In a previous debate, I also welcomed the addition of the British Council and the BBC World Service to the SDSR. Having lived in the Middle East for some years and worked in the British Council, I have seen its activities and impact at first hand. It is the envy of many and if it did not exist we would have to invent it. I have just received a letter from the Minister and I am fairly sure that the question I am about to put to him had not been checked in that letter. If I repeat a question, then I forgive him—or perhaps he will forgive me.

A noble Lord: Whichever way.

Baroness Jolly: Whichever way. Can he confirm that there will be no cuts to either the British Council or the BBC World Service? How does the extension of deep country expertise dovetail with cuts to the FCO budget?

We have heard some fascinating maiden speeches—four and a half of them. We have heard the challenge from the noble Lord, Lord Hannay, on peacekeepers. I think that was unique. Noble Lords have woven most other points in and out. I welcome the positive tone of the SDSR, the commitment to 2% spend and the annual uplift announced by the Chancellor. As noble Lords have said, more needs to be done. All is not perfect. Our Armed Forces are prepared to put their lives in peril for us. We owe it to them.

5.09 pm

Lord Touhig (Lab): My Lords, in this debate the House is being asked to take note of Britain’s,

“role in supporting international security and stability in the light of the Strategic Defence and Security Review”.

We have heard some first-class maiden speeches from the noble Lords, Lord Arbuthnot, Lord Bruce and Lord Hain, and the noble Viscount, Lord Hailsham. Each has served with considerable distinction in the other place and I have no doubt that they will do the same here, bringing their very considerable experience to our debates and enhancing the standing of your Lordships’ House.

The debate could not have come at a more important time: less than 24 hours ago we began air strikes against ISIL in Syria. The defence of our country and Britain’s international role in fighting probably the most evil of terror groups to inhabit our world is very much on the minds of our fellow countrymen and women. At the outset I pay tribute to the brave men and women of Britain’s Armed Forces who, day in, day out, put their lives on the line to defend our freedom and our way of life. In my eyes and, I am sure, in the eyes of many others, they have no equal. Now that the decision to engage in Syria has been taken, no matter whether we agreed with this action or opposed it, we have to get behind our forces, giving them and their families our full support.

It would be easy to stand at this Dispatch Box and tear into the strategic defence review. It has many shortcomings and we considered some of these in the debate following the Statement on 23 November, and a number of noble Lords have shared their concerns

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today. It would be easy to make party political points and hit out at the Government over the review. However, that is not my aim or intention. Today, of all days, we need to be a united country and a united Parliament.

There are still many unanswered questions about the review. Britain is a maritime trading nation and keeping open the world’s sea lanes for trade and commerce is vital to our economic well-being, yet our Navy is small, stretched and lacks sufficient vessels. There is also concern that we have too few personnel to man our ships. The SDSR told us that Britain will increase the size of its frigate fleet in the long term. Will the Minister say what is meant by “long term”? Is it five years or 10 years? How long is it? If he has answered that in the letter I received 20 minutes ago, I hope he will forgive me for asking the question again. We are told that there will be a new class of lighter, flexible, general-purpose frigate by the 2030s. Can the Minister put some more meat on the bare bone of this plan, or is it another of those “long on promises and short on specifics” that characterise much of the review?

The size of the Royal Air Force is at an all-time low, when monitoring submarine incursions in or near our territorial waters is increasingly important. The SDSR tells us that we will buy Boeing P-8 maritime patrol aircraft to perform the task that was once done by Nimrod. Can the Minister say when Britain will have a fully operational independent capability to do this? I am told that it will be 2020. Is that correct?

In the case of the Army, the SDSR sets out a plan to form two new strike brigades, with 5,000 personnel, capable of rapid deployment. When will that take place? My reading of the review suggests that it will be 10 years before the rapid strike brigades can be deployed. I return to a question that I asked the noble Earl on 23 November, to which, probably because of pressure of time, he did not answer. Is it true that our Special Forces have shrunk by 40% due to restructuring and reduced numbers? The noble Lord, Lord Robathan, said in his speech last night that the pool of talent for the Special Forces has been shrunk by cuts, a point to which he returned today. He said that the Army is half the size it was when he joined 40 years ago, adding that it was difficult, if not impossible, to increase the size of the Special Forces further without dropping standards, and that that would make them no longer special and no longer capable of the task asked of them. That comes from a former soldier and Defence Minister. The noble Earl might care to reply to that when he responds.

If we look at the size of the Army, the review makes it clear that the Government will continue their policy of filling the gap in the number of full-time soldiers by increasing the reserves. The SDSR tells us:

“We will continue to grow our Reserves to 35,000”.

Can the noble Earl tell us when this will be achieved? What of this comment from his noble friend Lord Attlee, speaking in the debate on the reserves in October, who said:

“I still think that the plan for volunteer reserves is deeply flawed—in particular, in trying to suggest that volunteer reservists will be identical to their regular counterparts”.?

