7 Dec 2015 : Column 1353

I welcome the statement from the Minister that the Bellwin scheme will be applied to give local authorities some helpful financial relief, but can the noble Lord clarify what additional financial help will be given to other essential services such as transport and health to make up the shortfall caused by these events?

There is also a personal crisis being experienced by thousands of householders and businesses. Many of these individuals have only just put their lives back together after the previous floods. There have been countless stories about individuals waiting years to receive the insurance money that they needed to rebuild their lives. I know that the noble Lord promised to look into this issue when it was raised last week by my noble friend Lady Symons, but, given the events of recent days which have underlined the urgency of this issue, I hope that the noble Lord will commit to a summit of the insurance companies to see what can be done to speed up the process of reimbursement.

Sadly, we also know that the new government-sponsored insurance scheme, Flood Re, will not come into effect until next year, so can the noble Lord say what if anything can be done to prevent the insurance premiums for properties in the affected areas rocketing in the mean time? As we know, the Flood Re scheme applies only to domestic households, but the flooding of town centres has brought its own heartbreak to local businesses. Many of them have spent years building up their businesses, so it is a matter of compensation not just for lost stock but for all of those customer relations which have made their businesses a success.

If we are not careful, these businesses will simply pack up, and, in doing so, they will rip the heart out of those communities. Can the noble Lord give some hope to those businesses that they will receive all the necessary support to help them stay and rebuild? In particular, can he update the House on the expenditure from the repair and renew grant which was meant to provide grants for flooded homeowners and businesses after the previous events of the past few years? Figures published earlier this year show that only 1,680 claims were met, despite the fact that more than 11,000 properties were flooded during the winter of 2013-14. Of those, the average payment was £1,666, which is much lower than the £5,000 maximum.

Meanwhile, the Government’s Farming Recovery Fund, which promised £10 million to help flooded farmers restore their land, has paid out only £2.8 million, with another £2.3 million in the pipeline. Is the Minister content with the limited scale of these payments—and, if not, what else is he doing to make sure that the money is put to the use for which it was originally intended?

Obviously we need to take all necessary steps to make amends for this disastrous event, but ultimately that is not the point. What everyone caught up in this crisis really wants to know is why it happened and what is being done to make sure that it does not happen again. The Prime Minister has again pledged support and financial aid for those affected by the floods, but the track record of this Government tells a different story. We are dealing with the aftermath of a disastrous decision by the incoming coalition Government

7 Dec 2015 : Column 1354

in 2010 to downgrade flood defences as a priority. In one year alone, the coalition slashed flood spending by more than £100 million. So, despite the money now being pledged for capital expenditure on flood defences, we are spending less than we were in 2009-10. In addition, the Government are preventing the Environment Agency from carrying out long-term planning on flood maintenance by restricting its budget to year-on-year announcements. Will the Minister agree to revisit the allocation policy and give the Environment Agency some longer-term certainty about future expenditure?

The mistake we have been making so far is to concentrate on flood defences rather than on the wholesale countryside management that contributes to these problems. In particular, we should be paying greater heed to upstream river management. We know, for example, that trees absorb water much faster than grass, so it should be a priority to reforest upland areas. Equally, we need to ensure that rivers are encouraged to flow and meander more slowly, if necessary flooding adjacent farmland. We need to address the impact of the CAP and the single farm payment to ensure that they are not offering perverse incentives to clear land that would otherwise trap water and prevent flooding. Moreover, we need to intervene to prevent farming practices such as overploughing, which cause rapid water drain-off. I would be grateful if the noble Lord could confirm that these policies are being co-ordinated to ensure that we make the best use of scientific evidence on these issues in the future.

Finally, we will not have a serious strategy at the heart of government until the Government fully embrace the fact that extreme weather events are the result of climate change. The Government have been repeatedly warned by the Committee on Climate Change that these catastrophic events will become more and more common, and that they require a whole-government response. The fact that the Paris talks are taking place is an opportunity for our Government to show real leadership by committing to a low-carbon economy and investing in low-carbon technology. Perhaps the noble Lord could take this opportunity to update us on the Government’s proposed offer to the Paris talks. Ultimately, we are not going to overcome the impact of extreme weather simply by building higher defences. We need to address the fundamental causes, and I look forward to the noble Lord’s response.

The Lord Bishop of Portsmouth: My Lords, I add my—

Lord Gardiner of Kimble: My Lords, I hope that the right reverend Prelate will forgive me, but it is traditional that the Front Benches of the two parties have the first 20 minutes.

Baroness Parminter (LD): My Lords, I add from these Benches that our thoughts and prayers are with those who are affected at this very difficult time, and we offer our thanks to those who are helping them. After the severe flooding in Cumbria six years ago, some £134 million was made available to the UK by the European Union fund for major natural disasters. It is very welcome news that the Bellwin scheme is going to be opened imminently, but, given the scale of the clean-up, the need for temporary accommodation

7 Dec 2015 : Column 1355

and the need to rebuild vital infrastructure after the record-breaking floods in the north of England, can the Minister say on this occasion whether the Government will be applying to the European Union Solidarity Fund in order to help these devastated communities?

Perhaps I may add from these Benches that I welcome what the noble Baroness said about an update on the climate change negotiations in Paris. It is important that we do not forget at this time of personal tragedy the wider implications of these events, which are occurring far too often.

5.58 pm

Lord Gardiner of Kimble: My Lords, I thank both noble Baronesses for their comments on what is overwhelmingly a personal tragedy for many families, and obviously the fatalities are a great upset to so many people and communities. One thing that has come across strongly is the way in which communities have come together, as noble Lords would expect, to help each other. The other point raised by both noble Baronesses is the extraordinary and exceptional way in which the emergency services from across the country have come together to help. I acknowledge their comments in this regard, and it is something that we should all acknowledge.

The noble Baroness, Lady Jones of Whitchurch, raised a number of points, and if there are matters of detail that I do not cover, I will be in touch with her. Looking at the investment both in capital and maintenance, it is interesting to note that from 2005 to 2010, there was an investment of £2.7 billion in flood defences. In the last Parliament, it was £3.2 billion. We now have a six-year programme involving a £2.3 billion investment in 1,500 schemes. The maintenance budget has also been protected and that is very important. We obviously have lessons to learn from what happened in Cumbria and other parts of the country.

However, there were a number of key points to which I must respond. A major one was insurance, because, clearly, this is going to be a matter of considerable concern to householders and businesses. The noble Baroness, Lady Jones of Whitchurch, is absolutely right that this came up in exchanges with the noble Baroness, Lady Symons. I understand that my right honourable friend the Secretary of State at Defra met the Association of British Insurers recently and, because the Communities Secretary will deal with the recovery element of this, there will be a meeting of the insurers imminently. However, the department is in regular touch with the Association of British Insurers to discuss not only the situation in Cumbria but beyond, and the industry’s responses.

We are assured that the action taken by insurers—we will work closely with them and make sure that this is the case—includes arranging and paying for temporary alternative accommodation or, for businesses, temporary trading premises; drafting in additional claims staff; prioritising elderly and vulnerable customers; doing all they can to ensure repairers are available to start repairs as soon as it is safe to do so; and making interim emergency payments to support flooded customers. Insurers are aware of the need for prompt payment but the need clearly is for the waters to recede

7 Dec 2015 : Column 1356

before damage can be assessed. Therefore, I assure the noble Baroness and your Lordships that both the Secretary of State at Defra has already had discussions with the ABI, and that the Communities Secretary will take this forward as we ensure we get into a proper recovery situation.

