12 Oct 2015 : Column 1

House of Lords

Monday, 12 October 2015.

2.30 pm

Prayers—read by the Lord Bishop of London.

Introduction: Lord Young of Cookham

2.38 pm

The right honourable Sir George Samuel Knatchbull Young, Baronet, CH, having been created Baron Young of Cookham, of Cookham in the County of Berkshire, was introduced and took the oath, supported by Lord MacGregor of Pulham Market and Baroness Bottomley of Nettlestone, and signed an undertaking to abide by the Code of Conduct.

Introduction: Lord Smith of Hindhead

2.44 pm

Philip Roland Smith, Esquire, CBE, having been created Baron Smith of Hindhead, of Hindhead in the County of Surrey, was introduced and took the oath, supported by Lord Strathclyde and Lord Feldman of Elstree, and signed an undertaking to abide by the Code of Conduct.

Oaths and Affirmations

2.48 pm

The Duke of Wellington took the oath, following the by-election under Standing Order 9, and signed an undertaking to abide by the Code of Conduct.

Deaths of Members


2.50 pm

The Lord Speaker (Baroness D'Souza): My Lords, I regret to inform the House of the deaths of the noble Lord, Lord Kilpatrick of Kincraig, on 16 September and of the noble Lord, Lord Healey, on 3 October. I should also like to inform the House of the deaths of two retired Members: the noble Lord, Lord Luke, on 2 October and the noble and learned Lord, Lord Howe of Aberavon, on 9 October. On behalf of the House, I extend our condolences to the noble Lords’ families and friends.

Retirement of a Member: Lord Brooke of Sutton Mandeville


2.50 pm

The Lord Speaker (Baroness D’Souza): I should also like to notify the House of the retirement, with effect from 18 September, of the noble Lord, Lord Brooke of Sutton Mandeville, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to thank the noble Lord for his much-valued service to the House.

NHS: Mental Health Patient Assessment Needs


2.51 pm

Asked by Baroness Gardner of Parkes

To ask Her Majesty’s Government what consideration they are giving to creating an NHS pathway for patients in need of urgent assessment who, due to mental health conditions, are unable to tolerate tests such as scans or blood tests without a general anaesthetic.

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Baroness Gardner of Parkes (Con): I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest, as my grandson is a severe case of autistic Down’s syndrome.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, we have not considered creating such a pathway. We would expect a patient’s mental and physical health needs to be taken into account when they access NHS services.

Baroness Gardner of Parkes: I thank the Minister for his formal Answer but I should go on to explain that my grandson, Christopher, now 23, has no speech and is unable to explain what is happening to him. He has changed from an apparently happy boy and a loving family member to a person suffering violent outbursts, in which he hits his head as if in pain or he attacks others. His increasingly erratic behaviour results in him being excluded from the health groups from which he has benefited so much in the past. Clinicians have already identified the need for a scan but this must be done under general anaesthetic. They are unable to access any NHS team able to do this as there is no clinical pathway, and in some cases patients known to these clinicians have had to wait up to two years. Why should any mentally disadvantaged child—as he was but he is now growing up—not be able to access a full and necessary examination within weeks rather than years?

Lord Prior of Brampton: It is obviously not possible for me to comment on an individual case but it sounds like a very tragic and a very difficult case. Of course, someone in that kind of position ought to have access to normal NHS facilities and care, and I am at a loss to know why my noble friend’s grandson has not been able to get proper access. The fact that a general anaesthetic is required, and has been said to be required by a clinician, should not make it any more difficult to access that kind of care. I am very happy to look at this as an individual case and, if it is not just an individual case but an example of a broader problem, I shall be very happy to meet my noble friend outside the Chamber to pursue the matter with her.

Baroness Walmsley (LD): My Lords, is the Minister aware that NHS staff are a very resourceful group of people and that in the past many of them have found ways of helping patients through these scans and so on when they have found them very difficult? What are the Government doing to ensure that these creative responses to patients’ individual needs can be shared with other members of NHS staff? Will the Government consider some kind of restricted-access online resource centre, through which NHS staff can share their good ideas and what they have found to work?

Lord Prior of Brampton: My Lords, I think spreading best practice is a perennial problem in the NHS. The noble Baroness gave an example of that but I could give many, many others: we are not good in the NHS at spreading best practice. I hope that the newly reformed

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combination of the TDA and Monitor into NHS Improvement will be a very useful repository of good practice, in the same way as the IHI is in the USA.

Baroness Howarth of Breckland (CB): My Lords, I find that reply singularly disappointing, as the Minister will know that any child exhibiting the kinds of problems that have been described today could be seriously ill—they could have a brain tumour or hydrocephalus. In addition, he also knows that the availability of good mental health services for young people, adolescents and those in their 20s is in serious difficulty at the moment. What are the Government doing to ensure that NHS England is improving these services and making a real effort so that we do not have cases such as this, for I am sure that it is not an isolated incident?

Lord Prior of Brampton: In picking up the general point that the noble Baroness made, the Government have committed a great deal of extra resource to the mental health needs of young people. For example, I cite the NHS mandate and the Health and Social Care Act 2012, in which there is a duty to establish parity of esteem between mental health and physical health. It is also true that one can never do enough, and when one hears about a tragic case such as that described by my noble friend earlier, one has to look very carefully in the mirror and ask whether one could do more. That is why I have offered to meet my noble friend outside this House to discuss the matter in more detail.

Lord Hunt of Kings Heath (Lab): My Lords, on parity of esteem, is it not a fact that, in their allocations, clinical commissioning groups have reduced the proportion of resource going into mental health services? Will the Minister tell the House what he is going to do about that? He mentioned the mandate. He will know that, in 2012, the mandate said:

“By March 2015, we expect measurable progress towards achieving true parity of esteem”.

Can the Minister tell me that that progress has now been achieved?

Lord Prior of Brampton: I cannot tell the House that we have achieved parity of esteem. Demonstrably, across the country, we have not yet achieved parity of esteem, but we are on a journey to doing so. On the figures that the noble Lord raised, we spent £300 million more last year than the year before on mental health, and every CCG is spending more on mental health this year than the overall increase in their allocation. At the end of October, we will have the figures for the first six months, and perhaps then I can come back to the House and give him those figures in more detail.

Lord Christopher (Lab): My Lords, was it not the case that a good deal of spreading the news of good practice was usefully done by the Audit Commission, which the Government abolished?

Lord Prior of Brampton: I cannot comment on the Audit Commission. I do not know how much good it did in that regard because I was not here at the time. However, I am very conscious of the fact that spreading best practice across the NHS, particularly operational

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and clinical best practice, could be a lot better. That would be true in a clinical specialty such as orthopaedics. However, it is also true that, in some hospitals, the flow of patients through the hospital is much better organised than in others. There is a great deal to be learned by spreading best practice. There is also a lot to be learned from around the world. I take the view that we have, in the NHS, probably some of the finest hospitals in the world. We also have some very poor hospitals. It should not be all that difficult for the poor to learn from the best.

Child Health: Play


2.59 pm

Asked by Baroness Benjamin

To ask Her Majesty’s Government what plans they have to introduce a national strategy for play as part of a holistic approach to child health and fitness.

Baroness Benjamin (LD): My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare an interest as the co-chair of the All-Party Group on a Fit and Healthy Childhood.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, local authorities have responsibility for commissioning services to enable healthy lifestyles, including active play. However, recognising the health benefits to children and young people from play, since 2013 we have been providing Play England with funding of £1.1 million to promote play. Public Health England’s Change4Life campaigns have supported families to make healthy choices, including being active, and we continue to support school sport, with investment of £222 million since 2011.

Baroness Benjamin: My Lords, the latest report from the All-Party Parliamentary Group on a Fit and Healthy Childhood concludes that play is important to a child’s healthy physical and mental development. It found that, despite government funding for school sports, 20% to 30% of those who do not participate in sport are obese children—the precise group that we need to focus on and target. What are the Government doing to engage with these children? Does the Minister agree that reducing opportunities for play has contributed to the rise of childhood obesity and that play is part of the solution in a whole-child health strategy? Will he agree to meet me to discuss the findings of the play report?

Lord Prior of Brampton: My Lords, when I am asked a question like that in such an engaging way, the answer has to be yes—and I look forward to it. I congratulate the noble Baroness and her team on the work that they have done with the all-party group on the fit and healthy child—I believe that the report is due to be published later this week. It almost goes without argument, and you do not need a lot of academic literature or UN conventions to know, that play is hugely important in the development of a

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child. On that, we are absolutely agreed, and I look forward to discussing with her ways in which we can help more in that regard later in the week or next week.

Lord Hunt of Kings Heath (Lab): My Lords, perhaps I could come, too; it sounds a jolly interesting meeting. Does the Minister agree that while fitness is very important for young people, so, too, is diet? Would he like to comment on the story on the front page of the Daily Telegraph this morning which suggests that his boss has prevented Public Health England publishing a report which shows the direct link between too much sugar and obesity? Will he confirm that the Secretary of State has prevented PHE publishing the report and can he tell me what action the Government propose to take to reduce the amount of sugar in foods that children take?

Lord Prior of Brampton: I regret that I have not seen the report in the Daily Telegraph, so I cannot confirm or deny what was written in it. What I can say is that the Secretary of State regards the fact that one in five primary school-age children is now obese as being, in his words, a “great scandal”. The report on childhood obesity is due to be produced, I think, before the end of the year, and certainly within the next few months. I imagine that it will say that the problems are a combination of lack of exercise, lack of play and nutrition—but we will have to wait and see.

Baroness Jenkin of Kennington (Con): My Lords, I am not sure whether my noble friend saw the report recently of a primary school which has introduced a running challenge where the children run one mile every day, to enormous benefit both mental and physical. Following on from the Minister’s previous remarks about best practice, is this something that the department could encourage other schools to do?

Lord Prior of Brampton: I wonder whether Members of this House might like to set an example in that regard as well by running a mile a day. There is no doubt that exercise is good for you. Not only is it good for all the problems associated with weight but there is plenty of evidence to suggest that exercise helps with mental health problems. Whether you are running or on your bike, I am wholly in favour of it.

Lord McColl of Dulwich (Con): My Lords, although exercise is very important in terms of the heart and so on, the real answer is to eat fewer calories. We may criticise politicians of one party, but does the Minister realise that politicians of all three parties kept on saying that the answer to the obesity epidemic was exercise when it was nothing of the kind? It was eating fewer calories.

Lord Prior of Brampton: Clearly, my noble friend is right: nutrition and diet are fundamental to the whole debate about obesity. That does not alter the fact that exercise is also very good for you.

Lord Addington (LD): My Lords—

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Baroness McIntosh of Hudnall (Lab): My Lords—

Baroness Finlay of Llandaff (CB): My Lords—

Baroness Jones of Moulsecoomb (GP): My Lords—

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, we have not heard from the Cross Benches on this Question yet.

Baroness Finlay of Llandaff: Do the Government recognise that there is another group of children who must be considered—those who have illnesses limiting their mobility for a variety of reasons, some acquired and some congenital? The role of physiotherapy in paediatric departments is essential to ensuring that they can grow and develop and become as independent as possible. I declare my interest as president of the Chartered Society of Physiotherapy.

Lord Prior of Brampton: The noble Baroness makes a powerful and strong point. All I can do is agree with her 100%.

Lord Addington: My Lords—

Baroness McIntosh of Hudnall: My Lords—

Baroness Jones of Moulsecoomb: My Lords—

Baroness Stowell of Beeston: My Lords, I suggest on this occasion that we go to the Lib Dems as this Question started with the Lib Dems, although I acknowledge that there were two Conservative speakers in a row, which should not have happened.

Lord Addington: My Lords, does the Minister agree that if we are dealing with a sports policy that talks about competitive sport, getting some idea of creative play and competitiveness within play is vital? If we have a sports policy, it must have a foundation based on something like my noble friend suggested.

Lord Prior of Brampton: There is no question that competitive sports have a huge role to play, but many children do not wish to participate in competitive sports, so having resources and time made available for less competitive activities such as yoga, pilates or dance is also very important.

Professional and Career Development Loans


3.06 pm

Asked by Viscount Hanworth

To ask Her Majesty’s Government how many professional and career development loans have been offered by the appointed banks to this year’s prospective postgraduate students, relative to the number of applications.

Baroness Evans of Bowes Park (Con): My Lords, in the 2015-16 financial year, to date around 5,000 loan applications have been accepted by the banks. That is

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consistent with previous years. Only when a student commences study does the loan become live. At that point, the system identifies those undertaking postgraduate courses. As most do not begin until late October, it is not yet clear what proportion of applicants are for postgraduate courses.

Viscount Hanworth (Lab): I thank the Minister for that Answer. The lack of information on this account is disturbing, since it means that the Government are paying too little attention to a matter of national importance. The truth, as I perceive it, is that inadequate financial support has been given to our native postgraduate students. It appears that the banks, on which the Government are depending to provide loans to students, have not been sufficiently forthcoming. Such loans are demanding the exorbitant rate of interest of 10%. That must surely have deterred many postgraduate students from contracting such loans. I seek an assurance from the Minister that the Government are aware of these deficiencies and that they are taking steps to amend the situation.

