as on probation. It has new management. David Behan, the chief executive, is a man for whom all of us, I think, have the greatest respect. There are examples in which the CQC is improving its practice but it is still only on probation, which in itself does not provide me with the complete reassurance that I should like. More seriously, it is all very well having market oversight, but you need the resources to do it. I have done a little back-of-the-envelope calculation based on the Explanatory Memorandum, which suggests that the CQC will spend £6,000 per chain monitoring whether it is in financial trouble. Frankly, £6,000 does not buy much of a top accountant’s time. So while I should like to think that the CQC will pick up readily in advance of crises that there are problems, I doubt whether it is resourced to do so. The Minister and the Government should satisfy themselves that this job will be done and is not just a paper exercise so that, if something goes wrong, they can say that they did something about it. In practice, that will not be effective.

It is not entirely accurate to say that the eligibility criteria regulations translate into legislation the present criterion of substantial. Indeed, it has been argued that this is a slightly more liberal definition than the present substantial definition of what creates eligibility. But it is also not wholly inaccurate. I do not have any objection to this. I have read the useful briefing provided by the Care and Support Alliance but I am not convinced that, given the shortage of finance, to which I shall return in a moment, it would make sense to impose a much looser definition of eligibility and substantial, as recommended by Dilnot—particularly in view of the financial situation in social services.

I know that figures get bandied about for ever on this. I chose to take one from the Department of Health’s publication of March 2014 in which it said that spending on adult social services had fallen by 8% in the previous two years. Since the Government say that that is true, it must be true. Incidentally, we are seeing a folly in public finance which deserves to be highlighted. When you ring-fence one bit of public finance or guarantee it in real terms, that leads to more pressure on other forms of public finance. Because healthcare is ring-fenced and maintained in real terms—I am not arguing about whether the numbers are right—social services ends up taking more of the brunt.

4 pm

I know that ingenious methods have been used by the Government to try to transfer money from one to the other without being caught doing so in terms of a breach of their health commitments, but it makes it all more complicated. Whatever approach you take to the necessary closer integration of health and social care, one budget has always seemed to me to be the absolute secret of it—and nothing here moves us greatly towards that.

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My second concern is that it appears that one is setting here—indeed, I think the Minister almost said as much—some sort of national standard where, wherever you live in the country, you are bound to get a certain amount of help if you have these substantial care needs. However, I refer back to a report of the Audit Commission. I am afraid I do not have it to hand; it is a number of years old, but it was very striking at the time. Whether you get help from your local council depends not so much on which council you live under, but on who the council happens to send round to see you. To caricature it: if you get a social worker who was brought up, as my wife was in the good old days, when social workers were advocates for their clients, and their job was to argue for the most money possible for them, you may get help despite having only relatively minor impairments; if you get one of the modern breed who has been told that their career prospects depend entirely on denying as many people as possible the help they need, you might get another verdict. This gives the illusion that it is removing national disparities across the nation. It is removing the geographic postcode lottery, but it is not removing the social-worker-you-get lottery—and that, according to the Audit Commission, is a more serious lottery.

Also, these verdicts will be even more significant in future than they are at present. At the moment, yes, the assessment determines whether you get local authority-supported help with your needs—whether you have to contribute towards the cost of that through the means test or whether you get it free is a separate issue—but, under the new regime, it will determine another thing, too: it will be what decides whether you start the meter ticking for eligibility towards the £72,000 Dilnot care-cost cap. Old people will have much more at stake in these assessments even than they do now. Their families will have a huge amount at stake, because if they are turned down and the meter does not start running, it will be longer before their care costs are paid for.

All this will come out in the wash, but it will be a very painful wash. There will be an awful lot of appealing going on; an awful lot of people who feel very ill treated because they do not get rated as having substantial needs, when they feel that their needs are substantial; a great many cross relatives; a great many older people feeling unfairly treated. Of course, there will be mistakes and anomalies and problems.

We all know the problems that arise with an old person when a social worker comes round. The person can hardly drag themselves out of bed and toilet themselves or whatever, but when the social worker comes, they think, “Christ, if I’m not careful, I might get taken into care”. So they say. “I am fine. I can bounce about my flat under my own steam with no difficulty at all”. Well, of course, the social worker then fills out the forms saying that no help is needed, whereupon the old person flops back into bed and stays there without the help they actually need for another year or two until someone tries again. I put it in simple and no doubt over-flamboyant language, but this is a reality that we need to face up to.

Although I have no substantial objection to these regulations, this is the beginning of the story, not the end of the story. There is a great deal to be worked

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through here and a great deal to be thought through by the Government, by local government and by the organisations that represent those in need of care. I am sure that it will need to be debated in the House—and further action taken as the months and the years go by.

Baroness Pitkeathley (Lab): My Lords, I will speak briefly on two of these regulations: those relating to the eligibility criteria, following on from my noble friend Lord Lipsey, and, first, the children’s carers regulations.

Some noble Lords in the Room will remember, when the Children and Families Bill went through this House, the struggle that we had to get parent carers recognised at all in the legislation. All credit to the Minister for finally recognising that parent carers had rights. However, there is now a serious problem because the regulations that we were promised would be issued along with the regulations under the Care Act have not in fact been issued. We have therefore left local authorities without clarity or direction about how to implement these new rights for parent carers—rights which we won with such difficulty but with eventual recognition from the Minister.

I ask the Minister, as did my noble friend, when the Government intend to publish statutory guidance on the new rights for parent carers under the Children and Families Act, why the statutory guidance was not issued at the same time as the guidance under the Care Act, and what plans they have to support local authorities in implementing the new rights for parent carers and young carers. I also support what my noble friend Lady Wheeler said about those carers who are left high and dry—the carers of disabled children who do not have parental responsibility. They are not covered by either piece of legislation and are left with a rump of rights under the long-outdated Carers (Recognition and Services) Act 1995. We really do need to clear that up.

I turn to the issue of eligibility criteria. As everybody knows, the Care Act creates an equivalent duty on local authorities to meet the care and support needs of adults and carers alike. In doing so, it puts carers of adults on the same legal footing as adults with care needs. This was a hugely significant legal development, giving carers the clearest rights ever to support in their caring role, and it is greatly welcomed. However, the Government’s decision to set the minimum threshold at the level at which local authorities are already providing support is a cause for huge concern. As we heard from my noble friend, the historic underfunding of social care has left thousands of older and disabled people without access to the care that they need, and has heaped pressure on to family carers, who are increasingly stepping in to provide care at great personal, societal and economic cost.

ADASS reports that spending on social care has been reduced by some 26% in the past four years. It is absolutely vital that a sustainable level of funding is put in place for social care, setting the funding mechanisms which will deliver the amount of money that we need to tackle the existing gap between need and supply

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and to keep pace with growing demand—and the demand is growing. The number of carers who care for 50 hours or more per week is rising faster than the number of the general carer population—Carers UK estimates that there has been an increase of 25% over the past 10 years. Despite the ongoing rise in the number of carers in the UK, the number receiving carers’ assessments and carer services from their local authorities is falling. I fear that that situation will only get worse. Carers are going without food and cutting back on essentials. Those who care for 35 hours or more a week are twice as likely to be in bad health as non-carers, with the knock-on effect that that will have on their own health in the future. Therefore, I believe that we have to look very carefully at the levels of funding and at what the eligibility criteria mean.