On repair and renew, I think the noble Baroness, Lady Jones of Whitchurch, and I need to compare our statistics. My understanding is that more than £24 million was granted for repair and renewal to 6,000 households and businesses who were flooded in 2013-14. My understanding—and therefore we must compare our information—is that on the farming recovery fund all claims were met in full. I think we need to ensure that we both have the right figures in front of us but I am grateful to the noble Baroness for raising this matter.

The other point was on farming practices. Clearly, we need to think very carefully about how we work with farmers who are going about their business and looking after their land to make sure that we achieve the best for the environment. We need to think, too, about the way in which farmland can be included, not only the protection of properties but also of agricultural land, which is so important for the production of our food. I mentioned in Questions last week the example of the slow the flow project in Pickering—I am conscious my noble friend Baroness McIntosh of Pickering may be in the Chamber. This is an important way of proceeding: looking at the use of land and how we work with the farming world to ensure that floods can be accommodated. While we should be mindful that farmland is valuable—it produces a crop, there may be certain parts of the country where we should be working together much more strongly to ensure that we slow the flow. I am a great tree planter. The planting of trees and the way in which we farm alongside watercourses are all going to be important.

Climate change is clearly an area which is of particular importance when, for instance, the Environment Agency is considering how best to work on our behalf to get the right results with the right investment to secure the best overall result. All flood risk management schemes are required to take into account climate change during their design and construction. The Environment Agency also produced its long-term investment scenario study in December last year, which sets out national long-term investment scenarios for flood and costal risk management over the next 50 years and includes adaption to climate change. Therefore, that is also going to be very important.

Clearly, important discussions are taking place in Paris. It is important that we are all responsible custodians of the planet in our generation. We need to have a result that ensures that the planet can—we hope—be better restored, and that there are ways in which we can work together with all countries. We need to do our part in this country but also we need to ensure that around the world there is recognition that many aspects of the way in which we live need to be addressed. I think what the noble Baronesses both raised about changes in climate is important in the way in which we deal with flooding.

The statistics on the floods and the levels of the rivers in Cumbria are extraordinary and unprecedented. A rain gauge in Cumbria in Honister recorded rain of

7 Dec 2015 : Column 1357

13.4 inches. This is the scale of what happened and the reason why many of the defences, which were above the level of the previous floods, were over-topped. If there is any positivity to come out of this, it is that those investments enabled fewer properties to be flooded and bought time for us to help the evacuation, the informing of the warnings and getting people away. I am sorry, obviously, that these flood defences held but were over-topped, but when I looked at the statistics for the level of rainfall and what the rivers and the defences had to cope with, it is quite extraordinary what the people of Cumbria had to withstand over the weekend.

6.08 pm

Lord Spicer (Con): My Lords, in the almost 40 years that I represented Worcestershire in the House of Commons flooding was one of two issues that came up the whole time. Does my noble friend accept that you cannot hide flood water? If you build barriers in one place, particularly on a river, and keep out the water in a particular place it is quite likely to be pushed on to another place. That happened continually in my old constituency. Upton-on-Severn was always flooding and was almost a national treasure for that at one point. Once we got that sorted out the whole lot went down to Tewkesbury and flooded that out. Therefore, when people call on the Government to spend more money on barriers, I hope he will bear that in mind.

Lord Gardiner of Kimble: My Lords, my noble friend has great experience of the flooding in his constituency and we have all seen the difficulties when many residents and businesses on the River Severn have been so affected. It is important to note that in Cumbria all the flood storage reservoirs were utilised—at Carlisle, Wigton, Longtown, Kendal and Penrith—and, indeed, the flood basins at Garstang and Catterall on the River Wyre were immensely valuable in preventing more properties being flooded. Therefore, how we stall water or how to slow the flow are things that we need to look at more rigorously.

Lord Judd (Lab): My Lords, I live only a short distance from Honister, and indeed from Cockermouth, and not far from Keswick, and I was at home during the weekend. The situation is hard to overdramatise. Obviously I could speak at great length about the experience but I will not. Suffice to say that we cannot thank the volunteers and the specialist services enough. They worked tremendously hard; they were very prompt in their arrival; and they worked effectively.

However, we cannot overemphasise the resilience of the people. I do not want the House to be under any illusion. There is a great deal of despondency in the area about how seriously the situation is taken. First, for a long time, ever since the last major incident, there has been scepticism about whether all the money was being spent to good effect and whether what was done was sufficient. Secondly, people had anticipated and discussed—I have heard them over the years—that because it was not enough it would create new problems. Indeed, this has happened. There were predictable knock-on effects from some of the defence work that was done, which aggravated the situation just along

7 Dec 2015 : Column 1358

the road, or just down the way, or wherever. That has to be considered very seriously. In other areas, the work was just useless because the floods completely overpowered it. There is a lot to be examined about the effectiveness and how far public expenditure was put to good use.

Thirdly, there is the impact on people. There will be trauma for a long time to come with consequences for the health service and others. While the resilience of the people is magnificent, there will be others who are completely broken, which will place a heavy demand on the psychiatric as well as the physical aspects of medicine. I bring these points the attention of the Minister.

Lord Gardiner of Kimble: My Lords, I am most grateful to the noble Lord for raising these points today. Absolutely, volunteers came from all parts of the country to help the people of Cumbria. I know there is a very strong flood warden system in Cumbria and I acknowledge, because of the resilience of those communities, that somehow they will get through it but it is going to be very difficult and very painful. I realise that and we need to take all these matters extremely seriously. As the Secretary of State and the Prime Minister have said, we need to learn further lessons from this. Obviously, there is the whole issue of river systems, and the way in which we deal with these enormous flows of water is absolutely crucial.

The Lord Bishop of Portsmouth: My Lords, I apologise to the House and in particular to the noble Baroness, Lady Parminter, and the Minister for my earlier ill-timed intervention. I add an expression of my compassion and sympathy, and the assurance of my prayers, to all those whose lives and livelihoods have been affected and particularly to the families of those who died.

The right reverend Prelate the Bishop of Carlisle lives in Keswick so has seen for himself the terrible problems caused by these storms. I know that the House will appreciate that he cannot be in his place today. In the past 10 years we have seen in Cumbria three so-called once-in-a-lifetime flooding events. Does the Minister believe that there may be a category problem here, and that some redefinition may be appropriate? Further, will Her Majesty’s Government reassess not only how they categorise these events but prepare for their apparent more frequent occurrence? We have heard of the help given by some of the flood protection measures that are in hand, but does the Minister believe that reconsideration of present flood prevention measures is not just needed—that is the reflection and learning that the Statement mentions—but urgently needed when we see so graphically the results of this particular circumstance?

Finally, will the Minister confirm that, alongside short to medium-term flood prevention measures, these ghastly events have surely confirmed the vital significance of the deliberations in Paris on climate change for a deep-seated change, so that floods and such awful events occur, if not never, certainly less frequently? Meanwhile, I know that Christian churches of all denominations are working alongside the huge number of volunteers, and we welcome that.

7 Dec 2015 : Column 1359

Lord Gardiner of Kimble: My Lords, I am grateful to the right reverend Prelate. I think that all Members of Parliament from Cumbria are in their constituencies and I am not surprised that the right reverend Prelate the Bishop of Carlisle is in his diocese.