Baroness Evans of Bowes Park: Over 250,000 people have been lent over £1.1 billion since 1988 under these loans. But the noble Viscount will be aware that the Government have just closed their consultation on a new postgraduate loan, which specifically targets postgraduates. This would be the first time that such a loan would be introduced. We are due to publish the response and final scope of that policy in the autumn, but the NUS vice-president has welcomed it, saying that it is step in the right direction, and the chief executive of Universities UK has said that it is good news so we are certainly doing what we can in this area. This new loan will be extremely welcome.

Baroness Garden of Frognal (LD): Will the Minister say what the Government are doing to work with universities to ensure that qualified UK postgraduates are encouraged to continue their academic careers—particularly those from disadvantaged backgrounds—and not deterred by unacceptable fee levels and the costs of loans?

Baroness Evans of Bowes Park: Well, as I said, obviously the professional career development loans exist at the moment, but the new postgraduate loan, which has been welcomed across the sector, will come in shortly. The consultation has closed and the full scope of that policy will be announced later in the autumn. Certainly, encouraging further study and making sure that everyone has access to the training and education they need are at the forefront of the Government’s mind.

Lord Stevenson of Balmacara (Lab): My Lords, may I wish the noble Baroness a speedy recovery from what looks like a very awkward injury, attractively dressed in the blue to match her suit? For those who cannot see it, she is struggling to answer and almost strangling herself in the process.

It seems that almost a sense of panic is setting in. We have £50 million of emergency bursaries from HEFCE to bridge the gap until the new schemes come in. We have postgraduate and career development

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loans, which are £10,000 per student, but with 10% interest rates charged to be repayable within three weeks of graduating, and we then have the Government consulting on a £25,000 income-contingent loan. Yet there is a 10% reduction in the numbers of people going on to become postgraduates on taught courses. Is there not something more we can do?

Baroness Evans of Bowes Park: This Government will be the first to introduce a loan specifically targeted at postgraduates, so we are taking this extremely seriously. On the interest rate point on career development loans, over the course of the loan the interest rate is more like 6%, because the Government pay the interest while students are studying. That is not to say that more cannot be done, but I assure the House that the Government are focused on higher education and consider it to be extremely important.

Baroness Sharp of Guildford (LD): Will the Minister please tell the House how far the Government are encouraging industry to help postgraduate students? Industry will benefit from the specialised courses that students do, so it is right that it should make some contribution.

Baroness Evans of Bowes Park: I entirely agree with the noble Baroness, and we are having regular discussions with businesses. Of course, a number of businesses have responded to the consultation. The noble Baroness is absolutely right that it is something that benefits business and the UK economy, and the Government are working hard to ensure that businesses play their part.

School Journeys by Car


3.11 pm

Asked by Baroness Randerson

To ask Her Majesty’s Government how they plan to reduce the number of home to school journeys made by car.

Baroness Evans of Bowes Park (Con): My Lords, local authorities are responsible for promoting sustainable travel and transport. The Government fund a number of schemes to promote and encourage parents, children and young people to make walking and cycling to school part of their daily routine.

Baroness Randerson (LD): My Lords, 23% of peak-time traffic is caused by the school run, causing congestion and pollution, of course. The coalition Government introduced a local sustainable transport fund, which was a success story, and the organisation, Living Streets, has been able to reduce the number of school journeys by 30% in areas where it operates. But that is in only 15 local authority areas. Will the Minister explain the Government’s plans and whether they intend to increase the amount of money available for Living Streets, or similar organisations to work in other areas, so that those benefits can be felt across the whole country?

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Baroness Evans of Bowes Park: I agree with the noble Baroness in welcoming the work that Living Streets has done. Certainly this is a priority for the Government. Our cycling delivery plan is a 10-year strategy on how we can increase cycling and walking across England. We have an ambition to increase the number of primary schoolchildren, in particular, walking to school to 55% by 2025. A number of Government schemes are available in which local authorities and schools can participate to help to encourage more walking and cycling to school.

Lord Storey (LD): The Minister will be aware that there are some really good practices in terms of walking buses, travel plans and safe cycle routes, but for some schools and local authorities it just becomes a tick-box exercise. How do we incentivise schools and councils to make this important issue take root? It rather fits in with the Question of my noble friend Lady Benjamin about fitness in schools. A kitemark could be something that the Government might consider.

Baroness Evans of Bowes Park: The noble Lord is right that this is a priority, and it is important that we encourage people to be as healthy as possible. As he says, this is an area in which local authorities have a responsibility to work closely with schools to ensure best practice across the system. I shall take back his suggestion to the department.

Baroness Howarth of Breckland (CB): I am sure the Minister agrees that what is often possible in urban areas is not possible in rural areas. Will she say something about helping children in urban areas who have to travel great distances to get to school so that parents do not feel that they are being stigmatised and are doing the wrong thing? I entirely agree with encouraging walking and running and certainly our rural school helps with that when the children get there. However, some children have to go by car.

Baroness Evans of Bowes Park: The noble Baroness is absolutely right. For instance, many local authorities charge young people a flat fee for bus passes. Particularly in rural areas we find local authorities encouraging buses to pick up children from other points so that they can access public transport. Again, it is the responsibility of local authorities, but they are very well aware of their responsibilities. Many are doing what they can to ensure that young people can access the good school that they need to in their local area.

Baroness Jones of Moulsecoomb (GP): My Lords, is the Minister aware of School Streets, a scheme in Edinburgh, where streets around schools are closed to motor vehicles for an hour before and after school, which means that children and their parents automatically walk or cycle? There are fewer cars, so less air pollution. It seems to be a winner.

Baroness Evans of Bowes Park: I thank the noble Baroness. I was not aware of that scheme and I am happy to go away and look into it.

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Lord Watson of Invergowrie (Lab): My Lords, more than 70% of parents walked to school when they were children, but now fewer than 50% of children walk to school on a daily basis. Will the Minister say what recommendation she will feed into the spending review to ensure that there are adequate resources for the Government’s cycling and walking investment strategy, so as to encourage more children to walk to school?

Baroness Evans of Bowes Park: I welcome the noble Lord to his position. I assure him that we are focusing on this. In fact, the number of children in England who now walk to school is at a high level—it has risen over the last three years. As I said, a number of government schemes are available to help local authorities. It is also worth remembering that over the last three years local authorities have spent around £1 billion on transport in this area. It is something that they take seriously, despite facing a difficult economic climate.

Lord Cormack (Con): My Lords, will my noble friend tell me how many academies have a walking and cycling strategy?

Baroness Evans of Bowes Park: I would love to. I do not have the exact figures to hand, but I can tell my noble friend that in some areas, for instance in Darlington, local authorities are working very closely with academies and free schools to develop transport plans. In fact, free schools are offering an option for parents to help to create new schools in areas where they have not had a local school. For instance, the Ongar Academy was set up in that town, which has not had a secondary school since 1989. Parents and teachers came together because they did not want children bussed out to other towns. We have seen the same in Ingleby Barwick’s Ingleby Manor academy as well. In their own way, free schools are helping to address this issue.

Lord Brooke of Alverthorpe (Lab): My Lords, the noble Lord, Lord Prior, advised us that the Government will produce a report on obesity in children. He was not quite certain when that will come out. On this Question, will the noble Baroness say what her department will be inputting into that review? Will she tell the House what she will suggest should be done?

Baroness Evans of Bowes Park: The Department for Education and the Department of Health work very closely and will be in close contact in ensuring that a whole range of issues are included in this strategy.

Lord Harris of Haringey (Lab): The Minister has repeatedly said how important it is that local authorities engage with getting children to walk or cycle to school. Part of it is also about enforcement and making sure, for example, that cars do not stop directly in front of schools on zig-zag lines. Why is it, then, that the Government put barriers in the way of local authorities on the use of CCTV and mobile CCTV, which would increase enforcement and make sure that parents cannot drop off their children in an irresponsible fashion?

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Baroness Evans of Bowes Park: I am not aware of any examples, but I am sure that the noble Lord is. As I said, local authorities, schools and national government have to work together. Everyone wants to ensure that there is less congestion and pollution around schools. Everyone needs to work together to make this happen.

Baroness Randerson: My Lords, in her reply the Minister said that the Government have a number of strategies for walking and cycling to school. Will she inform the House how much money is being spent on this in total?

Baroness Evans of Bowes Park: As I mentioned, local government has spent £1 billion a year over the last three years. There are a number of schemes. I do not have every single one to hand, but, for instance, there is £90 million on the cycling ambition grants. Some £400 million is available to local authorities until 2020-21. As the noble Baroness said, there is also funding to Living Streets. There is a significant amount of investment going into this and the Government take it seriously.

Select Committees

Membership Motion

3.19 pm

Moved by The Chairman of Committees

That Lord Hope of Craighead be appointed a member of the following Committees: Administration and Works, House, Liaison, Procedure and Selection.

Motion agreed.

Enterprise Bill [HL]

Enterprise Bill [HL]

Second Reading

3.20 pm

Moved by Baroness Neville-Rolfe

That the Bill be now read a second time.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills and Department for Culture, Media and Sport (Baroness Neville-Rolfe) (Con): My Lords, why have we introduced this Enterprise Bill? A dynamic, open, enterprising economy is a priority for this Government. We want this Bill to help create a better business culture, in which the harmful effect of late payment on small businesses is recognised. It is a major concern to us all that the level of late payment debt owed to small and medium-sized businesses stands at £27 billion.

Despite the progress we have made, businesses still suffer from red tape, especially red tape from regulators, which hitherto has not been routinely monitored. This Bill will change that and help us to continue our battle against red tape. We are also determined to make apprenticeships a success. We want to make sure that everyone can have confidence that an apprenticeship offers a high-quality career route, consisting of employment with training.

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There are three key elements to this Bill: the Small Business Commissioner, who will have a vital role to play in changing the culture around late payment; deregulation; and apprenticeships. There are also some other provisions. Small businesses make up 99.3% of all UK businesses. They account for around half of UK jobs in the private sector and a third of turnover. They are vitally important to our economy. Timely receipt of money is crucial for small businesses. It is wrong that, as research in January 2015 showed, the average UK small business waits for £31,900 in overdue payments. Late payment has a damaging knock-on effect on their ability to manage cash flow and plan for growth; and in the worst case, it threatens their very survival.

We have already legislated, of course, through the Small Business, Enterprise and Employment Act, to introduce a tough and transparent new requirement for the UK’s largest companies to report their payment practices and performance on a six-monthly basis. I believe that publishing these reports online will ensure transparency and help to bring about a major shift in culture. We have also strengthened the Prompt Payment Code to introduce a 60-day maximum payment term for all signatories. And now, this Bill will make it easier, quicker and cheaper for small businesses to settle payment issues with larger businesses by setting up a Small Business Commissioner. His or her role will be focused on helping small firms resolve disputes with large businesses they supply, and in particular tackling payment issues. This could be through providing advice and information, pointing them towards mediation or handling complaints and, of course, acting as a real disincentive to unfair behaviours.

This measure complements our other work to date to support small businesses, such as extending small business rate relief for a further year from April 2015—saving millions for small businesses—cutting £2,000 from the national insurance bills of small firms through the new employment allowance, and much else.

Under current law, there is no obligation for insurers to pay valid insurance claims to businesses within a reasonable time. These payments are vital for a business struggling to survive after an unexpected tragedy, such as a fire, break-in or flood. In the most serious cases, a business waiting for a late insurance payment can collapse. The Bill will make sure that insurers are under a legal obligation to pay up within a reasonable timeframe. Where this does not happen, they will be liable to pay damages. This provision is based on careful and detailed recommendations from the Law Commission, which worked closely with stakeholders to develop the criteria in the Bill and our proposed approach.

Another theme of the Bill is deregulation. The Government are absolutely determined to reduce costly, unnecessary bureaucracy for businesses. In the last Parliament, we reduced that burden by £10 billion through a wide range of savings, large and small. The business impact target created in the Small Business, Enterprise and Employment Act 2015 requires government to measure and report on the economic impact to business of any regulatory changes. However, business consistently tells government that the actions of regulators are at least as important as the content

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of legislation. In a recent survey, nearly half of businesses said that preparing for regulatory inspections and dealing with inspectors is burdensome, and nearly three-quarters of scale-ups said that they would be able to grow faster if dealing with regulators was easier—a frightening figure. The Bill will extend the business impact target to cover the regulatory functions of not just Ministers but regulators. This means that regulators will be required to assess the economic impact of new or amended regulatory activity in the scope of the target, and to obtain independent verification of the economic impact of those measures.

We will also be introducing new annual reporting requirements for regulators which are subject to the growth duty and the Regulators’ Code, thus increasing transparency and accountability for their actions in respect of these measures. We introduced the Regulators’ Code in 2014 to support regulators to design their policies and procedures in a way that suits business needs. The growth duty, which is due to be implemented in 2016, will require regulators to have regard to economic growth. By introducing these reporting requirements, we will be able to build a body of evidence on how the code and duty are operating, and make amendments to them as necessary. The new reporting requirements will apply to regulators subject to the Regulators’ Code, the growth duty, or both. Currently some 70 national regulators are subject to the code. We are planning to consult on the scope of the growth duty in the new year.

