Finally, I draw the noble Lord’s attention to the positive measures in this Bill to promote access to finance. Clause 1 removes a contractual barrier to invoice finance. Clause 4 provides for greater sharing of information through credit reference agencies. Clause 5 provides for the UK’s larger banks to be required to refer rejected finance applicants on to alternative finance providers. These provisions got a good degree of support across the House in Committee. I believe that all these measures will make a real difference to the availability of alternative finance for small business. Given the activity described, I am not convinced that a further report as proposed in this clause would be of merit. I hope that the noble Lord will feel reassured by what I have said and that he will feel able to withdraw his amendment.

Lord Mitchell: I thank the Minister for her reply. I thank the noble Lord, Lord Cope, for his insightful addition to what was said and on reflection I think that he may have a point on Clause 4. I also thank the noble Lord, Lord Leigh. He and I know each other well. I have never before heard the statement that he made but he has my email so he knows exactly where to send it. I also thank the noble Lord, Lord Myners—I find it very hard to say that and am tempted to say “my noble friend”—for making the comments that he did. I have always felt that the banks are, and act like, a cartel and that you cannot tell one from the other. It is really good that they are now starting to change and are being forced to change. If my particular area—digital technology—is making that happen, so much the better. Crowdfunding has been very exciting but many of the new challenger banks have been able to come into this because of the technology they are using. That is absolutely fantastic.

I thank the noble Baroness for her comments and feel very reassured that the Government are working in this direction. The facts are really clear. Whether we are in government or not, I would like to be standing here in a year’s time having a conversation like this with the facts at hand. I beg leave to withdraw the amendment.

Amendment 6 withdrawn.

Clause 13: Electronic paying in of cheques etc

Amendment 7

Moved by Lord Newby

7: Clause 13, page 13, line 18, leave out from second “instrument,” to end of line 19 and insert “if”

Lord Newby (LD): My Lords, Amendments 7 to 19 and 84 make two technical but essential changes to the

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cheque-clearing provisions relating, first, to consistency in the treatment of cheque and non-cheque paper instruments and, secondly, to the continuation of current statutory protections for the paying customer.

Amendments 7 to 9 and 19 are designed to ensure that non-cheque instruments, such as warrants and travellers’ cheques, are treated in the same way as traditional paper cheques under the new provisions for electronic presentment. Under the new legislation for cheque imaging, as currently drafted, it would be possible for corporate customers and other large non-bank customers to make arrangements to submit cheque images directly to the central switch that clears cheque transactions for all member banks, rather than their bank submitting images on their behalf. This would make the clearing process more efficient. However, the current drafting means that this option will not be available for non-cheque paper instruments that are not drawn on a bank.

The Government’s policy intention is to provide for a system that treats cheques and non-cheques in the same way, and therefore it is necessary to make these amendments to ensure the equal treatment of non-cheque instruments in all circumstances of presentment. On the basis of current practice, this approach does not present any difficulties. However, it is possible that the position could change in the future—for example, as a result of the development of new types of instruments that do not currently exist. For this reason, Amendment 9 confers a power on the Treasury to restrict the circumstances in which presentment by image is permissible. This power is intended to be used to deal only with any unforeseen issues that may arise in the future and could not be used to have any retrospective effect on instruments that have already been presented by image. It is subject to the affirmative procedure.

Amendment 12 is intended to ensure the continuation of current statutory protections for the paying customer. Under the existing cheque clearing system, a customer who makes a payment with a cheque can request the original cheque to be stamped “paid”, which stands as prima facie evidence that the payee has received the amount payable. This provides a protection for the payer in situations where the payee claims that they have not received payment.

The legislation for cheque imaging does not provide for an equivalent protection when cheques or other paper instruments are paid in by electronic image and the physical instrument does not end up in the possession of a bank. It has become clear that the loss of this protection would remove a useful service currently relied upon by some cheque users. Therefore, it is necessary to make an amendment to preserve this type of protection for the paying customer under electronic cheque clearing. This amendment will confer a power on the Treasury to make appropriate provision in regulations, subject to the affirmative procedure, because the precise nature of the evidence to be provided to the payer may depend on the technical design of the clearing system. The regulations will be able to set out the nature of the evidence to be provided to the payer and the effect of that evidence, including the weight to be given to such evidence.

Amendments 10, 11, 13 to 18 and 84 are consequential amendments dealing with the procedure for making

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regulations under Amendments 9 and 12, and they provide minor and technical clarifications of the drafting.

To conclude, these amendments will ensure that the provisions for electronic presentment treat cheques and non-cheques consistently and that existing customer protections continue under the new system. I beg to move.

Lord Stevenson of Balmacara: My Lords, I welcome the contribution to this debate by the noble Lord, Lord Newby, and for his helpful explanation of the matters that are being considered by this large group of amendments. We had a fair bash at this in Committee, so I was a little surprised to see so many additional regulations on this matter, particularly as this is an attempt to simplify rather than make more complicated an already rather obscure area of financial transactions. Indeed, in some senses these amendments seem to take us back rather than forward in that they seem to provide a bolstering of a paper-based or evidence-based solution to a number of things that one would have hoped could have moved on to an electronic age. But I am sure that the intention behind them is entirely correct, and we support the general direction of the move.

I wanted to pick up on one point. In the wording of the amendments on the Marshalled List there is reference to the power for the Treasury to make regulations, but it does not specify how they are to be exercised in practice. I agree that the number of occasions will be limited, but the Minister mentioned that the first group would be subject to the affirmative procedure and did not say anything about the second or third groups and whether they would be subject to the negative or the affirmative procedures. Could he clarify that for me please before we leave this point? If it is too difficult to do now, I am very happy to have that in correspondence, but we have no objection to this in general.

Lord Newby: My Lords, I think I said that the second group would be subject to affirmative resolution. My understanding is that the two issues that we are debating will both be subject to the affirmative procedure. If I am mistaken, of course I will write to the noble Lord.

Amendment 7 agreed.

Amendments 8 to 19

Moved by Lord Newby

8: Clause 13, page 13, line 22, after “to” insert “regulations under subsection (1A) and to”

9: Clause 13, page 13, line 22, at end insert—

“(1A) The Treasury may by regulations prescribe circumstances in which subsection (1) does not apply.

(1B) Regulations under subsection (1A) may in particular prescribe circumstances by reference to—

(a) descriptions of instrument;

(b) arrangements under which presentment is made;

(c) descriptions of persons by or to whom presentment is made;

(d) descriptions of persons receiving payment or on whose behalf payment is received.”

10: Clause 13, page 14, line 12, leave out “is” and insert “appears to be”

11: Clause 13, page 14, line 37, leave out second “banker” and insert “person”

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12: Clause 13, page 14, line 37, at end insert—

“89CA Copies of instruments and evidence of payment

(1) The Treasury may by regulations make provision for—

(a) requiring a copy of an instrument paid as a result of presentment under section 89A to be provided, on request, to the creator of the instrument by the banker who paid the instrument;

(b) a copy of an instrument provided in accordance with the regulations to be evidence of receipt by a person identified in accordance with the regulations of the sum payable by the instrument.

(2) Regulations under subsection (1)(a) may in particular—

(a) prescribe the manner and form in which a copy is to be provided;

(b) require the copy to be certified to be a true copy of the electronic image provided to the banker making the payment on presentment under section 89A;

(c) provide for the copy to be accompanied by prescribed information;

(d) require any copy to be provided free of charge or permit charges to be made for the provision of copies in prescribed circumstances.

(3) The reference in subsection (1)(a) to the creator of the instrument is—

(a) in the case of a bill of exchange, a reference to the drawer;

(b) in the case of a promissory note, a reference to the maker.”

13: Clause 13, page 14, line 43, leave out “subsection (1)” and insert “this section”

14: Clause 13, page 15, line 47, at end insert—

“89E Supplementary”

15: Clause 13, page 15, line 48, leave out “section” and insert “Part”

16: Clause 13, page 16, line 7, leave out “section” and insert “Part”

17: Clause 13, page 16, line 9, leave out from “containing” to “may” in line 10 and insert “—

(a) regulations under section 89A or 89CA, or

(b) the first regulations to be made under section 89D,”

18: Clause 13, page 16, line 12, leave out “this section” and insert “section 89D”

19: Clause 13, page 16, line 14, at end insert—

“(12) For the purposes of this Part, a banker collects payment of an instrument on behalf of a customer by—

(a) receiving payment of the instrument for the customer, or

(b) receiving payment of the instrument for the banker (but not as holder), having—

(i) credited the customer’s account with the amount of the instrument, or

(ii) otherwise given value to the customer in respect of the instrument.

(13) Section 89D(4) applies for the purposes of subsection (12) in its application to section 89D.””

Amendments 8 to 19 agreed.

Clause 17: Review of regulators’ complaints and appeals procedures

Amendment 20

Moved by Lord Stevenson of Balmacara

20: Clause 17, page 19, line 14, at end insert—

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“( ) The following regulators are excluded from the provisions outlined in this section—

(a) the Equality and Human Rights Commission;

(b) the relevant regulators in—

(i) the Department of Health;

(ii) the Department of Transport;

(iii) the Department for Work and Pensions;

(iv) the Department for Business, Innovation and Skills;

(v) the Department for Culture, Media and Sport;

(vi) the Department for Communities and Local Government.”

Lord Stevenson of Balmacara: My Lords, my noble friend Lady Thornton would have preferred to have been in her place on this matter, but unfortunately she has suffered an unexpected bereavement. I am sure that your Lordships’ House would wish to send her their commiserations and hope that she is in good spirits at this difficult time.

The question of whether the Government have the relationship with the EHRC correct has featured on a number of occasions in this Bill and the Deregulation Bill. The Minister will be aware that the EHRC enjoys an A status as a national human rights institution. It is therefore right that on all occasions the Government are crystal clear that it is not appropriate to apply general regulations to the EHRC. The A status is awarded by the United Nations International Coordinating Committee of National Human Rights Institutions, which regularly reviews the EHRC’s compliance with the United Nations’ Paris principles, which require the EHRC to be an independent body.

We have to avoid the reality, or indeed the perception, of interfering with the commission’s ability to perform its regulatory functions and ensure that they are always and at all times independent. If that were jeopardised, it would in turn jeopardise the A status, which is generally agreed to be of importance to the UK’s international standing and reputation. For example, it enables the UK to influence the protection of fundamental rights globally and gives us a voice at the United Nations Human Rights Council. Any downgrading of the commission’s status would have a significant negative impact on the UK’s global influence.

The amendment also deals with regulators in other departments unspecified, which suggests that there may be regulators within each or any of the departments that might have the same characteristics as those applying to the EHRC. In some senses, that is a reflection of the fact that we are still in discussions within the Deregulation Bill about exactly how this process will be developed.

We understand—the Minister may be able to confirm—that it has now been decided to exclude at least one regulator in the Department of Health. If that is the case, the exclusion should also appear in the Bill, as that of the EHRC will if the amendment is accepted.

5.30 pm

When she replied to this debate in Committee, the Minister said that this amendment was not necessary, primarily because the list of regulators to which the

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small business appeals champion provisions can apply will be set out in regulations and that, because these will be taken under the affirmative procedure, there would be adequate control of the process. It is well established within this House, and Parliament generally, that it is not possible to amend secondary legislation. Therefore, this is not really the answer to the question of whether it is appropriate to bring forward a list of specified regulators in secondary legislation. There are three main reasons why the Government should accept this amendment, which would provide clarity.

The first, which has already been mentioned, is the need to protect the EHRC from any possible imputation that it is not independent. Secondly, the noble Baroness herself argued that financial regulators should be excluded from the Bill because they already have an extensive statutory framework for engaging with business stakeholders. This makes it easier for other regulators in the other departments mentioned to be excluded. Following the line taken on financial regulators, it would be appropriate to think about whether there are specific regulators to which similar arguments apply and they should also be listed in the Bill. Thirdly—and more generally—it provides the opportunity for regulators to have uncertainty about their position removed, because they will not have to wait for secondary legislation to come forward to know whether they will be included in a future regulatory provision. As we all know, uncertainty is very bad for business.

The Minister said in Committee that she agreed that there may be regulators for which the growth duty—an issue that is for the Deregulation Bill, not this one—is not appropriate, but she did not think it would be appropriate to start excluding certain regulators within the Bill because,

“regulators may change over time and it is important that there is flexibility to amend the list accordingly”.—[

Official Report

, 12/1/15; col. GC 100.]

As I have tried to explain, the opportunity for flexibility is not given, because the secondary legislation process does not provide it. Real flexibility would be to determine now which regulators go into the Bill and which do not. That is why the amendment would be important in making sure that there is clarity. I hope the Minister will accept that there is at least a case for looking at this issue again and, perhaps, coming back to it at Third Reading. I beg to move.

Lord Deben (Con): I do not find the second half of the amendment compelling, but the first half is very important indeed. The EHRC has a very special role in society and it is looked at very carefully by people outside. The Government have to be super-careful: we know perfectly well that this will not, of course, interfere with the EHRC. This is not, in any way, some sinister operation, but there are people out there who will find sinister operations in anything, particularly when one is dealing with something as delicate as the issues with which the EHRC is concerned. The trouble is that the mischievous people come from both ends of the spectrum: one end wants the EHRC to be more dominant and expansive in its role and the other end wants to have as little to do with it as possible. It is, therefore, important that the wording is right and I hope that my noble friend will have been able to consider this, both in

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relation to this Bill and on the other occasion that this issue has been raised. I hope she understands that this is not because either side really thinks that there is something here that is wicked or hidden and being covered up. It is simply that there is a very blanket view from outside and it is quite hard to see why it is so difficult to exclude the EHRC. I very much hope that my noble friend will be able to help on that part, at least. The other part of the amendment is probably otiose: I shall not argue with it but I would not want to support it. However, the EHRC is particular, special and has a real reputation in the rest of the world that we do not want to see undermined.