The definition of how we deal with and approach what continue to be unprecedented circumstances is a difficult one. All I can say is: having seen the scale of the rainfall, I hope that what we saw over the weekend remains unprecedented. The point is that lessons always have to be learned when we have such emergencies. We need to look at the flood protection measures. As I said, very considerable sums of money are being spent not only on capital projects but on maintenance, but we clearly need to continue looking at whether they are the best value for money and whether they secure the best safety, which is obviously paramount for people. There are lessons to be learned and, as I have already mentioned, the deliberations in Paris on climate change are clearly of huge importance.

Lord Inglewood (Con): My Lords, I must declare an interest as I was born in Carlisle, I live in Cumbria, and I have property and business interests that have been damaged by these floods. However, they are nothing compared to the misfortune that has fallen on the head of a number of other Cumbrians, many of whom for the second time have been flooded out of house and home at the beginning of a wet and cold winter.

Over recent years the Cumbria Community Foundation, of which I am vice-president, has had a lot of experience after the various floods and the foot and mouth outbreak in distributing money to those who need it. The crucial lesson that you learn is that you need money up front for distribution now. In response to this flood, I understand from the net that the foundation has already raised £100,000, and I ask the Government whether they will make a contribution for immediate distribution to those who are in desperate immediate need of help. I should like to suggest a minimum of £1 million.

Lord Gardiner of Kimble: My Lords, I know of my noble friend’s connections and strong affinity with Cumbria and the communities there. I am sure that the Cumbria Community Foundation is an excellent local charity but obviously it is not in my gift to make such a donation. However, I can say to him that my right honourable friend the Secretary of State for Defra announced in her Statement that the Government will look over the coming days at what further steps they might take in support of those affected. I will ensure that his suggestion is put forward.

Lord Campbell-Savours (Lab): My Lords, as a former Member of Parliament for Workington, Cockermouth and Keswick, in expressing my sympathy I declare an interest as the convener of one of the flood action groups in Cumbria, occasionally meeting with the Environment Agency and United Utilities officials.

A lot of money has been spent on flood alleviation and resilience projects. However, none of the authorities concerned has been prepared to spend money on the big-ticket projects that are necessary if this unprecedented

7 Dec 2015 : Column 1360

and unpredictable scale of flooding is to be avoided in future. Will Ministers now consider upstream storage, even including new reservoir projects, pump-primed with state money but ultimately transferred to the private sector? Will they consider the urgently needed re-engineering of outflow valves on the dam at Thirlmere? Will they consider statutory month-by-month limits on water asset management at Thirlmere? Will they consider the removal of the Gote Bridge in Cockermouth and the Greta Bridge in Keswick and their replacement by single-span bridges that stop the blocking of water flows? Will they consider strengthening the course of the River Derwent below Cockermouth, to remove some of the meanders, as raised by my noble friend on the Front Bench? Can we have a complete ban on housing development on the west Cumbrian flood plain? Finally, can we have a review of the coverage of Flood Re, which is now exposed as fatally flawed, as thousands of people will find that they are not covered, even under the new scheme when it is introduced?

Lord Gardiner of Kimble: My Lords, I thank the noble Lord for raising those important issues. I will take his comments back, with some of his detailed points on upstream storage, re-engineering, water levels at Thirlmere, bridges, and the use of reservoirs and other places to keep water back when we can. The whole area of water asset management is clearly going to be important. On housing, the planning guidance on new development has been very clear. I will look into the particular point about Cumbria, but well over 95% of new housing is now not built in flood-risk areas. The noble Lord and I had a conversation about Flood Re after Questions last week. I am looking into the particular point of long-term leaseholders: I hope I can at least help to address this situation.

Baroness McIntosh of Pickering (Con): My Lords, I thank my noble friend for his Statement. Storm Desmond was clearly an act of God and resulted in flooding of biblical proportions. No matter what preparedness there was, I would defy anybody to find any flood defences that could have protected all the properties. I greatly regret the loss of life and damage to property.

When my noble friend looks at the role of insurance companies in rebuilding homes, will priority be given to developing greater resilience and lowering insurance claims where householders look to increase and improve the resilience of their properties? I declare an interest, as referred to in the register. Also, the first seat I fought was Workington and it is a delight to follow in the footsteps, in this House, of the noble Lord, Lord Campbell-Savours. I support his bid to have a review of the Flood Re categories, particularly for businesses, farms and leasehold properties. There is also the vexatious issue of those on low incomes who cannot afford contents insurance. What regard can we have for them?

Will my noble friend respond to the concern of farmers who will have lost livestock and the use of the land through contamination by these floods and those in 2009? Will he recognise the role of farmers and drainage boards in clearing minor watercourses to allow the flood waters to recede in events such as this? Will he look to introduce novel means of financing future flood defences by levering in private funding?

7 Dec 2015 : Column 1361

It is in the interests of insurance companies, and water companies, to fund major flood defences in future. If the Minister can be part of that debate, the whole of Cumbria and the United Kingdom will benefit.

Lord Gardiner of Kimble: My Lords, my noble friend spoke about the flood defences. I have now studied this: the extent of the rainfall was so extraordinary that the defences held but were overtopped because of the exceptional levels. However, we obviously need to look at where we can best devote our resources. It is very important that insurance companies work with policyholders: we want remedies there. Greater resilience is going to be very important. There are all sorts of ways in which we can start to encourage people, particularly in areas where flooding is a possibility or even a probability. I should have declared that I am a farmer myself. I therefore recognise the importance of the farming community working to maintain ditches and watercourses going through their property. It is important that we work closely with them, which is why we have regular meetings with the National Farmers’ Union and farming organisations. My noble friend asked about further funding. Partnership funding is going to be very important. It plays a significant role and may well help us ensure that there will be other sources, in addition to the £2.3 billion of government funding, to fund working closely with local communities to get good results.

Lord Stoddart of Swindon (Ind Lab): My Lords—

Lord Dubs (Lab): My Lords, I declare an interest, because I have a house four miles south of Cockermouth which, according to neighbours, has been flooded. I was not there—

Baroness Chisholm of Owlpen (Con): We have not heard from the Cross Benches yet and we have got just two minutes.

Lord Stoddart of Swindon: I have two short questions for the Minister. First, will he encourage people against non-permeable structures? Secondly, because electricity supply is so important, will he discuss with the electricity companies and National Grid protecting their substations from flooding?

Lord Gardiner of Kimble: My Lords, the noble Lord rightly mentions how we can best prevent flash flooding in particular. It is important that the policy guidance should be that developers and householders do not concrete everywhere. On the electricity grid, it is also essential that we protect our infrastructure. We are working on this.

Lord Dubs: My Lords, as the Minister will be aware, the last time Cockermouth was badly flooded, in 2009, it took a long time for the town to get back to normal and some of the businesses had to struggle very hard to survive. When he meets the insurance companies, will he make reference to the fact that it is partly a matter of being covered and partly a matter of the cost? I fear that some businesses and householders in places like Cockermouth will be charged so much to reinsure that they will not be able to afford it. Could

7 Dec 2015 : Column 1362

he please get them to be sensible about this and not slap up the charges? Last time there were floods, my insurance went up six or sevenfold.

Lord Gardiner of Kimble: My Lords, the noble Lord makes a very good point, which I will feed back. The best thing everyone could do is support Cumbrian businesses next spring and summer. That would be a gesture of support for the great communities of Cumbria, which is a tourism Mecca for so many.

Welfare Reform and Work Bill

Committee (1st Day) (Continued)

6.29 pm

Amendment 3

Moved by Baroness Meacher

3: Clause 11, page 13, line 12, at end insert—

“( ) The limit on the number of children or qualifying young persons for whom an individual element of child tax credit can be claimed, as set out in subsection (3B), shall not apply to households where one or more of the children or qualifying young persons are disabled (including, but not limited to, those persons in receipt of the disability element of child tax credit).”