He went on:

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“They may be interchangeable and they can certainly be interoperable, but they are never going to be the same. There is simply not enough time for training to get to that level of proficiency”.—[Official Report, 22/10/15; col. GC 59.]

Is the noble Earl, Lord Attlee, wrong when he tells us that the shortfall in regular soldiers is to be filled by less well-trained reservists who will never get to the level of proficiency we demand of our regulars? I am sure the House will be interested in the Minister’s response.

In our debate on the reserves, the Minister recognised the importance of retention. Can he update us today on this matter? Can he tell us the rate of recruitment and retention? In October he said that we had “turned a corner” on this matter about a year ago. How far around the corner are we? Just a handful of the 90 pages in this review mention the Armed Forces at all. There are still many questions but time prevents me asking them.

Finally, I will say something about the SDSR telling us that Britain is,

“the world’s leading soft power”.

The Government have acknowledged the importance of soft power with an £85 million investment in the BBC World Service to support initiatives in Russia, North Korea, the Middle East and Africa—a point that was made by the noble Lord, Lord Chidgey. Although we recognise the BBC to be one of the UK’s significant cultural exports, can the Minister indicate whether the Government have given any consideration to recommendations made by the Select Committee on Soft Power?

Many BRIC and Scandinavian countries shape their foreign policies around explicit soft power goals; for example, China has opened 327 of a projected 1,000 Confucius Institutes, encouraging philosophical understanding of its civilisation; and Finland sends monitors to join the Red Cross in Ukraine, not just for humanitarian aid but specifically to get closer to the people and to understand their wishes and needs. Worryingly, the Select Committee report concluded that Britain is weakening rather than bolstering its soft power institutions. Especially following the events in Syria, it is essential that the Government begin to make soft power central to any foreign and defence policy thinking. I would be grateful for the Minister’s views on this. Perhaps he could tell us a little more about what might be done other than the planned investment in support of the BBC.

I am sure the whole House will agree that it is the first duty of any Government to look to the care and well-being of their citizens, and that must begin with the defence of our nation. So when the Government come to Parliament with a document such as this, setting out their plans for our strategic defence and security, it is only right that it is given the most careful scrutiny. That has been done all around the Chamber today.

5.17 pm

The Minister of State, Ministry of Defence (Earl Howe) (Con): My Lords, we have had a detailed and extremely well-informed debate, benefiting, as ever, from your Lordships’ experience and expertise on

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defence matters. I congratulate my noble friend Lord Attlee on having introduced it so expertly. I congratulate also most warmly the four maiden speakers, each of whom in their own way has shown how maiden speaking should be done. Time has been tight but we have covered a great deal of ground.

I begin by reminding noble Lords of the context in which our discussions have taken place. We are living in dangerous and difficult times. The threats we face are growing in scale, complexity and diversity. In the past year alone we have seen a newly aggressive Russia using proxies to menace the borders of Ukraine. We have seen the Daesh death cult export the horrors it has perpetrated in the Middle East across the globe, from the beaches of Tunisia to the streets of Paris. We have also seen a great migration spilling across Europe’s borders and into the Mediterranean due to the effects of growing instability in the Middle East and Africa.

Such threats do not just pose a danger to us directly but undermine our entire international rules-based system on which our values of tolerance, the rule of law and freedom depend. Yet in the face of these dangers, we will not retreat to our shores. Instead, we will continue protecting our people, projecting our influence and playing a central role in supporting global security and stability.

Our strategic defence and security review, published last week, strengthens our defence in three ways. First, it gives us the means to match our ambition. This Government have prioritised defence and security over many other areas of public spending. We have made a commitment to meet the NATO 2% target. We have put in place £2 billion of the joint security fund, which will see the defence budget rising in real terms by 3.1% in this Parliament. On top of that, we are meeting our UN target by spending 0.7% of gross national income on development. Additionally, we are increasing our investment in our security and intelligence agencies, and in counterterrorism. That money allows us to take the full spectrum of measures needed to tackle the causes and consequences of the threats that we face: tackling the poisonous ideology of Islamist extremism; refocusing our aid budget to support fragile and broken states; and preventing conflict across the world.

However, our SDSR is about hard as well as soft and smart power. There will continue to be times when we need to employ armed force to counter aggression. That is why, in the past year, we have been acting around the world, whether policing Baltic skies to deter Russia’s expansionism or using our Brimstone and Hellfire missiles to degrade Daesh in Iraq. Following yesterday’s vote in Parliament, we will be doing more in Syria. We are determined to stand shoulder to shoulder with our allies and strike at the heart of the terrorist lair.