Primary Authority allows businesses to form partnerships with a local authority, giving them access to robust, reliable advice on a whole array of regulation to help them run their day-to-day businesses. Other authorities must then take this into account when carrying out inspections or addressing non-compliance, even if the firm trades across several local authority areas. Since its introduction, Primary Authority has doubled in size every year. There are now close to 8,000 Primary Authority partnerships, 85% of which are with small and medium-sized enterprises. In effect, the Bill amends and consolidates the existing legislation that underpins the scheme for ease of comprehension by enforcers and businesses, as can be seen in the Bill as published. It will give businesses the opportunity to receive tailored, assured advice from a primary authority in relation to key regulations affecting them. Pre-start-up enterprises, those regulated by only one local authority, and more groups of businesses—such as members of franchises or trade associations—will now be able to benefit from the scheme.

The Bill will also improve the business rates appeals system in England to make life easier for business. I am afraid that the current system is simply not working and appeals are taking too long to resolve, with speculative claims clogging up the system. This creates costs and uncertainty for businesses and is unfair to those who are owed a reduction in their rates bills. By introducing a more structured and rigorous system which is easier to navigate, cases can be resolved at an earlier stage and refunds paid out more quickly.

The Bill will also allow sharing of some Valuation Office Agency information with local government, saving businesses time and money as they will not

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be required to provide the same data twice over. These changes complement the Chancellor’s recent announcement on business rates, but the provisions, which are about improvement to the system, will still be needed.

I am glad to say that the Government have committed to delivering 3 million new apprenticeships during this Parliament. Investing in skills is a vital part of the Government’s plans to boost productivity in the UK but as the apprenticeship brand grows, we recognise that there is a risk that the term “apprenticeship” could be misused and applied to lower-quality courses. That is exactly the opposite of what we want to achieve. In our recent consultation exercise, we received evidence of people who thought they were doing an apprenticeship when in fact they were doing low-level qualifications and were not employed in a real job. We want to give employers, parents and apprentices confidence that apprenticeships are genuine and high-quality opportunities. The term “degree” is protected in legislation and by applying a similar protection for “apprenticeship” we will help safeguard the apprenticeships brand from misuse. When I was in retail, we used to have a special ceremony for graduating apprenticeships. I would like to see that sort of celebration and recognition everywhere.

We want to make sure that the public sector leads by example in the important area of apprenticeships. Across Whitehall there are already hundreds of apprentices learning the skills they need to be effective in the Civil Service, including one in the Permanent Secretary’s office at BIS and one in my own Enterprise Bill team. To pave the way to meeting our target of 3 million, the Bill will introduce apprenticeship targets for public sector bodies in England.

As we announced in our manifesto, we will also be putting a stop to six-figure, taxpayer-funded exit payments in the public sector. Only very recently, there was a payoff to a senior NHS manager worth more than £400,000. We simply do not believe that such huge exit payments, which are far in excess of those available to most workers in the private sector and wider economy, are fair or offer value for money to the taxpayer who funds them.

Finally, we are amending the Industrial Development Act 1982 to bring it up to date. First, the Bill will introduce an additional power to fund broadband projects across the country—a topic close to my own heart. This is on top of wider efforts to achieve 95% broadband coverage by 2017, which includes £1.7 billion of public investment to make superfast broadband available in areas where it would otherwise not be if left to the commercial sector. Secondly, we will increase the per-project threshold for providing financial assistance to businesses to reflect inflation since the 1982 Act was passed. This means that outside assisted areas, where different rules apply, it will be possible to provide a project with up to £30 million before a resolution from the House of Commons is required.

This Bill will contribute to the Government’s vital objective of making life easier for small businesses. We are progressing the Government’s commitment to backing businesses and not drowning them in red tape. It

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supports apprenticeships so that we invest in the skills we need now and achieve the objective, which I believe we all share, of 3 million quality apprenticeships. We have achieved a great deal already, mainly thanks to the enterprise, drive and hard work of businesses large and small, but it is now important to keep up the momentum. I commend the Bill to the House and I beg to move.

3.34 pm

Lord Mendelsohn (Lab): My Lords, I draw attention to my business interests as contained in the register. I start by thanking the noble Baroness for her courtesy in sending material on the Bill; it has been very helpful indeed.

I must confess that, during the course of the Queen’s Speech, my pulse was quite sent racing. I was very keen on the initial stated intentions of the Enterprise Bill, which were to,

“cement the UK’s position as the best place in Europe to start and grow a business, by cutting red tape and making it easier for small business to resolve disputes quickly and easily; and … reward entrepreneurship, generate jobs and higher wages for all, and offer people opportunity at every stage of their lives”.

I became slightly less enthusiastic when, on 17 September, the Government’s announcement of a series of publications rendered the latter intention as to,

“cut red tape for business, encourage investment in skills, and make it easier for firms to resolve payment disputes by setting up a Small Business Commissioner”.

That seemed to downplay somewhat the initial ambition of the Bill. It will therefore be no surprise to noble Lords to learn that the Bill as published has somewhat dampened my flame of excitement. The Bill states that it will,

“Make provision relating to the promotion of enterprise and economic growth; and provision restricting exit payments in relation to public sector employment”.

There are of course some measures that we will support. In fact, a number of the measures now being brought forward by the Government are ones that they resisted during the passage of the Deregulation Bill, Consumer Rights Bill and Enterprise and Regulatory Reform Bills in the previous Parliament. The Bill contains the product of a number of reviews, together with a curious mix of measures relating to the public sector and some well-intentioned but somewhat limited initiatives.

In this context, although we will always try to be as constructive as possible and seek to find ways in Grand Committee to convince the Government to improve some measures—and we will express our support for others—I cannot fail to say that our strongest disappointment concerns the Bill’s provisions relating to the Small Business Commissioner and late payments. No one is in any doubt of our support for the measures relating to those matters, but what has been proposed is, in our view and on the basis of available evidence, not just insufficient but highly likely to be negative.

The consultation on the Small Business Commissioner was limited. It reminded me of the quote attributed to Henry Ford, who said that if he had asked consumers what they wanted at the time, he would have invented a faster horse rather than the mass-produced motor

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car. The Government, resisting the arguments for a small business administration, have landed on the Australian model. This we warmly and enthusiastically welcome, but we do not believe that they have used the considerable experience and evidence base available to good effect. I know that the Minister recently met the Australian Small Business Commissioner, Mark Brennan, whose 15-year work in Victoria, Australia, has provided world-leading expertise in how to apply and develop that model. He has encouraged a massive evidence base to emerge with industry groups, academics and other institutions.

The Small Business Commissioner could be a great boon for our country, but its flaws as proposed are many. The first is its proposed scale. The Government anticipate that it will deal with only 500 cases a year. In fact, its staffing and resources compared to those in Australia, where there are small business commissioners in every state as well as at the federal level for a market and population considerably smaller than ours, will make it relatively smaller than the Australian federal and state commissioners.

Secondly, the Small Business Commissioner’s role and purpose is too limited. The origin of the Victorian Small Business Commissioner—the first one—was as a measure to improve the quality of the business environment. It was established with broad powers and functions in Victoria and developed from a review of the retail tenancy laws. When the original Bill fell due to the timetable, the next set of state Ministers considered that the advantages present in the Bill were likely to be highly beneficial to small businesses in general, rather than just the retail sector. The office of the Victorian Small Business Commissioner was established,

“to enhance a competitive and fair operating environment for small business in Victoria”.

That model has caught on. The specific provisions constituting the Victorian Act are not dissimilar to those found in the legislation of other states, which are essentially based on that model.

It is clear from the operation of all these models that there is a consensus and evidence base that a properly functioning small business commissioner covers: access to information and education; advocacy to government; investigation of small business complaints and business behaviour; facilitating the resolution of disputes, including and especially through mediation; and influencing a small business-conscious government and other key stakeholders including regulators, media, academia and the business community and trade organisations.

Fourthly, the decision not to provide the commissioner with a mediation role will inhibit it in establishing its place in the business community and takes little account of the evolution required to make the role truly effective. Universally, every small business commissioner in Australia will tell you that it is this role that led to the widespread support across the business community in large as well as small businesses for its work and established its credibility. The fact that it is underpinned by an important legislative power, namely that any company’s refusal to accept mediation must be taken into consideration

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over the question of who is responsible for costs of court action whatever the result, is fundamental to its effective operation.

I noted during the consultation that the Federation of Small Businesses did not support this role. On this, it is just plain wrong and I urge it to speak to its counterparts in Australia, who can brief it on the importance of this. The Government’s argument that there is no market failure is quite bizarre. Having listened to Ministers and read their documents in relation to the then Small Business, Enterprise and Employment Bill, their own conclusions on the asymmetries of power, information and resources are pretty clear that there is an entrenched market failure. The absence of mediation as a central function of the Small Business Commissioner is an error that requires correction.

Fifthly, the commissioner lacks the independence and long-term support to make it effective. Other similar agencies have been established, and beyond Australia, with greater independence so that they become the champions of small business rather than the potentially politicised tool of Ministers. Additionally, they have wide roles defined to make sure that they can evolve and design effective ways of working. It can hardly be credible that the Government have a serious, long-term commitment to these issues if they provide for the Secretary of State to be able to abolish it at the stroke of an administrative pen if they find it inconvenient.

Finally, and most extraordinarily, the Australian Small Business Commissioner model has very little to do with late payments at all. It has no specific powers or role there. It has little success and not one of the commissioners consider that an essential function. It has more to do with unacceptable payment terms, but there, too, it is limited. In fact, Australia’s record on late payments is probably worse than ours. On payment days, it has a significantly worse record than the UK. It is fiction to believe that it is either useful or effective in dealing with late payments. Given the 15 years or so of experience, it is sobering to observe that in Australia they are introducing a variety of legislative measures that we would do well to examine for how we deal with late payments. In fact, Australia’s recent introduction to deal with late payments in the public sector is to force the public sector to not just report any late payments but automatically pay interest on the costs to those it has not paid. We believe that that measure helps to materially and significantly address the problem of people not paying up by making them face consequences for late payments. We tried to introduce similar measures in the small business Bill, and we hope to re-examine this in Grand Committee.

I genuinely believe that the Government want to do something on this, and that they, too, are unconvinced that culture or a body that handles 500 cases a year can realistically address the ever increasing volume of late payments. We will lay amendments that we hope the Government will be inclined to work with. In the mean time, have the Government any plans to introduce, by amendment to this Bill or through administrative means, given the disproportionate disadvantage that small businesses have in funding cash flow, a requirement on all government departments and public agencies to pay additional compensation on small business invoices

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that are not paid within 30 days? Can we have an update on the Government’s experience on requiring contractors used by the public sector to pay their subcontractors within the same period as the main contractor is paid? Would they consider imposing a requirement for the main contractor to report on payment to the public sector body, including the payment of the interest on the late payment? Will they provide that all suppliers and bidders to the public sector and for public contracts must sign up to the Prompt Payment Code, and for suppliers to be able to make complaints about late-paying suppliers anonymously through their representative business organisations, as required under current EU legislation?

It feels a little early to be amending the small business Bill, but we are delighted to be doing so, as we made the point that the Government’s logic on regulation is that they should have introduced it then with regard to business impact targets. In addition, in Part 2, who could oppose anything to reduce the burden of regulation? That is, the burden, not the fact of regulation. I tried to find a single post-war Government that did not make this pledge. I believe the first to do so was when Harold Wilson, as the President of the Board of Trade, announced the “bonfire of controls” in 1948. The previous Government even suggested that they saved £2.2 billion through their “one in, two out” rule. I am pretty sceptical about that figure—a feeling that has grown stronger ever since I was given extremely unhelpful replies to my written questions on this matter. As an investor in and operator of small businesses, I have also been looking out for the couple of thousands of pounds by which I should feel better off as a result of this policy. However, in a report issued by the independent Regulatory Policy Committee in March perhaps gives the reason why I am still waiting. It identifies that, during the last Parliament, the Government introduced regulatory costs of almost £2.7 billion. Overall, the cost of regulation increased by at least £460 million. To be fair, the last Government tried to be more thorough than most of their predecessors in trying to reduce the burden of regulation, but they have not done so. Regulation from the EU—or that which it defines as EU—is excluded, and the remarkably unscientific so-called “equivalent annual net cost to business” conveniently ignored the Government’s own accounting rules.

On the business impact targets, we believe that the Government are right to place a duty on regulators to see how they operate and to ensure that their impacts are properly measured, and we will support those sorts of notions. However, as I say, we are sceptical about the numbers, and we hope that the Government will be interested in supporting a more independent examination of the regulatory savings and how that can be strengthened. I must say that the last Government stated that they had saved £2.5 billion a year—£10 billion over four years, the Business Minister said at the time—and that this Government are looking to save £10 billion in five years. Perhaps they could be slightly more ambitious.

We have previously raised concerns about the growth duty and how it may affect particular regulators. While the intent is clear, the legislation and the impact assessment

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provide no comfort as to whether the operation of this duty is consistent with the effective operation of other regulatory functions. We are keen to support that, but we would be grateful for more clarity on it. We will of course also support the concerns of the Equality and Human Rights Commission that it should be exempt as a result of its particular circumstances. Perhaps the Minister could tell us whether these measures would apply to the EHRC.