So far as carers are concerned, the Care Act is all that I could wish for—and have been working for for almost the last 30 years. It is ironic that it is being implemented at a time when budgets are so tight that the rights of carers may be threatened, not enhanced.

Earl Howe: My Lords, I am grateful to all noble Lords who have spoken for their questions and comments on these regulations. I turn first to the regulations relating to business failure duties and market oversight criteria, and in particular to the question posed by the noble Lord, Lord Lipsey, about why we have chosen the CQC as the regulator in this regard. I say openly to him that it was a finely balanced decision. We were confident that we had a choice between the CQC and Monitor. Either could have performed the role. Last year, the Health Select Committee recommended that the Government should reconsider their decision to choose the CQC rather than Monitor to undertake this regulatory function.

However, as set out in the committee’s report, there is a close correlation between poor quality and poor financial performance. It recognised that for this reason the CQC is well placed to perform the function. The CQC is gearing up to do that. It recognises that it needs additional skills to assess the financial sustainability of providers. It does not yet have these core skills in-house. The CQC has procured external consultants to assist in designing its new regime and the resources needed to operate it, which will comprise a mix of internal and external expertise. That will ensure value for money. It is recruiting a number of highly experienced specialists in accounting and insolvency who will be responsible for undertaking the financial sustainability assessments of providers in the regime on an ongoing basis.

The department will support the CQC to carry out this function by providing additional funding. I hope that that provides the noble Lord with some confidence that the CQC is well capable of undertaking this task. The CQC has published draft proposals on how the market oversight regime should operate. A four-week public consultation began on 29 January. Revised final guidance will be published in early April.

As regards the process of gathering financial information, which was referred to by the noble Baroness, Lady Wheeler, the CQC has the power to require a provider to supply the information specified. The provider

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cannot refuse without risking enforcement action by CQC. The CQC’s aim is that the information it requests from providers will be the same as the provider’s own board would use to assess how the business is faring. It will be light touch in the sense of not onerous. The CQC has a duty to minimise burdens on businesses. However, its overriding duty is to protect vulnerable people by understanding providers’ finances and sustainability, and giving early warning of any likely failure to local authorities to help them intervene. It will require information in a proportionate way to deliver this duty.

The noble Baroness also referred to the need to support local authorities to carry out their temporary duties when a care provider fails. We recently published statutory guidance outlining local authorities’ roles and responsibilities in the event of business failure to support them in this area. In addition, the department plans to work with the Association of Directors of Adult Social Services to develop further guidance on contingency planning for provider failure, which should be available by the summer of 2015. The department has also commissioned guidance which will help local authorities to assess the financial sustainability of their local care market and individual providers within it that are not subject to the market oversight regime.

As regards the Care and Support (Children’s Carers) Regulations, concerns were raised by the noble Baronesses, Lady Wheeler and Lady Pitkeathley, around children’s carers, and in particular the new right to assessment for carers in the Children and Families Act which covers adults caring for disabled children only when they have parental responsibility. The Government will address this issue through the Care Act 2014 and the Children and Families Act 2014 (Consequential Amendments) Order 2015, which will be laid in draft before Parliament very shortly. The order will effectively save Section 1 of the Carers (Recognition of Services) Act 1995 in so far as it applies to adults caring for disabled children who do not have parental responsibility. This means that such adults will continue to have a specific right to ask for an assessment under the 1995 Act if they are caring for a child being assessed under the Children Act 1989 or the Chronically Sick and Disabled Persons Act 1970. I hope that that is helpful.

As to the specific right of adults caring for children to support to meet eligible needs, care and support for children and their carers takes place in a different context to that covered by the adult statute. Children’s legislation rightly gives primacy to the welfare of the child and this is reflected in the way the legislation works. With that said, of course the Government recognise the enormous contribution of carers of disabled children and the sacrifices they often make in taking on these caring roles. That is why the Children and Families Act includes a specific right to assessment for parent carers of such children and a requirement that in carrying out these assessments local authorities must now have regard to the well-being of a parent carer. This mirrors the definition of well-being in the Care Act, which is of course also the basis for considering the impact on well-being through the eligibility criteria.

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4.15 pm

I do not believe that the concern of the noble Baroness, Lady Wheeler, that carers of children will be left with inferior rights during transition, is well founded. The regulations stipulate that services may not be provided to a child to meet the needs of their carer under this legislation, but we are not at all saying that providing services to a child would never be an appropriate response to supporting their adult carer. The stipulation is simply about division of responsibility, specifically the principle that care and support for children should always be provided under children’s legislation. Where children under 18 are supported, this should always happen under children’s legislation—usually the Children Act 1989. This of course is also the rationale for a parent carer’s broader right to assessment being inserted into the Children Act 1989 rather than included in the Care Act. Transition is a time when it is particularly important to be clear about the division of responsibility, so it would not be appropriate to create an overlapping set of legal entitlements for carer support for children based on whether or not their adult carer has had a transition assessment.

I come lastly to the Care and Support (Eligibility Criteria) Regulations 2014. Perhaps I may, first, briefly cover the comments made by the noble Baroness, Lady Wheeler, about funding for adult social care in general. We know that there have been pressures on local authority budgets and it would be idle to pretend that local authorities have not felt that pressure very acutely across the board. Since 2010 we have allocated additional funding for the NHS each year to support social care. That funding is worth £1.1 billion in the current financial year. Social care expenditure has decreased in real terms but by a great deal less than local authority expenditure in other areas.

We can also look forward to next year when the better care fund will be established to provide better integrated care. One of its conditions is to improve the delivery of health and social care by preventing people reaching crisis point. The vast majority of the £5.3 billion that has currently been allocated to the fund is being spent on social care and out-of-hospital community health services.

The noble Baroness asked whether it followed that the 12% reduction in local authority budgets and the knock-on effect in care spend, plus the 14% growth in the numbers of elderly and vulnerable people, equates to a 26% shortfall. I cannot agree with her maths on that. The two figures are for different issues and are not comparable. For a start, not all of the additional elderly people will be eligible for care and support.

Lord Foulkes of Cumnock (Lab): My Lords, if the Minister is going to correct my noble friend, could he say what the combined effect will be in percentage terms?

Earl Howe: I shall have to take advice before answering, but I will be happy to answer the question as soon as I receive inspiration.

Implementing the Care Act will be a challenge for local government, and takes place in the context of competing policy and financial pressures. However,

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we have already announced £470 million in total for the cost of the new duties in the Care Act which come into effect in April 2015. We have made substantial revisions to our impact assessment, following work with local authorities, to reflect changed assumptions on costs. This will mean acknowledging greater costs for carers in 2015-16 and beyond. We have recognised that.