This brings me to my second point. Our SDSR gives us the might to deliver, at home and overseas. Our Armed Forces are now increasing, not reducing. We have an equipment budget that has risen by £12 billion to £178 billion over 10 years, and we are using it to establish a potent new expeditionary force. It will be able to deploy 50,000 people, rather than the 30,000 we previously planned. It will give us two new strike brigades and be equipped with: more F35s, and earlier;

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more Typhoon squadrons; nine new maritime patrol aircraft; new frigates and the two fully-crewed aircraft carriers; and more ISTAR and more cyber, along with £2 billion more on special forces. At the same time, we are guaranteeing our continuous at-sea nuclear deterrent by replacing our four nuclear submarines. Lastly, we will be keeping our capability on the cutting edge by launching a new defence innovation initiative next year.

Thirdly, our SDSR recognises that we must work with allies and partners to deliver our national security goals and tackle global threats. Of course, we have always worked with partners but, in the past, this happened far more by instinct; tomorrow, it will happen by design. At the heart of this new approach is our commitment to NATO, the cornerstone of our defence. As well as meeting our 2% commitment, we will be leading NATO’s new high-readiness Spearhead force in 2017 and at next year’s Warsaw summit, we will be pushing to ensure that the alliance delivers the military capability and investment agreed in Wales.

Besides NATO, the UK will be leading the joint expeditionary force of seven like-minded nations. On Monday, we signed a memorandum of understanding giving our forces the green light to train and operate together. We are also strengthening the institutions on which our rules-based international order depend, notably by doubling our peacekeeping contribution to the United Nations. But bilateral relationships are as significant as multilateral ones so we will be enhancing our special relationship with the United States; working with France as part of the combined joint expeditionary force, which stands up next year; and expanding our DA network, forging new friendships while bolstering our alliances around the world.

My noble friend Lord Attlee asked me a number of questions. First, he asked where we are with eLoran, an issue also raised by the noble and gallant Lord, Lord Boyce. As part of our work to improve the resilience of our precision navigation and timing systems, we are studying a variety of technologies. However, the need for a readily available and highly precise system with worldwide coverage is likely to mean that our requirement for resilient global navigation satellite systems will endure. I will write to my noble friend and the noble and gallant Lord if I can provide further information on that issue.

My noble friend Lord Attlee also asked me about the Vanguard class of SSBN and whether the intention was to run that on longer than originally intended. As set out in the 2010 SDSR, we have assessed that we can safely manage and maintain the Vanguard boats until successor submarines are introduced into service in the early 2030s. He asked me about extending the role of the Type 45 to include ballistic missile defence. As the White Paper sets out, there will be a programme of exploratory work around the BMD role for the Type 45, but it is too soon to speculate any further at this stage. My noble friend also asked about the new general-purpose frigates. As set out in the White Paper, the exact requirements for any general-purpose frigate will reflect other decisions taken as part of the national shipbuilding strategy to be announced next year.

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My noble friend also asked about the two armoured infantry brigades and whether that means we will be down to two armoured regiments. The design of the armoured infantry brigades, so that they meet the Army’s revised structure as announced in the SDSR, is being considered as part of new work being undertaken by Army HQ, so is work in progress. He questioned whether the two infantry battalions which are to be reconfigured for defence engagement would have sufficient capability—I think he said they would not have the capability of even a light-role battalion. That is not correct. As current world events demonstrate, the ability to build the CT capacity and fighting power of regional partners will be a vital aspect of the UK’s future national security. The exact size and shape of these battalions will become clear as the concept develops, but these are exactly the kind of stimulating, challenging and relevant roles required to retain our most skilled and ambitious soldiers. As regards the 10,000 military personnel available to assist the civil authorities, my noble friend was correct in in saying that this would be via well-established procedures for providing military assistance to civil authorities, with the military working in support of the police.

My noble friend Lord Fairfax, who I am delighted to see back on our Benches, made several very well-put points. I can tell him that the UK will lead a very high readiness joint task force from next year. The planning assumptions in the SDSR increased our ambition for the Army, and our plan is to deploy a war-fighting division as required. There is a strong emphasis in the document, as he will have observed, on innovation, and a substantial innovation initiative will be announced in the coming weeks.

If my noble friend Lord Lyell will forgive me, I will write to him about how the force of 50,000 will be made up, but it is important to emphasise that the Army is able to deploy a division now with sufficient notice, which could consist of an armoured infantry brigade, 3 Commando Brigade and 16 Air Assault Brigade, as well as forces from other nations. Joint Force 2025 is about improving capabilities to enable us to deploy a division from a wider range of Army formations more quickly.

I can tell the noble Lord, Lord Bilimoria, that there are no plans to reduce the numbers of Gurkhas in the British Army. The noble Lord, Lord Hannay, asked me about the provision of UN peacekeepers. The number of service personnel serving at present as UN peacekeepers is 291, of whom 276 are currently in Cyprus. Up to 370 additional personnel could be assigned to peacekeeping duties in South Sudan and Somalia, but I will write to him on the question of the baseline. However, as for equipment, I hope it will be a reassurance when I say that any UK forces deployed on UN duties will be trained and equipped, as normal, to the extremely high standards that we have always had in this country. The noble Earl, Lord Stair, questioned whether the figure of 82,000 includes the reserves. No, it does not. The reserves will be on top of the 82,000, with a total of 35,000. Manning levels have been increased—not by a great deal, but the corner has been turned.