We are strongly supportive of extending apprenticeships and of ensuring that they provide the right quality of opportunities and outcomes that we desire. I have also previously praised some of the initiatives the Government have undertaken on this. The wider concerns are how Ministers who are adding responsibilities and duties whilst cutting budgets to local authorities and requiring them to create new ways of working can realistically add centrally set targets and reduce the local capacity to design and develop training and reskilling of existing staff during restructurings. Does the Minister recognise that this might be a problem, and what measures or flexibilities have the Government examined to take this into account? In addition, will the Minister tell us whether the Government will now consider that if it is good enough for the public sector to have such targets, it might be under the Minister’s consideration for the private sector to have similar targets imposed in due course?

In relation to protecting the name “apprentice”, we are inclined to be positive. There are of course some major concerns about the operation of apprentices and a number of cases of abuse and of poor quality, which I am sure will be addressed by part of the debate on Thursday. However, I am also starting to worry about some of the noble Members of this House. Under this measure, would it be lawful to describe a 12-week training scheme, where an individual wins an investment in a business, as an apprenticeship? I suspect that we will see a start this Wednesday. However, I also suspect that those who might be threatened by this will appreciate that their salvation may be that the Government, which have presided over a 40% reduction in the budgets and size of trading standards, expect trading standards to be able to police this effectively; we are unconvinced that they have the resources to do so. I would be interested to see whether the Minister is providing some more resources, and if she will speak to that. Also, why has a consumer-facing body been charged with this duty, and what else did the Government consider before arriving at that conclusion?

This Bill has good intentions, carrying the conclusions of some impressive reviews but with some serious policy flaws and some measures whose vagueness raise questions over their efficacy. There are some things that we were expecting. In July, the Treasury briefed the media that the Bill would include provisions for the Government’s suggested changes to Sunday trading. Can the Minister confirm that that will be introduced in Grand Committee? There has been some speculation that the department has lost responsibility for this aspect of business policy and it has moved to the Department for Communities and Local Government. Which department holds primary responsibility for

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this measure, and is there an agreement that this should be introduced in a BIS-sponsored legislative measure?

I do not fault the Minister, who I recognise does a great job in dealing with some tricky government legislation, and we are always very keen to work with her. We on this side look forward to a long and detailed examination of these measures in Grand Committee, and have great expectations that the Government will be more forthcoming with details, data and evidence to support their positions. We will bring forward amendments that are consistent with the Government’s stated intentions and with the objectives of the Bill, covering areas that merit urgent consideration. But we will be resolute in trying to ensure that, for key measures in the Bill, this House provides a better piece of legislation to the Commons than that which came to this House, and we will be prepared to support others in this House, from whichever Bench, who share the same view.

3.51 pm

Lord Stoneham of Droxford (LD): My Lords, this is a deeply disappointing Bill, given the all-embracing nature of its title, and I am not sure that the Minister really answered her initial question as to why it was necessary to have this Bill now rather than doing more work on it. Only £25 million of net annual savings will come from these measures for business. That is what the impact assessment says. Many of us thought that the Government would reveal the principal items of their further push on red tape to cut the £10 billion of cost to business that they are projecting. I am never quite sure whether that is an annual target or whether it is £10 billion over the life of the Government. Perhaps the Minister could reassure us on that point. But it seems that this Bill is taking us back to new Labour targets; it will be used to extend the target for cutting red tape through the activities of the regulators, although it is unclear what impact that will actually have. I hope that the Minister can reassure us in her summing up that this is more than just a finger in the air by telling us how much detailed work has been done to reach these targets.

We welcome the promotion of an enterprise economy. We think that it has had a major role in job creation as we have moved out of recession, and it will have an even more critical role in job creation going forward. Frankly, with the great problems that Britain still faces in its balance of payments, financial deficit and low productivity, the small business sector is needed to make a massive contribution in all those areas. We need better managers; help with cash-flow problems for people setting up new businesses, with alternative sources of funding; more work and development by the British Business Bank; and we need to see small businesses directly encouraged to take on more apprenticeships and develop more skills. But the agenda of this Bill is very limited. Indeed, its appearance on the day we left for the conference recess suggested that the Government had spent the summer scratching around for things to put into it. Free of the shackles of the coalition, we were expecting the red meat of pro-business and pro-enterprise strategy pioneered by the free-market new Secretary of State to really get our

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teeth into—but we have been disappointed. Our worry is that it will provide a veneer of action before the public expenditure cuts nearer Christmas cut into the partnership activities of the industrial strategy, catapult centres, training budgets, adult education and research and development that are so vital to the country’s business renaissance.

We welcome in principle the concept of the Small Business Commissioner, but there are a number of issues. We are told that the running costs will be £1.3 million, with capacity to handle only 500 complaints a year. Voluntary mediation is apparently the way forward. There are no back-up powers and no ability to shame big business operators using bad practice or to enforce codes of practice—unless something is going to follow, and it is not clear that it will. As we know, complainants will be reluctant, as now, to come forward if they fear that business will be cut from them in future. That is the key problem. We know that small businesses do not complain for fear of losing future orders, so how will the Commissioner be able to reassure people and encourage them to complain?

Apprenticeships were one of the great successes of the coalition. They built on the foundations of work started by the previous Labour Government. We are happy to see protection for the branding and quality of apprenticeships, but should the emphasis now be on the power to set targets in the public sector when the issue there should be largely one of the resources and will in that sector to do apprenticeships? The real problem is not there; it is getting the small business sector to take on new apprentices without weighing it down with the bureaucracy of government incentive schemes and costs. We would do better to oversee government resources going into this and, in particular, into adult education which can play such a big role in supporting local businesses in their area. There is a huge need.

With the Government desire for more homes, the big need is in the construction industry and sector, where the role of public sector infrastructure contracts could be so important in getting more apprenticeships. The Government should be addressing the annual shortage of 30,000 new engineers going into training. There are regional disparities and there is no mention of the fact that there are areas, such as the north-east, where the achievement in apprentices is much more disappointing than in other areas of the country. As providing resources is the key, can the Minister confirm that, in line with the devolution of local government, local authorities are not going to be included in the public sector targets at this stage?

On industrial development grants, the improvement of financial assistance in line with inflation has our support. There is a recognition that partnerships are helpful and that government funding can be essential, as we have seen in the motor industry in the past 15 years. Widening support to the electronic communications sector is welcome. This supports the view of the Minister before she was a Minister. In 2014, she said:

“Broadband and mobile coverage have become essential utilities, like water or power. Without coverage it is like living in the old world without a post box or hot water”.—[Official Report, 13/5/14; col. 1749.]

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Over the past few months, I have been trying to get a specific figure from the Government on the number of households with super broadband. The skill of the Treasury in avoiding the question is remarkable, so I shall try again with BIS. What percentage of households currently have access to super broadband compared with the target of achieving 95% in 2017? Until I get that figure, I will be very suspicious that the Government are worried that they are not going to achieve their target. That may be one of the reasons they are putting this clause in the Bill: to put a bit more resource towards it, or at least to protect their backs. I would like to know what our progress is.

The importance of broadband for the small business operator needs emphasis. People can start businesses from home, which we encouraged in the previous Enterprise Bill, but it is no good if super broadband is pathetic or BT comes forward with completely unrealistic charges for putting in private lease lines, which I suspect it does as a way of getting more money, thereby holding up what it should be doing as part of public service.

On the day that it has been announced that Redcar is being not mothballed but closed down, will the Minister say whether there has been any consideration of industrial development grants in a situation which is devastating not only for the second-biggest steelworks in Europe but for all the small businesses in the north-east which have been dependent on it?

I find it strange that we have a public sector employment clause restricting exit payments in a Bill on a matter of enterprise. I am not sure why it is here. We on this side of the House accept that it is appropriate and reasonable that leaving payments should be limited, appropriate and not excessive. There are of course examples where they have been excessive but I fear that the Government are responding to Daily Mail headlines, and it is populism that results in poor government. “Give me 100 good managers rather than £1 billion in extra government spending”—I think that somebody said that recently. As somebody who has spent a lifetime in management, I could not agree with that more. We should be encouraging enterprise, good candidates, change and more appropriate commercial expertise in the public sector.

It is a hugely difficult job. I left the public sector in my 30s because I could not face dealing with some of the problems of a career in public sector management. Maybe the Minister did as well; she knows what it was like. I always admire the people who stuck it out, because I did not. Yet here we are, always looking to restrain salaries and cut back on perks and benefits. Sometimes, although there are instances where payments are excessive, you need to oil the wheels to get change and progress in the public sector, just as you do in the private sector. This legislation suggests that contractual terms are about to be broken, and it is extremely dangerous in terms of our objective of trying to get more change in the public sector that one of the mechanisms that is often needed is going to put a huge restraint on encouraging good people to come to work in this area.

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I have one more point to make, which others have mentioned. I hope that we are not going to have some late amendments to the Bill on the Sunday opening issue, following the consultation. I hope that the Minister can confirm that to us in her summing-up.

This is a deeply disappointing Bill. There is little direct impact on the cost of regulation or direct help to small businesses. The Government’s agenda at this time needs to be to support small businesses. We should be giving ongoing attention to helping their cash flows and speeding payments, not least in the public sector and in the construction sector. We should be easing access to government schemes that support small businesses. We should be encouraging small businesses to take on new staff and apprentices, particularly with the use of grants. We should be looking particularly to local chambers of commerce to provide more help to the expert potential of small businesses. The Government need to be more convincing towards the enterprise economy if they really wish to address the nation’s need to compete globally.

4.02 pm

The Lord Bishop of London: My Lords, as has been said, the Bill is modest in ambition but still very useful, especially the proposals in Part 4 setting targets for apprenticeships and containing measures for protecting the brand. I was fascinated by the Minister’s throwaway suggestion that there ought to be some ceremonies to symbolise the successful conclusion of apprenticeships. Speaking as a representative of “Rituals ‘R’ Us”, I could certainly offer a consultancy. We might even have apprenticeships in the Diaghilev industry that I can see growing today.

I was recently at the topping-out ceremony for the new Bloomberg building in the City of London. It covers three acres and will contain the largest quantity of stone of any building in the City since the construction of St Paul’s, so I dread to think what has happened to Derbyshire as a consequence. Five million hours of labour had already been put in before the ceremony, and there will be another 9 million before the centre is finished. The talk was all about a point that has already been made by other noble Lords: getting Britain building and, in that context, the vital importance of apprenticeships in securing the supply of properly qualified engineers and tradesmen. There was a special emphasis on the restoration of the dignity of making. That is obviously a very considerable cultural challenge and the direction has gone somewhat in another way, but presumably the measures to enhance the credibility and status of apprenticeships are partly aimed at addressing that. “The dignity of making” was one of Lord Foster’s phrases on the occasion of this extraordinary launch.

In the City of London, of course, regulations governing apprenticeships, to which the Bill contributes a 21st-century coda, go back to the 13th century. Then, the minimum was seven years and sometimes longer, and I hope that the Minister is aware of, and looks to, the 109 livery companies as allies. They are small businesses in themselves and, as part of their extensive involvement in education, they have also increased their involvement in craft-based apprenticeships. Companies such as the spectacle-makers are participating

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in advanced three-year apprenticeships and they have certainly acknowledged the support of BIS in getting their scheme off the ground. They are part of the Livery Companies Skills Council, which was set up in 2013 to support all manner of craft-related apprenticeships.

I declare an interest in representing 16,000 small businesses—parishes, church buildings and cathedrals—with a responsibility, among others, for maintaining 45% of all the grade 1 listed buildings in England, which are a vital part of our cultural inheritance. So we are also vitally interested and involved in the high-level training of stonemasons and other apprentices. The Cathedrals’ Workshop Fellowship is part of the effort. It was created in 2006 and nine cathedrals, including Canterbury and York, are currently involved in work-based programmes validated by the University of Gloucester. We very much welcome the emphasis on protecting the status of the brand. Measures to increase the supply and enhance the status of apprenticeships are very welcome. In life generally, apprenticeships are the way to success and mastery. The alternative is overnight stardom, but there is no legislating for that.

4.07 pm

Lord Baker of Dorking (Con): My Lords, this is something of a patchwork Bill, in which the Government have produced a variety of proposals which, they hope, collectively will make our society more enterprising. The dubiety of that has already been expressed by the Labour and Liberal spokesmen.

I should like to follow the right reverend Prelate the Bishop of London and talk about Clauses 18 and 19 on apprenticeships. The Government have set great store by transforming the whole apprenticeship movement and developing what has happened before, and they have set a target of 3 million by 2020. I think that that will be very challenging if we are to have high-quality apprenticeships, because the apprenticeship movement has been much abused in the past. I remember that about two years ago I went round an FE college and met two youngsters in the corridor. One was carrying a brush and the other a mop and bucket. I said, “Hello, what are you doing?”. They said, “We are apprentices”. I would not have thought that mastering a brush and a mop and bucket required a one-year or a two-year apprenticeship, and I doubt very much that they were doing the subjects which should be done when studying building maintenance via electronic engineering, making quite sure that computer systems and ventilation systems work. I do not think that they touched on those things at all; it was a racket. Some company—I do not know whether it was in the public or the private sector—was paying them a salary to do this. Maybe the FE college itself was paying them a salary because it would benefit from doing the training. However, I hope that the Minister will take this home to BIS and make sure that we do not have apprentices like that in the future.