The Earl of Lindsay (Con): My Lords, I also have a problem with a large part of the amendment. I disagree with the argument of the noble Lord, Lord Stevenson, that putting some departments and regulators in the Bill would make it more flexible than using secondary legislation. The Bill provides a requirement for that secondary legislation to be debated by Parliament. My other concern is the very wide exemption that the amendment suggests for a large number of regulators that fall under the six departments cited. This would undermine and threaten a policy that has been developed specifically to support small businesses and would send an unhelpful message. The policy is simply aimed at improving the appeals and complaints processes of a regulator when dealing with small businesses.

We should not forget that driving greater efficiency, accountability and transparency into the interaction between regulators and those they regulate has to make sense, as does having a simpler, more effective, more transparent, less costly and better understood series of processes by which small businesses are able to challenge regulators’ decisions and behaviour. Ensuring that regulators have appeals and complaints processes that work well and are fit for purpose, that rectify wrongs with minimal delay and are sensitive to small businesses—and micro-businesses in particular—must be good news for the economy as well as for the objectives that regulators are seeking to deliver. I would be very uneasy at the thought of the Bill exempting the number of departments and the very large number of regulators that the amendment proposes. I agree about the EHRC, but I understand that the Government will use secondary legislation to exempt it from this section.

Baroness Neville-Rolfe: My Lords, I thank the noble Lord, Lord Stevenson, for his comments on Amendment 20, which would restrict the regulators to which the provisions on small business appeals champions can apply. It was also good to hear from my noble friends Lord Deben and Lord Lindsay.

Clause 18 already provides that the list of regulators to be covered by the appeals champions should be set out in regulations. A consultation on the list of regulators closed in January. We intend to publish a summary of the consultation and our response before Parliament rises, based on careful consideration. The Government’s response will then become the basis of the regulations which will bring regulators into scope. These regulations will be subject to affirmative resolution, so Parliament will have the opportunity to consider which regulators

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should be on the list. On other occasions, the noble Lord, Lord Stevenson, has called for just that affirmative resolution. Although the consultation has closed, we shall take into account representations that noble Lords have made during discussions on the Bill. I am coming on to reassure about the EHRC, but I encourage any noble Lord who has particular concerns about anything else to let me know: we will give them a fair hearing.

Listing inclusions and exemptions would make the Bill cumbersome and unwieldy. Pre-empting our case-by-case consideration through a blanket exemption is not the right way ahead. The amendment first seeks to exclude the EHRC. Noble Lords have linked this to the protection of the EHRC’s A status as a national human rights organisation. The Government share the determination to protect the commission’s status and we understand that, as a regulator, the EHRC is different and needs to maintain its independence from government.

The Government’s position is that the EHRC will not be in the scope of the champions policy. It was not included in our consultation on the list of regulators to be brought into scope. No specific regulatory functions of any other particular named body are listed for inclusion or exclusion in the Bill and it is not necessary to do so in relation to the regulatory functions of the EHRC. Doing so would set a precedent that might lead to overly complex legislation. We have never proposed to include the EHRC, and today I can make a commitment not to do so. The Government will not include the EHRC in the small business champions policy. I hope that noble Lords will accept that full, unequivocal and repeated assurance. In Committee, the noble Baroness, Lady Thornton, was kind enough to accept my assurance on this point, and the majority of noble Lords accepted similar assurances in respect of the growth duty during the passage of the Deregulation Bill. I hope that the House will be willing to do the same today.

The second part of the amendment proposes to exclude any regulator belonging to a list of departments. The proposal would exclude more than half of the regulators we propose to include. Many of them have considerable contact with small businesses. There is broad support for small business appeals champions to make sure that businesses have effective routes to regulators. The amendment would deny that assurance to care homes, which need to challenge rulings by the Care Quality Commission or businesses challenging inspections by the Health and Safety Executive. I do not understand why we should emasculate a policy that has such widespread backing.

The noble Lord, Lord Stevenson, asked whether the Government had decided to exclude a health regulator from the appeals champion policy. We have made no decisions yet, and we shall do so on a case-by-case basis. As I have said, if any noble Lord or regulator is in this situation, they should make representations to us. We intend to make a decision on the list and publish our response before the end of the Parliament.

This is not the growth duty. This is simply a policy that aims to improve public administration and provide an assurance that regulators have the procedures and

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processes in place to support business appropriately. We all agree that small businesses need a better deal, and we should be aiming to apply this policy to regulators where possible rather than looking at potentially wide exemptions. I hope that, in the circumstances, the noble Lord will feel reassured and that he will agree to withdraw the amendment.

Lord Stevenson of Balmacara: I thank all those who have contributed to the debate. Perhaps I may make one or two points about it. I would say to the noble Earl, Lord Lindsay, who obviously has great knowledge of and experience in this area, that I can understand why he might think so. However, I draw his attention to the fact that the intention in the second part of the amendment is to select a group of regulators equivalent or similar to the EHRC in the sense that they are required to be taken out of a broader approach. It does not attack all the regulators in a department. If he misunderstood that, I apologise, but it is clear that what we are trying to do here is to say that because we were not involved in drawing up the list of regulators, we are not absolutely clear which are in and which are not. In that sense, it is imperfect and we would have to be quite inventive, if the amendment were to be accepted, to come to the right conclusion. I accept that it is not as well done as it could have been. However, it has provoked a good debate and that is the point. Indeed, the noble Baroness has already accepted that there may be one or two regulators that might well be included in the list of the growth duty within the Deregulation Bill. That might not be appropriate for small businesses—and vice versa. We are in a situation where we are not sure how the lists will bottom out. It is that unease which I was trying to attack, and in that sense I hope that the noble Earl is reassured on the point.

It is worth reflecting on the fact that, to do what is required in the Bill, as I understand it, appointments would need to be made to various regulators at board level. That would have an impact on how these bodies operate. I do not think it is an entirely free-riding champion helping to resolve appeals. These are people who, by their constitutional and statutory position, will have to have an involvement in the day-to-day work of these regulators. By accepting this, we are accepting by implication that there will be a change—perhaps a beneficial one—to the way that some regulators will operate in the future; they will not do so as they were originally set up. Again, that is what I am trying to reflect in this debate.

However, I accept that, as presently drafted, the amendment would not achieve the ambitions we had for it and there may be better ways to approach this. It may be that the rather convoluted process whereby I think the noble Baroness was inviting individual Members of your Lordships’ House to write in with special and favourite regulators to be excluded will mean that we arrive at a resolution in an appropriate way. I am sure that this will come out all right in the wash, but at the moment it seems rather a complicated way of doing it.

I will say again that it will not be possible for either House of this Parliament to pick and mix within the secondary legislation. It must either be accepted as it

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stands or we can vote against the whole of the SI. It is not fair to say that we will have a choice at the time when these regulations are going through. The choice will have to be made outside Parliament and before the Government, whichever Government they are, put forward the secondary legislation. We have to be realistic about the fact that there will not be the same level of scrutiny.

I broadly take the points which have been made. It will be interesting to see how they go through. We made it clear in Committee that we are not against the idea of there being appeals business champions, as it were. I think we agreed that we would call them “small business champions” in relation to regulation. It is a good idea but I am not quite sure whether it will work in practice; only time will tell.

Finally, on the EHRC, I am grateful to the noble Lord, Lord Deben, for his consistent support for this issue. If it is so clear in the minds of Ministers that the EHRC is not, will not and never can be part of the processes involved in this Bill or in the Deregulation Bill, why on earth can they not just accept that it would be sensible to table an amendment at Third Reading stating that the EHRC is not involved? That would peradventure put beyond doubt the question of whether the EHRC is ever around. There may be evil forces at work and there may not. We do not think there are, and we are not looking at it with suspicion. However, enough damage has already been done to the EHRC, for heaven’s sake, and what is left of it needs to be protected. It would be a positive and rather a noble thing for the Government to accept at this stage that it would be right to have that line in an amendment, just because the EHRC is so special, as the noble Lord said, and to be super-careful because of the particular nature of the commission. That is for the Minister to reflect on and perhaps to come back at Third Reading.

5.45 pm

Baroness Neville-Rolfe: I very much take the point that the noble Lord has made. I am happy to consider whether we could put the EHRC into the Bill, but whether I can do that, I am not sure. Giving the commission that clarity seems to be widely supported around the House.

Lord Stevenson of Balmacara: That is a very generous offer and I think it would solve an awful lot of problems. Indeed, we have been discussing it week after week for the past two or three months. I would be very pleased if she can do this, but I repeat that I am happy to withdraw the amendment at this stage.

Amendment 20 withdrawn.

Clause 19: Guidance by the Secretary of State

Amendment 21

Moved by Baroness Neville-Rolfe

21: Clause 19, page 20, line 1, after “must” insert “—

(a) ”

Baroness Neville-Rolfe: My Lords, government Amendments 21, 22 and 23 respond directly to our

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Committee debates regarding the small business appeals champion and the business impact target. Regarding the champion, the noble Lord, Lord Mendelsohn, made a number of helpful observations about how it might work in practice. He was keen to ensure that any guidance issued to the champions should be laid before both Houses as well as published. I made it clear in Committee that this was already our intention and I am pleased to confirm it with Amendments 21 and 22.

I turn now to the business impact target. I thank the noble Lord, Lord Stevenson, for his comments in Committee regarding the scope of the target. In particular, he raised concerns around the clarity of the coverage regarding voluntary and community bodies. I have reflected on this issue and I agree that there is more that we can do in the Bill to clarify it. I have therefore tabled Amendment 23, which is a relatively straightforward provision to simplify Clause 27(5). It will remove the current membership threshold of at least 21 individuals for unincorporated bodies that do not distribute any surplus to their members. As I am sure many noble Lords will be aware from their own work in the voluntary sector, such bodies can be adversely affected by redundant, ineffective or excessively burdensome regulation, just as much as businesses can. Therefore, including them within the scope of the business impact target makes a lot of sense. It will not harm the voluntary sector, but will help to ensure that any burdens from new regulations are minimised and that there is transparent reporting of impacts.

This Government have already made a number of changes that have made it easier to set up and run charities and social enterprises. Those include providing greater legal clarity on volunteer liability and supporting proposals to make criminal record checks simpler and less onerous. The amendment will mean that such bodies are not excluded from the definition of “small” and “micro” businesses in Clauses 33 and 34, meaning that they can benefit from any regulatory exemptions made by reference to that definition. I hope noble Lords will welcome the amendments, and I beg to move.

Lord Stevenson of Balmacara: This must be the shortest amendment ever considered in my time in the House. I look to the clerks for further guidance on these matters. The Minister suggested that we might welcome the amendments; we do welcome them.

Amendment 21 agreed.

Amendment 22

Moved by Baroness Neville-Rolfe

22: Clause 19, page 20, line 2, at end insert “, and

(b) lay any such guidance or revised guidance before Parliament.”

Amendment 22 agreed.

Clause 27: Sections 21 to 25 etc: interpretation

Amendment 23

Moved by Baroness Neville-Rolfe

23: Clause 27, page 26, line 16, leave out sub-paragraph (i)

Amendment 23 agreed.

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Clause 28: Duty to review regulatory provisions in secondary legislation

Amendment 24

Moved by Lord Stevenson of Balmacara

24: Clause 28, page 27, line 23, at end insert—

“( ) The Secretary of State shall conduct a review of the current regulatory machinery used to consider regulatory and deregulatory proposals.

( ) The review should include, but not be limited to, the work of the Regulatory Policy Committee.

( ) Following the findings of the review the Secretary of State shall bring forward regulations to enhance the role of the Regulatory Policy Committee and its recommendations.”

Lord Stevenson of Balmacara: My Lords, the amendment is in my name and that of my noble friend Lord Mendelsohn.

The amendment might have been raised within the Deregulation Bill, because it deals with the overall architecture of the regulatory framework. Although I am proposing the amendment to Clause 28, to some extent, it is possibly echoed in some other phrases and clauses in the Bill. However, it would be useful to get a response from the Government on the issue. I look forward to hearing what the Minister is able to say in response to my comments.

By way of background, I want to reflect a little on the purposes of regulation. The purpose of the amendment is to probe further the Government’s intentions in the changes that they are making to the regulatory machinery, particularly that bit currently undertaken by the RPC, which reflects on secondary legislation and gives the Government an external view of how that regulation will work in practice, particularly in the business area but not restricted to that.

Regulation is a word that we use extensively in this Bill and the Deregulation Bill. It takes several forms, and we should be careful to try not to mix them up too much. There are things that businesses have to do to be compliant, either with industry standards or with health and safety. But there are, in some senses, different types of regulation, including pre-emptive measures by businesses to reduce the likelihood of being sued, inspection-based regulations for food and hygiene standards, and workplace and financial regulations, particularly health and safety. Many of these will offer benefits to businesses outside of simple compliance, but, in many cases, they are there in generic form and do not specifically help an individual business.

It is important to bear in mind that the culture and context within which businesses operate, which we talked about a lot in earlier amendments, results from a combination of legislation and regulation. The two go together and cannot be distinguished, but where they are coming from and what they are trying to achieve must be carefully thought through.

I say all that because the Government have made a virtue of their one-in, one-out approach—now one in, two out. Doing it by numbers has rather taken the eye, rather than trying to lead into proper consideration of what the regulation is about. In some senses, it is a good thing. Simply saying that there has to be a reduction in regulation does focus the mind. But, and I offer this simply by way of observation, I feel that, in

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the Deregulation Bill, we got a response by numbers and not by intention or principle, which is not necessarily the right way. There may be a better approach, which might be to think harder about what it is that regulation is attempting to do and try to work out, across the various aspects of it, how it could be made more appropriate to the job.