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A number of noble Lords devoted their remarks to matters relating to soft power. I will not elaborate hugely on what the SDSR contains on that subject, although I am the first to acknowledge the integral importance of UK development assistance to long-term security and prosperity. Our commitment to spend 50% of overseas aid on the states most important to national security will undoubtedly focus on south Asia, the Middle East and Africa.

The noble Lord, Lord Touhig, asked me about Special Forces numbers. It has been the practice of successive Governments not to comment on the size of the Special Forces, but I re-emphasise to the noble Lord that we are investing £2 billion in new equipment for Special Forces, which I hope will be an encouraging sign of the emphasis that we place on the role that they play for this country.

The noble Lord, Lord Chidgey, asked me about access to the World Service FM broadcasts. If I may, I will write to him on that topic, as I will to the noble Baroness, Lady Jolly, on both the World Service and the British Council.

The noble Baroness, Lady Smith, focused her remarks on morale and whether the Armed Forces are now large enough to cope with the tasks that are required of them. I simply say that, by deliberately planning for the Armed Forces to do more and improving their productivity, which is undoubtedly what we are doing, we will better reflect the current demands on the force, and we will configure better to meet the demands of multiple, smaller and more geographically dispersed operations. We have also built in the agility to reconfigure the force to respond to a higher priority challenge, should it arise. However, we are the first to recognise the risk of overstretch and of damage to morale, so her points were very well made and are well taken.

The noble Lord, Lord West, spoke about the 2% figure for NATO. The 1.7% figure that he cited is an external estimate of the defence spend for 2020-21, not now. I would say that comparing defence spending now with 2010 is not appropriate, because before 2014 we spent considerable amounts on operations such as that in Afghanistan. We now spend less, but with no impact on our capability.

The noble Lord, Lord Anderson, asked about funding for the military involvement in the Ebola outbreak in Sierra Leone. The net additional cost of Operation Gritrock in Sierra Leone was in fact met by DfID.

The noble and gallant Lord, Lord Boyce, perhaps understandably, spoke, as he sometimes does, about the size of the Royal Navy fleet. We will indeed maintain a destroyer and frigate fleet of at least 19 ships. We will look to increase that number by the 2030s. The fleet will be supported by a very capable and renewed tanker fleet, and a fleet of up to six patrol vessels will support our destroyers and frigates in delivering routine tasks and enhancing our contribution to maritime security and fisheries protection. Altogether, this means that not only will our fleet grow for the first time since World War II, but its high-end technological capabilities will allow it to provide a better contribution and to retain a first-class Navy up to 2040 and beyond.

The noble Lord, Lord Touhig, asked about the flexible general purpose class of frigate, which I mentioned earlier. Our plan to commence in 2016 a concept

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phase assessment for an additional light frigate, which may result in a different type of frigate that satisfies the requirements of the Royal Navy, will proceed shortly. We believe that if the design and concept is worked through, it will be attractive to the export market. A combination of the modern Type 45 and the new anti-submarine warfare variant, the Type 26, should be sufficient in the mean time to provide protection to the deterrent and maritime task group. It is envisaged that the general purpose frigate will be able to conduct a wide range of other maritime security-related roles around the world, and thus take some pressure off our high-end warships.

The noble Lord, Lord West, asked about HMS “Ocean” and bemoaned the fact that it is going to be decommissioned in 2018. This is not in fact a bringing forward of the decommissioning date; it will continue in service as planned well into this Parliament, but, as part of the SDSR process, the decision was taken not to extend the 20-year lifespan that she originally had. We need, indeed, her personnel to man the new carriers.

My noble friend Lord James spoke powerfully about the need for a capability for home defence. I can tell him that that is foremost in our thoughts; my right honourable friend the Prime Minister recently announced that up to 10,000 trained Armed Forces personnel would be available to assist in any major incident within the UK. The SDSR also includes our work to provide closer military border force co-operation and better maritime surveillance. It is important to understand in this context that we have a cross-government approach to meeting our maritime surveillance task; the Royal Navy and UK Border Force provide different capabilities, which are suitable in different situations.

The right reverend Prelate the Bishop of Portsmouth focused some of his remarks on the plan to reduce the civilian workforce. It is too soon to say how those will play out. Further efficiencies will need to be found beyond our existing change programmes; we will undertake a series of studies that will identify opportunities for more innovative and flexible ways in which to work, including through better technology and moving work to different locations. The reduction in MoD civil servants will include many personnel in change programmes that are already under way, including the final draw down of British forces in Germany.