There are four important levels of apprenticeships. Level 2 is taken at the age of 16, but industry and commerce look upon those as semi-skilled—they are not demanding enough. The next level is A-level or level 3, which is much more important and is a demanding

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level of achievement. For this, a two or three-year apprenticeship is needed. Then there is level 4, which is the old HNC and diploma level; and then the foundation degree level or level 5. We are now beginning to see, very slowly, some foundation degree apprenticeships—the noble Baroness is nodding, but I can assure her that it is only a tiny handful.

Last week, a report from the Sutton Trust on apprenticeships and their comparison with positions across the world shared a very interesting statistic. Someone who does a high-level apprenticeship—at levels 4 or 5, such as I have been talking about—will, over their working life, be likely to earn £50,000 more than a university undergraduate, apart from, of course, those attending the very best universities. We have to get it across to many young people that an apprenticeship is not a second-class pathway to success. It can, in fact, be infinitely better than a university degree, because the English education system is now cursed by only one target: three A-levels and a university. That has resulted in a very large increase in graduate unemployment at the moment.

We have to create new pathways to success. But how are we going to go about doing that? Take someone leaving an ordinary comprehensive school at the age of 16. Today, that student will have been doing mainly academic subjects—the famous three A-levels and a university. Technical subjects are being squeezed out in schools for those below the age of 16. Design and technology is a very good technical subject that I introduced into the curriculum in 1988. Already, in the last five years, the numbers taking it at GCSE and A-level have declined quite regularly because it does not appear in the league tables or get students to the magic three A-levels and a university. Someone aged 16 who has done only academic subjects and wants to be an apprentice will, quite frankly, be very hard pushed to find any company to employ him. Take those between the ages of 16 and 18. Again, fewer technical subjects are being taken at A-level. We then come to foundation degrees—the pinnacle of this pathway to success—and they also fell last year.

This is a really rather depressing position. We have a very substantial skills gap in our country. The Royal Academy of Engineering estimates that the skills gap in graduates in STEM subjects is 45,000 a year for each of the next five years. At the moment, it will be very difficult to get anywhere near filling that gap in the choice of students going into universities. When it comes to technicians, the figures are very much larger. At degree level, the gap is 830,000; at technician levels 3 and 4, we will need 450,000 over the next four or five years. I do not believe that the present education system in schools, FE colleges or universities will get anywhere near matching that gap.

The other thing I would say is that we should really have a look at how Germany has done it. In Germany, by the age of 18, almost 75% or 80% of students will have experienced a form of technical education. We are at 30%. Last year, over 500,000 apprentices in Germany finished their course, while we had about 200,000. This is a huge gap indeed.

I am now quite convinced that, if we are going to try to fill the skills gap, starting technical subjects at

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the age of 16 is too late and starting at the age of 11 is too early. I believe that students in our schools should start technical education at the age of 14. That is why, over the last six years, I have been promoting university technical colleges, because they take students from the ages of 14 to 18. The noble Lord, Lord Bhattacharyya, is in the House. He knows about this, because he supported a very successful one that opened in Coventry, supported by Jaguar—he is nodding. It is very popular and doing very well. It means that a student starts at the age of 14 and by 16 has a level 2 qualification. They are then just employable, and so it is much better for them to stay on and get a level 3 qualification and go on to a level 4 and level 5. That is why we need in our education system a clear and definite pathway for technical subjects for students between the ages of 14 and 18. The CBI has now called for the Government to establish this, as have the chambers of commerce. I hope that we will move towards it.

Certainly, the university technical colleges that are operating at the moment—we have 39 open and another 20 preparing to open—all very much subscribe to the phrase that the right reverend Prelate used: they all involve the dignity of making. For 40% of the curriculum below 16—that is, for two days of the week—the youngsters are making and designing things with their hands, in various types of metal, wood and other materials, and doing advanced computing. They are therefore very suited to providing apprentices. The JCB UTC in Uttoxeter in Staffordshire has 50 apprentices this term. They will be there for two years; they will be employed by companies in the area; and they will go to the college for two days a week to improve their basic education. That is very rare. An ordinary comprehensive could not possibly do that because no company would employ its students unless they had some technical skills.

Another UTC, at Reading, which was rated as outstanding by Ofsted this year—it is remarkable for a new school which has been open for only two years and is pioneering a new type of education to get such a rating—specialises in advanced computing. When I went to see Charlie Mayfield, the chief executive of John Lewis, I wanted to talk to him about food processing, because one of the UTCs wanted to do it and there is a shortage of hundreds of thousands of technicians in that industry, but he said, “No, I want to talk to you about the lack of computer scientists. I cannot get enough computer scientists of a sufficient quality to run what is a very difficult logistical operation of a large retail group”. So he has to employ from abroad. I then put him in touch with the Reading UTC, and I am glad to say that it is providing apprenticeships for Waitrose next year.

This is an entirely appropriate cause for the Government to be committed to. Huge sums of money are involved—the spending on apprentices this year will be £1.5 billion, or slightly more than that—but they must get it right. They must focus on the high quality of apprenticeships, because that is where we need it most. If you are going to have a really enterprising economy, you will have to have many more technicians in it, inventing and designing things. That should be our target in our apprenticeship policy.

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4.17 pm

Baroness Donaghy (Lab): My Lords, with so many topics covered by the Bill, I will concentrate on public sector exit payments and then add brief references to cash retention and apprenticeships. I am concerned about the proposal to cap public sector exit payments. I have a fair amount of experience in this area and know that the measure will have unintended consequences which make reorganisation more difficult. It will mean less flexibility for redundancies and less certainty for staff—particularly those over 50—and, in the end, might cost the taxpayer more money not less.

In the Civil Service, the proposal cuts across a negotiated agreement. The then Minister for the Cabinet Office, now the noble Lord, Lord Maude of Horsham, described the agreement reached in 2010 as one which would be “lasting”; he said that it would,

“provide a fair balance between the interests of taxpayers and the interests of civil servants and protect those approaching retirement and the lowest paid”.—[

Official Report

, Commons, 14/12/10; col. 849.]

So what has changed?

The impact of the proposed cap will be on those with long service rather than on the highest paid. The Cabinet Office has confirmed that some civil servants earning less than £25,000 a year could be affected by the cap because they have worked for so long for the Civil Service. Conversely, some high earners with less service will not be affected, because the Civil Service Compensation Scheme is service-related and there is already a maximum pay limit. This maximum pay limit has meant that a number of employers have not been able to restructure their organisations or make the staff changes that they had planned. If the Civil Service had a viable redeployment process, it would provide better value for the taxpayer than an exit cap. It would also meet the ACAS guidelines for employers on redundancy handling.

In the health service, there is already an exit cap of £160,000. National Health Service trade unions have recently been in negotiations with employers and the Department of Health on further changes to the NHS redundancy scheme. The Department of Health has been keen to use this latest round of talks to introduce a staggered clawback of redundancy payments where staff were re-employed within 12 months, and a taper of redundancy calculations for staff approaching retirement age. The National Health Service trade unions have been keen to use the talks to limit the need for payments through establishing better scope for redeploying staff at risk of redundancy. While there are still issues to iron out, these talks have been productive. However, the announcement of the Government’s £95,000 cap has set this timetable back significantly and has the potential permanently to derail these talks—another unintended consequence, I am sure. If there has to be a cap, the figure must be increased and there must be a commitment to index-linking that amount.

The Local Government Association has indicated that the proposed cap may threaten essential future staffing restructuring in councils. The Bill also fails to provide certainty over when the cap will apply, which is unhelpful for staff and employers. A start date

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should be made clear. UNISON has also referred to necessary restructuring as a result of the dramatic cuts in local government budgets. UNISON described these reorganisations as,

“a staggered process over several years to maintain service delivery and to enable smooth transitions from old to new delivery models”.

The union made the point that,

“employers and employees may therefore have made dramatically different decisions in [the] initial stages of restructuring if they had been aware of the constraints proposed for future stages by this proposal”.

Under recently negotiated public sector pension changes, guaranteed not to be meddled with for 25 years, when a member of the local government pension scheme is made redundant over the age of 55 they are instantly entitled to draw their pension without the usual penalty for drawing it early. The employer makes a one-off lump sum payment known as a strain payment. The proposals in the Bill explicitly include payments made to a pension scheme. It would impact on those earning £35,000 a year and as pension age protections wither on the vine the pension strain payment will begin to affect staff on much lower incomes.

As UNISON pointed out,

“under these proposals, an individual staff member’s length of service and age could become the determining factors in employers seeking to avoid the complication of this arbitrary cap”.

That may be discriminatory. I hope that the Government will withdraw this clause altogether. If they are not minded to do that, I hope that there will be a protected period of two to five years where an employer can demonstrate that they are in the middle of an ongoing restructuring programme. The cap should be increased so as not to derail NHS joint negotiations. There must be a mechanism for index-linking, and pension strain payments should be excluded from the exit payment calculations. There should also be an exemption for low to moderate earners. My final point on this particular part of the Bill, particularly with the Trade Union Bill coming down the track, is that reneging on agreements reached after much agonising on both sides is a sure-fire method of creating havoc in employment relations and staking up a lot of trouble for the future.

The Enterprise Bill provides an opportunity to return to the subject of cash retention, particularly in the construction sector. Some of us participated in a debate on the small business Bill but the previous Government were not minded to introduce some safeguards on this. The same Minister is presiding over this Bill and I hope that she will change her stance. I also hope that there will be support from across the House for a provision in the Bill that requires cash retentions to be placed in trust or that alternative security such as bank guarantees are provided. I am sure that the noble Lords, Lord Aberdare and Lord O’Neill of Clackmannan, are majoring on this important subject, so I will keep my contribution as brief as possible.

The Specialist Engineering Contractors’ Group has been calling for this provision for some time, and it is depressing to read about the companies that have gone under simply because of companies which owed money and did not pay up. As the SEC has stated, cash retentions are withheld from progress payments ostensibly as security against failure to remedy defects. In practice, they are deducted to support the cash flow of the

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paying party. Cash retention in the construction industry is a scourge which causes bankruptcies, loses jobs and reduces training. When I was preparing my report on construction fatalities six years ago it became clear to me that cash retention was part of the downside of the construction industry. Flexibility will always be a necessary ingredient for that industry’s success. While I was not able to prove a conclusive link between cash retention and safety in the industry, I feel sure that the uncertainty it causes, the cutting of corners, the massive strains put on subcontractors and those further down the supply chain make a negative contribution to safety. Cash retention is like an underground poker game. I urge the Minister to at least force these games into the fresh air.

I shall make a brief and final reference to Clauses 18 and 19 on apprenticeships. The commitment on paper is welcome, and I notice that the much-despised targets are back again. Unless the Minister has the powers of Prospero and can conjure up 3 million apprenticeships without any visible means of support for the public sector, I am very much afraid that this plan will be a Caliban. The levy could turn out to be a tax on training and could displace training budgets for existing workers. So I ask what plans there are for proper negotiation with employers and unions in its implementation. If the National Health Service is forced to take on more apprentices, where there is insufficient staffing capacity to provide supervision and mentoring, it could be very risky. The types of roles for which apprenticeships exist do not necessarily match up with the job vacancies. A healthcare assistant in the NHS wishing to become a nurse cannot currently do so through an apprenticeship and would require funding to support their progression. This could be a really important development if the Government were so minded and would provide real jobs at the end of the process.

Is it the Minister’s intention that the Skills Funding Agency continues to run and fund the National Apprenticeship Service, which co-supports the public sector? What information will be gathered on gender, age, ethnicity and disability in each region to ensure fairness? Will all apprenticeships receive the minimum wage and not just six out of seven as a recent BIS survey revealed? How will standards be streamlined? For instance, the level 2 healthcare support worker trailblazer apprenticeship does not require participants to achieve a level 2 qualification.

Finally, will the UK Commission for Employment and Skills report on the quality of apprenticeships being provided and produce a review of what social dialogue has taken place to help to ensure the success of these schemes? I look forward to exploring these issues further in Committee.

4.28 pm

Baroness Brady (Con): My Lords, as always it is an honour to speak in the House—especially on enterprise, a subject dear to my heart.

I will begin by describing the backdrop in front of which this Bill sits, and thereby illustrate just how important it is that we debate the issues it raises. With the party opposite having appointed a shadow Chancellor who does not believe in market capitalism, this Bill is a

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good opportunity for those of us who do and who believe that business is a force for good, to recognise the contribution that all businesses make to the life of our country and to begin to restore trust in business by creating new opportunities for small businesses to grow and for large businesses to help them do so.

As my party’s small business ambassador, I make no apology for championing the efforts of our nation’s start-ups, entrepreneurs, sole traders and growth companies. However, the Bill presents an opportunity to bring the whole of the business community together, large and small, as one economic and social ecosystem. Large businesses were once small and they can help our SMEs flourish as they have done.

I will begin with a few key benefits of the Bill to small companies. In a recent survey, 73% of scale-ups said that they would be able to grow faster if dealing with regulators were easier. The Bill will make that interaction easier. The Small Business, Enterprise and Employment Act already mandates that the Government publish the economic impact on business of legislative changes, but it currently covers only national legislation. It is to be welcomed that the Bill will bring any and all regulators in scope so that they, too, will need to be mindful of the economic impact of their output. It will also mandate that regulators report on how they are accounting for the impact on economic growth of the regulations that they are responsible for. This will help identify measures that are hampering growth and investment and therefore should be consigned to the legislative dustbin.