In the first year, we will create a new carers grant to target this funding where it is most needed. As a result of this work, we believe that implementation of the Care Act will be affordable to local authorities in 2015-16. We will take further steps with the LGA and ADASS to agree a process for monitoring the costs in-year during 2015-16, to check on our assumptions and to provide evidence for the next spending review. Affordability is not just about the overall funding. We are also investing in a large suite of materials to help councils implement the Act effectively.

As regards the question posed by the noble Lord, Lord Foulkes, I am advised that the calculation that he seeks is not a simple one. I will need to write him a letter. I hope that he will allow me to do that. I shall try to be as explicit as I can in that letter.

Lord Foulkes of Cumnock: It is certainly not a simple calculation, and I think my noble friend was near the mark. Would the Minister send a copy of the letter to all the Members present?

Earl Howe: I will be very happy to do so.

The noble Baroness, Lady Wheeler, referred to the closure of the Independent Living Fund, and asked for the Government to provide guidance in the light of that. In response to the views of stakeholders during the consultation, we have provided guidance on how local authorities should manage the transition to social care for people previously receiving ILF funding. The guidance is included in the Care Act guidance that has now been published.

Both the noble Baroness, Lady Wheeler, and the noble Lord, Lord Lipsey, questioned the words “significant impact on well-being”. In particular, they expressed concern that there might be a variation of interpretation of that phrase. One of the core principles of the Care Act is that the person is central to the new care and support system, and that support is built around their needs and the outcomes they want to achieve. Considering the impact on the person’s well-being in deciding on their eligibility will make the determination personal to them. This recognises that people with similar needs and inabilities to achieve certain outcomes may have different eligibility determinations because the impact on their well-being is different.

It is important that there is consistency in approach in how the eligibility criteria are used. We have commissioned Skills for Care to develop training material and the Social Care Institute for Excellence to develop practice materials to support implementation of the eligibility criteria across authorities. Professional judgment will remain key to decision-making—this should not become a tick-box approach which does not focus on

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the person. We have never claimed that this will remove disparity. The system is person-focused, so it is inevitable and right that individual decisions will be made.

As regards the concern of the noble Baroness about requiring people to be unable to carry out two or more outcomes, and whether that would restrict access to care, this was an issue that was raised with the consultation version of the regulations, where there was concern that it would be impossible for people with mental health problems to become eligible due to how we described the outcomes that had to be considered. We addressed this in the regulations we are discussing today by converting the two lists of outcomes which were described in the consultation version of the regulations into one list which would capture all groups. We checked this approach with our stakeholder working group, which included members from the Care and Support Alliance and ADASS. The group concluded that it could not identify any groups that would be unintentionally excluded from eligibility due to this approach.

I turn next to the issue of informing the public, so that they have a clear understanding of their rights and the system overall. The noble Baroness will remember that we discussed this extensively during the passage of what is now the Care Act. We are putting in place a full communications campaign to ensure that people receiving services, their carers and families—and the broader population—understand the impact of the Care Act and what it means for them. The campaign will feature a partnership between the local and the national, building on the successful approaches pioneered by previous campaigns such as Change4Life. Local authorities, working with other local partners including the NHS and the voluntary sector, will get messages out directly to their own populations. We have developed a range of campaign materials and guidance to help councils communicate the changes in their local area. That will be supported by wider-reaching national activity—

The Deputy Chairman of Committees: With great respect to the noble Earl, I am afraid that a Division has been called in the Chamber. The Grand Committee stands adjourned until 4.35 pm.

4.25 pm

Sitting suspended for a Division in the House.

4.35 pm

The Deputy Chairman of Committees: My Lords, it is 4.35 pm. I happen to know that the Minister is on his way because I was with him in the corridor. If we could perhaps crave indulgence for just one more minute, I am sure he will appear.

4.37 pm

The Deputy Chairman of Committees: The Minister has now rejoined us. I cut him off in mid-flow, so perhaps he would like to continue.

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Earl Howe: My Lords, I have only a few more remarks to make. I was explaining the measures that we would take centrally and nationally to inform the public, including door drops to 2.5 million households and articles in the national media, as well as local radio and digital activity. The first phase, which focuses on people already receiving services, began late last year and is planned to continue through to April 2016. Scoping is also under way for a behaviour change campaign to encourage people to prepare for care and support needs as part of their wider financial planning.

The noble Lord, Lord Lipsey, questioned whether the final version of the regulations described the current level of access to care and support in an adequate way. We have commissioned the PSSRU to evaluate the final version of the eligibility regulations so that we can further our understanding of their impact. It will carry out its evaluation during the summer, when the regulations have been in use for six to eight weeks, and will report in August. However, there is no reason why people currently receiving care and support have to lose their access to this because of the introduction of the national eligibility threshold. The Care Act provides people with the assurance that local authorities must meet needs that meet the national threshold and, as I mentioned earlier, authorities can also decide to meet needs that are not eligible—in other words, they can meet needs that are considered moderate. Therefore, there is flexibility for local authorities in that sense.

To the extent that I have not been able to answer questions, I shall of course write to noble Lords. However, I hope that with those comments the Committee will be sufficiently reassured to approve these sets of regulations.

Motion agreed.

Care and Support (Children’s Carers) Regulations 2014

Motion to Consider

4.39 pm

Moved by Earl Howe

That the Grand Committee do consider the Care and Support (Children’s Carers) Regulations 2014.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Care and Support (Eligibility Criteria) Regulations 2014

Motion to Consider

4.40 pm

Moved by Earl Howe

That that Grand Committee do consider the Care and Support (Eligibility Criteria) Regulations 2014.

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Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 19th Report from the Secondary Legislation Scrutiny Committee

Motion agreed.

Care and Support (Market Oversight Criteria) Regulations 2014

Motion to Consider

4.40 pm

Moved by Earl Howe

That the Grand Committee do consider the Care and Support (Market Oversight Criteria) Regulations 2014.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Smoke-free (Private Vehicles) Regulations 2015

Motion to Consider

4.41 pm

Moved by Earl Howe

That the Grand Committee do consider the Smoke-free (Private Vehicles) Regulations 2015.

Relevant documents: 17th Report from the Joint Committee on Statutory Instruments, 21st Report from the Secondary Legislation Scrutiny Committee

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, these regulations aim to protect children from the harms of second-hand smoke in private vehicles. In 2007, smoke-free legislation was introduced in England and Wales to protect employees and the public from the harmful effects of second-hand smoke in public places, work premises and vehicles. At that time, the legislation was not intended to extend to private vehicles.

The Children and Families Act 2014 amended the Health Act 2006 to give the Secretary of State regulation-making powers to make private vehicles smoke-free places when carrying children under the age of 18. Second-hand smoke is a serious health hazard, and there is no safe level of exposure. Every time someone breathes in second-hand smoke, they breathe in more than 4,000 chemicals. Many are highly toxic, and more than 50 are known to cause cancer. Second-hand smoke is a real and substantial threat to child health, causing a variety of adverse health effects, including increased susceptibility to lower respiratory tract infections such as pneumonia and bronchitis, the worsening of asthma, middle ear disease, decreased lung function and sudden infant death syndrome. We also know that children are more vulnerable to second-hand smoke exposure in vehicles as they breathe more rapidly and inhale more pollutants than adults.