I will, of course, write on those issues that I have not had time to cover—

Lord Howell of Guildford: The report has a great deal to say about the Commonwealth network from both a trade and a security point of view. My noble friend has not mentioned that, and it may be difficult to do so now in the last few seconds. Will he ensure that when we debate the Commonwealth on 17 December he, or a fellow Minister, will be properly and well briefed in that aspect, because it is central to the future of this country?

Earl Howe: I share my noble friend’s emphasis on the importance of the Commonwealth. I shall ensure that his words are registered in the right quarters as regards our debate on 17 December.

Our message here is clear—the danger may be increasing but so, too, is our determination to counter the threats that we face. Our SDSR ensures that we

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have the means and might to match our ambition; it guarantees that, whatever challenges lie ahead, the UK will remain at the forefront of international efforts to preserve our security and stability for many years to come.

5.37 pm

Earl Attlee: My Lords, I am grateful to all noble Lords who have contributed to this debate, especially the Minister for answering it. I agreed with almost all noble Lords, although I think that some of them need to research the existence of the Fleet Air Arm. I remembered during the debate that I had forgotten to raise one particularly obvious point but, fortunately, no other noble Lords raised it, so I can keep it for another event. In the mean time, I beg to move.

Motion agreed.

Overseas Territories Joint Ministerial Council


5.38 pm

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, with the leave of the House, I shall repeat a Statement made in another place earlier today by my honourable friend James Duddridge, Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:

“I thank the honourable Member for Foyle, Mark Durkan, for his Urgent Question, which gives me an opportunity to talk about the excellent work of the Overseas Territories Joint Ministerial Council. The meeting formally concluded late last night, but in reality it will carry on today with a number of bilateral meetings across Whitehall, including with me.

The Joint Ministerial Council is the highest political forum established under the 2012 overseas territories White Paper. It brings together Ministers, elected leaders and representatives from the overseas territories for the purpose of providing leadership and shared vision across the territories.

At this year’s meeting, we discussed a large range of subjects, including child safeguarding, economic development, financial services transparency, climate change, sustainable energy, education and skills and the challenges of providing healthcare in small jurisdictions. We also discussed sports participation by the overseas territories, pension arrangements with the Department for Work and Pensions, governance and security. We had a very full communiqué, establishing how we would work together over the coming year. It has been very successful and I look forward to further meetings later today, following up on some of the commitments made last night”.

5.40 pm

Lord Collins of Highbury (Lab): My Lords, the latest issue of Private Eye reported that, in the tax year 2013-14, there were 11,000 property purchases in the UK using tax-haven companies. Confirming that

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this issue was discussed, the Minister said that we need to open up beneficial ownership so that criminal assets can be seized before they are moved out of the reach and jurisdiction of the UK Government. This morning, the Minister spoke only of an agreement to create central registries, and did not mention the words in the final communiqué about “similarly effective systems”. Has there been agreement from all overseas territories with financial centres to create central registries, or have some agreed only to “similarly effective systems”? If so, which ones?

Baroness Anelay of St Johns: My Lords, this is clearly a work in progress, and progress has been made. I have seen the flow chart showing where red and orange have gone to green, and progress has been achieved. The noble Lord asked about similarly effective systems. It may be that in some of the jurisdictions a centrally-held register is not seen as the best way forward. However, we have made clear that, in working in partnership with the overseas territories, it is important to have good governance and transparency. As my honourable friend said this morning, the discussions that have taken place over the past two days have been set out in the communiqué, and all the territories with financial services sectors agreed to hold beneficial-ownership information in their respective jurisdictions via central registers or similarly effective systems. We then said that we would give the highest priority to discussing how to take that forward, and I hope that we will then be in a better position to give the exact details that the noble Lord requests.

Lord Wallace of Saltaire (LD): My Lords, a number of houses in Windsor, Maidenhead, Kensington and Chelsea and various other safe Conservative seats in or around London are empty, either permanently or for much of the year. I have heard the Conservative Benches talking about this scandal, so this is a matter of great interest to the Conservative Party as well as to others. We were told after the G8 summit that the Prime Minister intended to establish publicly accessible central registers for beneficial ownership of companies in overseas territories and elsewhere. We appear not yet to have achieved central registers, nor even that our law enforcement and security agencies will have access to such central registers. How slowly does the Minister expect further progress to be made, and when can we at least ensure that the security services and police will have access to central registers in what are British sovereign territories?

Baroness Anelay of St Johns: My Lords, progress is being made on gaining access for the National Crime Agency to information that is held. It is important that we continue to do that work in co-operation with the overseas territories. We have been making progress, and I shall give some examples, which may help the noble Lord, Lord Collins, as well. Gibraltar will implement a central registry of company beneficial ownership in line with the EU fourth money laundering directive. Bermuda already has a central register. The British Virgin Islands have agreed to bring all beneficial ownership onshore, and the Cayman Islands are introducing a centralised platform. Montserrat will implement a central register with the information publicly available—though,

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I recognise, on the payment of a fee. Fruitful discussions have taken place on developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purpose of law enforcement, in which, whatever our party or none, we all have an interest.