Further, amending the Industrial Development Act 1982 so that the Secretary of State can increase the number of grants or loans made in the name of spreading communications networks is a timely adjustment that should better enable the spread of broadband right across our country. Good, reliable connectivity is essential for businesses of all types, but its absence has a much bigger impact on small businesses. I also welcome the increase in the per project threshold in Section 8 from £10 million to £30 million to reflect the effect of inflation since 1982.

I mentioned that the Bill presents an opportunity to bring all sections of the business community, large and small, into one ecosystem, because, of course, in reality they interact all the time. The creation of a Small Business Commissioner is symptomatic of this ecosystem and is an exciting attempt to improve it.

In January 2015, BACS reported that 59% of the UK’s small and medium-sized businesses were impacted negatively by late payments, with a total debt burden of £32.4 billion. In July, a BIS survey found that 75% of businesses agreed that the relative size and market power of small and larger businesses is the primary cause of unfair practices between businesses. The Small Business Commissioner will be there to level the playing field. The Bill will enable the commissioner to handle complaints, facilitate access to support when disputes arise and help small businesses take action while avoiding going to court.

I also mention that the inception of this new office is an opportunity for larger businesses, too. That is because of the last objective of the commissioner: promoting a change in culture on late payments. Larger

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companies should not wait to be told to pay up by the commissioner. Instead, on day one they should seek to demonstrate their responsible practices by paying promptly and engaging with the work of the commissioner to encourage others to do the same. In this way, larger companies can show that they are helping their smaller cousins flourish and grow as they have done, and not using their incumbency to protect their status.

The Bill is about being pro-market and pro-competition, not pro-vested interests and incumbency. If big businesses are seen only as entities looking to protect their status, doing the bare minimum to comply with the law while keeping smaller businesses down, we will not build trust in our system and our economy will grow more slowly and be less dynamic as a result. But if the Bill enables small businesses to grow and large businesses to play a part in that, then we can. Business is all about ideas, innovation, and investing in people and technology. This is business at is best and this is what this Bill is about, too.

NHS: Financial Performance


4.33 pm

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, I shall now repeat in the form of a Statement the Answer given by my honourable friend the Parliamentary Under-Secretary of State for Care Quality to an Urgent Question in another place. The Statement is as follows:

“Mr Speaker, I thank the honourable lady for giving me this opportunity to come to the House and make a Statement on the financial performance of the NHS. On 9 October, Monitor, the regulator of NHS foundation trusts, reported that foundation trusts ended the first three months of the financial year with an estimated net deficit of £445 million. Monitor’s publication noted that performance in the first quarter of the financial year is usually worse than the rest of the year.

The NHS Trust Development Authority also published that day the financial position of NHS trusts for the first quarter of 2015-16. This showed that the NHS trust sector ended the first quarter of the year £485 million in deficit. The financial position of the NHS is undoubtedly challenging but it is important to recognise that, despite the difficult decisions we have had to make because of the calamitous deficit we have inherited, this party has chosen to prioritise funding for the NHS. That is why we are committing an additional £10 billion over the lifetime of this Parliament, starting with £2 billion this year.

However, additional government spending is not the only answer to the challenges faced by the NHS. The Government have taken action with their arm’s-length bodies to support local organisations to make efficiency savings and reduce their deficits. In the first three months of this year, NHS trusts spent £380 million on agency staff, while foundation trusts spent £515 million. That is nearly £10 million a day across the NHS. We need to reduce this spending and challenge the agencies, which are charging, frankly, outrageous amounts for their staff. To that end, a package of measures, including a ceiling on the amount that each trust can spend on

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agency nurses and mandatory central framework agreements, was announced by my right honourable friend in June. These measures came into effect on 1 October. If further action is necessary, we will not hesitate to take it.

Furthermore, we have taken action through tough new controls on consultancy spending and executive pay, and in supporting organisations to dispose of surplus land among other initiatives. The impact of all these actions will not have been seen in the quarter 1 figures published last week.

The Government and NHS leaders have taken national action to support local leaders in managing down these deficits. I welcome very much a constructive discussion with the party opposite on where we may be able to go further in driving the efficiency savings that the NHS must find if it is to provide the exceptional standard of patient care that we all on both sides of this House wish to see”.

4.37 pm

Lord Hunt of Kings Heath (Lab): My Lords, the Minister is certainly having a busy day. I thank him for repeating the Statement. Obviously, these figures are very worrying. They relate to quarter 1. We are now well into quarter 3. What is the Minister’s latest assessment of hospital finances and his updated estimate of the year-end position? Clearly, there is not enough money in the budget to cover the existing costs of growing pressures, so how on earth is the service to fund seven-day services?

I noted the Minister’s comments about consultancy spend and agency staff. However, does he recognise that the reason so much money has been spent on agency staff, apart from through the actions of agencies themselves, is the fact that his Government cut the number of nurse training places in 2010? Does he also recognise that his Secretary of State’s attitude towards doctors is driving many of them away from this country? We should not be surprised if desperate NHS bodies, beset by criticism from the CQC about the numbers of doctors and nurses they need on the wards, resort to the use of agencies. As far as consultancy spend is concerned, does he accept that the Government’s own agencies—Monitor and the NHS Trust Development Authority—encourage NHS bodies to use consultancies? Will he ask them to try to reverse some of their actions themselves?

I quoted the Daily Telegraph to the Minister earlier. However, I want to say something about a story in the Mail yesterday concerning Sir Thomas Hughes-Hallett, chairman of Chelsea and Westminster Hospital in London. He has said that the NHS is in crisis and has referred to:

“A ‘worsening financial crisis’ leading to a ‘crisis in care provision’; An ‘environment of negativism’ triggered by endlessly critical missives from Ministers and officials; ‘Highly burdensome regulation’ leading to ‘abject confusion, fatigue and short-sightedness’; A ‘climate of fear’ ruling wards … ‘Continued emigration’ of doctors … The risk that these problems will cause an ‘inevitable reduction in quality and patient care’”.

You do not have to believe everything that Sir Thomas said without knowing that most people in the NHS share that view about tackling impossible pressures with limited resources. What are the Government going to do about it?

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Lord Prior of Brampton: My Lords, I thank the noble Lord for those helpful comments. His first question was: what is the updated estimate for the full year? There is a general figure out there that the King’s Fund, the Health Foundation and others have come up with—£2.1 billion—as the underlying provider deficit for the year. That figure is largely based on the first quarter’s results because you cannot annualise the first quarter’s results; the first quarter is often much worse than the subsequent three quarters. We believe we can manage that £2.1 billion down quite significantly; interestingly, last year the underlying provider deficit was £1.2 billion. We have other ways of managing that deficit through the surpluses that may arise on the commissioning side and other sources of revenue.

The noble Lord talked about agency staff. I recognise some of what he says but there is no doubt that in the aftermath of the tragedy at Mid Staffordshire, the strengthening of the CQC when I was there has led to greater pressure to increase staffing numbers. I heard the noble Lord say, I think when he was chairman of the Heart of England trust, that if you are going to get shot it is better to get shot for not hitting your financial budgets than for not having enough staff on the wards. There has been a much greater emphasis on higher levels of staffing and that has put pressure on agency staffing. There are actually 8,000 more nurses and 9,000 more doctors in the NHS since 2010.

The noble Lord mentioned the cost of consultants. I recognise the strength of what he says—that it is a bit rich for us to complain about the cost of consultants when, through our arm’s-length bodies, we have been responsible for recruiting them. We expect much of the improvement methodology that has been provided by independent consultants to be provided by NHS Improvement; for example, the fact that we have now taken on Virginia Mason to help us spread best practice in running hospitals in the NHS is a model for things to come. I also hope that chains of hospitals will emerge and develop some of the best practice from hospitals such as Salford Royal, Frimley Park, the Royal Free and others, so that we can spread best practice without relying so heavily on external consultants.

Unfortunately, I have not read the article by Tom Hughes-Hallett. I would say to Tom, who I know, that he might spend more time focusing on his own hospital, which got a “requires improvement” notice from the CQC, than on spreading his views to all and sundry, although I recognise the strength of some of them. Sorry, I am running past my time. I had not realised that time was of the essence.

Baroness Walmsley (LD): My Lords, quite clearly there is a crisis of funding in the NHS on an enormous scale and nothing I have heard from the Government indicates that the problem is going to be solved by any single party. This should be of cross-party concern. During the election, my right honourable friend Norman Lamb asked the Secretary of State for Health if he would co-operate with a cross-party commission to look at a cross-party solution to a new settlement for the NHS. He agreed, as did the Labour spokesman, yet five months later nothing has happened. Can the Minister tell me when it will?

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In Scotland health and social care have been integrated and are already showing successes because of that. When will that happen in England? The situation in Scotland illustrates the fact that the challenges to the NHS are never going to be solved by the NHS alone. This is a whole-government issue. When will the Government beef up the Cabinet committee on health so that every department can be held to account for whether its policies contribute to the greater health of the nation or not? Until that is done, the NHS alone cannot be expected to solve the looming problems.

Lord Prior of Brampton: My Lords, it is worth reminding your Lordships that there was considerable consensus around the five-year forward view. I think that the noble Baroness’s party wholly signed up to it and, along with the Conservative Party, to committing £8 billion of extra money to the NHS over the lifetime of this Parliament. We stand by that. The NHS, in its turn, agreed to find £22 billion-worth of efficiency savings, which I think the noble Baroness accepted when she was part of the coalition Government. That is still the situation so I do not think that we need a new settlement. There is a settlement: it is called the five-year forward view and we are fully committed to it.

The noble Baroness raised the issue of integration. I agree 100% with her and it is an essential part of the five-year forward view—the vanguards are based on it. I remind noble Lords that the spending in the UK per capita on health is $3,200. In France it is $4,100 and in Germany it is $4,800. The NHS does a remarkable job in delivering world-class healthcare, which is rated by the Commonwealth commission and other independent agencies as among the best in the world, with considerably fewer resources than any other developed system in the world.

Lord Kakkar (CB): My Lords, I declare my interest as chairman of University College London Partners. What assessment have Her Majesty’s Government made of the potential contribution of accountable care organisations to addressing the need to advance quality outcomes in the NHS and its financial performance?

Lord Prior of Brampton: I thank the noble Lord for that perceptive and interesting observation. The accountable care organisation is one whose time has come. A health organisation with a capitated budget is indeed the way forward. It will drive the integration that the noble Baroness was talking about earlier on. It is a key part of this Government’s health strategy to support accountable care organisations.

Baroness Wall of New Barnet (Lab): My Lords, I too welcome the Statement, as did my noble friend. I have to admit that Milton Keynes Hospital, of which I am chairman, has contributed to the £550 million deficit referred to in the Statement. I want to focus on the issue around agency staff. I presume that the Minister has not seen the EveningStandard today—it has only just come out, so that is quite acceptable. In it, however, the chief nurse at Guy’s says very much what all chief nurses are saying: that hospitals are really performing with their hands tied behind their

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backs and that we have no staff to fill all our vacancies and have to recruit agency staff. We have just had an instruction, which the Minister referred to in the Statement, to reduce our agency staff by 1 October. I think it is from 22% to 17%. We have obviously gone back with some mitigation around that, which has been accepted. That has been very helpful but it does not solve the problem: we cannot get nurses through.

We went to Croatia and got 60 nurses. Five of them have had visas to get through and the rest cannot come, so we have to carry on with agency nurses to cover them. We have more 1:1 nurses than any other trust around London. I am going to wind up but as the chairman of a trust, I am talking about what really happens—the Minister knows that. Can he tell us how he is going to get this other money to reduce the deficit that he talked about and which is going to happen? I would be very interested in that. Also, when is the NHS going to make sure that the people who have that remit for nurses being admitted into our country will do something about it?

Lord Prior of Brampton: I will have to be very quick in replying. Maybe we could discuss this outside the Chamber. There are three ways in which we can find the resources for this. The first is partly through extra government money: there is another £10 billion coming to the NHS over these next five years. The second is driving through efficiency improvements. There are vast efficiency improvements that we must make over the next five years. I regard efficiency as a moral imperative because every £1 that we can save from waste is £1 that we can plough back into patient care. The third way is through new structures of organisations—accountable care organisations are one example; chains of hospitals are another. I think that the days of the independent DGH ploughing its own furrow, or of the foundation trusts structure around the DGH, are behind us.

Right to Buy: Housing Associations


4.49 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, with the leave of the House, I will repeat as a Statement an Answer given earlier by my honourable friend the Minister for Housing and Planning. The Statement is as follows.

“As stated in our manifesto, this Government want to give housing association tenants the same home ownership opportunities as council tenants. Since the introduction of right to buy, nearly 2 million households have been helped to realise their aspirations to own their own homes—46,000 sales since April 2010, with nearly 40,000 of those under the reinvigorated scheme introduced in 2012 by the last Government.

This Government want to help families achieve their dream of home ownership, but about 1.3 million tenants of housing associations are not able to benefit from the discounts that the last Government introduced.