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A significant number of children say that they are exposed to second-hand smoke in private vehicles. In 2012, 26% of 11 to 15 year-olds reported being exposed to second-hand smoke in their family’s car and 30% in someone else’s car. We estimate that approximately 3 million children in England are exposed to second-hand smoke in their family car.

Research shows that smoking in vehicles can result in the build-up of high levels of second-hand smoke, which can persist even when windows are open or the ventilation system is in use. Many children feel unable to ask someone to stop smoking when travelling in a car. Research shows that 34% of children who are exposed to second-hand smoke in vehicles do not feel able to ask the person smoking to stop, because they are frightened or embarrassed.

The Government are committed to protecting children from the harms associated with smoking. Much support has been expressed in this House for ending smoking in vehicles carrying children. I commend all the noble Lords who have campaigned for the introduction of these provisions, particularly my noble friend Lord Ribeiro, who sought to introduce similar measures in his Private Member’s Bill.

The regulations extend the existing smoke-free legislation by setting out the circumstances when private vehicles are smoke-free. Specifically, they amend the current regulations that make public vehicles and work vehicles smoke-free so that all road vehicles that are not already smoke-free will be smoke-free places when they are enclosed and a person under 18 is present in the vehicle. As with the existing smoke-free legislation, the regulations do not apply to ships, hovercraft and aircraft, as they are covered under different legislation, and they do not apply to motor homes, camper vans and caravans when they are being used as a home. This is because the policy aim is for the regulations to apply to vehicles, not homes.

4.45 pm

It will be an offence to smoke in a private vehicle with someone under the age of 18 present, and for a driver to fail to prevent smoking in a private vehicle with someone under the age of 18 present. To make the penalties for both offences proportionate, the regulations introduce a fixed penalty notice for the offence of failing to prevent someone smoking in a private vehicle. Currently, for existing smoke-free premises and vehicles this offence falls to the owner or manager of a business and can be dealt with only in court, but an FPN is more appropriate for drivers of private vehicles.

Anyone who smokes in a smoke-free private vehicle will be guilty of an offence regardless of their age, which is consistent with existing smoke-free legislation. The offence of failing to prevent smoking would apply to the driver of the vehicle in all instances, including provisional licence holders, although there is a defence of the driver having taken reasonable steps to cause the person to stop smoking. The FPN will be £50 for both offences. Enforcement officers will use their discretion in deciding whether to issue warnings or fixed penalty notices or to refer an alleged offence directly to court.

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Local authorities enforce the existing smoke-free laws. The regulations add police forces as enforcement authorities for smoke-free private vehicles because, unlike local authorities, they are able to request that a vehicle stops if they suspect that an offence is being committed. Local authorities would also be able to enforce the proposed regulations, and there will be an important role for local authority regulatory officers in working jointly with the police on local enforcement activities, as well as continuing their efforts to build compliance for smoke-free legislation generally. The regulations include a statutory duty to review the regulations within five years of their coming into force.

It is important that Public Health England continues its work to encourage voluntary action to protect children from the harms from exposure to second-hand smoke. It will be running a campaign to raise awareness of these health harms from next week. It will also develop a campaign to raise awareness of the new regulations in advance of them coming into force.

The regulations will come into force on 1 October 2015. I consider that the April common commencement date is too soon to allow for sufficient training of enforcement officers and to raise public awareness of the regulations, particularly as it would fall in the purdah period. We expect that to start in late March and it would mean that the Government were limited in their public communications activities.

It is important to remember that, as with the existing smoke-free regulations, we will measure the success of the proposed regulations not by the number of enforcement actions that are taken but, rather, by how behaviour, attitudes and health outcomes change in time.

These regulations form part of our comprehensive approach to tobacco control. We have introduced legislation to make it illegal for an adult to buy, or attempt to buy, tobacco for anyone under the age of 18. Through regulations, we would look to extend the scope of this offence to cover e-cigarettes. The department is consulting—the consultation is in train at the moment—on draft regulations to introduce age-of-sale requirements for electronic cigarettes, just as we have for tobacco. Also, as my honourable friend the Minister for Public Health announced on 21 January, we will be bringing forward legislation for standardised packaging before the end of this Parliament. Protecting children from the harms of second-hand smoke is an important public health measure, and I commend the order to the Committee. I beg to move.

Lord Ribeiro (Con): My Lords, I thank the Minister for his very kind words. This is a good-news day for children. These regulations and the Bill that went through are about protecting our children in the future. I think that we will send a very powerful message by passing these regulations and I hope that noble Lords will support them.

There is no point in rehearsing all the evidence that the Minister has very kindly given us. However, there is evidence that there has been a significant improvement in children’s health since regulations were introduced. We have only to look to Canada, where there is a ban on smoking in 10 of the 13 provinces. The evidence

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suggests that since the legislation was brought in, children’s exposure to second-hand smoke has dropped by a third.

The other important thing is the Government’s intention that these regulations should be not just punitive and about fining people but about behavioural change. When there was real reluctance from the Government to see the Bill go through—both when I introduced it as a Private Member’s Bill and early on during its passage—the questions raised were how to police it and how to ensure that people stick to the regulations and the law. The very fact that the emphasis is going to be on prevention, with a focus on health, is good.

Regarding the £50 fine that will be introduced, I am also delighted that the Government have taken the view that there will be a discount of £20 for those who pay within 15 days. That is a very important incentive. I had hoped that we might be able to introduce a learning exercise similar to the one for speeding, where people get some help in understanding the hazards and dangers of speeding. I had hoped that something like that might be brought in under this legislation. None the less, there will be a review five years from now in 2020, and if the general view is that the legislation has been effective, I am sure that it will be possible to devise an educational package so that people do not see the need to smoke in cars with children present. I thank the Minister for taking through these regulations.

Lord Foulkes of Cumnock (Lab): My Lords, I greatly welcome this legislation. I want to ask two questions, which I hope the Minister will be able to deal with. Before doing so, though, I want to say why I am particularly pleased about this. In the early 1980s I tried to introduce a Bill in the other place to ban smoking in public places. I was almost literally laughed out of the House because everyone thought that it was ridiculous to have a ban on smoking in public places. Of course, it is now accepted as the norm.

I was also vilified, as indeed were all the anti-smoking campaigners, by an organisation called FOREST, the so-called Freedom Organisation for the Right to Enjoy Smoking Tobacco. I do not know how anyone can enjoy it—they just have to do it because they become addicted—but there we are. The organisation, which was funded by the tobacco companies, twisted all the figures. It was not a very pleasant experience. I know that my friends who worked in Action on Smoking and Health at the time, as well as other people, were subject to the same kind of criticism and attacks. I am very pleased that things have moved on since then and I commend the Government for pursuing this matter.