Baroness Meacher (CB): My Lords, Amendment 3 seeks to exclude all families with a disabled child from the two-child limit on receipt of the child element of child tax credit and the child addition within universal credit.

I have also tabled Amendment 8, which is more limited in the protection it affords. Amendment 8 would exclude any disabled child from the number of children considered in relation to the child element of universal credit. Thus, if Amendment 8 were accepted by the Government, a family with four children, one of whom is disabled, would still lose the child element for the third non-disabled child. I argue very strongly for Amendment 3, but Amendment 8 would be a great improvement on the Bill as it stands. At this point, I pay tribute to Rob Holland from Mencap for his considerable help with the Bill.

Families with disabled children face financial and other stresses which are not faced where all the children are healthy and able-bodied. These families have extra costs for special aids, adaptations to their homes, and additional clothing and travel costs. The travel costs of medical appointments alone can be very considerable. One family, for example, reported regularly having to get to three appointments a week, and this can rise to as many as seven. The appointments are at four different hospitals, involving additional petrol costs, depreciation of the car and, most particularly, parking fees. Another family talked of their child often breaking bedroom furniture and other items due to the frustration of their disability, which then had to be replaced.

The enormity of the cuts envisaged for families with disabled children is quite extraordinary. While I know that the Government are committed to a much smaller role for the state in future, can it be right to hit the most disadvantaged the hardest? Without these amendments, the two-child limit for claims of child tax credit means that if a two-child family has a third child who is disabled, the family will be £2,780 per year, or an average of £50 or so per week, worse off

7 Dec 2015 : Column 1363

than they would be under the current provision. This loss must be considered alongside the substantial fall in the level of the disability element of child credit under universal credit. The current value of that benefit is £57 per week, whereas the disability addition in a family’s universal credit entitlement will be worth only £28 a week—a loss of £29 per week. I understand that, in all, a new claimant family with three children, one of whom is disabled, will be about £79 per week worse off when these two changes come into effect than a family currently claiming equivalent benefits. Will the Minister confirm whether or not he agrees with these figures?

Research conducted by the Children’s Society and Citizens Advice in 2012 into the two-child limit for child tax credit found that the impact could be disastrous for the health and well-being of the children. Two-thirds said that they would have to cut back on food, more than half said that it would lead them into debt and more than one in 10 feared that they would have to give up their home.

Have the Government assessed the impact of these cuts on the number of children placed in residential care? There seems little doubt that all parents will be less able to cope with a disabled child at home if money is as tight as highlighted by the Children’s Society and Citizens Advice. What would be the net savings to the Exchequer, having taken into account residential care costs of a proportion of the children involved, as well as other costs of health and social care? I would be grateful if the Minister could clarify whether work has been done to clarify the net savings from the two-child limit in the context of the other planned benefit cuts, and taking account of increased government spending on other services. If this analysis has not been done, does the Minister agree that these changes should not go ahead until the Government have a clear understanding of these points? As one parent put it, “We would face the choice of increased debt or the eventual institutionalisation of our child”.

The Government may be assuming that local authorities will take over the burden of these family costs. I understand that this simply will not happen. In fact, among the families already receiving additional support from local authorities, about 60% said that that support had been cut over the past year, and there will be more cuts to local authority services in the coming years.

A big concern is lone parents with disabled children. Many years ago when I was training to be a social worker, which I did for a few years, I spent six months working in a school for severely handicapped and disabled children. I found myself running a group for the parents of those children. The group comprised about 14 parents, every single one of whom was a single mother. The fathers had apparently walked out some time after the disabled child was born. If these mothers had also abandoned their disabled children, the state would have had to take care of the children and pay the bill. The impact of the two-child limit will be greatest for these parents.

In a meeting with Ministers about tax credits, I was told that the Government expected claimants to work extra hours to make up for their losses. However, these

7 Dec 2015 : Column 1364

lone parents with disabled children are not able to make up the shortfall by working extra hours. The simple fact is that the disabled children and their healthy siblings will suffer if this measure goes ahead. I understand that the Government recognise that some groups—I think it is two groups—should be exempted from the two-child limit for the child elements of child tax credit and universal credit. I hope very much that the Minister will today assure the Committee that he will give serious consideration to exempting families with disabled children from this particularly savage cut. I beg to move.

Baroness Pitkeathley (Lab): My Lords, I support these amendments. It is very important to remember that being the parent of a disabled child is not the same as being a parent. It is sometimes very difficult to get that point over. I remember that when we discussed the Children and Families Bill, officials and even Ministers said, “I am a parent and I do not need any extra support”. However, this is not the same as being a parent of a normal child, if I can put it that way. We all expect to care for our children until they are 18, and many of us for much longer than that but, for a parent who is caring for a disabled child, that caring is likely to be a lifelong commitment— your life or their life. That is the point we have to remember. That lifetime commitment means that these parents face huge problems. They face practical problems, particularly when services are being cut and there is not enough support. They also face very severe emotional problems. As the noble Baroness reminded us, marriage breakdown is very common where there is a child, or more than one, with disabilities. These parents also face financial problems, which is what we are concerned with here. I suggest that most households with a disabled child already face financial hardship, even without these changes. More than half—53%—of parent carers answering the State of Caring survey in 2015 said that they were struggling to make ends meet.

Research shows that it is three times more costly to bring up a disabled child than a non-disabled child, as we have been reminded. Some 34% of sick or disabled children live in households where there is no adult in paid work compared with 18% of children who are not sick or disabled. Four in 10 disabled children live in relative income poverty once the additional cost of their disability is accounted for. Last year, the Carers UK Caring and Family Finances Inquiry found that parent carers of disabled children were one of the groups least likely to be in employment. As one carer said, “I gave up work thinking I would be able to return within a year or two once I got my daughter the support she needed. Little did I know how poor local services were and I am still caring years later”. That carer will probably be caring all her life and certainly for all the life of that disabled child. Surely we are not thinking of making hard lives even harder by these pernicious changes. I support the amendment.

Baroness Sherlock (Lab): My Lords, I wish to speak to Amendment 19, standing in my name and that of my noble friend Lord McKenzie of Luton, and to the other amendments in this group, which I support.

7 Dec 2015 : Column 1365

The case has already been so well made by the noble Baroness, Lady Meacher, and my noble friend Lady Pitkeathley that I will not add much more. However, I want to get a sense of scale. Contact a Family reports that there are 770,000 disabled children under the age of 16 in the UK. That equates to one child in 20. Most struggle on alone with only 8% of families getting services from their local social services. As we have heard, it costs up to three times as much to raise a disabled child as it does to raise a child without disabilities. We have heard the figures from official statistics showing the much higher rate of poverty among families with a disabled member and the high proportion of children with a disability who live in households in poverty

Families are already struggling. It is very good that we will retain the disability element, which covers some of the additional costs of disability, but the child will still have to be fed and clothed and cared for. The reality is that not only do disabled children cost much more but it is much harder for parents to increase their income, a point made by the noble Baroness, Lady Meacher. Suitable childcare for disabled children is much harder to find, more expensive when it is found and for some children the nature of their disability makes it very hard for anyone other than the parent to be able to take care of them.

As the Children’s Society pointed out in its briefing, the child disability element for children other than those on the high-rate care component of DLA has already been effectively halved within universal credit. Currently a family with a disabled third child would receive a maximum child tax credit entitlement of £5,920. Following the reduction of the disability component and the two-child limit, they get a maximum of just £1,513, little more than a quarter of their entitlement in the current tax credit system.