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That is why we want to give housing association tenants the same home ownership opportunities as council tenants.

At present, we have a situation where some housing association tenants have the preserved right to buy at full discount levels, some have the right to acquire at lower discount levels, and others have no rights at all. That cannot be right, and the Government want to end this inequity for tenants and extend the higher discount to housing associations.

On 7 October, the Prime Minister announced that a deal had been agreed with the National Housing Federation and its members which would give tenants of housing associations the opportunity to buy their home with an equivalent discount to the right to buy. This will deliver the manifesto commitment to extend the benefits of right to buy to 1.3 million tenants.

In summary, the deal will enable the following: 1.3 million families will be given the opportunity to purchase a home at right-to-buy-level discounts, subject to the overall availability of funding for the scheme and the eligibility requirements. The presumption is that housing associations will sell the tenant the property in which they live.

The Government will compensate the housing association for the discount offered to the tenant, and housing associations will retain the sales receipt to enable them to reinvest in the delivery of new homes. Housing associations will use the sales proceeds to deliver new supply and will have the flexibility, but not the obligation, to replace rented homes with other tenures such as shared ownership. The Government will continue to work with the National Housing Federation and its members to develop new and innovative products, so that every tenant can buy a stake in their home.

As part of the agreement, the Government will also implement deregulatory measures which will support housing associations in their objectives to help support tenants into home ownership and deliver the additional supply of new homes. Boosting the number of sales to tenants will generate an increase in receipts for housing associations, enabling them to reinvest in the delivery of new homes. Housing associations will be able to use sales proceeds to deliver new supply and will have flexibility to replace rented homes with other tenures such as shared ownership.

Housing associations have a strong record in delivering new homes, as evidenced by the way we have exceeded our affordable homes target, delivering nearly 186,000, which is 16,000 more than originally planned, between 2011 and 2015.

We want more people to be able to own a home of their own, and extending the right to buy is a key part of this, giving tenants aspiration and something to strive for. Extending the right to buy will enable tenants of housing associations to have the opportunity for the first time to purchase their home at the same discount level currently enjoyed by tenants of councils.

We will now be working closely with the sector on the implementation of the deal, and I will update honourable Members in due course on the next stage of the implementation”.

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4.54 pm

Lord Kennedy of Southwark (Lab): My Lords, I thank the noble Baroness for repeating the Answer to the Urgent Question from the other place. I declare an interest as an elected member of Lewisham Borough Council. The extension of the right to buy to housing associations funded by the forced sale of council homes will mean fewer affordable homes, and we will oppose that. I am sure the noble Baroness will have seen the figures from Shelter estimating that up to 113,000 council homes could be sold to pay for this policy. Can she tell the House more about the guarantee of like-for-like replacement that she referred to? Is that both for housing association and council homes?

Baroness Williams of Trafford: My Lords, councils should effectively and efficiently use their resources. Where there is an increased need for housing across the country, it makes no sense for a local authority to keep high-value, vacant council houses when it could sell them to fund the building of new homes that will reflect its local housing need and increase overall housing supply. We want to work with both local authorities and local associations to ensure this one-for-one additional housing.

Lord Shipley (LD): My Lords, I thank the Minister for her Answer. I am still unclear whether there is to be a requirement on local authorities to sell off their best housing to help pay for this policy. Will sheltered housing, which is protected under the right to buy for local authority sales, be treated similarly in the context of housing association right to buy? What is the Government’s target for net new homes for rent as a consequence of this policy?

Baroness Williams of Trafford: My Lords, as I just said, where there is a need for housing across the country, it makes no sense at all for local authorities to keep hold of their high-value, vacant council houses. Selling such properties will mean more money to fund the building of new homes. That will better meet their local needs and some of the money will go to support housing association tenants to buy their own property. This is part of our wider effort to help anyone who works hard and wants to get on the property ladder to achieve their dream. We are legislating to require local housing authorities, as the noble Lord said, to pay the Secretary of State a sum in line with the anticipated receipt from the sale of high-value council housing, and councils will be able to retain some of the sale funds to support new housebuilding locally to increase the overall housing numbers in their area. We will announce more detail in due course, obviously through the housing Bill. In terms of our aspiration on affordable housing, our aim is to deliver—

Lord Shipley: It was sheltered housing.

Baroness Williams of Trafford: I am sorry. On sheltered housing, all the exemptions that apply currently will continue to do so.

Baroness Gardner of Parkes (Con): At what stage will we know details about such things as a sinking fund for those buying these housing association properties?

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That will definitely be an important feature as this has proved such a bugbear for those who bought their council flats and now find that they cannot afford the repairs.

Baroness Williams of Trafford: My Lords, I assume that such details will be in the housing Bill.

Baroness Masham of Ilton (CB): My Lords, does the Minister agree that there is a shortage of special housing for disabled people? Many housing associations provide this. Will these houses be protected?

Baroness Williams of Trafford: My Lords, the Government will expect housing associations to abide by their obligations in terms of homes for disabled people, for homeless people and for sufferers of domestic violence.

Lord Best (CB): My Lords, the Government are very wise to back off from giving a statutory right to buy to housing association tenants. I congratulate the Secretary of State for coming to this compromise with the National Housing Federation. However, 55% of housing associations voted in favour of this. The rest have yet to make up their minds or voted against it. What will happen to the housing associations that do not voluntarily sell to their existing tenants?

Baroness Williams of Trafford: My Lords, as I understand it, 94% of housing associations signed up to this but the federation confirmed that the offer—

Lord Best: I think that 94% of the properties owned by housing associations are covered but only 55% of the housing associations themselves, many of them small bodies such as independent charities, have signed up to the deal.

Baroness Williams of Trafford: My Lords, I stand corrected by the noble Lord, who is far more expert than I am. However, the federation has confirmed that the offer is sector-wide and that it will encompass all housing association tenants. If necessary, the Homes and Communities Agency will be given additional powers to assess housing associations to a new homeownership standard. If necessary, we will take further steps to ensure that the right to buy is available to them, in line with our manifesto commitment.

Baroness Hollis of Heigham (Lab): My Lords, housing associations have come from the charitable sector to build social housing for those unable either to rent or to buy. As a result, this policy is morally wrong, it distorts the charitable objectives of housing associations and it is financially illiterate. Will the Minister confirm that as a result of this policy, housing associations will lose a social home to rent on the waiting list, and local authorities will lose a second home available to rent for people on their waiting list, to fund, thirdly, a gift of up to £100,000 to a sitting tenant, which, if the statistics on RTB for council housing prevail, within five years will have been recycled into buy to let, into the private rented sector, at double the rent and double or treble the housing benefit bill, which the taxpayer

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will pick up? Therefore there will be two sales, a huge discount, funded in turn by going into buy to let at taxpayers’ expense, to do what? It will not add a single house to the stock but merely change the label over the door that says “tenure”.

Baroness Williams of Trafford: My Lords, I confirm to the noble Baroness that houses that have a specific charitable purpose will retain it. I also confirm that the Government make no bones about the fact that they support people’s aspiration to own their own home. Contrary to what the noble Baroness thinks, the building of extra homes on at least a one-for-one basis by housing associations will add significantly to the housing stock in this country.

Baroness Hollis of Heigham: One in nine of the houses sold under RTB has been replaced. Why does the Minister think that the housing associations sales will be any different?

Lord Patten (Con): My Lords, it is indeed very good news that a majority of housing associations are in favour of this excellent opportunity afforded to them. Can my noble friend say when next there will be an opportunity to have an estimate by the Government of what individual tenants, many of whom wish to have this opportunity, are thinking, and when that will be published?

Baroness Williams of Trafford: My noble friend makes a very important point, because at the heart of this policy are the tenants and their aspiration to own their own home. I will segue into the previous point made by the noble Baroness, Lady Hollis, about right-to-buy properties not keeping pace; in fact, that programme has literally just started.

Lord McKenzie of Luton (Lab): My Lords, has the ONS confirmed that it will re-examine the classification of housing associations in the national accounts? That followed a warning from the Office for Budget Responsibility that the extended right to buy and the planned cut in housing association rents could trigger that review. Of course, reclassification would mean that income and expenditure would be part of the public finances and, most importantly, it would add something like £63 billion to the Government’s borrowing requirement. Is it not the case, and is it not part of the government rationale for the voluntary deal, that if right to buy is volunteered, not imposed, that removes one of the key reasons for the ONS review?

Baroness Williams of Trafford: My Lords, whatever the ONS chooses to do in terms of classification, we are absolutely determined to deliver 275,000 affordable homes by the end of this Parliament. Noble Lords should not forget that the 2015-18 programme is still in its initial year, as I said to the noble Baroness, Lady Hollis. We saw housing associations—the providers—maximise outputs at the end of the 2011-15 programme, which has caused an inevitable lag in starts in the current programme.

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Enterprise Bill [HL]

Enterprise Bill [HL]

Second Reading (Continued)

5.04 pm

Lord Curry of Kirkharle (CB): My Lords, I warmly welcome the Bill, and believe that it has the potential to create an even more favourable climate within which businesses can become established and grow. First, let me be clear about my own interests: not only am I in involved in small businesses, but I also declare an interest as the independent chair of the Better Regulation Executive. In the interests of transparency, let me state that the BRE has played a significant role in the formation of Part 2, Clauses 13 to 15, of the Bill. The Better Regulation Delivery Office, with which I also work closely, has been involved in Part 3.

This country has a long tradition of being an epicentre of business, but this Bill will ensure that there is an even more favourable climate in Britain for business to thrive. I hope that this Bill will help to position the UK as the lead country in Europe in which to do business, and build on progress to date. The Enterprise Bill will go further in helping to change the culture, in which small businesses will be able to start, uninhibited by mountains of red tape, and be given the help, support and encouragement that they need at every stage of their development to be able to grow, create employment and generate wealth.

The aim of Part 2, as the Minister said, is to extend the scope of the business impact target to include the regulatory activity of statutory regulators and to report publicly on the actions that they are taking in the fulfilment of their duties under the Regulators’ Code and the growth duty, and contribute towards the £10 billion target over the life of the Parliament. The result of the regulatory provisions will be to make regulators more transparent and accountable when performing their regulatory functions and, in particular, how they affect the activities of businesses. The transparency and accountability afforded by these provisions will ensure visibility of the impact of regulators’ activities on businesses, which will give further confidence to businesses that regulators are actively considering such impacts when making decisions.

The noble Lord, Lord Mendelsohn, has referred to the data published on regulatory savings during the previous Parliament. The RPC has been responsible for publishing those data, as he said, but he questioned their accuracy. The RPC is an independent body—I need to stress that—which jealously guards its independence. However, I have always had a concern that hard data alone are not a great indicator of success. The indicator of crucial importance is the attitude of business and business perceptions, and the most recent business perceptions survey shows that there has been a 10-point fall within the last five years in the number of businesses thinking that regulation is a barrier to progress. That for me is a much more important indicator than the hard data. However, the overall number of businesses that still consider regulation to be a problem means that the figure is still too high—so we still have more to do. I hope that we continue to drive this down further if we are to succeed in driving the change in culture that I mentioned

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earlier. That is why this Bill is important. Regulators need to appreciate the impacts of their actions on the bodies that they regulate. That is part of good policy-making, so I welcome its wider application to regulators now.

A key concern that has been expressed to me about these measures is the effect that they might have on the independence of regulators. I want to make it clear that this Bill does not constrain their independence and does not prevent them taking action in fulfilling their statutory duties. Regulators will be able to contribute to the Government’s overall business impact target, but they will not be required to meet any individual deregulation targets themselves. The responsibility for meeting the business impact target lies with the Government and government departments, not with specific regulators. Instead, it is all about transparency. The proposal will require regulators to report on any additional cost burdens or savings that their actions might impose on business, which they should be aware of in many cases.

I take this opportunity to welcome the regulators’ reporting requirements set out in Clauses 14 and 15. The Regulators’ Code and the growth duty are both positive measures designed to ensure that regulators consider the needs of business when exercising their functions. It is important that government and business are able effectively to appraise these important measures so that the impact they are having and the benefit they bring to business can be properly measured. To enable this to happen, regulators must be transparent about the action they have taken in respect of both measures.

I support Part 3 on the extension of the primary authority scheme. I hope this will not be a contentious part of the Bill. The primary authority scheme has been a huge success. It is highly valued by the business community. It has reduced bureaucracy and significant costs and improved efficiency, so this extension to the scheme is an important step forward in its evolution.

I shall now change course and comment on another key element of the Bill. A number of comments have already been made about the apprenticeship proposals in the Bill. I endorse the comments of the noble Lord, Lord Stoneham, on the disappointing figure for uptake in the north-east of England. The enrolment of apprentices is crucial to the establishment of a skilled workforce and the improvement of our productivity. I and others have a keen interest in the economy of the north-east of England. We need to focus on making sure that uptake increases and that we achieve the current targets within the scheme.

The Minister is aware that I have a serious interest in the agriculture, food and rural sectors. Apprenticeship figures in those sectors are also disappointing. They are crucial to improving our productivity within the agri-food industry. We need a concentrated effort to improve performance and uptake. I work very closely with the land-based colleges and their sector body, Landex. They are concerned about this and are keen to play a key role. I would be interested in briefing the Minister on this issue, if she would find that helpful.