However, I have two questions. One relates to enforcement. The ban on smoking in public places has been effectively self-enforcing because the penalties and the problems that would be created by people smoking, particularly for publicans, shopkeepers and people responsible for public places, would be substantial, not just in terms of the fines that they might be subjected to but in terms of losing licences and other problems. Therefore, as I said, the ban has been effectively self-enforcing, with all but 100% compliance, I am pleased to say.

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However, the legislation concerning the use of mobile phones in cars has not been so effective. I have seen a lot of people continuing to use mobile phones in cars while driving but I understand that there have been relatively few prosecutions of this extremely dangerous habit. I get the impression that the police are not particularly good at making sure that people are pursued in relation to that offence, and I am a little concerned that the offence of smoking in a car with children present will be more akin to using a mobile phone while driving than smoking in public places such as pubs, shops and so on. I would be grateful if the Minister could deal with that and give an assurance that enforcement and compliance will be more effective.

Secondly, unlike the noble Lord, Lord Ribeiro—who I commend for the way in which he has pursued this issue—I am not sure that £50 is a sufficient penalty. I understand that it is similar to the penalty for parking in an inappropriate or illegal place, a much less grave offence than one that causes danger and harm to children. Many people will take the risk of smoking in a car with children present, particularly as, with no disrespect, a £50 fine to Ferrari drivers and drivers of large, expensive cars will not mean very much in terms of their regular expenditure. I wonder whether this is an appropriate penalty for the offence. The Minister mentioned a review; perhaps this matter could be looked at in that review.

Those are my only two reservations, neither of which takes away from my warm welcome to the Government for these regulations. As the Minister knows, I do not regularly welcome the things that this Government do, but on this occasion I am pleased to do so.

Baroness Finlay of Llandaff (CB): My Lords, I welcome these regulations and congratulate the noble Lord, Lord Ribeiro, on his work to achieve this position. Children themselves have asked for this measure. In the 2011 British Lung Foundation survey, 86% of children between the ages of eight and 15 said that they wanted protection. It is worth noting that the Welsh Fresh Start campaign, which was aimed at cutting down smoking in cars when children were present, did not have as great a success as one would have hoped, but these regulations send an important message that will change behaviour. Quite apart from encouragement to change behaviour, there needs to be a clear message out there.

The data from Wales have shown that 4% of children reported being in a car when someone was smoking almost every day, and 23% reported that they were sometimes in a car when someone was smoking. Where a parent smoked, one in five children reported that smoking was allowed in the family car. These regulations are welcome and will have a major part to play in bringing about behaviour change. Of course the fact that there are provisions for a fine is important, but behaviour change will be most sustainable in the long term.

I am grateful to the Minister for his comment that he will keep a watching brief on e-cigarettes and that that consultation will continue. I worry that we are at the beginning of an explosion of a highly addictive substance.

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5 pm

Baroness Tyler of Enfield (LD): My Lords, I, too, welcome these regulations and congratulate my noble friend Lord Ribeiro on his unstinting efforts in this area. I stress that this new law and these regulations are not designed to turn smokers into criminals or to demonise them; they are about protecting children from the avoidable dangers that tobacco smoke presents to their health and welfare. For me, that is what it is all about. Right through these discussions, I always saw this legislation primarily as a matter of child protection. If noble Lords will excuse the terrible pun, it was about putting children in the driving seat.

When we had those early debates, I was very taken with the number of children who said that they felt that they had no control over the situation and that they were either too embarrassed or too scared to ask adults to stop smoking. The survey mentioned by the noble Baroness, Lady Finlay, referred to how children really want this legislation. In my professional life, we often talk about the voice of the child being at the centre of what we do. Based on that survey, we have a clear mandate from children and young people to take these regulations forward.

The Minister said that the start date will be October. In an ideal world I would have liked to have seen it earlier, but I accept the reasons that he gave. It will be incredibly important legislation in addressing health inequalities, and will go some way at least towards protecting children from the most disadvantaged backgrounds from smoke and enable them to have a healthier start in life. As others have said, this is very much about behaviour change. Certainly, the experience that we have seen on similar issues, such as public smoking and compulsory seat belts, suggests that educational campaigns, which are important, are most effective in changing behaviour when accompanied by appropriate legislation. For the effect of legislation on the proportion of people wearing seat belts, I have a figure that shows an increase from 25% to 91%, which seems extraordinarily large. Just imagine how many children’s lives will be improved if this legislation has even half that success.

The Minister referred to success being measured in terms of positive behaviour change rather than the number of fines handed out. I am sure that that is right, and I approve of that approach, but will he confirm precisely how that behaviour change will be measured?

There are very high levels of public support for the law. In previous debates, as one would expect, we heard that parents were very much in favour of this legislation. However, we also heard about recent surveys and the number of adults, including adult smokers, in favour of this legislation and the number of car drivers who support it. There is a real and growing consensus that these regulations are a good thing and should be introduced without delay.

I very much hope that, without much further delay, we will very soon debate the regulations on standardised packaging.

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Viscount Simon (Lab): My Lords, the Minister knows—I suppose I should declare it as an interest—that in January 1995 I developed severe brittle asthma. On a motorway with my car windows closed, I probably will have an asthma attack if someone is smoking a cigar in another car. Children are particularly vulnerable to second-hand smoke as they have smaller lungs and breathe faster, and their immune system is not as developed as that of adults. This leaves them more open to ear and lung conditions triggered by passive smoking.

It has not been mentioned this afternoon and it is not generally known or acknowledged, but the concentration of tobacco smoke in a car with the windows half down is much higher than the amount of smoke that there used to be in pubs in the old days, and it increases to 11 times more in a stationary car with the windows closed. If parents knew of this, I suspect that they would stop smoking in their cars, but they do not know. We therefore have these regulations before us today. The Minister has given us an excellent description of how the regulations will work, and I support them.

Lord Hunt of Kings Heath (Lab): My Lords, I, too, welcome the regulations. They follow on from my amendment at Report to the Children and Families Bill, which was agreed by 222 votes to 197, to ban smoking in cars when children are present. I am very proud of that amendment and I express my thanks to organisations such as ASH, the British Lung Foundation, the BMA and others who lent their support to it. I echo the tributes to the noble Lord, Lord Ribeiro, and to other noble Lords who have been campaigning on this matter for some years, including the noble Baroness, Lady Finlay, my noble friend Lord Faulkner, and the noble Baroness, Lady Tyler. My noble friend Lord Simon persuasively and eloquently illustrated the issues that we are dealing with. I am confident that these regulations, if they come to be successfully implemented, will do a lot on those issues.

My noble friend Lord Foulkes was very brave, a long time ago, to pioneer the proposal. What he had to say about the tactics and activities of the tobacco companies was a point very well taken. I welcome the Government’s decision to go ahead with standardised packaging regulations but we know that many of those companies will do their best, through representative bodies, to sabotage them—as I think they have attempted to do in Australia. We must be ever watchful about that.