The Minister has said repeatedly today that this is about choice and that we want to enable families who are on tax credits and universal credit to make the same choices as other families. Will he acknowledge that having a disabled child is not a choice a family makes? Often the family will not know that the child is going to be disabled when the child is conceived. Either the disability may not be known, or the child may develop a disability or an illness which causes a disability after birth. The family are therefore not in a position to know the additional costs they are going to be taking on. I have problems in general with this policy, as I will explain in a later stand part debate, but one of the reasons for having so many exemptions is to try to get the Government to explain the rationale of exempting certain categories of person and not others. The Minister needs to be consistent. If his intention is all about clear-eyed choice, then can he explain how that applies in this case?

Lord Kirkwood of Kirkhope (LD): My Lords, I put my name to Amendment 3, and I support the powerful speech made by the noble Baroness, Lady Meacher, and other contributions that we have had in this short debate. I want to make a simple point about disability. I had the distinct impression that, although the Government were determined to force through their

7 Dec 2015 : Column 1366

£12,000 million savings, health and disability were going to be a priority for Ministers over the next five years. There are signs that that is true. Some of the attempts that we are watching unfold to bridge the disability employment gap and issues of that kind are welcome, as far as they go. That should give the Minister some cover to go back to the Treasury and say that there should be some identified exemptions for working families in particular. We are trying to encourage people to sustain employment in the future. Some families have young members with different levels of disability as well as mental health issues and disabilities. There is a little more emphasis on this, thanks to the excellent work that was done during the coalition Government days. There is a real peg on which the Minister can hang an approach to these tragedies which says that something needs to be said and some provision made for disability in the context of Clauses 11 and 12.

I say again to the Minister, and I mean it, that the Committee will weigh carefully what he says in terms of the exemptions or otherwise. So far he has been playing a pretty straight bat and holding the line on behalf of the Government, by which I think he means the Treasury. I understand all that, but he has to be very careful. I have said this before, and I will say it again in the clause stand part debate, that he risks losing some of these clauses, if he is not careful, if he does not appeal to good moderates such as the noble Lord, Lord McKenzie, and me. No, I take that back—it will damage his political career in the new Labour Administration.

There is an opportunity in the context of Ministers rightly focusing again on work and health. If that is applied to the amendments that have been so ably moved, I think there is some room for compromise. If there is not some give and take, I think that the Minister is going to have trouble carrying some of this Bill through the rest of its proceedings.

6.45 pm

Baroness Hollis of Heigham (Lab): I was not going to add to the very powerful opening speech by the noble Baroness, Lady Meacher, but I will just say to the Minister that, when he faced a similar problem of housing and the cut in benefit to those with a so-called spare bedroom—I refer to the bedroom tax—the Minister understood the degree of disquiet around the House and invested in discretionary housing payments, which he increased and increased. In other words, there was a recognition that there needed to be some head space in the system for dealing with difficult issues, many of which we have discussed today. I suggest to him that we have had so many of those in the previous amendments and most powerfully again on the issue of disabled children that he should seek a similar discretion which then the Government can come back with in proposed draft regulations which the House can discuss before they then become part of the legislative process by the time we get to Report.

The Earl of Listowel: My Lords, I support my noble friend Lady Meacher in her amendment, which she so eloquently expressed. A couple of years ago a woman called Stacie visited Parliament to talk to your Lordships

7 Dec 2015 : Column 1367

in preparation for a childcare Bill. She talked about her difficulty, as a mother of a disabled child, in finding appropriate childcare. I think she went through more than 20 childcare providers who just said, “Look, we cannot deal with the needs of your child”. Eventually she found a very good provider that was prepared to go the extra mile. I know that this is an issue we have to take seriously and are looking to improve in terms of making childcare more easily accessible. It continues to be a problem. So there is that additional issue that I would highlight to your Lordships.

My noble friend also highlighted the fact that so many of these women are bringing up disabled children on their own. I invite your Lordships, women and men, to think about trying to bring up a child on your own when that child has a disability. The risks of isolation, of being overwhelmed—all those things must be exacerbated.

The Minister, in the early discussion about popular feeling with regard to taxation, made his response. It made me reflect a little that perhaps part of the way the public sees these issues is mediated by how the Government present them. I encourage the Government to be very careful, and I hope that this will not be taken the wrong way. On Saturday morning I was speaking to a mother with a two week-old baby, and she was speaking with another mother. The other mother, perhaps a little unkindly, because this two week-old baby had an elder sister, who was three, said, “Has the older sister started trying to kill her yet?” What this highlighted for me is that it is such a basic element of human nature to be envious, to resent something that somebody else has, that one has to think through very carefully how one presents sharing resources with somebody else, giving resources to somebody else and not giving it to another person. I am afraid that that may not come across very well. I say to the Government that I hope they are being very careful about how they present these things.

Baroness Manzoor: My Lords, we on these Benches support this amendments, too—Amendment 3 in particular. The House needs some assurances from the Government that the disability premium for each disabled child in both tax credits and universal credits will be protected, regardless of the number of children in the family. However, the child element in tax credits and universal credit will be paid only in respect of two children in a family, even when the third child is disabled. That is the point. We need to look at those exemptions, so if the Government have already said that there is some protection, surely that same protection should be afforded to the third child who is disabled.

Baroness Lister of Burtersett (Lab): My Lords, I want to make a brief point in support of the powerful case that has already been made. I believe that the latest HBAI statistics showed an increase in poverty among disabled children. Can the Minister tell us his assessment of the impact of these clauses on the number of disabled children living in poverty?

Baroness Tyler of Enfield (LD): My Lords, very briefly, I lend my support to these very important amendments. We have heard some extremely powerful

7 Dec 2015 : Column 1368

arguments. I want to draw attention to one point in Amendment 3, which refers to child tax credits and says that the limit should not apply,

“where one or more of the children or qualifying young persons are disabled”.

I remember vividly a meeting that I attended during the course of what became the Children and Families Act, organised by the noble Baroness, Lady Pitkeathley. The very point which she was talking about was the impact on parent carers trying to bring up disabled children. One of the mothers was bringing up three disabled children. I remember that vividly because I think it brought tears to most of our eyes, including those of the Minister. Can the Minister say what the Government’s thinking is about households which have more than one child who has a disability?

The Minister of State, Department for Work and Pensions (Lord Freud) (Con): I thank noble Lords for this debate and, particularly, I heard the point made by the noble Baroness, Lady Meacher, about how the lone parent—the mother—is so often left on her own with a disabled child. That is a very moving point and clearly rings true.

Perhaps I may look at the technical position. Amendment 3 would exempt those families who have at least one disabled child from the policy which limits support to two children. The intention of this amendment is to allow families with a disabled child to claim the child element of child tax credit for an unlimited number of children. Under Amendment 19, that intention would apply to both tax credit and universal credit. I should point out, as a matter of information, that the difference in having the child element allowed for a third child is not actually that great, if you look at the statistics. That is because the number of parents who go on to have more children is actually very few, as the noble Baroness, Lady Meacher, will probably know, so there is not a lot of difference in the cost. I know that she will appreciate the thinking behind that point. If I look at Amendment 8, meanwhile, which goes on to the point about paying the child element, it is technically a bit misdrafted, but I know that the intention of the amendment is to allow that child element to be paid.