Such an approach really has to answer questions about whether regulation is the right approach or there is some other solution; whether the regulations come from an external force, such as European Union requirements; and whether it will be easy to comply with. These are all areas that follow on from the need that one has. One hopes that, in doing that, the assessments that are made in the preparation of regulation answer those questions and, in aggregate, provide a better environment in which regulation operates. As part of that arrangement, the Government have set up and use an independent body, the RPC, to look at regulations put forward. It provides a kind of “traffic light” solution, which is relatively crude in its outline, as well as some detailed comments about whether the regulations are fit for purpose, whether they will achieve what is intended and whether they need to be rethought in terms of their impact.

If we are to continue to have the approach that I have outlined, which is not just a by-numbers approach but one which reflects the kind of economy that we are trying to build, supporting high-quality skills and other things, and where regulation in totality is fit for purpose and is as good as can be got, there is a role for a body which looks across the totality of government and considers more than just how the Government are proposing regulations but how they will apply. It is a two-sided approach: both looking at the words in the regulations and the impact that they will have, not just on business but on society more generally. One then has to ask what needs to be set up in order to do that.

As I understand it, Clause 28 requires departments to review secondary legislation that they propose. In our earlier exchanges in Committee, the impression was gained—I would like the Minister to confirm or deny it—that this would affect the work of the existing RPC, which is very well regarded. It is not entirely clear from Clause 28 what exactly is happening here, so I would be grateful if we could have more detail on that. Will the RPC be made statutory? Will there be more bodies that each department will have? Will the new arrangements being introduced be limited to secondary legislation or will it have a wider remit, as has the RPC, for all regulation, including regulation that impacts on other groups such as consumers, charities and other bodies?

Where will responsibility for the new system lie within government? Will it be within BIS or will it go to the Cabinet Office? That would be a more logical place to locate it, because the arrangements have to apply around Whitehall and not just within the business department.

The primary purpose of the amendment is to add some more detail to what was said in Committee and to enable us to reflect more carefully on the position of the RPC. I beg to move.

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6 pm

The Earl of Lindsay: My Lords, in moving the amendment in his name and that of the noble Lord, Lord Mendelsohn, the noble Lord, Lord Stevenson, raises a number of interesting issues. I am delighted to be able to share many of the sentiments that lie behind the proposal, having served both the previous Government under both its Prime Ministers and this Government on a number of independent bodies advising them on better regulation.

While supporting and sharing the sentiments that lie behind the amendment, I am not completely convinced that the Bill is the right place in which to progress them. I am also concerned that, as written, there could be unintended consequences.

I wholly agree that the Secretary of State should be reviewing the current regulatory machinery used to consider regulatory and deregulatory proposals. I would prefer to see—which I believe is the case—the relevant Secretary of State regularly reviewing the entire regime that oversees regulation and deregulation; so rather than it being a one-off exercise, this, as it were, should be a regular exercise undertaken by any Government.

Going on to the next part of the amendment, I also agree that the scope of the review should include the RPC, but not be limited to the RPC. That is absolutely right. Not only are regular reviews very important, but the reviews should be very broad and should cover the broad scope that the noble Lord, Lord Stevenson, set out in terms of the landscape that surrounds and underpins legislation and determines the culture that produces legislation, regulation and so forth.

The ecology of regulation is certainly a very long and quite complex one. The review should look at how the better regulation machinery deals with policy-making prior to regulatory proposals being brought forward. It should look, as the RPC does, at specific proposals that come forward, but it should also look at compliance and enforcement issues. As the noble Lord, Lord Stevenson, mentioned, it should also look at the extent to which alternatives to regulation are properly considered. I share the motives behind this amendment, but, as I said, I have concerns about the exact proposal for putting this in the Bill.

In terms of the possible unintended consequences, it is the third part of the amendment that I have some concerns about. It is, to an extent, pre-emptive. To have a review of the better regulatory regime, and then presume that it must be the RPC that needs to be strengthened, is almost pre-empting the outcome of any such review. I wholly agree with the noble Lord that, at the moment, the RPC is the best show in town. It is doing an excellent job. It is well established, very well respected and extraordinarily effective. It is providing robust and independent scrutiny and analysis, supporting new regulatory proposals.

At 3 pm today I went to the launch of the RPC’s latest annual report. It was a well attended event. It looked back at the work it had done since 2010, over the lifetime of this Parliament. There are some very impressive statistics in the report. For example, it has managed to drive an improvement in the percentage of impact assessments from departments that are judged

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to be fit for purpose to around 80%. That is a much higher percentage than was the case in 2010, and some departments are achieving a much higher percentage than 80%. If noble Lords read nothing else but the executive summary, they will see a page or two of very impressive achievements elsewhere on what it has managed to deliver by way of progress. Further to the remarks of the noble Lord, Lord Stevenson, in those five years the RPC has scrutinised more than 1,200 regulatory proposals and issued just over 2,000 opinions on the quality of the evidence base supporting those proposals. It has done an extremely important piece of work throughout the past five years. I agree that the RPC’s role is absolutely fundamental to the current better regulation regime.

If we had been debating this matter eight years ago, we would have said that the Better Regulation Commission was the best show in town. A similar amendment then would have suggested putting the BRC in the Bill. If we had been discussing it 12 years ago, we would have said that the Better Regulation Task Force was the best show in town and would have suggested putting that in the Bill. One of the strengths of the better regulation effort by successive Governments over the past 10 to 15 years has been its ability to evolve. My concern about the last part of this amendment is therefore that it presumes the continuity of the current body. The RPC is, as I said, doing an extraordinarily effective job at the moment; but given what we have learnt from the past 15 years, it is not unlikely that we might eventually want either the RPC to evolve into a successor body or to create another body alongside it to broaden its duties or scope.

The last chapter of the RPC annual report which was launched today deals with the future. It is a very interesting chapter in that the RPC speculates, with the experience it has gained, on how it could be more effective and how the better regulation effort could be more effective in the years to come. Although I favour leaving the Bill as it is, the noble Lord’s comments in moving the amendment, and the issues which the amendment raises, are very important. The Secretary of State should regularly conduct major reviews of the machinery and landscape surrounding regulation. Those reviews should be very broad-ranging and should look both at current bodies and at new bodies that may be sensibly developed in the future. In the mean time, I welcome that the Bill provides for the continuity of the role that the RPC performs and the outcomes that it delivers. That is the most important thing—that the role is undertaken and the outcomes achieved.

Under the business impact target, the Secretary of State must appoint an independent body to verify the impact of new regulations that are scored under the target. That is set out in Clause 25 and has been welcomed by the RPC. I agree that it is an important signal that independent scrutiny will continue to play a central role under any future Administration. The current arrangements under the RPC are working very well, and the RPC has developed a strong foundation for the future. However, to assume that the current machinery will be the right machinery in three or five years’ time might not be the best way to proceed with the Bill. Otherwise, I welcome the issues that have prompted the noble Lord to table this amendment.

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Lord Popat (Con): I thank the noble Lord, Lord Stevenson, for his amendment and for his comments on the work of the Regulatory Policy Committee. I liked his comment on the “traffic light” solution. Indeed, I give credit to the party opposite for its decision to establish the RPC in the first place. That created an important and enduring cornerstone for the regulatory machinery—one which this Government have continued to develop and improve.

The amendment requires the Secretary of State to review the current regulatory machinery used to consider regulatory and deregulatory proposals. Of course, such reviews already take place from time to time. They look both at the distribution of responsibilities between different bodies, and at the specific rules and requirements. When this Government came into office, they carried out their own review as to what arrangements were required to deliver their key policy priorities for better regulation. Critically, that involved a strengthening of the RPC’s independent scrutiny role.

The Government carried out a further review in 2012, when some useful changes were made, including a “fast track” route for proposals whose impact on business is modest. That change has helped make the system more efficient for both departments and the RPC. I am sure that the Government will ensure that reviews of the system will continue to take place as and when necessary. Given the terms of the amendment, I am equally sure that the Opposition, were they to be in our place, would do the same.

However, the benefit of reviews needs to be balanced against the need for stability in the system. This is why, for example, the appointment of the verification body under the business impact target in Clause 25 is required to be for the duration of a Parliament. An open-ended duty to review, as proposed in this amendment, could potentially undermine that stability and as a consequence put at risk a future Administration’s ability to deliver against the business impact target. It would also generate uncertainty for stakeholders about the wider regulatory system.

The amendment also requires that once a review of the machinery has been completed the Secretary of State must bring forward proposals to enhance the role of the RPC. The Government are by no means opposed to expanding the role of the RPC where it can add value—in 2013, we asked the RPC to scrutinise the new small and micro-business assessment—but it is very odd to create a statutory commitment to a further expansion of the RPC’s role in advance of the review that the amendment envisages.

The noble Lord, Lord Stevenson, asked whether the Government were legislating for the RPC. We are legislating to underpin the business impact target with robust independent scrutiny. Clause 25 requires the Secretary of State to appoint an independent body to perform that verification function. The proposals in the Bill entrench in legislation the verification role currently performed by the RPC but do not change the status or independence of the RPC. As regards the status of the RPC, it is an advisory non-departmental public body of BIS. It is not established in statute and does not have a separate legal personality. Its members are independent from the Government.

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There is cross-party support for the RPC, the wider framework within which it operates and the principle that, from time to time, that framework should be reviewed. We can rely on that consensus to secure such reviews when they are needed. We do not need a statutory provision to do so. I hope that the noble Lord will be persuaded by my explanations and will agree to withdraw his amendment.

Lord Stevenson of Balmacara: I thank the Minister for that response and also the noble Earl, Lord Lindsay, for his comments. We are at exactly the same place on this. I was only a bit sad that I got caught out trying to have my cake and eat it by sketching out the work which I think we agree is continuing and necessary, which will be to think harder about the regulatory functions, how best they can be delivered and—constructively and creatively—how best to do that work of review and scrutiny. On the other hand, I was taken by the “best show in town” argument: since we need something like this, why not just build on what we have, because it seems to be the best version of the body we all seem to think is necessary?

The Minister is right: the ecology of regulation needs a bit more scrutiny than it sometimes get. Of course, his work and experience here were instrumental in our thinking on this. Without that scrutiny, we will not be in a very strong place to build on the policy issues we are talking about, and to think harder about the way in which legislation and regulation will bite on individuals, companies and society as a whole. There is not an easy solution. We must just keep it under review.

I note what the Minister said in his response. Maybe we should leave things as they are for the moment, but the lessons need to be taken back to all departments, not just BIS. There may be some argument for BIS perhaps loosening its hold on this and encouraging other departments to have a bigger share of it. Although in some senses that makes it less likely to be effective because there is no champion within government, it might have the impact of raising other people’s game, which would be good. We need more thinking around that—I am not saying that we would necessarily do it at this stage.

The annual report of the RPC is very impressive, as the noble Lord said. The volume of work it does is astonishing, given that it is independent, non-statutory and has no particular locus within government. I do not know how we get these people to do the work they do, but it is a message we might pick up in other areas. With that, I beg leave to withdraw the amendment.

Amendment 24 withdrawn.



6.15 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Lord Ahmad of Wimbledon) (Con): My Lords, first, I congratulate the noble Lord, Lord Stevenson, on his excellent timing. With the leave of the House, I shall repeat a Statement made in another place by my honourable friend the Minister for Housing:

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“Honourable Members will be aware of the Government’s ambition to create a new garden city at Ebbsfleet and of our intention to establish an Urban Development Corporation to drive forward its development and delivery. I would like to take this opportunity to update honourable Members on the progress we have made.

The country has faced a shortfall in housing for many years, with young people and families struggling to find the homes they want and need, particularly in the south-east. We are committed to increasing their chances, and our programmes to accelerate housebuilding are already seeing results. Our £1.5 billion large sites programme is expected to unlock 100,000 homes by the end of this month and a further 200,000 homes could be unlocked as we take the programme forward. This is in addition to the plans in place to create housing zones on brownfield sites across the country.

Last year, we published our prospectus for locally led garden cities, and we are now working closely to support the development of a new garden town at Bicester, with capacity to deliver up to 13,000 new homes. Our approach is a locally led approach. We invite local areas to come forward without any top-down, centrally imposed requirements. This approach will help make new garden cities locally acceptable and so make them a reality.

With close transport links and large areas of brownfield land, the Ebbsfleet area has huge potential as a place to deliver a substantial number of new homes. It has long been identified as an ideal location for major development—in fact, as far back as the last Government’s Sustainable Communities Plan. Yet, despite these ambitions, progress has been slow and Ebbsfleet remains largely undeveloped. Our plans for Ebbsfleet aim to change that and drive forward this historic development.

At last year’s Budget, the Government therefore announced plans to create a new, locally led garden city at Ebbsfleet, Kent, capable of providing up to 15,000 new homes based predominantly on brownfield land or former quarries. The Government are seeking not only to increase the pace of development but to create high-quality development and to build homes that are supported by local employment opportunities, green space and the necessary infrastructure so that Ebbsfleet becomes a place where people want to live, work and raise families.

To help realise this vision, the Government have announced that up to £200 million of infrastructure funding would be made available to support delivery. We also announced that a new statutory body—an Urban Development Corporation—would be formed to bring real focus on driving forward delivery. Since then, we have been working closely with each of the three local authorities and other partners on the preparatory work to establish the Urban Development Corporation and set the scene for the future garden city. I welcome the cross-party support that the Opposition have given to these proposals.

I am pleased to report that housebuilding is already under way in some areas of the proposed garden city. Last November, I opened the first phase of housing being led by Ward Homes at Castle Hill. Today, Land Securities exchanged contracts with Persimmon Homes

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for the next phase of 170 new homes at Castle Hill. Much remains to be done to increase the rate of development at Ebbsfleet, but this is welcome progress none the less.