Lord Naseby (Con): My Lords, in asking this question, I declare an interest as a member of my family works in the Cayman Islands. Is my noble friend aware of how welcome paragraphs 9, 12 and 16 are? Paragraph 12 states:

“It is not appropriate to refer to British Territories as ‘tax havens’”.

Furthermore, will she confirm in relation to paragraph 16 that “beneficial ownership information” is only,

“for the purpose of law enforcement”,

and nothing else?

Baroness Anelay of St Johns: My Lords, my noble friend is right to refer to the fact that the overseas territories involved in discussions about beneficial ownership are international financial centres, which is an appropriate way to describe them. My noble friend is right to point out that paragraph 16 refers to,

“technical dialogue between the Overseas Territories and UK law enforcement authorities on further developing a timely, safe and secure information exchange process to increase our collective effectiveness for the purposes of law enforcement”.

Lord Hannay of Chiswick (CB): My Lords, will the Minister confirm that I was right in noting that in the long list of subjects that was covered by the council in its discussions in the past few days, there was no reference to the possible effect on the overseas territories of a vote to leave the European Union, which would presumably have extremely important implications for them as far as aid, trade and the movement of people are concerned? Will she say whether this matter was discussed and whether the Government are helping the overseas territories to understand what the implications would be? Will she say whether the Government of Gibraltar really appreciate and understand that if this country were to vote to leave, Gibraltar will leave too, however it votes, and that its border with Spain will become an external border of the European Union, not an internal border?

Baroness Anelay of St Johns: My Lords, I assure the noble Lord, Lord Hannay, as I have done during the passage through this House of the European Union Referendum Bill, that we take responsibility for advising Gibraltar of the impact of its membership of the EU—through the fact that we are a member—and of its rights and responsibilities and the consequences that flow from them. I have also made it clear that we work in partnership with Gibraltar and that Gibraltar will be taking its own decisions about how to implement the European Union Referendum Bill. I am sure we will be further able to discuss with Gibraltar the broader issues about trade and the other matters to which the noble Lord referred.

With regard to the impact on other overseas territories, the noble Lord makes a very interesting point, and I shall certainty take it back.

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Lord West of Spithead (Lab): My Lords, our nation, with the overseas territories, controls the largest area of ocean and EEZs of any nation in the world. Has there been any discussion about the protection of those huge areas and the development of their economic potential for the countries themselves and our nation?

Baroness Anelay of St Johns: I am very glad that the noble Lord raises this point, particularly as COP 21 is under way at the moment. He is right that the overseas territories include some of the most remote and biologically interesting places on earth, and contain more than 90% of our biodiversity. I assure him that that is why these matters were under discussion and why the UK Government made a commitment to protect these unique and diverse areas from being damaged. We have made that clear in the past, and we aim to designate the largest contiguous no-take MPA in the world around Pitcairn in 2016. We are working with the Ascension Island Government to protect 50% of their waters from fishing activities, and we are also working with South Georgia, the South Sandwich Islands, the British Antarctic Territory and the British Indian Ocean Territory. This is a vital matter for those overseas territories.

Baroness Northover (LD): My Lords, following on from my noble friend’s question, can I probe a little further? The Minister mentioned one or two overseas territories which were publishing registers, but could she say whether all overseas territories are participating in the central registers, and what is the timetable for doing this? Obviously the next stage is to make sure that these are public.

Baroness Anelay of St Johns: My Lords, discussions are ongoing about whether those registers will be public. Of course, some overseas territories feel that that is not appropriate to them. These discussions are continuing, but we have made great progress. We do not put a deadline on this, because the overseas territories have their own elected Governments; therefore we work in partnership with them. We do not dictate to them but work with them.

Baroness Hooper (Con): My Lords, in the past, representatives of the overseas territories have accompanied Ministers in their attendance at international meetings and conferences; I know that from my own experience, particularly in the Department for Education. However, it has been pointed out to me that at the recent and current meetings in Paris on climate change, no representation from the overseas territories was invited by the Government. Given what the Minister has said in reply to the previous question and that the overseas territories are likely to be greatly affected by climate change, is that not a mistake, and what is the Government’s policy on this for the future?

Baroness Anelay of St Johns: My Lords, our policy has been very firmly to engage the interests of the overseas territories in our discussions on climate change. I can say that with some confidence simply because it is one of my ministerial duties at the Foreign Office to be in charge of our participation in the COP 21 process. Therefore I have been involved in the soft

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diplomacy, which has involved my working with the small island developing states, not only in this country but when I have visited New York and attended ministerial week there. My noble friend is right to say that the overseas territories do not as of right have the opportunity to attend a vast range of international meetings because they are not sovereign nations, but they are able to attend the summit occasions by invitation. On this occasion I assure her that they have been fully involved in discussions beforehand, and I believe—although I do not have a record of this—that they submitted their views to the association of small island developing states when they came to their conclusions.