The noble Baroness, Lady Sherlock, drew on the issue of whether a choice has been made. Clearly, we have considered the issue of disabled children carefully and looked at the challenges which these families face. We are committed to supporting those families with disabled children by paying the disability element of child tax credit and the equivalent in universal credit. That is true for all disabled children, although there are in practice rather few—I mean that there will be some, but relatively few—so, however many there are, it will be for not just the first disabled child but all of them. From what I am hearing, I think that the debate is now around the child element as well as the disability element and that that is where the differences lie in practical terms.

If I may go on, I can acknowledge broadly the figures to which the noble Baroness, Lady Meacher, was drawing attention in regard to the reduction without the child element. Although when that is in UC as a unified benefit, it will be only one part of the total payment. On the amount that the family gets, the

7 Dec 2015 : Column 1369

reduction will be much less than the “down to a quarter” figure to which she was referring. On top of the disability element that we are exempting, we are exempting from the benefit freeze all those benefits which relate to the additional costs of disability, including PIP and DLA.

On Amendment 19, which would create a duty for an appeals process, I repeat the point that I made earlier: we already have comprehensive appeal arrangements and therefore do not need this amendment.

The noble Baroness, Lady Lister, made a point about what happens to HBAI figures. As we have found out year after year, it is impossible to predict with accuracy future HBAI figures. As is customary, the noble Baroness, Lady Hollis, has a solution to it all, but I am not convinced that the discretionary approach would be the optimum one in this area. Whatever happens, I do not think that any kind of solution would come from that.

Baroness Hollis of Heigham: Given the amendments that we have debated so far—in the first group, the second group and now this one—what proportion of the estimated £1.3 billion in savings that I think the Government were expecting to make from this would therefore be lost to the Government?

Lord Freud: I am simply not in a position to deal with what are entirely hypothetical issues. I am not in a position today to offer very much satisfaction in these areas, as noble Lords know.

Baroness Hollis of Heigham: Can I push the Minister on this? In earlier debates, he was saying that the two main drivers for these proposals on the two-child policy were, first, the need to get financial control—he quoted very large figures that he expressed great concern about—and, secondly, to produce a level playing field between working families and non-working families. He must know the cost of all these amendments, because he will have had the briefing from the Box about them, but I have not heard him tell us that. How much would the cost be of the previous exemptions and, in addition, the exemptions referred to so powerfully by my noble friend Lady Pitkeathley and the noble Baroness, Lady Meacher? How much of those savings would the Government lose if they were to meet the exceptions that all the Committee has, so far, argued for today?

Lord Freud: I am not in a position to answer those questions because I have had all kinds of amendments tabled—including that from the noble Baroness, which would remove the policy and lose all of the £1.3 billion. I am not in a position to go through the exemptions at this stage like that.

Baroness Hollis of Heigham: So are the Government really saying, “We are opposing amendments because we can’t afford them”, but do not know what they will cost?

Lord Freud: I have given out as much information as I can on the questions at this stage and indicated what the relative positions are. On this amendment in particular, I was careful to make it clear that there is

7 Dec 2015 : Column 1370

not a huge difference in cost terms—and I will double-check this—between allowing a child element for the disabled and exempting the family which has a disabled child. That is the main cost implication which I have been able to provide today.

Baroness Pitkeathley: If the Minister is not in a position tonight to answer those questions, can he give an indication of when he might be?

7 pm

Baroness Sherlock: My Lords, before the Minister answers that, can I just say that I have found his responses today a little surprising. Many noble Lords have experience of being in Committee with him and having careful, detailed and well-informed debates. We are used to the Minister regularly getting up and telling us how much things cost and I find it almost impossible to believe that his department does not know how much these elements will cost. They have been proposed a long time. The department has had every opportunity and there are very good statisticians and modellers in the DWP. I can conclude only one of two things—either they know and have not told him or he knows and is saving it up for Report to launch it at us from the Box when we try and press a vote. Which is it?

Lord Freud: I would never launch something at noble Lords on Report in that way. Let me go and think about how I might present some useful figures in a reasonably timely way. That is not a promise to produce anything more than I have but I will look and see whether I can be more helpful, given that I clearly have not been now.

The Earl of Listowel (CB): My Lords, will the Minister consider writing me a letter about improving access to childcare for disabled families?

Lord Freud: Can I look at it? I am not sure quite how much of this is in my own purview. If I can, I will.

Baroness Hollis of Heigham: I am amazed this information was not available at the Commons stage of this Bill, given it has been discussed in Parliament for several months—certainly I think it was back in July the Second Reading took place—and to still not to know these figures surprises me enormously. While the Minister is being helpful in producing information, given that we know that 85% of the welfare cuts proposed by the Chancellor will fall on women and given we know that nearly all the “victims”—the recipients of concern in the exempted groups that we were talking about in previous amendments—are women, will he also do us a gender breakdown? He is absolutely right, as other noble Lords have also said, that it is usually the mother who is left caring for disabled children. I remember meeting vaccine-damaged children—part of the Minister’s responsibility, I think—and every parent there with a disabled child was a woman. Can I ask the Minister if he will add a gender analysis to the financial analysis of where some of these cuts fall and who the exemptions, therefore, would help to protect?

7 Dec 2015 : Column 1371

Lord Freud: I think I have to fall back on the position that we have produced an analysis that is published and is available to noble Lords. I just make the point that often these statistics refer to households with both a man and a woman in them and it depends on who the recipient is. It is a household payment, not a payment to women specifically. One has to be rather careful of that when one looks at those statistics in the way that the noble Baroness has.

Baroness Lister of Burtersett: The noble Lord is correct but women still tend to bear the main responsibility for the care of children, so the impact on a household is borne particularly by the mother.

Lord Freud: We are getting way off but our evidence is that the vast bulk of households share financial resources, so although someone in a household may receive a particular amount of money it does not necessarily mean that they do not share the burdens evenly. One can make a lot of false assumptions out of some of these data if one is not careful. I urge noble Lords not to press these amendments.

Baroness Meacher: My Lords, I thank the many noble Lords who have spoken in this relatively short but very powerful debate. The Minister certainly got a clear message that this is a matter of considerable concern to Members in most parts of the House. Perhaps I can say again that one-nation Tories of the past have always supported families with disabled children. I still hope that this Government too can show that they will follow the traditions of their party and not leave these families bereft and in severe straits. That is what these provisions will do in the absence of any amendments to them. I thank the Minister for his thoughtful responses as always. I think he always gives us a pretty good innings, but I hope that before Report he will feel able to clarify the relative costs of these various amendments, and then we can perhaps sit down and really think where the need is the greatest. If we are all in the dark it really is quite difficult to make sense out of things, unless the Government have implacably decided they will not change anything in this Bill at all. I hope that is not the view of the Government and of the Minister. I thank all noble Lords and the Minister and beg leave to withdraw the amendment.

Amendment 3 withdrawn.

Amendments 4 to 7 not moved.

Debate on whether Clause 11 should stand part of the Bill.

Baroness Sherlock: My Lords, I propose that Clauses 11 and 12 do not stand part of the Bill. We have heard during the debate today that this measure will have all sorts of, presumably, unintended consequences disincentivising kinship care and private fostering, disincentivising adoption, separating sibling groups, incentivising the break-up of larger families and acting as a deterrent to the formation of stepfamilies. It could require intrusive inquires of women who have been raped and, of course, will take large amounts of

7 Dec 2015 : Column 1372

money from families with children. Another problem with the policy is the lack of any mitigation. Impact assessments often have a section that explains how the policy will be mitigated but here there is nothing. Of course that is because, once a child is conceived, there is no mitigating action that parents can take other than to have an abortion or to give up the child for adoption. I presume that nobody is advocating that. However, the Government are offering no help to families to mitigate the impact of these losses except where a woman has been raped or in the case of multiple births.