In August last year, we consulted on the proposal to set up an Urban Development Corporation. We set out the powers that we are proposing that the corporation will have, including compulsory purchase powers, the transfer of the planning management powers that are currently exercised by the local authorities and, of course, the ability to invest money to secure the regeneration of the area. In our consultation, we asked for views on the area in which the Urban Development Corporation would operate, the planning powers that it would be granted and the composition of the board. The consultation was supported by an active engagement campaign, and the results demonstrated overall support for the proposal to create a development corporation for Ebbsfleet. In December last year, we published our response to the consultation in which we therefore confirmed our intention to continue with the proposal to establish a development corporation at Ebbsfleet.

The consultation, although supportive, did highlight some areas of concern, such as the impact of development on existing infrastructure. These issues were not unanticipated, and at the Autumn Statement the Government announced that there will be a review of the transport provision for the Ebbsfleet area. At the Autumn Statement, the Government also announced the provision of the first £100 million to fund infrastructure and land remediation to kick-start development, subject obviously to due diligence. We are working closely with local partners to understand the scale of the infrastructure required and how best to accelerate delivery. We want to ensure that, on establishment, the Urban Development Corporation has in place the tools necessary to enable it to hit the ground running. It is crucial that the Urban Development Corporation is able to pick up the reins from the local authorities and deliver on its objectives seamlessly, without causing any unnecessary uncertainty among the local communities and businesses.

In August last year, we appointed Michael Cassidy as the chairman-designate. He was the chairman of the City of London Property Investment Board and has extensive experience in a range of roles across the business and industry sectors. Since his appointment, he has been actively engaging with local partners and the major landowners to develop a shared understanding of the work required to drive forward development.

More recently, we launched the recruitment process for a permanent chief executive. However, as this post will take some months to fill, we are appointing key interim personnel to maintain momentum and continuity. These interim posts will, in the mean time, continue to drive forward not only the set-up of the Urban Development Corporation, but also progress with the work to develop a shared strategy for the garden city. We have also made progress with the process to recruit, through open competition, the remainder of the Urban Development Corporation’s board members. Ninety applications were received and interviews are under

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way. These will be in addition to the local authority representatives from Dartford, Gravesham and Kent, who, as we have already made clear, will have a seat on the board.

The Urban Development Corporation will develop a shared vision and master plan for the locally led garden city which reflect the views of the local people. However, there is much that can be done in the mean time to set in place the foundations for this work and provide a platform for the Urban Development Corporation to work from. We are therefore progressing with the production of a development framework for the area. This will provide critical baseline data and act as the starting point for the design of the future Ebbsfleet garden city. In parallel, we are preparing the procurement process for a full master plan which can then be taken forward by the Urban Development Corporation. We want the design of the garden city to be as collaborative as possible. We will therefore use this preparatory work to make sure that future master-planning is carried out in a way that encourages the full participation of the local communities and local businesses.

We recognise that there is likely to be a transition period between the establishment of the Urban Development Corporation and the point at which it will be fully resourced to operate as the local planning authority. We are therefore working closely with the local authorities to agree and put in place a service-level agreement. This will enable the local authorities to administer the planning service for the Urban Development Corporation for a transitional period to ensure a smooth handover and develop a partnership to deliver a locally led garden city. We are also pushing forward with the final key stages of the physical set-up of the Urban Development Corporation, putting in place the accommodation and technical facilities needed to ensure that it is fully resourced and equipped to undertake its objectives.

Honourable Members will be aware that, in the other place, the Government tabled an amendment to the Deregulation Bill to change the parliamentary approval procedure from affirmative to negative for the establishment of the urban development areas and Urban Development Corporations. This amendment was accepted and is now part of the Deregulation Bill. I would like to place on record my thanks to the honourable Member for the City of Durham, Roberta Blackman-Woods, for her participation in discussions on how to proceed on this matter. I know she shares my view that we want to see progress in taking this proposal forward.

The Government therefore intend, subject to parliamentary approval, to lay a negative statutory instrument immediately following Royal Assent to establish the Urban Development Corporation. A separate order to grant the Urban Development Corporation planning functions, making it the local planning authority responsible for the development of the area, will be laid at the same time. I trust that this update will reassure honourable Members of the Government’s commitment to drive forward with creating a locally led garden city at Ebbsfleet fit for the 21st century”.

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6.25 pm

Lord McKenzie of Luton (Lab): My Lords, I thank the Minister for repeating a Statement made in the other place. We are strong supporters of the development of Ebbsfleet and agree with what has been said about it in the Statement about it having huge potential to deliver a substantial number of new homes, which are desperately needed. The development of Ebbsfleet provides opportunities but by all accounts challenges in difficult terrain. We want to see a new generation of garden cities and new towns, and Ebbsfleet could be an important contribution towards such a programme. As the Minister said in his Statement, that is why my colleagues in the other place have sought to work constructively and on a cross-party basis with the Government on the delivery of Ebbsfleet. When because of their tardiness the Government fell foul of the Delegated Powers Committee we supported them on the amendment to the Deregulation Bill. The Minister will be aware that we remain unconvinced that the negative procedure, accompanied by a statutory duty to consult, was the best one for establishing the UDC.

As the Minister in the other place said, my honourable friend the Member for the City of Durham participated heavily in the discussions with the Government on this. She has a strong commitment to the delivery of a new generation of garden cities and has spoken eloquently on these issues in the other place and elsewhere. We of course welcome the forming of a development corporation to drive the development, but we have concerns about the use of urban development corporations to deliver a full programme of garden cities. Perhaps the Minister could take a moment to say in what way the garden city principles are to be encapsulated by the Government in the plans for Ebbsfleet. As he knows, UDCs are not set up to deliver garden cities or developments formed on the basis of garden city principles. That is also why we pushed for the inclusion of a sunset clause in what was then the Infrastructure Bill.

Although we welcome the initiative that the Government are taking to set up a UDC, it is safe to say that over the past five years they have given mixed messages on Ebbsfleet and garden cities. These were summarised by my honourable friend Emma Reynolds MP. She reminded us that in 2011, the then Housing Minister spoke about “rebooting” garden cities. Three years ago the Prime Minister announced that he would be publishing a consultation on garden cities by the end of the year. Six months later, the Deputy Prime Minister said that there was some lively debate going on within Government, but promised incentives that would deliver projects that were “big and bold”.

In December 2012 the Government announced that Ebbsfleet would be a site for the large-scale development of 20,000 homes. Early last year, instead of the big and bold projects that were promised, there were reports in the newspapers that the Prime Minister was suppressing a document and had gone cold on the idea. In January last year the then Housing Minister said that he was not aware of a report that was supposed to have been published, but the Deputy Prime Minister said that there was a prospectus and that the Government should be honest about their intentions. Then the Secretary of State contradicted

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his Housing Minister and said that he had been told by his department that there was a report, but not a report from the Department for Communities and Local Government—so that is all very clear.

In the Budget, the Chancellor announced that there would be a new garden city at Ebbsfleet with 15,000 homes. But today we should not be churlish. We finally have the welcome step of the setting up of a development corporation, but after five years of confusion and lots of announcements but very little action, I am afraid that many people will have concluded that this Government are not serious about tackling the housing crisis.

I shall conclude with a few questions. The Government made it clear earlier in the year that, once established, the Ebbsfleet urban development corporation would be expected to identify sources of additional funding further to the £200 million earmarked by the Government for basic infrastructure. Will the Minister tell the House how much additional funding is necessary to get Ebbsfleet moving and whether this additional funding has been identified from the private or public sector?

Will the Minister explain why he has not mentioned affordable housing today? Can he reassure the House that in the master plan there will be a commitment to a significant number of affordable homes? The Government’s garden city prospectus invited communities to come up with garden city proposals—or “big and bold” projects, as the Deputy Prime Minister called them. Will the Minister tell the House how many bids have come forward so far? Finally, will he say why is it thought that the urban development corporation is an appropriate model for the development of garden cities?

I reiterate that we support the development of Ebbsfleet. Now is the time to make real progress after the delays of recent times.

Lord Ahmad of Wimbledon: My Lords, I record my thanks and those of the Government to the Opposition and, in particular, to the noble Lord, Lord McKenzie, for his co-operation and support in the discussions that we have had about the Ebbsfleet development. Indeed, the noble Lord suggested the sunset clause he alluded to, which was taken up by the Government. I thank him for the constructive discussion we had in this regard on the important issue of moving forward.

The noble Lord asked a series of questions, and I will address them. He mentioned the importance of housing and the need to move forward. The Government share that objective, and we are driving forward on a raft of different initiatives that I referred to in the Statement I repeated.

The noble Lord raised the issue of the principles of garden cities, with specific regard to Ebbsfleet. We do not seek to prescribe what a garden city will mean at Ebbsfleet. That will be for the UDC to establish with the local community—but, as noble Lords would expect, we expect it to include good-quality design and green space. The noble Lord asked why a UDC was necessary and perhaps answered that question in that, as I mentioned in the Statement, we have seen delays on the development at Ebbsfleet, and the UDC will provide the necessary focus and commitment in ensuring that we move development forward in this area.

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The noble Lord asked a series of other questions about the funding of the Government’s commitment. Again, it is for the UDC to establish what is needed and to make progress with development in the Ebbsfleet area—which will be the funding over and above the £200 million. He also asked about the garden city prospectus and said that there was confusion about whether it existed, whether it was a secret report and where it sat. It is not a secret report; the Government’s position is set out in the prospectus.

The noble Lord asked about the number of bids. I have announced Bicester—I mentioned that in the Statement I repeated—and we continue to work with other places interested in the delivery of large-scale development and garden city principles through the large-sites programme.

Once again I thank the noble Lord and Her Majesty’s Opposition for their support in moving this development forward with the creation of the UDC. I hope that once it is created we will be able to move forward rapidly in seeing housing developments progress to the target of 15,000 homes that has been set.

The noble Lord also asked about affordable housing. I have previously said from the Dispatch Box that the affordable housing requirement will reflect what is contained in the local plans of the authorities that will make up the UDC and will sit on its board.

6.35 pm

Lord Avebury (LD): My Lords, we, too, welcome the statement that £1.5 billion is being made available to the large sites programme. I know that had already been announced, but that has been taken a stage further with the news that Bicester has applied for funding under the infrastructure support route, as mentioned in the Statement. The Minister did not quite answer the question put to him by the noble Lord, Lord McKenzie, about whether the £200 million that will be made available to Ebbsfleet for infrastructure is supposed to cover the whole of the cost of the infrastructure development or whether some money has to come from other sources and, if so, what they are. The Minister said that was a matter for the UDC to press forward. Will it be able to come back to the department if the £200 million proves insufficient or does it all have to come from private sources, which is what the noble Lord, Lord McKenzie, asked?

The Minister said that the first £100 million is to fund infrastructure and land reclamation and to kick-start development. Will he amplify that a little? What does he mean by “kick-start development”? I understand that a lot of work has to be done on the infrastructure because the state of the land means that a lot of remedial work has to be done on it. Does “kick-start development” mean that part of the £200 million that has been allocated for Ebbsfleet is for the construction of homes or facilities for the people who live in the homes? I know that the funding of schools has already been arranged with the developers. It would be useful if the Minister could say a little more about how that will work. If the developers are responsible for providing public services, such as schools or health centres, it would be useful for us to know that at the start.

The Statement says that—

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Lord Ashton of Hyde (Con): My Lords, 20 minutes are available for all Members. Questions are meant to be brief.

Lord Avebury: I will try to be as brief as possible. What is the work required to drive forward development which the head at Ebbsfleet is now discussing with others? Will the Minister be a little more specific about that? Will he amplify what was said in the Statement about the development framework for the area? Will he give us some indication of what the baseline data which are to be provided are and the timescale for them to be provided? Finally, local authorities are to administer the planning service for the UDC for a transitional period. What does he envisage that will be? When will the UDC be in a position to take over the planning functions that it will ultimately have to deliver?

Lord Ahmad of Wimbledon: My Lords, my noble friend has raised a series of questions related to infrastructure and funding. With the leave of the House, I will answer one or two to allow for more questions, and will then write to him with specific details, which I will of course share with noble Lords.

The mainstay of my noble friend’s questions was about the £200 million and the further money required. This is not a cap for the UDC to work out what is needed and to make the case to the Government if more money is required. As I have said, the first task for the UDC is to draw up a business plan with details on how to spend the first £100 million—not on homes, as he asked specifically, but on infrastructure. That could include—to answer some of his questions—schools and community facilities. We very much want the UDC to be in the position of telling us how it can move this forward.

The important element is that this is not about giving the UDC specific targets or parameters in which to work. Once the UDC is created and appointed with local expertise, including representation from local authorities on its board, it is then up to the UDC to identify the priorities for the area, to ensure that whatever garden city develops reflects local needs, as I said in my response to an earlier question from the noble Lord, Lord McKenzie. As to the other specific questions that my noble friend asked, I will write to him.

Lord Beecham (Lab): My Lords, I join my noble friend in welcoming the Statement. I will ask a few very short questions and will be perfectly content with the Minister replying to most or, if necessary, all of them in writing.

First, what proportion of the affordable housing might be expected to be for rent, and will that include social housing? Secondly, to what extent will environmental concerns about housing design—particularly around energy efficiency—be incorporated into the scheme? Thirdly, will there be provision for extra care housing for the elderly? Since there will probably be 40,000 people or more we are going to see a town here, so it might be sensible to have extra care housing as part of the development. Fourthly, what steps will the Government encourage the UDC to take to ensure that there are

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employment opportunities—including training—for local people from the Kent area and the district councils there?

At what point, if any, will the local community—once it is becoming more of a town—be involved with the UDC? Will there be opportunity for local residents to become members of the UDC board once they become established there? Finally, what is the position regarding the provision of health facilities? Presumably NHS England will be involved in that, although normally of course the CCG will be commissioning hospital services. At what point will NHS England and the UDC be looking at the provision of appropriate health services?