Welfare Reform (Northern Ireland) Order 2015

Motion to Approve

5.52 pm

Moved by Lord Freud

That the draft Order laid before the House on 26 November be approved.

Relevant documents: 16th Report from the Secondary Legislation Scrutiny Committee, 11th Report from the Joint Committee on Statutory Instruments

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, the order will ensure that the people of Northern Ireland, at the request of their Executive, can benefit from the welfare reforms enabled by the Welfare Reform Act 2012 in Great Britain.

The UK Government have no intention or desire to legislate on an ongoing basis for welfare in Northern Ireland. Welfare is devolved to Northern Ireland and will remain so. The enabling Act time-limits the Government’s power to legislate so that an order cannot be made after 31 December 2016.

The legislative approach we are taking has arisen at the request of the Northern Ireland Executive and the Assembly has granted its consent. The content of the Order in Council broadly corresponds to the 2012 Welfare Reform Act, which was debated at length and in great detail in this House. It introduced a number of changes to ensure that work pays, that the most vulnerable in society continue to receive the support they need, and that taxpayers’ hard-earned money is spent responsibly. These principles underpin the Welfare Reform Act 2012 and are the same principles that underpin the Order in Council before the House today.

The Order in Council is based largely on the Assembly’s Welfare Reform Bill that fell at its final stage in May of this year. It includes the reforms made in Great Britain by the Welfare Reform Act 2012; the various flexibilities agreed between the Northern Ireland Department for Social Development and the Department for Work and Pensions; the amendments agreed during the passage of the Assembly Welfare Reform Bill; and provisions that allow for Northern Ireland Executive-funded top-ups.

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This order is a fundamental part of the agreement reached last month. As part of that agreement, the Government are committed to delivering welfare reform in Northern Ireland. We would, of course, have preferred not to take this approach. I assure noble Lords that the Government are taking only the action necessary to ensure that welfare reform is no longer an issue undermining the political process in Northern Ireland. We believe that this is the only way to resolve the welfare reform impasse in Northern Ireland.

As I have said, welfare is a devolved matter in Northern Ireland. However, it has in principle maintained parity with Great Britain, meaning that benefit claimants have been able to avail themselves of the same rates of benefit as those in the rest of the United Kingdom. However, as a result of the failure to implement welfare reform, the system in Northern Ireland is becoming increasingly different from that operating in the rest of the United Kingdom. This difference is not sustainable and will cause particular problems in the delivery of people’s benefits. Once Great Britain moves entirely to the new system based around universal credit, Northern Ireland will need to create and maintain its own, separate system and meet the significant costs of the IT needed to support it.

The order means that Northern Ireland’s welfare system will be placed back on track. A legacy welfare system that makes people dependent on benefits is no more sustainable in Northern Ireland than it was in Great Britain. The order will provide real benefits to people in Northern Ireland by helping to tackle worklessness and delivering real economic benefits.

The order provides the legislative framework to implement these reforms in Northern Ireland, including: replacing DLA with the PIP, which helps towards additional living costs caused by a long-term health condition or disability and is based on how a person’s condition affects them, not on the condition they have; reforming contributory benefits so that they align with universal credit conditionality, including introducing a claimant commitment as a condition of entitlement; time-limiting ESA to underline the principle that, with the right support, claimants are expected to return to work; introducing tougher penalties for benefit fraud; and bringing in a benefit cap to ensure that those on benefits face the same choices as people in work. It reflects the agreements with the Northern Ireland Executive to make provision for agreed Northern Ireland-specific welfare-related administrative flexibilities and top-ups.

It is important to remember why the order is necessary. It is not intended to diminish Northern Ireland’s devolution settlement. The legislative approach that we are taking has arisen at the request of the Northern Ireland parties, and the Assembly has given its consent. The order reflects the draft Northern Ireland (Welfare Reform) Bill, which has been debated at great length in the Assembly over the past three years. Accordingly, the order includes a number of amendments that reflect the will of the Assembly, including an 18-month limit for higher-level sanctions and discretionary payments.

The order is about delivering the fresh start agreement. It is about supporting hard work and aspiration, and creating the right incentives for people to fulfil their

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potential and create a safe, secure and self-sufficient life, supported by, but independent from, the state. It is about making sure that spending on welfare is sustainable and fair to the taxpayer, while at the same time protecting the most vulnerable. Building an economy based on higher pay, lower taxes and lower welfare is right for the UK and right for Northern Ireland. I commend the order to the House.

Lord McAvoy (Lab): My Lords, I am grateful to the Minister for outlining the order to the House and for his brevity. Before we get to the order, it is important to be mindful of the events that have led up to this point and the context of this debate.