I agree with the noble Baroness, Lady Tyler, that it is interesting how much public support there is for this measure. She may well have seen the work by the British Lung Foundation which has shown, in survey after survey, that a huge majority of children wanted action to be taken. We have also had the ASH poll conducted last March by YouGov, which showed that 77% of all adults—including 64% of smokers—agreed that action should be taken. Does the noble Earl agree that that shows that there is public support for measures such as this, particularly when it comes to the protection of children? I wonder whether he shares our ambition on this side of the Committee to reduce smoking prevalence to 10% by 2025 and, over the longer term,

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our goal that all children born in 2015 and beyond will become the first smoke-free generation in hundreds of years.

I noted that the regulations come into force on 1 October 2015. The noble Earl explained why 1 April is not appropriate but I wonder whether 1 July could not have been chosen instead. The noble Baroness, Lady Finlay, raised the experience in Wales. Is the noble Earl confident that the provisions for Wales will come in at the same time as those for England? Could he say a little more about the public marketing plan being developed by Public Health England? That very much relates to the questions asked by my noble friend Lord Foulkes about enforceability, which is so important. I am confident that a great majority of the members of the public will in fact respect the change in the law. The evidence is pretty strong on that. None the less, we need an effective public health campaign and the support of the police in being prepared to take action against those who transgress the law.

Earl Howe: My Lords, I am very grateful to all noble Lords who have spoken and I am grateful for their universal welcome for these regulations. I begin by referring to the remarks of my noble friends Lady Tyler and Lord Ribeiro and the noble Viscount, Lord Simon, all of whom reminded us why we are doing this—the noble Viscount from a very personal perspective. Three million children are exposed to second-hand smoke every year and we want to protect them. Existing smoke-free legislation is popular, as has been said, and has a very high rate of compliance. Personally, I credit the public with more willingness to follow the law and therefore protect their children from second-hand smoke, rather than thinking of elaborate ways to break the law.

The noble Lord, Lord Hunt, asked about public attitudes in relation to these regulations. We know from the responses to the consultation that there is widespread support for protecting children from the harms of second-hand smoke. I do not expect people to go to great lengths to carry on smoking in cars when they know that it is an offence to do so. As has been said, legislation can be instrumental in driving behavioural and cultural change. That has certainly been true in other areas of regulation in the past. Of course, we have to inform the public in a reasonable way before these regulations come into force.

More generally, we agree that education is essential in informing people of the harms of second-hand smoke, particularly to children, and we recognise the importance of social marketing campaigns. The department and Public Health England will continue to protect children from the harms of exposure to second-hand smoke by encouraging voluntary action through social marketing. Previous campaign results illustrate that such campaigns have been effective both in changing behaviour and in driving quit attempts. Of course, I agree with the noble Lord, Lord Hunt, that our ambition as a nation should be to drive down the prevalence of smoking to the maximum extent that we can. We are going to monitor progress in respect of these regulations by assessing the reduction in the number of children who are exposed to second-hand smoke in cars from the current level of 26%, and it is possible to do that.

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As I said, I agree with my noble friend Lord Ribeiro about the importance of building public awareness of these health harms. Once again, I pay tribute to all his efforts in this sphere of activity. I also add my thanks to the noble Lord, Lord Foulkes, for his welcome for these regulations, and I acknowledge his far-sightedness in this context, even if he felt like a voice in the wilderness for a number of years. He expressed concern about the enforcement of the regulations—in particular, in view of his perception that the police do not go to great lengths to enforce the mobile phone laws. In fact, my advice is that the police assure us that they endeavour to enforce mobile phone legislation, as they would any law. In fact, in 2012 more than 90,000 fixed penalty notices were issued for mobile phone offences. We estimate that considerably fewer fixed penalty notices will be issued for smoking in private vehicles—possibly around or slightly above 2,000 each year.

The noble Lord, Lord Foulkes, also questioned whether the £50 figure was sufficient. The regulations were drafted following discussions with the police and others to provide for effective enforcement. As I said, the police have confirmed that they will enforce these regulations in the same way as they enforce other laws, such as those relating to seat belts and the use of mobile phones. It is for individual police forces to decide how enforcement will be carried out locally. They have advised that this can be taken forward by local police officers in conjunction with their wider functions on road safety. For example, when running an operation to check compliance with the laws on seat belts or child car seats, the police would also check for anyone smoking or discuss the offences with the driver if there was tobacco in the car. A fine of £50 is consistent with the existing smoke-free legislation, but that level of fine could certainly be subject to review when the regulations as a whole are reviewed.

Lord Foulkes of Cumnock: Was any consideration given to putting points on licences? That would be a much greater deterrent. My understanding is that people feel very worried about having any points added to their licence because of the effect: once it tots up, they could lose their licence. I understand that this is being dealt with as a public health matter but in my view smoking while driving creates a bit of a danger, just as mobile phone use while driving does. I wondered whether that was considered as likely to be a more effective deterrent.

5.15 pm

Lord Ribeiro: My Lords, before the Minister replies, when I phrased the initial Private Member’s Bill, I put in a fine of £60 rather than £50. One of the things that I was conscious of was that the people who would be driving very young children, those strapped into the back of the car, are mothers. We do not want to introduce punitive measures that would cut across trying to change their behaviour. That is why the fine was set at that level. If we were thinking of someone driving a Ferrari or a Maserati, that would be a completely different ball game—and they would probably have a chauffeur. That is why that figure is there. The emphasis should be on re-education rather than punishment.

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Earl Howe: I am grateful to both noble Lords. In answer to the noble Lord, Lord Foulkes, on the question of points on the driving licence, this avenue was considered but rejected because it would be inconsistent with current legislation. However, I take the point about road safety. As he will be aware, if police judge that a driver is driving unsafely, they have powers to take action under different legislation.

With regard to the position in Wales, smoke-free legislation is a devolved matter, as the noble Lord, Lord Hunt, is aware. I am advised that the Welsh Government have consulted on similar provisions, and we are working with them to co-ordinate our approach where possible.

Lord Foulkes of Cumnock: I am sorry to come in again. Will the Minister confirm whether that is also the case in Scotland?

Earl Howe: My Lords, I am aware that there is legislation before the Scottish Parliament that seems to seek to introduce similar provisions, but I am not aware of the proposed timing that the Scottish Government envisage.

I was asked about the implementation date by the noble Lord, Lord Hunt. He put forward the suggestion that 1 July might have been a better date than October. We chose the common commencement date of 1 October because we judged that we would need that length of time to achieve a sufficient level of public awareness, and indeed for the police to be adequately prepared for their enforcement role.

Motion agreed.

Armed Forces Pension (Consequential Provisions) Regulations 2015

Motion to Consider

5.20 pm

Moved by Lord Newby

That the Grand Committee do consider the Armed Forces Pension (Consequential Provisions) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Lord Newby (LD): My Lords, the regulations we are debating today make consequential modifications to the Pension Schemes Act 1993 and to the Finance Act 2004 to make sure that the major public pension schemes created under the Public Service Pensions Act 2013 work as intended.