Lord Ahmad of Wimbledon: The noble Lord rightly asks a series of quite specific questions. If I may, I will take up his offer and come back to him in writing on some of them. He raised—for example—the issue of affordable housing and clean energy and there is a target of 30% in the local plans, covering all forms of tenure. It is for the UDC to look at issues such as clean energy, and the board will be recruited on the basis of a wide variety of skills including expertise in this area. He asked specific questions about the elements of affordable housing. As I said earlier, this will reflect the priorities of the local authorities which will be represented on the UDC board. Specific questions on care homes, again, are very valid concerns to raise. On the specifics of affordable housing, I will write to him, because it is important we cover these issues in the detail he asked for.

Lord Whitty (Lab): My Lords, could I put this in a wider context? Progress on Ebbsfleet is welcome but, as the Statement indicated, it has been complex and slow and at the end of the day, we are talking about 15,000 dwellings. Best estimates suggest that we need 200,000 dwellings or so a year, of all forms of tenure. Can the Minister indicate in terms of other potential garden cities, or similar large sites, what proportion of that 200,000 is likely to be provided by initiatives such as Ebbsfleet and, I hope, Bicester? What proportion of that would be affordable housing, because we really need a much more substantial effort on the total housing crisis? While progress today is welcome, it is a very, very small step indeed.

Lord Ahmad of Wimbledon: I thank the noble Lord for his welcome support. He mentioned Ebbsfleet, but Bicester has certainly put forward a bid and we are looking at other areas to come forward with bids which will reflect their local needs. As to the specific issue of housing and the need to meet the requirements that we currently have, I share his concern.

I talked earlier about unlocking 100,000 homes through the large sites programme. This is the aggregate number of the impact the Government have made on housing delivery through providing investment, capacity funding and brokering solutions. We have talked about unlocking a further 200,000. This is what we expect to be delivered through the current shortlisted schemes, and the Government are investing a great deal in various initiatives that we have undertaken. One example

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I will share with your Lordships’ House is the issue of housing zones. We are in the process of announcing the list of successful housing zones, whereby we are looking at innovative solutions to actually provide the housing which is clearly needed up and down the country.

Maternity Services in Morecambe Bay


6.46 pm

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con): My Lords, with the leave of the House, I shall now repeat a Statement made earlier today by my right honourable friend the Secretary of State for Health in another place about maternity care at the University Hospitals of Morecambe Bay NHS Foundation Trust. The Statement is as follows.

“With your permission, Mr Speaker, I would like to make a Statement on the independent investigation into the care of mothers and babies at the University Hospitals of Morecambe Bay NHS Foundation Trust, which is being published today. I commissioned this report in September 2013 because I believed there were vital issues that needed to be addressed following serious incidents in maternity services provided by the trust dating back to 2004.

There is no greater pain than for a parent to lose a child, and to do so knowing it was because of mistakes that we now know were covered up makes the agony even worse. Nothing we say or do today can take away that pain, but we can at least provide the answers to the families’ questions about what happened and why, and in doing so try to prevent a similar tragedy in the future.

We can do something else, too, which should have happened much earlier. That is, on behalf of the Government and the NHS, to apologise to every family that has suffered as a result of these terrible failures. The courage of those families in constantly reliving their sadness in a long and bitter search for the truth means that lessons will now be learnt so that other families do not have to go through the same nightmare. We pay tribute to those brave families today.

I would especially like to thank Dr Bill Kirkup and his expert panel members. This will have been a particularly difficult report to research and write, but the thoroughness and fairness of their analysis will allow us to move forward with practical actions to improve safety, not just at Morecambe Bay, but across the NHS.

Before we discuss the report in detail, I know the whole House will want to recognise that what we hear today is not typical of NHS maternity services as a whole, where 97% of new mothers report the highest levels of satisfaction. Our dedicated midwives, nurses, obstetricians and paediatricians work extremely long hours providing excellent care in the vast majority of cases. Today’s report is no reflection on their dedication and commitment, but we owe it to all of them to get to the bottom of what happened so we can make sure it never happens again.

The report found 20 instances of significant or major failings of care at Furness General Hospital, associated with three maternal deaths and the deaths

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of 16 babies at or shortly after birth. It concludes that different clinical care would have been expected to prevent the death of one mother and 11 babies. The report describes major failures at almost every level. There were mistakes by midwives and doctors, a failure to investigate and learn from those mistakes, and repeated failures to be honest with patients and families, including the possible destruction of medical notes. The report says that the dysfunctional nature of the maternity unit should have become obvious in early 2009, but regulatory bodies including the North West SHA, the PCTs, the CQC, Monitor and the PHSO failed to work together and missed numerous opportunities to address the issue.

The result was not just the tragedy of lives lost. It was indescribable anguish for the families left behind. James Titcombe speaks of being haunted by ‘feelings of personal guilt’ about his nine day-old son who died. ‘If only’, he says, ‘I had done more to help Joshua when he still had a chance’. Carl Hendrickson, who worked at the hospital and lost his wife and baby son, told me that he was asked to work in the same unit where they had died and even with the same equipment that had been connected to his late wife. Simon Davey and Liza Brady told me the doctor who might have saved their son Alex was shooed away by a midwife, with no one taking responsibility when he was tragically born dead. In short, it was a second Mid Staffs, where the problems, albeit on a smaller scale, occurred largely over the same time period.

In both cases perceived pressure to achieve foundation trust status led to poor care being ignored and patient safety being compromised. In both cases the regulatory system failed to address the problems quickly. In both cases families faced delay, denial and obfuscation in their search for the truth, which in this case meant that at least nine significant opportunities to intervene and save lives were missed. To those who have maintained that Mid Staffs was a one-off ‘local failure’, today’s report will give serious cause for reflection.

As a result of the new inspection regime introduced by this Government, the trust was put into special measures in June 2014. The report acknowledges improvements made since then which include more doctors and nurses, better record-keeping and incident reporting, and action to stabilise and improve maternity services, including a major programme of work to reduce stillbirths. The trust will be reinspected this summer, when an independent decision will be made about whether to remove it from special measures. But patients who use the trust will be encouraged that the report says that the trust,

‘now has the capability to recover and that the regulatory framework has the capacity to ensure that it happens’.

The whole House will want to support front-line staff in their commitment and dedication during this difficult period.

More broadly, the report points to important improvements to the regulatory framework, particularly at the CQC, which it says is now,

‘capable of effectively carrying out its role as principal quality regulator for the first time … central to this has been the introduction of a new inspection regime under a new Chief Inspector of Hospitals’.

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As a result of that regime, which is recognised as the toughest and most transparent in the world, 20 hospitals—more than 10% of all NHS acute trusts—have so far been put into special measures. Most have seen encouraging signs of progress, with documented falls in mortality rates, but there remain many areas where improvements in practice and culture are still needed. Dr Kirkup makes 44 recommendations—18 are for the trust to address directly, and 26 for the wider system. The Government received the report yesterday and will examine the excellent recommendations in detail before providing a full response to the House.

However, there are some actions that I intend to implement immediately. First, the NHS is still much too slow at investigating serious incidents involving severe harm or death. The Francis inquiry was published nine years after the first problems at Mid Staffs, and today’s report is being published 11 years after the first tragedy at Furness General. The report recommends much clearer guidelines for standardised incident reporting, which I am today asking Dr Mike Durkin, director of patient safety at NHS England, to draw up and publish. However, I also believe that the NHS could benefit from a service similar to the Air Accidents Investigation Branch of the Department for Transport. Serious medical incidents should continue to be investigated locally, but where trusts feel that they would benefit from an expert independent national team to establish facts rapidly on a no-blame basis, they should be able to do so. Dr Durkin will therefore look at the possibility of setting up such a service for the NHS.

Secondly, although we have made good progress in encouraging a culture of openness and transparency in the NHS, this report makes clear that there is a long way to go. It seems medical notes were destroyed and mistakes covered up at Morecambe Bay, quite possibly because of a defensive culture where the individuals involved thought they would lose their jobs if they were discovered to have been responsible for a death. However, within sensible professional boundaries, no one should lose their job for an honest mistake made with the best of intentions. The only cardinal offence is not to report that mistake openly so that the correct lessons can be learnt.

The recent recommendations from Sir Robert Francis on creating an open and honest reporting culture in the NHS will begin to improve this, but I have today asked Professor Sir Bruce Keogh, medical director of NHS England, to review the professional codes of both doctors and nurses and to ensure that the right incentives are in place to prevent people covering up instead of reporting and learning from mistakes. Sir Bruce led the seminal Keogh inquiry into hospitals with high death rates two years ago that led to a lasting improvement in hospital safety standards and has long championed openness and transparency in healthcare. For this vital work he will lead a team which will include the Professional Standards Authority, the GMC, NMC and Health Education England, and will report back to the Health Secretary later this year.

The report also exposed systemic issues about the quality of midwifery supervision. While the investigation was underway, the King’s Fund conducted a review of

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midwifery regulation for the NMC, which recommended that effective local supervision needs to be carried out by individuals wholly independent from the trust they are supervising. The Government will work closely with stakeholders to agree a more effective oversight arrangement and will legislate accordingly. I have asked for proposals on the new system by the end of July this year.

For too long the NMC had the wrong culture and was too slow to take action, but I am encouraged that it has recently made improvements. Today it has apologised to the families affected by the events at Morecambe Bay. The NMC is already investigating the fitness to practise of seven midwives who worked at the trust during this time, and it will now forensically go through any further evidence gathered by the investigation to ensure that any wrongdoing or malpractice is investigated. Anyone who is found to have practised unsafely or who covered up mistakes will be held to account, which for the most serious offences includes being struck off. The NMC also has the power to pass information to the police if it feels a criminal offence may have been committed, and it will not hesitate to do so if its investigations find evidence which warrants this. The Government remain committed to legislation for further reform of the NMC at the earliest opportunity.

The report expresses a ‘degree of disquiet’ over the initial decision of the Parliamentary and Health Service Ombudsman not to investigate the death of Joshua Titcombe. I know the Public Administration Committee is already considering these issues and will want to reflect carefully on the report as it considers any improvements that can be made as part of its current inquiry.

Finally, I expect the trust to implement all 18 of the recommendations that have been assigned to it in the report. I have asked Monitor to ensure that this happens within the designated timescales, as I want to give maximum reassurance to the patients and families who are using the hospital that no time is being wasted in learning necessary lessons. We should recognise that, despite many challenges, NHS staff have made excellent progress recently in improving the quality of care, with the highest ever ratings from the public for safety and compassionate care. The tragedy we hear about today must strengthen our resolve to deliver real and lasting culture change so that these mistakes are never repeated. That is the most important commitment we can make to the memory of the 19 mothers and babies who lost their lives at Morecambe Bay, including those named in today’s report: Elleanor Bennett, Joshua Titcombe, Alex Brady-Davey, Nittaya Hendrickson and Chester Hendrickson. This Statement is their legacy, and I commend it to the House”.

My Lords, that concludes the Statement.

7 pm

Lord Hunt of Kings Heath (Lab): My Lords, I thank the noble Earl for his well judged statement and entirely echo the sentiments he expressed. Families in Barrow and the wider Cumbria area were badly let down by their local hospital and the NHS as a whole. He was right to apologise to them on behalf of both

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the Government and the NHS, and I do the same for the previous Government. It is hard to imagine what it must be like to lose a child or partner in these circumstances, but to have the suffering intensified by the actions of the NHS is inexcusable. Bereaved families should never again have to fight in the way that these families have had to fight to get answers. The fact that they found the strength and courage to do so will benefit others in years to come, and I pay tribute to them all, but particularly to James Titcombe. The report finally gives families the answers they should have had many years ago. It explains in detail both what went wrong and the opportunities missed to put it right.

I echo the noble Earl’s praise for Dr Bill Kirkup, the investigation team and the panel which assisted them. Our shared goal must now be to ensure that this report changes this hospital trust and the NHS as a whole for the better. Its recommendations are powerful but proportionate. We support them all, and the noble Earl can rely on our full support in introducing them at the earliest opportunity.

People’s first concern will be whether services are safe today. Clearly there are parts of this report where the alarm bell is being rung. It identifies the root cause of the failures as the dysfunctional local culture and the failure to follow national clinical guidance. There are suggestions in the report that this problem has not entirely disappeared. It says that,

“we also heard from some of the long-standing clinicians that relations with midwives had not improved and had possibly deteriorated over the last two to three years”.

It goes on,

“we saw and heard evidence that untoward incidents with worryingly similar features to those seen previously had occurred as recently as mid-2014”.

I am sure the fact that problems have been acknowledged means there is improvement. I very much take the latter point the noble Earl made in that regard, but can he say more about those findings and what steps are being taken to ensure that the trust now has the right staff and safety culture?

After safety, people will rightly want accountability, not just for the care failures but for the fact that problems were kept hidden from the regulators and the public for so long. When information did come to light it was not acted upon. Lessons were not learnt and problems were not corrected. The investigation recommends the trust formally admits the extent and nature of the problems and apologises to those affected. I am sure that this House, as well as the other place, will endorse that and want to see it done both appropriately and immediately.

Can I ask the noble Earl to ensure that any further referrals to the GMC and NMC are made without delay? Will he ensure that any managerial or administrative staff found guilty of wrongdoing are subject to appropriate action? I wonder whether it is time to revisit the issue of the regulation of managers and administrators because of this concern about staff moving on to another organisation and still being in the employ of the service, seemingly without being subject to accountability for their actions. We know a number of staff have left the trust in recent years, many with

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pay-offs. Will the noble Earl review those decisions in the light of the report and take whatever steps he can to ensure that those who have failed are not rewarded?

One of the central findings of the investigation is the particular challenges faced by geographically remote and isolated areas in providing health services. The investigation warns of the risks of a closed clinical culture, where,

“practice can ‘drift’ away from the standards and procedures found elsewhere”.