The Minister still has not explained the rationale for the exemptions. I am not satisfied with the question of choice. We also are left with the question of domestic violence and the 16% of pregnancies that are unplanned. Ministers sometimes talk as though conception were simply a matter of choice. The NHS website says very clearly that no contraceptive is 100% reliable. Where contraception has failed a woman has not exercised a choice to have a third child, unless the Minister is suggesting that a refusal to have an abortion constitutes a choice to have a baby, which it clearly does not. So why is that family penalised for having a third child? As we have discussed and will discuss again in a moment, it will affect some children who are already alive, as people making fresh claims for universal credit will get no money for their third child.

Given those effects and the lack of mitigation, the Government need a pretty compelling case for this policy. Have they made their case? The impact assessment says:

“The objective of these policies is to reform tax credits and Universal Credit to make them fairer and more affordable. They will ensure that the benefits system is fair to those who pay for it, as well as those who benefit from it, ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work. Encouraging parents to reflect carefully on their readiness to support an additional child could have a positive effect on overall family stability”.

That is what it is meant to do, so does it? Let us deconstruct it. The first objective is to make the system,

“fair to those who pay for it, as well as those who benefit from it”.

This contains an implied fallacy from the start, suggesting that there are two categories of person—those who pay for benefits and those who receive them, and ne’er the twain shall meet. We know that this is not true. As my noble friend Lady Hollis pointed out in a compelling Second Reading speech,

“over the course of 18 years, half the population has needed and received a means-tested benefit”.—[

Official Report

, 17/11/15; col. 57.].

People move in and out of entitlement to benefits and tax credits and the amount of tax they pay, and the degree to which they are a net recipient or contributor to the system changes over their lifetime and as things happen to them.

What about the second part, namely,

“ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work”?

Again, that paints a picture of people who are not working and having lots of children that hard-working families, who pay the taxes that fund the benefits and tax credits, could never afford to have. Let us test that.

7 Dec 2015 : Column 1373

First, are those affected unemployed? The IFS figures show that, at the moment, 872,000 families receive an average of £3,670 for three-plus children. Of these families with three-plus children, 548,000 have parents in work, so approximately 63% of those getting benefits at the moment are in work—the typical victim of this policy is not the unemployed mother of a large family.

Of course, if the benefit cap is reduced, as the Bill proposes, to £23,000 in London and £20,000 elsewhere, then any family out of work with three-plus children is unlikely to get to enjoy the benefit of the child tax credit in any case. Shelter has pointed out that a typical couple with two kids renting a house in somewhere like Plymouth or Leeds—so not Mayfair—will be hit by the cap. Most of those affected are working, which means that tax credits are only part of their household income and top up their earnings, with the exact amount they get at any point depending on how much they earn. They are already funding much of the cost of raising their children in any case from their own resources and their own earnings. In that case, is there evidence that those in receipt of tax credits are having lots of children in a way that other people are not? No. We began a debate on this earlier. I have looked quite carefully at a study based on ONS statistical information which looked specifically not just at very large families but at what proportion of families had three or more children. It put it very starkly:

“These data show that socio-economic class, perhaps contrary to popular belief, does not affect family size”.

The third policy aim was:

“Encouraging parents to reflect carefully on their readiness to support an additional child”.

That raises two questions. First, do the Government believe that cutting funding will reduce the number of children born to poorer families? Although it mentions in passing a study on working tax credit, the impact assessment acknowledges there is “no evidence” on the strength of any such effect. My reading of the global evidence is, frankly, that it is inconclusive. Secondly, to what extent is this about choice and, more specifically, economic choice? Ministers—to be fair those of more than one Government—have in my view a surprisingly touching faith in the rational-actor model of humanity. In fact, the evidence shows that plenty of us make economically irrational decisions, or rational non-economic decisions, all the time. People may have cultural or religious reasons for wanting larger families, or be unwilling to take steps that might limit family size because of ethnical views on contraception or abortion. If people had children only when they were sure they could support them, that would mean conceiving only if they knew for sure their household income would be secure for the next 18 years. How many people can be confident of that? Who would have children if that were the case? Eighteen years ago, people might have thought working in steel factories could be a job for life, but factories close and economies falter; even MPs can lose their jobs. Things happen to people and working patterns change.

I then began to wonder whether this could be a way of managing population change. Ministers have not claimed that, but maybe it is a secret option which is so politically sensitive that they cannot mention it.

7 Dec 2015 : Column 1374

But that does not make sense either, because again the latest ONS population studies, published in 2013 using 2011 census data, showed the fertility rate. They focus on women born in 1968 because they assume that when you reach 45 you are past your child-bearing years—many of us certainly hope we are. The assumption at that point is that you can assume that the child-bearing period has finished. Women born in 1968 had an average of 1.92 children—it is worth noting, as Naomi Finch and others do, that a replacement rate, which would maintain the population, would be a fertility rate of 2.1. The studies also show that fertility rates are remarkably constant. The ONS notes that for over 70 years the two-child family has been the norm, while the numbers for families with three children and no children are also broadly consistent for women born in 1968. Interestingly for those worried about large families, one in 10 women born in 1968 had four-plus children, down from one in five for women born in 1941. That is clearly going in a direction that need not worry the Minister.

I have the following questions for the Minister. If the policy were to result in families on benefits and tax credits having fewer children, would the Government regard that as a good thing or a bad thing, or would they be indifferent to it? Secondly, what will the Government do to mitigate the effects on children of the hardship and damage to life chances that must result from increasing poverty in large families? If this policy succeeds in persuading poorer families to have fewer children, our society will suffer. As my noble friend Lady Hollis mentioned, since our birth-rate is below replacement rate, if the Government are serious about wanting to clamp down on immigration as our population ages, who is going to be around of working age to pay our pensions, fund our health service and care for us when we get old?

7.15 pm

However, in fact there is little evidence that that will happen. If this policy does not change the number of children being born, then it must increase child poverty—it can do nothing else. One or the other must happen. It will take money away from larger families when child poverty is already 35% higher in those families, so the real losers from these policies will be the children who happen to be born into larger families, especially as younger siblings.

The policy also undermines the fundamental point of our welfare state, which is to protect the vulnerable and insure citizens against the hazards of life such as illness, disability, unemployment and bereavement. Given all that, the onus is very much on the Government to provide the evidence that this policy is necessary and proportionate. I look forward to hearing the Minister do just that.

Baroness Lister of Burtersett: My Lords, I was so disappointed with the Minister’s responses to the olive branch that the noble Lord, Lord Kirkwood of Kirkhope, held out and the inflexibility in response to all the suggestions of how these clauses could be mitigated. In support of the contention that these clauses should not stand part of the Bill, I want to address two main issues: one is the mentality underlying the clauses, and the other is the equality and human rights implications.

7 Dec 2015 : Column 1375

My noble friend Lady Hollis referred back to the 19th century in her earlier speech. I will go back just one century. The mentality of the Bill was summed up rather well in a letter to the Scotsman in 1931 which was quoted in The People by Selina Todd, which I just happened to read on holiday—it is a very good book. The letter complained that:

“Many of the workless marry and breed families while in receipt of the dole”,

adding to the taxpayers’ “heavy burden”. Nearly a century on, perhaps we are a bit more subtle, but that sums up the mentality. We have this constant false division, referred to by my noble friend Lady Sherlock, between taxpayers who fund the tax credits system and those who benefit from it and references to how families supporting themselves solely through work do not see their incomes increase when they have another child. Who are these families? Apart from the very wealthiest, those families will be in receipt of child benefit, so they are not supporting themselves solely through work. If they have another child, they will get extra child benefit, and rightly so.