It is now almost a year since the Stormont House agreement was finalised. Those negotiations made substantial progress on some of the most contentious issues, including flags and parades, while also seeking a way forward on matters such as welfare reform and the devolution of corporation tax. The agreement marked a turning point but, as your Lordships will be all too aware, during the last year, particularly in the past 12 weeks, it appeared that there was a genuine risk not just that the devolution settlement might collapse but that we might see a return to direct rule for the first time in almost a decade. It is to the Government’s credit that they have worked hard to come up with this agreement and, in doing so, they have our full support in bringing it forward.

6 pm

The Northern Ireland (Welfare Reform) Act 2015, which received Royal Assent this week, together with this order which the Act enabled, takes an important step towards bringing the events of the last 12 months to a close. I am sure no one will see this order as a perfect solution, but most will nevertheless regard it as necessary, as it paves the way for an end to financial penalties and a return to stable government.

The House knows that we disagree with much of the Conservative Government’s welfare reform programme, and we have not held back from expressing that. However, we have also been consistent in our view that these debates are not the right forum for rehearsing the arguments we have made, and will continue to make, elsewhere. The Opposition will not, therefore, oppose the order today, just as we did not vote against the enabling Bill, which became law last week.

We hope that, in bringing recent disagreements over welfare reform in Northern Ireland to a close, this legislation will mark the beginning of a new chapter in its history and lay the foundations for progress on long-stalled issues. We particularly welcome the provisions made for transitional protections to help mitigate the impact of the changes. These include important protections for existing claimants affected by the bedroom tax and the transition from disability living allowance to the personal independence payment. There has also been an agreement on the way that universal credit will be implemented in Northern Ireland, which includes exemptions from the requirement for single household payments, provisions to allow the housing costs element to be paid directly to landlords and protections in the sanctions regime for lone parents seeking work. These are all welcome compromises on

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the part of the Department for Work and Pensions. Although they may not address all the concerns that have been raised about welfare reform in Northern Ireland, they will go some way towards mitigating the impact on some of the most vulnerable among those affected.

Importantly, this agreement will also make available additional funding for the Police Service of Northern Ireland to step up its efforts to fight terrorism, and new funding for community initiatives, among them efforts to bring down the peace walls that have historically divided Northern Ireland’s communities.

The compromises reached by all those involved helped to get the exceptional circumstances of Northern Ireland recognised, and the settlement agreed between Stormont and Westminster presents an opportunity not only to draw a line under the difficult events of recent months but to look to the future as we continue to support the building of a peaceful, as well as prosperous and fair, Northern Ireland. We welcome the order.

Lord Newby (LD): My Lords, I briefly echo the comments of the noble Lord, Lord McAvoy. In some respects, of course, this is an imperfect way of dealing with these very important changes. But the key point is that it is a way of dealing with them. They will now be able to be implemented in a way that is impossible to see via any other route. They do, as the noble Lord, Lord McAvoy, said, unlock other important developments in Northern Ireland. Therefore, we on these Benches welcome the order.

Lord Freud: I thank both noble Lords for the way they have approached this as something that we need to do to help the process in Northern Ireland and allow that country to function.

It is worth picking up just a handful of points before I close. The noble Lord, Lord McAvoy, indicated, I think, that he did not necessarily approve of some of the Government’s welfare measures. However, let me explain how the current Welfare Reform and Work Bill will work in the Northern Ireland context. As part of the fresh start agreement, the Northern Ireland Executive recognised the importance of addressing welfare reform more broadly and not just the 2012 measures. The legislative consent Motion passed by the Assembly made this clear. So if required, we will introduce a further order to implement the relevant provisions of the Welfare Reform and Work Bill for the same reasons that we are introducing the order currently before the House: to provide Northern Ireland with a fit-for-purpose welfare system that takes parity as its starting point.

The noble Lord, Lord McAvoy, mentioned the transitional provisions of the order, which allow the Secretary of State to exercise the vast majority of regulation-making powers in the first instance. In effect, this means that the Secretary of State has the power to introduce regulations until that power is handed back to Northern Ireland.

On the noble Lord’s point about some of the changes, the Northern Ireland Bill included a number of specific amendments which were agreed to help ensure that the reforms could be implemented. The Government remain

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convinced that the proposals introduced in Great Britain remain right for Great Britain. In Northern Ireland, we have agreed administrative flexibilities to allow payments to be made more frequently and for the rent element to be paid directly to landlords. This recognises the devolved nature of welfare and the ability for there to be different administrative arrangements in Northern Ireland. It will be up to the Northern Ireland Executive to work out their exact administrative procedures. The universal credit system in Great Britain also allows for us to make these alternative payment arrangements, which will be used where appropriate.

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I emphasise again that this order fulfils a vital commitment made as part of the fresh start agreement and it has the support of the Northern Ireland Assembly. It does not diminish the devolution settlement but supports the future of devolution in Northern Ireland and paves the way for the introduction there of a modern, reformed welfare system. I commend the order to the House.

Motion agreed.

House adjourned at 6.07 pm.