Given that, is not the report right to recommend a national review of maternity care and paediatrics in rural and isolated areas, and will he take that forward? Will the noble Earl comment on the concerns about the sustainability of the Cumbrian health economy? My honourable friend the Member for Copeland has today written to Simon Stevens, the chief executive of NHS England, to call for a review of the specific challenges it is facing. I hope that Ministers will be sympathetic to this call.

On the question of the CQC, the role of the regulator is to be a champion for patients, to expose poor care and to ensure that steps are taken to root it out. It is clear the regulator failed in that duty in this case. Given what was known, the decision to register the trust without conditions in April 2010 was inexplicable, as was the decision in 2012 to inspect emergency care pathways but not maternity services. In doing so, it failed to act on specific warnings. The report says there was, and remains, confusion in the system as to who has overall responsibility for monitoring standards, with overlapping regulatory responsibilities. We support the moves to makes the CQC more independent, but does the noble Earl agree that the journey of improvement at the regulator needs to continue and that there is a need for further reform, as recommended?

Will the noble Earl ensure that NHS England draws up the recommended protocol on the roles and responsibilities for all parts of the oversight system without delay and does he agree that the CQC should take prime responsibility? Does he also agree that the answer to a number of the problems identified is a much more rigorous system of review of deaths in the community and in hospitals than currently exists? Is it not the case that the reform of death certification and the introduction of a new system of independent medical examination are well overdue? We know Ministers have previously said that they are committed, in principle, to bringing this in but nothing has happened. I hope that the noble Earl will agree to bring this new system in without delay. It needs to go further, too. We need to look at mandatory reporting and investigation as serious incidents of all maternal deaths, still births and unexpected neonatal deaths. We need to see how we can move to a mandatory review of case notes for every death in hospital. We have asked Professor Nick Black to advise us and inform a review which we want to conclude by the end of the month. I hope the noble Earl will support us in that review.

There are two other points I would like to raise with the noble Earl. I want to ask him about leadership of the profession nationally. He will know that maternity services are coming under great pressure at the moment. With the increase in the number of births, many maternity services are facing huge difficulties and

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challenges, particularly in recruiting midwives to work in those units and in making sure that they can respond to the pressures that are undoubtedly there. We do not have a chief midwifery officer, either at the Department of Health or at NHS England. I wonder whether we need a leader of the profession who can really start to raise the morale and tackle some of these issues which have been around for many years. There will be a head of profession within his department who will be working with the Chief Nursing Officer, but I wonder whether we need a more visible leadership of the profession.

The noble Earl also mentioned the work of the NMC and the King’s Fund review into midwifery supervision and regulation. I very much understand those recommendations and am very sympathetic to the need to look at this carefully. That clearly has major implications for the current supervisory role of midwives. I take the point he and, indeed, the King’s Fund report make, about that role needing to be independent of the employing authority. Can he confirm, though, that much of what supervisors do is of value and that, in moving to a new system, we would not want to lose the value of the work that current supervisors undertake? I echo the noble Earl’s views on the work of the NMC. Under the current leadership it has shown great signs of improvement, and it needs to be supported.

Finally, I pick up the point that the noble Earl made about the acceptance of honest mistakes as long as people and organisations are open. I agree with that, but could he reassure me that he believes that that philosophy is consistent with the Private Member’s Bill of the noble Lord, Lord Ribeiro, in relation to the issue of doing no avoidable harm? I believe that it is. Perhaps we will come back to this when we debate the noble Lord’s Bill, but if the noble Earl was able to say that it is consistent, it would provide considerable reassurance to those health organisations that have reservations at the moment.

Earl Howe: My Lords, I welcome the measured and constructive comments of the noble Lord, Lord Hunt. He asked me a series of questions and I shall answer as many as I can. First, on how things are today at the trust and the safety of its services, clearly the CQC is the body best placed to make judgments about the quality of services. At the last inspection of the university hospitals of Morecambe Bay in February last year, safety in the maternity service at Furness was rated as good but overall the maternity services were assessed as requiring improvement. As a whole, the trust has been rated as inadequate. This demonstrates that, while the trust is making progress, there is still a long way to go, and it is clear that embedding changes of this nature takes time. The CQC will reinspect the trust in May 2015 and will make a judgment on whether it has made the required improvements.

The noble Lord asked about referrals to the NMC and the GMC. Where there are failings by a member of staff, they must be held to account. If an allegation is made about a medical doctor, a nurse or midwife, who may not meet the professional standards required in the UK, the relevant professional regulator has a duty to investigate—and, where necessary, to take action to safeguard the health and well-being of the

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public. The Department of Health is aware that the NMC and the GMC have each received a number of fitness to practise referrals linked to maternity and neonatal services provided by the University Hospitals of Morecambe Bay NHS Foundation Trust. As an independent body, each of them is responsible for operational matters concerning the discharge of its statutory duties. I would hesitate—in fact, I think it would be wrong of me—to comment further on those fitness to practise cases. However, we are confident that the NMC will take account of the recommendations and findings in the report.

The noble Lord made a number of comments about managers. As he well knows, the NHS is a huge and complex service staffed by committed people who often work under a huge amount of stress. I believe that those tasked with leading our NHS organisations, whether in management positions or clinical ones, are committed to making good decisions on behalf of patients. When it becomes clear that they are not up to the job, they should be replaced. Many senior leaders at Morecambe Bay have now been replaced. The current leadership should be allowed a period of time to refocus the trust on those values that are so vital to good patient care—staff morale, sound governance, strong leadership, team working and a focus on delivering high-quality care.

On the issues that are particularly pertinent when you have NHS services that are geographically remote, NHS England has today announced details of a major review of the commissioning of NHS maternity services as promised in the five-year forward view. The review will assess current maternity care provision and consider how services should be developed to meet the changing needs of women and babies. Recent advances in maternity care, changes in the demographics of women having babies and preferences of where they want to give birth will form the key focus. This review, which is expected to report by the end of the year, will be led by an external chair, supported by a diverse panel, and will include a review of UK and international evidence on safe and efficient models of maternity services.

I listened with interest to the noble Lord’s comments on the Cumbrian health economy as a whole. I am not in a position to comment on that at the moment but, if I may do so in writing, I shall be happy to. As for further reform of the CQC, we will examine the recommendation on this score in detail and publish a full response in due course. Further consideration is needed to ensure that the overall responsibility for patient safety sits in the right part of the system and the department has already committed to consider with relevant organisations the options for transferring NHS England’s responsibilities for safety to a single national body. We will also continue to look for opportunities to improve both the operation of the oversight arrangements in place at present and the understanding of those arrangements by NHS organisations and the public.

On the matter of reviewing all deaths and picking up the recommendations around death certification, a number of the recommendations in Sir Robert Francis’s Mid Staffordshire inquiry report refer to our planned reform of the death certification system and the

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introduction of the role of medical examiner in England and Wales. A new system of medical examiners has been successfully trialled in a number of areas around the country. The work of the two flagship sites in Gloucestershire and Sheffield has been continued and extended to operate a medical examiner service on a city and county-wide basis on a scale that will be required for implementation by local authorities when legislation is introduced. We will publish shortly a report from the interim national medical examiner, setting out the lessons learnt from the pilot sites. I hope that that gives the noble Lord an indication that this is work very much in progress.

On mandatory reporting of maternal, stillbirth and neonatal deaths, the Government are committed to doing further work to review avoidable deaths. We are working with NHS England to introduce a national standard approach for undertaking case-note review. This has the potential to enable NHS trusts to develop a better understanding of avoidable deaths. However, a top-down approach to ensuring that every trust reviews every death is not, in our view, appropriate. Our aim is to ensure that trusts focus their efforts on improving patient safety through learning about the root causes that have led to avoidable death. A systematic, but not necessarily burdensome, approach is needed, which is why we are moving ahead to develop a national rate and produce an estimated number of avoidable deaths for each hospital. The numbers will be made public. Trusts will be expected to report annually to the Secretary of State for Health on their actions to reduce avoidable deaths.

The noble Lord made a very interesting suggestion about the possible appointment of a chief midwifery officer. I would be happy to consider that idea. Of course, he knows that there is a head of maternity in NHS England at the moment.

On the performance of the NMC, it is, as the noble Lord is well aware, an independent body accountable to Parliament, via the Privy Council, for the way in which it carries out its responsibilities. In addition, its performance is monitored by the PSA, and the Health Select Committee has also chosen in recent years to hold an annual accountability hearing with NMC leadership. So there are a variety of robust measures in place to hold the NMC to account. I am aware that the performance of the NMC has a troubled history, which is why Ministers commissioned the Professional Standards Authority’s predecessor body, the CHRE, to undertake a full strategic review in 2012. As noble Lords will remember, the final report of the strategic review was published, putting forward 15 high-level recommendations for improvement in delivering the NMC’s regulatory functions, with the expectation that demonstrable improvements should be seen within two years. We welcome the new NMC chair and we hope that, under Dame Janet’s leadership, it will continue to make improvements to become a confident and capable regulator.

7.19 pm

Baroness Barker (LD): My Lords, back in 2006 the Minister and I had the unhappy experience of being in opposition when the NHS Redress Act went through your Lordships’ House. We are both on record as

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saying at the time that we felt that it was a fairly inadequate piece of legislation. I think the 44 recommendations in this report are searing evidence that that is in fact the case.

In the wake of the reports by Dame Carol Black, Sir Robert Francis and Sir Bruce Keogh, does the Minister agree that it is now time for a thorough root and branch review of the legislation underpinning the NHS complaints system? I have very little time in which to deal with the great many points in this report, but I wish to ask the Minister about two, which are important. First, in recommendation 27, the regulatory bodies, the GMC and the NMC, are asked to reconsider the guidance to professionals about what to do if they suspect that clinical standards or services are not being fulfilled. It seems to me that in this case there was a failure at every level in that respect. That is unacceptable. Secondly, the report points to the breakdown of the relationship between the CQC and the Parliamentary and Health Service Ombudsman. They had no communication and the consequence was that the families had nowhere to go to seek redress. It is difficult because that ombudsman is both the parliamentary and the health service ombudsman for Members of Parliament to make recommendations about ways in which the health service might be reformed. Will the Government act quickly on the recommendation of this report that there should be a memorandum of understanding between the CQC and that ombudsman?

Earl Howe: I am grateful to my noble friend and I do indeed recall our debates on the NHS Redress Act. It is telling that the previous Government chose not to bring that Act into force in the end. The recommendation in the report that there should be a fundamental review of the NHS complaints system is one that we will consider very carefully. We agree that there are still challenges to improving NHS complaints handling, including improving the culture around complaints. Those challenges have been well documented. Our work to improve complaints handling across the board was set out in our update on progress in response to the Francis inquiries in February. Complaints and how they are handled is now one of the key strands of inquiry in all inspections of the CQC.

On my noble friend’s point in relation to recommendation 27, the GMC, the NMC and the PSA have guidance in place on how to raise and act on concerns about patient safety. We will work with these bodies to determine whether this guidance needs strengthening in the light of this report. The GMC has been undertaking its own review of how it deals with doctors who raise concerns in the public interest.

On my noble friend’s final point about the disjointedness of the CQC and the Parliamentary and Health Service Ombudsman, a new MOU was signed in September 2013 which outlined how the two organisations would collaborate, co-operate and share information relating to their respective roles. It is without question that the lack of co-ordination between the CQC and the PHSO was a contributory factor to the ongoing inability of the wider system to identify and act on failings at the trust.

Baroness Emerton (CB): I thank the Minister for repeating the Statement. I want to pick up two points. The report by the King’s Fund relating to the supervision

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of midwifery said that there was a risk in changing the situation because there might be no one ready to take on the job. That is a very telling phrase in what is a very long and sad report about what has been going on. We need to be very clear. I hope that the noble Earl will be able to reassure us that the supervision of midwives, which has a long history, from 1902 to now, but in very changed circumstances, will be sustained in a way that is going to be to the benefit of mothers for the safe delivery of babies. A report like this always sends shock waves through the profession and is very sad for the families involved. We need to be clear that the action being proposed in the Statement is taken forward quickly. I notice that the supervision is supposed to be concluded by the end of July. That is a very short time to sort out a very complex system.

The second point I want to pick up is the one made by the noble Lord, Lord Hunt, about a chief midwifery officer. The Minister said that he would look at that. It is not something that has been thought of very carefully. We have a Chief Nursing Officer and a director of public health and so it would be sensible to give this serious consideration, especially in light of the present situation. I ask the Minister to take that away and consider it.

Earl Howe: On the noble Baroness’s second point, I shall of course take due note of her recommendation. It is something to which we will give very careful thought. On the principal issue that she raised about supervision, as she knows, the statutory supervision of midwives was designed more than 100 years ago—in 1902, I believe—to protect the public. In our view, it no longer meets the needs of current midwifery practice. The King’s Fund was commissioned by the NMC to review midwifery regulation following the findings of the ombudsman that midwifery regulation was structurally flawed as a framework for public protection. The current structure does not differentiate between the requirements of regulation and clinical supervision.

If, as I anticipate, legislation is needed to change this—I think it is clear that it is—that is likely to take up to two years, even on the best estimate. During that time the Department of Health will work with the UK chief nursing officers, the NMC and the Royal College of Midwives to develop a four-country approach, which it has to be, as the noble Baroness will understand, to midwifery supervision that will replace the current statutory midwifery supervision. I hope that that is helpful.

Lord Patel (CB): My Lords, I have to admit that, as an obstetrician, when I read this report, my immediate response was intense anger, anger at this systems failure on a grand scale. None of these things should have occurred. This is not an example of failure of a mild degree or of a relationship. This is failure on a major scale. No maternity unit in the country would tolerate these kinds of tragedies occurring in their own unit.

I commend the report. I have worked with the chairman and several of the expert advisers. Dr Kirkup worked with me when I carried out the inquiry on cancer services in Gateshead. He was a member of the team and I know the others, particularly as they come from my own hospital. Professor Stewart Forsyth was neonatologist with me, and I know James Walker,

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whose father is responsible for all the successes I have had in obstetrics and none of the failures. His name was also James Walker.