They make some small and technical modifications to the law governing the new teachers’, NHS, civil service, police, firefighters’ and Armed Forces pension schemes. The consequential modifications relating to the Judicial Pension Scheme are being debated as part of its main regulations.

It might be helpful if I set out some of the context and background to the wider reforms to public service pension schemes. People are living longer and the cost

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of providing public service pensions is increasing. Following recommendations made by the noble Lord, Lord Hutton of Furness, and adopted by this Government, new pension schemes are being established under the Public Service Pensions Act 2013 for civil servants, the judiciary, local government workers, teachers, health service workers, fire and rescue workers, members of police forces and the Armed Forces.

These reforms were needed to balance the legitimate concerns of taxpayers about the cost of public service pensions with the need to ensure decent levels of retirement income for millions of people who have devoted their working lives to the service of the public. I am pleased to say that these reforms received cross-party support when they were debated in your Lordships’ House.

The design of the new schemes has now been settled, and the schemes will take effect from 1 April this year. The statutory instruments before us today are simply the means of ensuring that the scheme designs work properly within the wider framework of pensions and tax law. They will make sure that the members of these schemes get the pensions that they expect and that they do not lose out as a result of any glitches between the scheme design and the wider pensions law.

Two sets of modifications are being made to the Pension Schemes Act 1993, the first of which is needed to ensure that members moving from their existing schemes to the new schemes are not inappropriately treated as deferred members of their existing schemes. The purpose is to ensure a seamless transition between the old and new schemes.

The modifications are, first, to ensure that the benefits they have accrued in their existing schemes are not revalued as if they were deferred members; secondly, that their right to a cash equivalent transfer value, to a refund of contributions or to a cash transfer sum applies only when they leave the new scheme; and, thirdly, that anti-franking provisions do not apply as if they were deferred members on 1 April 2015. The modifications we are making mean that for these purposes such individuals do not cease to be active members of their existing scheme until they also leave their new scheme.

5.22 pm

Sitting suspended for a Division in the House.

5.35 pm

Lord Newby: As I was saying, the modifications that we are making mean that for these purposes such individuals do not cease to be active members of their existing scheme until they leave their new scheme.

We are also making modifications to the regulations that govern contracting out, specifically those dictating the process that a scheme must follow to be contracted out. For the new public service pension schemes we have simplified the process, ensuring that the new schemes, and therefore their members, continue to be contracted out of the additional state pension until the end of contracting out in April 2016.

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The second set of modifications that we are making to the Pension Schemes Act 1993 concern only the police, firefighters’ and Armed Forces pension schemes. These are needed to ensure that the 1993 Act is in line with the 2013 Act, which requires active and deferred members in these three schemes to have different pension ages. To give a little context, the 1993 Act says that schemes cannot calculate the pensions of deferred members differently from those of active members, while the 2013 Act explicitly requires the uniformed schemes to assign a different pension age to active and deferred members. That difference in pension age makes a difference in pensions calculation inevitable.

In recognition of the unique nature of these occupations, and following recommendations made by the noble Lord, Lord Hutton, the Government are implementing a normal pension age of 60 in these three schemes, while members of other schemes will have a normal pension age well above this, set equal to state pension age, which for the majority of members will be 68. The Government have also decided to implement the noble Lord’s recommendation for deferred members of the police, firefighters’ and Armed Forces pension schemes to have a deferred pension age equal to the state pension age as the need for early retirement does not apply once a member has left these services and is no longer performing that unique and physically demanding role. The modifications before us today enable this split pension age in the police, firefighters’ and Armed Forces pension schemes to operate in harmony with wider legislation on short-service benefits.

The third set of modifications that we are making today relate to the Finance Act 2004 and ensure that members with service in both a new and an existing pension scheme who retire with an ill-health pension do not face unintended tax consequences. Specifically, they ensure that parts of the ill-health pensions available to members who fall ill are not measured twice for annual allowance and lifetime allowance limits simply because of the transitional mechanics for payment of ill-health benefits. Put simply, the modifications ensure that the tax regime will apply in the way intended by the Government to those members who move into the new scheme and then retire because of illness.

These are very technical modifications to wider pensions legislation that seek to ensure that civil servants, teachers, NHS staff, firefighters, police officers and military personnel can get the pensions that they expect without any unexpected effects as a result of tensions with the wider law. I therefore commend these modifications to the Committee.

Lord Tunnicliffe (Lab): My Lords, the noble Lord, Lord Newby, and I seem fated to address technical and lengthy statutory instruments in front of a packed Committee, with the general public watching on with bated breath.

In representing Her Majesty’s Opposition in these circumstances, there seem to me to be two options: the one-hour option and the 100-hour option. The 100-hour option would mean tracing through all six documents and referring to, but not excluding, other laws and regulations made in 1992, 1993, 2004, 2006 and 2013 and sundry other modifications. Amazingly enough, I have not chosen the 100-hour option.

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The one-hour option, of course, is to look at the Explanatory Memorandum and to see whether it is consistent and relevant, makes sense and so on. I have done that and I am pleased to advise the Committee that, in line with normal tradition, we will not be voting against these regulations when they come forward into the Chamber in a day or two’s time.

However, I felt a need to look behind the regulations. The way I did that was to look at the consultation. I felt that if the regulations were straightforward and fairly sensible and everyone involved with them also said that, then everyone would be happy. I looked into the consultation and it is fair to say that the consultees are content with five out of six of the sets of regulations. I shall therefore speak only to the one where the consultee—the Fire Brigades Union—is not content.

In response to the invitation to consult, it provided a letter dated 14 November from Sean Starbuck, its national officer. As I understand it, the union has three areas of concern. The first is that the benefits or value in its 1992 scheme could not be, as it were, crystallised and then imputed into the 2015 scheme. I am sure that there is a series of good pension words to more precisely express what I have said but we are all familiar with the system of pensions where you have a pension in one scheme moved to another scheme with a separate employer; there is then a calculation about the value of your accrued benefit, a calculation about the accrued benefits in the new scheme, money changes hands between the schemes and everyone is happy. As I understand the 2015 scheme, if you had worked in another firm or business, the state or—surprisingly in this case—the military, that is exactly what would happen. There would be a transfer of scheme value from, say, a military pension into the 2015 pension.

However, for firemen that is not possible. For firemen, as I understand it, one scheme ends and its value is deferred—I am sure that I have got the words wrong—until the point at which it is earned, and the service then starts in the 2015 scheme. The Fire Brigades Union took the view that it would be a good thing if that option was available to firefighters. Its view was that this should not be a problem because the very essence of these kinds of transfers is by definition cost-neutral. The money is calculated and moves over.

The union is particularly seized of that because, as I understand it—I confess I have not read the parent legislation—there is envisaged in the 2015 scheme a capability for partial retirement, which I gather everyone thinks is a good idea. That involves drawing some proportion of the pension but continuing to work on a part-time basis. It contends that the provisions that fall out of the various Acts and these regulations would make the partial retirement provision non-viable. Lastly, it contends that that does not honour assurances given by Ministers. It quotes in particular a Written Ministerial Statement of 28 October that states:

“Where firefighters are transferring to the 2015 scheme, they can be reassured that the pension they have built up in their existing schemes will be fully protected, and they can still choose to retire at the age they currently expect (which could be from age 50)”.