I thank noble Lords for listening. I shall return to the subject of regulation and hope that noble Lords agree that these measures will be better for business

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and for Britain if we are able to introduce the more transparent, accountable and effective regulatory system which is proposed in the Bill.

5.13 pm

Lord Patten (Con): I dislike crumby, financially repressive and socially uncaring capitalism very much indeed—by which I mean the misuse of market mechanisms to meet malign and mindless corporate ends. I much admire the market when it is free and socially responsible, when it becomes a great force for human advance and happiness. Good capitalism is very good indeed, with competitive markets and innovations piled on innovations for the common good.

Crumby capitalism is not the fault of market mechanisms but of the corporations that misuse their power to repress suppliers, work in covert monopolies and delay payments to smaller companies, sometimes bringing them to their knees. I therefore applaud the last coalition Government for making a start on some of the worst excesses of the big supermarkets and others by introducing the Groceries Code Adjudicator Act, which came into force in June 2013 and has powers to ensure that big corporates treat their suppliers lawfully and fairly. I think that the adjudicator has made a good start, but Christine Tacon has a task on her hands even to persuade suppliers to come forward for fears of reprisals by the supermarkets into which they seek to sell. There will be a long march to bring about the vital corporate cultural change which, in the end, is needed so much more than even the best of codes. I entirely applaud what the noble Lord, Lord Curry of Kirkharle, has just said about cultural changes being as important as legislative changes.

The Bill, which I strongly support even though it looks a bit like a big legal pudding made up of all sorts of ingredients hauled off the shelf, contains two themes that I judge seek to carry on the good work in the Groceries Code Adjudicator Act 2013 that I referred to: the measures to introduce a Small Business Commissioner and powers to deal with the late payment of insurance claims. In the case of the first of those two themes, the Small Business Commissioner, with a role in assisting small businesses in disputes with bigger, bad businesses, will be in a position to guide and help those who feel repressed. These practices, as the Minister pointed out in her introductory speech, currently have an annual impact on small businesses of more than £25 billion. However, the commissioner is empowered only to advise and assist, not to become some kind of tsar to go out there with powers to direct and resolve disputes, thus empowering small businesses to resolve their issues.

Promoting fair treatment for all is the theory of the Bill, as politely put, but in coarse reality that is also a matter of the big behaving better to the small. We must not expect too much too soon from this body, which has the power not to provide legal advice but just to exhort. Although exhortation and the use of the bully pulpit can be very important, the body does not have the power to arbitrate; it can only signpost the options for business conflict resolution. It will be a slow process; I come back to that groceries adjudicator,

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slogging on after two years of existence but still having to hold her latest big seminar for suppliers, better to understand the workings of the code, as she did most recently on 29 September—only last month. Many did not come forward for fear of those reprisals.

To make both the groceries adjudicator and the new Small Business Commissioner redundant will be a matter not of a few months or a few years but probably of decades. It will also depend on major cultural changes by malign big corporates. That is my observation based on years of big corporate experience and involvement in the financial world and as a shareholder, all three of which are declared properly in my entry in the register of interests. There are well-documented cases of corporate malfeasance back in the 1970s that took the companies involved 20 or 30 years to lay totally to rest through the introduction of vigorous codes of practice, ethics checking, internal corporate housekeeping and the vital task of never-ending staff education, for just as one lot of staff go through a period of cultural training, another lot are recruited.

Sometimes it takes big-stick legislation to deal with the handful of big corporate repeat offenders. Perhaps the best example of this, and I pay tribute to both sides of the House, is the introduction of our excellent Bribery Act 2010, which has induced enormous corporate change, albeit at the threat of the use of a big stick. I well remember the noble and learned Lord, Lord Woolf, who is not in his place today, saying during the proceedings on the Bill, I think at Second Reading, that he felt that while there was an urgent need for legislative provision, there was an urgent need for corporate cultural change as well to parallel what was being brought forward. I can only say a respectful “Hear, hear” to him.

Secondly, there are the provisions, which I also applaud, to deal with the financially repressive late payment of insurance claims. I think that these will have a much more instantaneous effect through the proposed introduction of a new Section 13A in the Insurance Act 2015 with an obligation to big business, in particular, in the insurance world to pay within a reasonable time all contracts of insurance. The insurance industry does not have to wait for the introduction of the provisions of this Bill; it should start doing it today. It has it in its power to do it today and it knows that these measures are coming. It is bad business for the industry not to start straight away.

It is wrong for some companies in the insurance industry, most of which I greatly admire, to delay payments quite deliberately as a matter of policy, massaging their figures, particularly in the run-up to interim or final results, to make the reported figures look that tiny bit better because they have paid out that tiny bit less—delays that have ruined some tiny businesses. Any such activity can hinder, or at worst torpedo, the efforts of small businesses to get back on their feet after, for example, the catastrophic floods, which the Minister referred to recently, down on the Somerset levels near where we live and have our webbed feet, and in other areas on the River Thames that were hit. However, nothing will work as well as it should do until all big corporates recognise that looking after

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their suppliers or those that they insure is simply good for enterprise, good for business and therefore good business.

So there are three separate hares running: the groceries adjudicator, the Small Business Commissioner and the impact of trying to persuade corporates in the insurance world to pay their claims within a reasonable time. I think that these three are interlinked. We should see how they proceed but I would certainly say to my noble friend the Minister that by 2018—three years hence—we will have a very clear view of whether they are working. We will need a review in 2018 and I look to her to perhaps give a pledge to at least look at the possibility of bringing forward a debate in that year about how these three separate themes are working and, if they are found not to be working, to bring on a latter-day equivalent of the Bribery Act to deal with the continuing problem in these three areas.

5.22 pm

Baroness Warwick of Undercliffe (Lab): My Lords, in recognising the intention of the Bill to promote economic growth, I want to focus on just one part: Clause 18 and apprenticeships. I declare an interest as chair of the National Housing Federation, the body that represents housing associations.

There is a huge need to increase the number of apprenticeships and to ensure that they are of high quality. Looking in particular at the number of young people who are not in education, training or employment, I believe that there is an urgent need to focus on creating opportunities that will get them into employment. Work placements, traineeships and work experience opportunities can help some of the most disadvantaged in our society into a position where they can move into work and, for some, into apprenticeships. That is one of the key reasons why housing associations have become committed to building and developing both employment and skills support and apprenticeship programmes for their tenants and residents.

Many of those who are eligible for social or affordable housing are out of work or in low-skilled, low-paid jobs. The unique and regular contacts that housing associations have with their clients, together with their networks of local connections, provide an opportunity to offer innovative, tailored programmes to help those people into work and so provide the basis for stable tenancies. Both sides benefit, and the country benefits as well, as tenants become productive members of the labour force and no longer need to depend on welfare benefits.

I welcome the Government’s commitment to create 3 million apprenticeships by 2020, although I, too, acknowledge that that is a very challenging target. Housing associations want to play their part in creating those apprenticeships, but I am anxious that the Enterprise Bill will create obstacles and not opportunities for them to do that. Why do I say that? Clause 18 includes measures that would provide a power for the Secretary of State to set targets for public sector bodies in England in relation to the number of apprentices who work for them. They apply to most public sector organisations and require these bodies to have regard to any targets set on them and to report annually on

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progress against meeting those targets. The public bodies within the scope of the Bill will be set out in regulations, and a consultation is planned on exactly which bodies will be required to meet a target.

The Bill’s definition of a public body is:

“(a) a public authority, or

(b) a body or other person that is not a public authority but has functions of a public nature and is funded wholly or partly from public funds”.

It is paragraph (b) that concerns me. It would potentially apply a target to any body in receipt of public funds, which would certainly include housing associations, as well as many charitable bodies and many other recipients of public funding. I am anxious that the implications of this have not been carefully thought through. The consultation will, of course, allow concerns to be raised, but I want to flag this up now with the Minister in the hope of receiving reassurance on the issue.

I am concerned about two things. First, this is a broadly drawn definition of “public body” and could mean that larger housing associations, as well as many third sector and private sector bodies, will be brought into the scope of this legislation. Secondly, there is a risk that innovative approaches to apprenticeships, skills development and wider employment support may be stifled by the need to meet formal targets on apprenticeship numbers.

It is important to stress that housing associations are not public bodies. Housing associations are not-for-profit organisations, generating the majority of their funding from private sources. The ONS currently classifies them as private bodies. The independent status of housing associations underpins their ability to borrow billions on the private market to invest in housebuilding and to support programmes for the communities in which they work. To date, they have raised £76 billion. The ONS is currently conducting a review of the classification of housing associations and considering whether they should be reclassified as public bodies, as we heard only in the last debate. The federation that I chair is keen to avoid the reclassification of associations as public bodies. The accounting rule changes that would flow from a reclassification could carry harmful implications for associations’ ability to borrow and their use of cash flow and surpluses—all of which are important for funding the new supply of houses. There is growing concern in the sector about cumulative legislation and policy interventions that attempt to direct the corporate strategy of associations, because this is the central tenet of the test that the ONS will consider in its classification review. Any proposals that position housing associations as public sector bodies are likely to add to this cumulative risk to the sector’s independence.

My second concern is the stifling of innovation. Social housing tenants experience considerable disadvantages in the labour market and many require additional support to enable them to fulfil their potential. Around one-third of housing associations see supporting their residents into employment, education and training as a key priority. They provide employment support and training and skills development. Alongside all that, they provide many work placements, traineeships and work experience opportunities. In doing this, they are helping to support some of the most disadvantaged

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people in our society so that they are able to move into work and, for some, to undertake an apprenticeship. I would be very concerned if these innovative approaches were stifled because of a focus on in-house apprenticeship numbers. For example, many housing associations use their supply chains to deliver additional apprenticeship opportunities. I would be concerned if targets for in-house apprenticeships reduced capacity to support these externally provided apprenticeships. Many of these are in small and medium-sized enterprises in the construction and maintenance sectors. Increasing the number of skilled operatives in these sectors will be vital if the Government’s housebuilding and wider infrastructure ambitions are to be met.

Housing associations are committed to developing and supporting apprenticeship schemes. Over the last three years, they have directly employed around 12,000 apprenticeship starters. Annually, their contribution accounts for just under 1% of all apprenticeships across England. They are ambitious about helping even more people into work and they are good at doing it. I hope that the Minister can reassure me that the Enterprise Bill will not include housing associations in the definition of “public body” and that it will not jeopardise housing associations’ aim of increasing the number of apprenticeship schemes they can support.

5.30 pm

Lord Cope of Berkeley (Con): My Lords, any Bill called the Enterprise Bill starts with me prejudiced in its favour. I think that everyone who has spoken is in favour of enterprise in principle, but experience also makes one look at the detail. After all, many enterprising business men and women, when asked what the best thing the Government can do for them, say, “Keep out of our way”, and start from that point of view. Every change in legislation or regulations, even if it is in favour of the particular businesses concerned, needs to be looked at by them to see what it says and does.

As many have pointed out, this Bill is full of variety. It has eight quite different parts, not counting the general provisions at the end. I am not sure what dictated the logic of their order, but I notice that, broadly speaking, the odd-numbered parts help SMEs directly while the even-numbered parts are directed primarily at the public sector.

Part 1 sets up the Small Business Commissioner, charged with changing the culture of late payment of debts by large companies. This is a hoary problem, but it is still very much with us despite successive Governments’ efforts over many decades. The noble Baroness, Lady Donaghy, referred in some detail to the problems of the construction industry. If anybody doubts that such problems are serious, they should look at the business section of the Times today, where there is a very long and interesting article explaining exactly what they are.

The title “Small Business Commissioner” sounds wide, but, as has been pointed out, the role is limited. The Bill’s provisions ensure that they concentrate on this one matter of late payment. It will require a very special individual—as has already come out in the debate—to change the culture through the voluntary

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means that are at the disposal of the commissioner. They need, after all, to overcome the forces generated by the relentless pressures of cash flow which lie behind the problem. I think that the concentration of the commissioner on this one issue is right at this time, because it is a very important issue which we have failed to solve, but perhaps in time, if the commissioner succeeds with late payment, the remit might be extended by statute to cover other sources of concern to SMEs—but that is for the future.

However, one limitation on the commissioner’s role concerns me now. Under the Bill, the commissioner cannot deal with problems or complaints against local authorities and other public bodies over late payment. This can be a problem also for SMEs—I had several cases mentioned to me not so long ago. My noble friend Lord Patten referred to the Groceries Code Adjudicator, but I see that that office itself is being criticised for late payment. Whether the criticism is valid I cannot tell, but it is an example of where there seem to be problems.

Clause 3(1), read with the definition in Clause 3(11), limits the commissioner’s advice specifically to problems with larger businesses and excludes problems with public authorities that pay late. This limitation applies also to the complaints procedure. Clause 3(10) includes public authorities in the definition of “supply relationship”, but rules it out again in the next subsection—but that is a matter for Committee. I understand that the reason for excluding public authorities is that it is regarded as creating double jeopardy because of other mediation mechanisms that are available. However, given the limitations on direct action by the commissioner, I would like to see him or her at least able to give general advice and information under Clause 3: for example, about the mediation available in the case of public authorities and its efficacy, just as the commissioner can do in respect of larger companies.