What can we do? There is the idea of mandatory reporting of unexpected maternal deaths and stillbirths. We have a stillbirth rate in the antenatal period that has not reduced in this country for 40 years. We have unexpectedly high numbers of normally formed babies who die in the interpartum period but who should not die. If that kind of tragedy ever occurred in my unit, there was a major investigation immediately afterwards. Mandatory reporting may highlight this issue because we need to address it.

I will focus on one recommendation of the several that are addressed regarding the professional organisations in medicine and midwifery. They need to step up to the plate and respond positively to this report on what their role will be in making maternity services safer in this country. The noble Earl referred to an airline-type investigation for root cause analysis. I accept that that is absolutely necessary but it requires experience and training and it must be done soon after the event to learn the lessons that might be applicable to other maternity units. I am encouraged to hear that NHS England will carry out a review of maternity services and I hope that it will be an in-depth review with the specific purpose of making maternity services safer. It should not be about demarcation issues with which we got ourselves tied up previously between different professional groups. It should not be about relocating services. It should be about making maternity services safer.

I have lots of questions but they are not for today and I will save them for another time. I hope all of us—no matter who the Government are—will now work to make maternity services in this country among the best possible.

Lord Winston (Lab): Does the noble Lord not agree that one of the key issues is that nurses as midwives and obstetricians no longer work together as a team? They work separately and conflict with each other instead of seeing patients together. Would not solve many of the problems identified in this shocking report?

Lord Patel: The noble Lord is absolutely right. That is why I said that the review must address how to make maternity services safer and not address any of the demarcation issues. I work with midwives. Midwives taught me—I have said that before in this House—so there should be no issues between different professional groups, whether they be nurses, midwives, doctors, neonatologists, anaesthetists or whoever.

Earl Howe: My Lords, anyone who reads this report will not fail to alight on the phrase that Dr Kirkup uses—that what we had at this hospital was a “lethal mix”, comprising, among other things, substandard clinical competence, poor working relationships in the maternity unit, a move among the midwives to pursue normal childbirth at any cost, shooing obstetricians away at various points, and failures of risk assessment and care planning that led to unsafe care. All these things should pull us up short and, indeed, do so.

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They are shocking. We certainly expect the relevant professional regulatory bodies, including the GMC and the NMC, to review the findings of this investigation report and act on the recommendations. Those organisations should review the findings of the report concerning the professional conduct of registrants involved in the care of patients at the trust to ensure that appropriate action is taken against anyone who has broken their professional code, but building on those lessons to see whether there are wider matters around safety to be considered.

On mandatory reporting, I can only add to the remarks that I made to the noble Lord, Lord Hunt, by saying that we remain totally committed to the principle of the reforms. Further progress will be informed by reconsideration of the detail of the new system in the light of other positive developments on patient safety since 2010 and by a subsequent public consultation exercise. We are working with the health departments in the devolved Administrations, NHS England and the professional bodies to consider how standardised reviews for all perinatal losses might be introduced.

Baroness Masham of Ilton (CB): My Lords, what will happen if the 18 recommendations are not put into practice? Will they apply to all hospitals across the country? The maternity service at the Friarage Hospital, Northallerton, which is my local hospital, has recently been downgraded to midwives only, to the anxiety of the local people who live in a very rural area. I hope that the noble Earl can give some assurances on safety as there are so many worried people and there will be more after this report.

Earl Howe: My Lords, as regards Northallerton, our approach as Ministers and in the department is that service reconfiguration has to be a matter for local decision-making. We do not, as a rule, interfere with those decisions unless there is a referral from an overview and scrutiny committee in the statutory manner. I hope the noble Baroness will therefore understand that I am rather precluded from commenting on that local situation. Nevertheless, on her first point, we have asked the trust to implement the recommendations that have been assigned to it in the report. We have asked Monitor to ensure that this happens within the designated timescales to give maximum reassurance to the patients and families who are using the hospital that time is not being wasted. At a local level, the trust is in special measures. It has put in place a largely new management team, which is working towards delivering against its agreed improvement plan. Progress against that plan is being closely monitored by the quality surveillance group, thereby ensuring that the trust, CCGs, regulators and others are working together in the best interests of the local population.

Health: Rare Diseases

Question for Short Debate

7.37 pm

Asked by Lord Turnberg

To ask Her Majesty’s Government what action they are taking to improve access to treatments for patients with rare diseases.

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Lord Turnberg (Lab): My Lords, many rare diseases can be severe and life threatening, and the problem for patients unlucky enough to suffer from them is that there are few really effective treatments for most. So among the small number for whom a new treatment seems to hold out some promise, there is intense interest and renewed hope. Of course, it is reasonable that new treatments should be evaluated for their effectiveness and that they should be prioritised before they can be commissioned. But therein lies the rub—because, although these diseases each affect a small number of patients, there are more than 8,000 individual rare and ultra-rare diseases in existence. Although there are no treatments for most, more than 100 drugs licensed by the European Medicines Agency are awaiting approval for funding by NHS England, and many of them are very expensive.

It is not surprising that companies that develop such drugs for very small numbers of patients find it difficult to recoup their investment without a high charge; and it is hardly surprising that NHS England, which foots the bill for specialised services, is pretty cautious about what it can afford to pay. This budget is already overspent by £900,000. So we can no longer avoid recognising the dilemma of how to pay for these expensive drugs. My first question to the noble Earl is: what effort are the Government making to face up to this problem? We clearly now need to have the open discussion and thorough review that the topic deserves. The consultation exercise that NHS England is currently conducting is interesting but limited in scope, and the whole issue of affordability of expensive drugs is one that should be opened with the public by the Department of Health itself.

Leaving aside that issue for the moment, nothing can provide an excuse for the enormous delays in decisions being taken by the bureaucratic systems that we have set up. They are not only complex but so completely opaque that clinicians and the pharmaceutical industry despair, and the poor patients are completely bewildered and perplexed. I have spent a considerable amount of time trying to understand the ways in which these treatments are assessed, and here I have relied heavily on advice from the Rare Disease UK alliance, whose members represent a large number of patient groups.

The problems begin when anyone who is proposing that a new treatment should be centrally funded is faced with no less than seven possible routes to take. The first three are through NICE—although only one of these, the HST or highly specialised technology route, is really capable of assessing these types of treatment. The problem here is that the HST can manage to deal with only three proposals a year. It does not have the capacity to cope with more. It has, in fact, so far approved only one treatment—eculizumab, for atypical haemolytic uraemic syndrome—since it took over responsibility for rare disease treatments more than a year ago. Yet we know that the EMA is licensing many more new treatments for rare diseases, and that many of these, at least 10 a year, have to be redirected to NHS England itself. However, the rationale behind which three treatments NICE will take on itself and which it will hand on is clouded in mystery. Even worse, it seems that a few drugs have to go through an

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assessment by both organisations. Can the Minister say how NICE decides which treatments to examine itself and which to hand on—and, more importantly, why on earth we need two separate systems of appraisal? Would it not save a lot of time and money if we had one well resourced and efficient system?

Then we come to the remarkable apparatus set up by NHS England, where we also have several possible entry routes that I will not bore noble Lords with. The main route is through the clinical reference groups, of which there are 75, each assessing different types of potential treatments. Their views are then transmitted to one of five programme of care boards—and that is just the beginning. Approval is then sought from the clinical effectiveness team and the finance group, before the matter is sent on to the clinical priorities advisory group, which in turn passes it on to the specialised commissioning oversight group and the directly commissioned services committee. I hope that noble Lords are keeping up. If it gets through that lot, it is sent out for public consultation and, if approved, has to wait until the beginning of the next financial year for funding.

You can imagine the frustration and angst that all this creates among patient groups who feel alienated by the whole prolonged and tortuous process, which is made worse by the fact that the way in which these committees go about their business seems quite opaque. No minutes seem to be available, decisions are hard to come by and patient involvement is tangential to say the least. The noble Earl, in a response to my Written Question on 1 December, tried to reassure me that patients were involved in a number of advisory committees, but I have to tell him that many patient groups feel quite ostracised by the systems that have been set up. There are no less than seven serial committees, and a cynic might think that this complicated system has been devised to avoid having to make any funding decision. You might well think that; I couldn’t possibly comment.

As if that is not enough, the whole apparatus has now ground to a halt after a legal challenge to CPAG on behalf of a child with Morquio’s syndrome. No new treatments have been examined since December and there is no end in sight until at least next June. There is now a backlog of some 80 treatments awaiting a decision. Can the Minister say when we might expect this matter to be resolved?

With such a complicated system, it is little wonder that there are inconsistencies in the decisions that have been taken. For example, why has funding been agreed for patients with tuberous sclerosis who have brain tumours but not for those with kidney tumours that are equally life threatening? How come treatments have been approved for a very small and specific subgroup of patients with cystic fibrosis but not for a small specific subgroup of patients with gastrointestinal stromal tumours? The numbers affected are similar and the treatments equally effective for each of these rare subgroups, but there is no consistency in the decisions taken. Will the noble Earl press NHS England to rethink this problem of inconsistency?

On another issue, can the noble Earl say why the commissioning through evaluation system, set up in 2013, has apparently not yet approved any drugs

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brought to it—that is, zero drugs—despite having an available budget of some £16.9 million? Why has this innovative scheme not been activated?

Then there is the question of the high costs that drug companies have in developing new treatments for these very small markets. There is a need here for negotiation between government and industry on price—and there is clearly room for negotiation where industry could be asked to justify its high charges when it has such small patient groups to test and can avoid the very high costs of large-scale phase 3 trials. In practice I understand that companies find that, despite the price access scheme, it is extremely difficult to fix up a meeting even to begin negotiations. Can the noble Earl explain why there seems to be this reluctance to negotiate?

There is also a particular problem when a clinical trial of a new innovative treatment is coming to an end and patients are seen to be benefiting from it. Industry funds the trial but expects to be able to hand on the costs of continuing the treatment after a successful trial has finished. This area of negotiation is particularly fraught since many patients who have benefited are desperate to continue the treatment yet find themselves in limbo because of a reluctance to reach a decision on who pays. Can the Minister clarify what engagement the Government are having with companies and patients who find themselves in this position?

Finally, there is a mind-blowing system of committees and advisory groups set up in NHS England. Can all the CRGs, PoCs, CPAGs, SCOGs, DCSCs and RDAGs be justified? I doubt it. Is it not time for NHS England to get a grip and radically prune this morass of committees? Will it take advantage of its current consultation exercise to think again, and will it kick-start some interim measure to get past the logjam while it is cogitating? I hope that the noble Earl will exert some pressure on it to provide a simple, clear and transparent system of appraisal in a timely way that takes full account of patients’ views. We clearly do not have that now and it is desperately needed.

I return, finally, to my plea for a thorough and open inquiry into the ways in which it might be possible to cover the costs of expensive drugs for rare diseases in an equitable way. That is something that the department itself can hardly avoid tackling. I look forward to the noble Earl’s response.

7.47 pm

Baroness Bottomley of Nettlestone (Con): My Lords, I warmly congratulate the noble Lord, Lord Turnberg, on securing this debate on a critically important subject and one in which I know he has taken a long-term interest. His comments are very much top-down; I am going to speak more from the bottom up. I think my noble friend Lord Howe has been quite an exceptional Health Minister, with a mixture of principle and pragmatism, and the UK Strategy for Rare Diseasesis a remarkable document. It is a vision. It is not all in place in practice but the focus is on patient involvement, patient groups, empowering patients, ensuring patients are listened to, personal care plans, specialised clinical centres, education, training and research. These are the elements of where we hope to arrive.

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I take two examples. In 1980, in my former professional life, I was incredibly proud to have an article printed in the Journal of Child Psychology and Psychiatryon the management of families with Huntington’s Chorea. It was a case study to illustrate some recommendations. With the psychiatrists at the Maudsley, where I worked, I had been working with a family affected by Huntington’s disease, as it is now called. They faced a very bleak future. There was little support and little identification. It is quite extraordinary the changes that have taken place over the years. Our basic thesis was that the children in a family always know if there is a secret and if you listen to them, they know what the problem is, and you have to talk to them about Huntington’s disease. Recently, the Huntington’s Disease Association, a magnificent patient group—of the kind that has developed in so many areas and quite remarkably in this country for so many conditions—has produced wonderful guidance about talking to children about Huntington’s disease.

On the MRC, we campaigned to get the human fertilisation legislation through. That was the first Bill that I handled as a Health Minister. Earlier this month, we heard that baby Amelia had been born, through IVF, free from Huntington’s disease. It is an incurable condition which parents have a 50% chance of handing on to their children. Therefore, that is an example of remarkable progress.

However, I want to draw my noble friend’s attention to a totally different condition: lymphangioleiomyomatosis —LAM. This is a wretched condition. Huntington’s disease affects 120 people in 1 million; LAM affects about seven in 1 million, so it is a very unusual condition. I want to talk about Amanda Simpson, a brave young woman from the Isle of Wight. She had chest problems and went to the hospital, where they told her that she had pigeon fancier’s disease, ME or emphysema. She was not happy. In fact, she was miserable because nobody had recognised her condition. Nobody knew what it was. She had two young children. Was it depression? Was it lethargy? However, she felt bad.

She then secured private funding to get a second opinion in Southampton and was referred to a centre in Nottingham, where LAM was identified. It is a pretty wretched chest condition creating cysts, which sometimes lead to non-malignant tumours on the kidney. The prognosis is poor. Fortunately, there is now a drug called sirolimus, which seems to address the problem. However, there are only 200 patients with this condition in the country, so Amanda has not had a care plan. LAM Action is a very small support group. I want to read from her comments. Having been referred to a specialist consultant from the Isle of Wight, she says:

“In a nutshell he told me I was a … hypochondriac and the problems were probably down to stress. I remember going home in tears feeling that no one believed me”.