The Fire Brigades Union has had no formal direct response to its concerns, which seems to me to be of singular concern. In a sense, the union has had a

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partial response through the response in the Explanatory Memorandum. I mean “partial” in two ways: first, the response is incomplete, and, secondly, it affirms rather than proves that there is some cost. As the Minister said, the Opposition have more or less gone along with these regulations consensually because we recognise the financial problems and we are not seeking to burden the Government with more of them. However, the response affirms that it will be costly rather than arguing it through.

5.45 pm

I looked at the regulations. The second paragraph says:

“In accordance with section 21 of that Act”—

that is, the Public Service Pensions Act 2013—

“the Secretary of State has consulted the representatives of such persons as appear to the Secretary of State likely to be affected by these Regulations”.

I contend that the Secretary of State has not consulted. A consultation is a two-way process. However, the FBU, which overwhelmingly obviously is the representative of those workers who are affected, has put forward a proposition but has not been responded to directly. I have had communication with one Andrew Cornelius at the DCLG, and it is clear that there is no intention to communicate with the union directly. He says:

“The Department would not normally respond to individual respondents to a consultation and the usual approach to consultation with the Firefighters’ Pension Committee would be for a more detailed response to be provided at the next meeting of the Committee, through a formal Committee paper”.

The killer line is the next sentence:

“However, the Firefighters’ Pension Committee is being superseded by the introduction of a Scheme Advisory Board and there will not be another formal meeting. We will therefore shortly be issuing the paper providing our response to the consultation to individual members of the former committee”.

If I had been able to see the representation from the Fire Brigades Union and a detailed response to the points that it raised, I would be in a position to judge whether or not the response deserved our support or at least advocacy, but I am not in that position because we have not seen a detailed response from the department.

Obviously, we are not going to oppose these statutory instruments; that is the sort of thing that we do about once a year in really exceptional cases. We accept that the general intent of the orders is sound and we support them, but I am not satisfied with the consultation in this case. I seek from the Minister an assurance that the Fire Brigades Union will receive a full response and that the Members of the Committee present—which, realistically, is me—will get a copy of it. I do not know how he is going to respond to that request but I remind him that these regulations are to be taken tomorrow in another place and, as he will know, a rather more contentious atmosphere might exist there. I am sure that Members of the Opposition will be taking account of his response today.

Lord Newby: My Lords, I am grateful to the noble Lord for his welcome of the regulations as a whole. Perhaps I may deal with the consultation and the Fire Brigades Union. The Department for Communities

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and Local Government undertook a short technical consultation on the draft regulations that we are discussing.

Lord Tunnicliffe: I noticed the word “technical”. I do not see suggested anywhere in the regulations the idea of technical. Obviously I have not read the Public Service Pensions Act cover to cover. It talks about consultation and I am not sure what is meant by the word technical in that context.

Lord Newby: My Lords, a key difference between these regulations and the main regulations being established under the Public Service Pensions Act is that these consultations cover only these technical regulations. The regulations we are talking about today are not the main scheme regulations. They are simply a series of regulations that enable the transition from the earlier scheme to the new scheme to go smoothly, without people being taxed twice or not taxed enough, and to make sure that, from the Government’s, the employer’s and the individual pension holder’s point of view, things move forward in terms of their entitlement, almost as though no new schemes were being introduced. That is why I used the word technical. Perhaps I should have said that they undertook a short consultation on the draft technical regulations, which would have been clearer English. As the noble Lord pointed out, the FBU submitted responses to that consultation.

As is always the case with these types of consultations, the department did not provide an individual response; it provided a response that covered them all. As the noble Lord said, it published its formal response in the draft Explanatory Memorandum which accompanied the draft regulations. Yesterday, a committee paper was circulated to members of the Firefighters’ Pension Committee notifying them of the outcome of that technical consultation. The noble Lord is right that that committee is coming to an end, but it is being subsumed into the scheme advisory board, which will be a body on which the FBU is represented and the purpose of which is to advise the department on the operation of the new scheme going forward.

Lord Tunnicliffe: My Lords, if it is technically possible, perhaps I could receive a copy of that circulated paper electronically so that I might have it in my in-tray by tomorrow morning.

Lord Newby: The noble Lord certainly can have a copy of the response sent to the committee. I am happy to give that assurance. That is what has happened. In terms of the FBU’s concern, its response proposed that these regulations should permit former scheme members who joined the new firefighters’ pension scheme to transfer 2006 scheme benefits into the 2015 scheme and allow 1992 scheme members to take their pension without having to retire or face a tax charge. The former would increase scheme costs and the latter would substantially increase costs, as 1992 scheme pension benefits will come into payment earlier and will be unfunded. It was open to representative bodies to put forward alternative scheme designs during the discussions leading up to the publication of the proposed

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final agreement to ensure that any increased costs were taken into account when setting the accrual rate in the 2015 scheme.

The department concluded that it was not appropriate to use these regulations, which are of a technical nature, to provide unfunded improvements to existing scheme benefits, as requested in the consultation. There is a process point about which regs would be the appropriate ones to deal with that issue. The department and the Government’s contention is that, as these are very technical regulations, they are not the appropriate regulations to do that. The main scheme regulations, if it were to be done, would be the way to do it. However, the Government are not convinced that it should be done. No doubt these issues will be raised again in ongoing discussions via the scheme advisory board between the FBU, the department and other stakeholders.

Motion agreed.

Firefighters’ Pension Scheme (England) (Consequential Provisions) Regulations 2015

Motion to Consider

5.55 pm

Moved by Lord Newby

That the Grand Committee do consider the Firefighters’ Pension Scheme (England) (Consequential Provisions) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Police Pensions (Consequential Provisions) Regulations 2015

Motion to Consider

5.55 pm

Moved by Lord Newby

That the Grand Committee do consider the Police Pensions (Consequential Provisions) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

3 Feb 2015 : Column GC228

Public Service (Civil Servants and Others) Pensions (Consequential and Amendment) Regulations 2015

Motion to Consider

5.55 pm

Moved by Lord Newby

That the Grand Committee do consider the Public Service (Civil Servants and Others) Pensions (Consequential and Amendment) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

National Health Service Pension Scheme (Consequential Provisions) Regulations 2015

Motion to Consider

5.56 pm

Moved by Lord Newby

That the Grand Committee do consider the National Health Service Pension Scheme (Consequential Provisions) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Teachers’ Pension Scheme (Consequential Provisions) Regulations 2015

Motion to Consider

5.56 pm

Moved by Lord Newby

That the Grand Committee do consider the Teachers’ Pension Scheme (Consequential Provisions) Regulations 2015.

Relevant document: 17th Report from the Joint Committee on Statutory Instruments

Motion agreed.

Committee adjourned at 5.56 pm.