After she went to the private specialist, she at last felt that she knew she had some reliable information. She continues:

“The next few days proved really challenging. I read up all I could and felt that in essence my world had come to an end. The prognosis wasn’t great and doing a self diagnosis on the internet threw up more questions than answers. I had extensive scarring of

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my lungs with cysts which were getting worse. My efficiency had fallen to nearly 40%, there was no known cure for the disease and I had two children under three. It all seemed so unfair. I had finally got my life on track and then this was thrown at me. The next six months proved really difficult. All the data I could get was not very helpful and there is a real shortage of any kind of support for”,

LAM. She goes on:

“The counsellors I did speak to seemed unable to grasp the situation and to all intensive purposes they were pretty useless”.

Finally, she was referred to Nottingham. I know of services provided at the Brompton hospital, the Heart Hospital and other specialist centres, but at Nottingham, with Professor Simon Johnson, professor of respiratory medicine, at last she had somebody who understood the whole subject. His wife, Jan, has set up LAM Action, creating a support group, and encouraging and promoting research. Amanda has been put on to the new drug, sirolimus, which only 30 people in the country are receiving, and it is having a beneficial effect on her. Even so, she has to get from the Isle of Wight to Nottingham, where she stays for three days at a time. There is no financial support. Now, her teeth are deteriorating, and she has to go to Winchester. Nobody understands all this.

In comparison, associated with cancer are Cancer Research UK, Macmillan Cancer Support and Marie Curie. People know and understand about cancer; they are sympathetic. Most people think that Amanda is a hypochondriac. They do not know what she is talking about and there is precious little sympathy or concern.

I want to make that contrast because of the change that I have seen in my lifetime in the approach to Huntington’s disease—its recognition and people’s understanding of it. There is a whole cohort of regional support advisers to help families and a very effective patient group recognised by the National Health Service. There is a clear pathway for this disease, and now there has even been a breakthrough with a family producing a child free of the affected gene. As the noble Lord said, there are 8,000 rare diseases, but I wanted to take this opportunity to identify the condition that had particularly come to my attention.

I want to say in passing that the new proposals for the tariff system and for the changes in commissioning for rare diseases need to be addressed in such a way that in time it will be possible for people suffering from LAM at least to get the recognition that is given to sufferers of some of the other more prevalent rare diseases.

7.55 pm

Lord Walton of Detchant (CB): My Lords, last week I had the privilege of attending a symposium, or reception, for what was called Rare Disease Day, sponsored by the International Rare Diseases Research Consortium and various other bodies. The Minister made a useful and helpful contribution, as indeed did a member of the staff of NHS England.

As the noble Lord, Lord Turnberg, to whom I am very grateful for introducing this debate, said, several thousand rare diseases have now been identified. These are of varying degrees in that some are fatal, some are progressive and some very much less so, but there is

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clear evidence that new forms of treatment are beginning to emerge for many of them, not least for the many inherited rare diseases, many of which are due to single genes. The gene has been located, the missing or abnormal gene product has been isolated, and effective drugs are now coming on stream to overcome the problems. The drugs for the very rare conditions are called ultra-orphan drugs, whereas drugs for conditions affecting 1,000 or more patients are called orphan drugs. It is clear that, although some of them are life-saving, others have produced an improvement but not, as yet, a cure. I pay tribute to the industry for the excellent work that has been carried out to develop these drugs, which is continuing to expand at a very important and interesting rate. I have often said that today’s discovery in basic medical science brings tomorrow’s practical development in patient care, and there is no more obvious example than the case of many rare diseases.

Many of the drugs are extremely costly, because the benefit to patients is relatively small and the number of patients who benefit is, again, very small—hence in many instances they are not commercially viable. Quite a few of these drugs have been licensed. Examples come particularly from the Cancer Drugs Fund, but that fund of £360 million is now running out of money and under threat of being closed. When, a couple of months ago, I said to the Government how important it was that they should create a rare disease drugs fund, this was not looked upon with any great favour because the Cancer Drugs Fund is not now managing to handle the needs of many patients with cancer.

There are excellent examples of drugs for rare diseases. A drug called eculizumab is a cure for haemolytic uraemic syndrome, but it has to be continued almost indefinitely, at a cost of £100,000 per patient per year. As the noble Lord, Lord Turnberg, mentioned, for other conditions such as tuberous sclerosis, which causes brain tumours, and the rare condition called lysosomal acid lipase deficiency, which causes severe liver disease, drugs are now available. But they are not at the moment becoming prescribable under the NHS.

My own field of research is muscular dystrophy, and I declare an interest as life president of Muscular Dystrophy UK. About 10% to 15% of cases of the serious progressive paralysing disease Duchenne muscular dystrophy are due to a nonsense mutation where a single letter of the DNA places a stop signal in the middle of a gene. The drug encourages cells to ignore this, and the signal therefore allows the dystrophin protein to be restored in the muscle, which produces clinical improvement. Clinical trials in Newcastle have shown significant improvement in the walking capacity of boys receiving the drug. A new generation of drugs called exon-skipping drugs are being developed that produce a molecular patch over deletions in the gene. Clinical trials were very effective in Newcastle and the results were helpful, but the drug, although licensed, is not currently prescribable under the NHS because it is going through what is called a draft clinical commissioning policy. That means that these boys, whose walking was improving, are now finding that they are again deteriorating because they are no longer in a position to receive the drug.

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As the noble Lord, Lord Turnberg, made clear, the bodies in the NHS are extremely complex. NICE, the National Institute for Health and Care Excellence, has a specialised technology assessment, a single technology assessment and a multiple technology assessment. There is also specialised commissioning under NHS England and a Rare Diseases Advisory Group advising NHS England. As yet, I am finding it extremely difficult to find out what that Rare Diseases Advisory Group is doing and I cannot get hold of any of its reports. This is an extremely complex problem because the cost of these drugs will be huge. Patients’ charities and patient groups are small but are collectively becoming increasingly vocal and concerned about the problem of finding the appropriate treatment for these diseases. I have said that the patients are relatively few but, collectively, they are huge in numerical terms, and it is not possible in my opinion to assess human suffering in purely numerical terms. We need from the Government greater clarity on how the drugs for these rare diseases can be produced.

I have to express serious concern for the future. The next Government will be faced with a huge dilemma because drugs are coming on stream at such a rate that it is perfectly clear that the present mechanisms available in the NHS will not be able to fund the treatment necessary for these diseases. I wonder whether it is not time, as the noble Lord, Lord Turnberg, said, to have a major review of the funding issue. I would love to see a mechanism whereby the Association of Medical Research Charities, the Specialised Healthcare Alliance and other bodies in this field might embark on a massive fundraising programme to support the availability of these drugs.

If only we could find a donor like Bill Gates, who has given so much to the management of malaria. I was even thinking of the second wealthiest person in the United States, Christy Walton, the widow of John Walton—no relation, I am sad to say—who was at Walmart. Can we not find someone to take on board the funding of the drugs—a very major effort? It might temporarily reduce the money available for research, but the important thing is that the research will not be translated into treatment unless we have funding for the treatments that result from that research. A major new initiative along those lines will be needed.

8.03 pm

Baroness Thomas of Winchester (LD): My Lords, I acknowledge at the outset that the two matters I am mainly going to speak about tonight are not drug treatments for rare diseases, but they are certainly treatments in the wider sense of that word. I, too, am very grateful to the noble Lord, Lord Turnberg, for asking this Question, which can never be asked too often. I am also very pleased that the noble Lord, Lord Walton of Detchant, spoke about the new drugs coming on to the market for some Duchenne muscular dystrophies. I should at this point declare an interest as I have a rare disease. The two matters that I wish to raise are cough assist machines and hydrotherapy.

Last week, Muscular Dystrophy UK published a new report called Right to Breathe, highlighting the vital need for access to specialist respiratory care for

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people with muscle-wasting conditions. The report found that respiratory infections have been a primary factor in deaths for certain muscle-wasting conditions with, shockingly, a third of families being repeatedly turned down for equipment by local NHS commissioners, even when it has been requested by consultants or specialist physiotherapists.

Each cough assist machine costs in the region of £5,000, which is equivalent to a 48-hour stay in an intensive care unit. They are considered to be of vital importance by respiratory specialists and are routinely used during hospital stays for patients. An example of what can happen is the case of Freddie Kemp, who had Duchenne muscular dystrophy. He was turned down by his local NHS for a cough assist machine, which would have helped keep his lungs clear. Tragically, in November he died, weeks after leaving hospital following a serious chest infection. This essential piece of equipment may not be a treatment in the way that a new drug is, but it can still save lives. What assurances can my noble friend give that people with muscle-wasting conditions who require a cough assist machine will be provided with one by their clinical commissioning group? This matter of spending a relatively small amount of money on the right equipment for vulnerable people in order to save an expensive hospital stay later on crops up time and again. Surely, something should be done to point this out to CCGs.

Hydrotherapy is a highly effective form of therapeutic exercise in a warm water pool for people with muscle-wasting conditions. For many, particularly boys with Duchenne or anyone with serious mobility problems, it is the only exercise they might be able to manage. The benefits are perhaps obvious, but I will spell them out. The first include a sense of freedom from the confines of a wheelchair, a greater range of movement with the relaxation that very warm water gives and, very often, the alleviation of pain. Secondly, the psychological effect on a person’s well-being should not be overlooked. Perhaps the provision of hydrotherapy should be partly assigned to the mental health budget because of its effect on a patient’s sense of well-being. One young woman with congenital muscular dystrophy told the all-party group some time ago that she felt much better for days after a hydrotherapy session.

However, accessing hydrotherapy is ridiculously hard. If a local hospital does have a pool—many have closed or are in danger of closing in order to save money—patients are told that they are entitled only to a block of six sessions. If you have a progressive condition and this is the best way of keeping you well, a block of six sessions gets you only so far. It is fine for a broken leg, but those of us with progressive conditions will never have what is called “an outcome”. It is not easy to measure the effect of hydrotherapy on those with progressive conditions, but we all know that it is good for us. A study into the provision of these pools in the south-west of England a few years ago by Khurm Arshad, whose brother Auzair has Duchenne muscular dystrophy, found that there were more hydrotherapy pools for horses than for people. Muscular Dystrophy UK is undertaking an audit into hydrotherapy provision for people with muscle-wasting conditions across the country. Will my noble friend encourage the NHS to

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work in partnership with Muscular Dystrophy UK to compile this audit in order to improve access to hydrotherapy pools?

Muscular Dystrophy UK’s Fast Forward campaign is looking at potential new drug treatments, in particular to ensure that cutting-edge, high-cost potential treatments are not being held up due to lack of funding. That will be the leitmotiv throughout this debate this evening. I am sure that I know the answer to this, but I must just ask whether there are any plans to re-establish a ring-fenced fund for rare disease drugs.

8.09 pm

Lord Rogan (UUP): My Lords, I would also like to thank the noble Lord, Lord Turnberg, whom I congratulate on initiating this interesting and important debate. Immune thrombocytopenia, or ITP as it is commonly known, is a bleeding disorder affecting both adults and children and is seen in between one and four in 100,000 of the population. It is a rare condition and I am one of that rarity. I am conscious that members of the medical profession present this evening will have knowledge of what I am about to say, but it is nevertheless important that we have on record the concerns of ITP patients and their families.

This disease is known as an autoimmune disorder because the body’s immune system targets itself. It leads to a reduction in the elements of the blood, called platelets, which are responsible for making the blood clot. When their numbers fall, there is an increased risk of bleeding which may, in the most severely affected patients, be spontaneous, difficult to control and life-threatening. The impact on patients’ lives can be profound. Extensive bruising can be quite socially isolating, particularly in the summer months when one cannot cover up. Active bleeding from the nose, into the gut or as heavy periods can be distressing and may lead to anaemia and the problems which that can cause. At the very lowest levels of platelets there is always a risk of bleeding into the brain, which may be fatal for many.

Some 11 months ago I retired to bed perfectly normally to wake up, the next morning, in a bed with pillows and sheets covered in blood and bleeding from my nose and mouth. I was admitted to hospital and on examination I had a platelet count of two. It was somewhat distressing and I pay tribute to Dr Benson and his team at the Belfast City Hospital for the care and treatment they gave me over my eight days in hospital and to Dr Paul Grimes, our resident medical practitioner, and Professor Adrian Newland for their explanations, which helped me to understand my condition.

Patients with a severe disease live permanently with the risk of a major, life-threatening event. However, even those with moderate forms of this disease are not free; they have many risks. We are told not to play contact sports; advised not to fall down and hit our heads; advised not to have a car crash. I am afraid I did not heed the last one. Coming out of hospital, my wife took me to Sicily to recuperate. We spent the first two days beside the pool and it was wonderful. On the third day, I hired a car. On the fourth day, I wrote off three cars and ended up in hospital in Palermo. Up to

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one-third of patients will also complain of crippling fatigue as part of their disease process, which again impacts on their day-to-day life.

In the majority of patients there is no known cause that can be treated and, in general, treatment has been aimed at reducing the rate at which the platelets are destroyed by the antibodies produced as part of the autoimmune process. Traditionally, treatment has relied on the use of steroids to dampen down the immune process. These have well recognised side-effects causing mood change and weight gain: I gained 20% of my body weight while I had this. There are other side-effects: diabetes, osteoporosis, cataracts and an increased risk of infection. Patients tolerate but rarely like taking these steroids. For those many who fail to respond to this initial approach, further treatment options have in the past been fairly limited, involving either major surgery to remove the spleen, which in many patients is where the platelets are destroyed, or using drugs to suppress the immunity. These latter are the same drugs as those used to treat cancer, with the known problems that they can cause. Both these approaches increase the risk of serious infection and we know that as many patients may die of infection as a consequence of the treatment as from the bleeding caused by the condition.