The main difference between now and the situation referred to in the letter to the Scotsman is that the Government do not want those in work and on low incomes to breed too many children either, given that, as we have heard, the majority affected will indeed be in paid work. Incidentally, could the Minister tell us what the rationale is for the abolition of the family element and its universal credit equivalent, which I think perhaps we have rather overlooked in focusing—rightly—on the two-child limit? Is that to discourage people in poverty from breeding altogether?

I turn to the human rights and equality implications. The Equality and Human Rights Commission has raised concerned under a number of articles of the UN Convention on the Rights of the Child, the International Covenant on Economic, Social and Cultural Rights and the Convention on the Rights of Persons with Disabilities. The impact assessment and the Government’s human rights memorandum do not adequately address these issues at all, although I commend the department for providing the latter.

Relating back to the point made by my noble friend Lady Hollis about the gender impact, the legal officer of the Child Poverty Action Group—I declare an interest as honorary president—refers to Article 14 of the ECHR and the disproportionate impact on women as mothers. Indeed, the impact assessment notes that women are more likely to be affected than men. Article 16.1(e) of CEDAW guarantees that women have the right,

“to decide freely and responsibly on the number and spacing of their children and to have access to the information, education and means to enable them to exercise”,

that right. The International Conference on Human Rights proclaimed:

“Parents have a basic … right to determine freely and responsibly the number and the spacing of their children”.

With regard to families and children, as the Government acknowledge in their human rights memorandum, it may be argued that the clauses discriminate against large families and that large families have status for the purposes of Article 14. They

7 Dec 2015 : Column 1376

discriminate against religious groups with a conscientious objection to contraception and abortion, which is contrary to Article 14, read with Article 9, of the ECHR. We have heard a lot from different faith groups about their very real concerns about the impact of these clauses.

It is difficult to see how these clauses are in the best interests of children affected, in line with Article 3 of the UNCRC. The Government’s justification in their human rights memorandum is that the articles are,

“justified, proportionate and not manifestly without reasonable foundation”.

That is based partly on all the usual guff about fairness and the encouragement,

“to make the same financial decisions as families supporting themselves solely through work”.

However, we have already heard that the majority of the families affected will be in paid work anyway. The overwhelming response, from a wide range of organisations, suggests that the clauses are not justified, are not proportionate and are without reasonable foundation.

Article 3 of the UNCRC is addressed with what I would call unconvincing arguments in the human rights memorandum, which says:

“The best interests of children … is to have parents in work”—

as we have already heard, the majority of these parents will be in work—

“and work remains the surest way out of poverty”.

These clauses will mean that it is a less sure way out of poverty than it is at present, and that is saying something.

The memorandum says that the savings,

“will allow the Government to protect expenditure on education, childcare and health and the improvements to the overall economic situation will have a positive impact on children and their best interests”.

I draw attention to the arguments of the noble and learned Baroness, Lady Hale, in the recent judgment on the benefit cap. She said that,

“article 3(1) … requires that first consideration be given to the best interests, not only of children in general, but also of the particular child or children directly affected by the decision in question”.

I suspect that the noble and learned Baroness, Lady Hale, would give the arguments in the human rights memorandum pretty short shrift. She will probably have the opportunity to do so quickly, if this Bill becomes law. I look forward to hearing her judgment on it.

The EHRC is also concerned about the disproportionately negative impact on particular black and minority ethnic groups, which are more likely to have large families. It says that this could be at risk of breaching Articles 2 and 5 of the International Convention on the Elimination of All Forms of Racial Discrimination. The statistics bear this out—of course, those statistics are not provided in the impact assessment, as it would be asking too much to have statistics in the impact assessment. For example, an analysis of the HBAI statistics, pooled for 2010-13 by Professor Lucinda Platt for the Women’s Budget Group, shows that just under two-thirds of children in Pakistani and Bangladeshi families with three or more children are already in

7 Dec 2015 : Column 1377

poverty. Two-thirds is a staggering figure, and I dread to think what that figure is going to be like if these clauses go ahead.

Lord Kirkwood of Kirkhope: My Lords, I will make just two points. First, although it makes me sound old-fashioned, I am in favour of using the social security uprating rules, established over years, for looking at the total spend of the department and what proportion of the national wealth goes to social protection. I am always frustrated and angry when Chancellors of the Exchequer stand at the Dispatch Box. The Treasury knows the square root of nothing at all about social protection. In the run-up to the Budget, we have purdah, so nobody knows what is going to issue forth from the Chancellor’s Budget briefcase. We get things landed upon us that we all have to live with as a consequence.

I want to try to persuade Governments in the future to stick to the established rules, because there are very clear ways of changing rates and benefits. In the annual uprating, Parliament has a chance to look at trends and how things are changing, make decisions and support the Government or make suggestions otherwise. That is a sensible, well-established way of doing business.

My objection to clause stand part, absent any further exemptions, is that we now have a two-child rule. It is a precedent that I believe is very dangerous, because Chancellors of the Exchequer in future could start importing it to other parts of the social security system without let or hindrance. We might start asking ourselves: what are the intrinsic differences between the child element of tax credits and child benefit itself? They are semantic and subtle; we could be entirely wrong. My point is that a clause such as Clause 11, interfering with child tax credits, and the way in which it has been done, leaves the House with some really serious thinking to do about whether this is supportable.

My view is an olive branch, and I will probably be off the Christmas card list of the noble Baroness, Lady Lister, as a result of taking this weak-kneed position. But if the Government do not come up with serious responses to the powerful speeches that have been made this evening, it will condition how I will approach any future support for Clauses 11 and 12. Of course, it is technically true that clause stand part is not necessarily available to us on Report or at Third Reading, but there will be ways of trying to address this in other ways. I was put right on that by a stern note from the noble Baroness, Lady Hollis, a moment ago. She is of course right, as she always is.

I am quite clear about this: it is dodgy procedure and a dangerous precedent. The Minister might be able to sell it to people like me if there is serious consideration of the powerful speeches that have been made. I understand the constitutional context; we are not in easy territory. I am not looking for trouble or to pull the Government down, defeat manifestos or any nonsense of that kind, but I have a conscience to deploy in deciding how to vote on some of these really important things and I will follow my conscience. I am not frightened of constitutional rows, if that is what it comes to. However, we do not need to get into that

7 Dec 2015 : Column 1378

territory if the Minister carefully reflects, as he has done in the past, on what he has heard this evening and comes back with further and better particulars in terms of exemptions.

The Earl of Listowel: My Lords, in listening to this debate, a few things have become clearer to me. One is how important it is that the Government have been so successful in securing employment for so many of our people. In the debate that the noble Baroness, Lady Hollis, had and the noble Baroness, Lady Stroud, spoke to, both agreed that getting work is the most important way out of poverty. I pay tribute to the Government again for being so successful in that.

The Minister opened by saying that we are in an atmosphere of austerity and may need to make some tough choices. But it seemed to me that the language changed later on, to say that this is not just about austerity but is the right thing to be doing. I challenge that sincerely. It does not seem at all right to put these burdens on people. Just think: at the moment there is a storm in the north of England—Storm Desmond—flooding many families’ homes. A family in poverty, who may be working but on a very low income, may think to themselves, “We won’t take out insurance on this, that and the other, and we will hope for the best. We hope that there won’t be a storm”. Then this storm comes along and they have not insured their home, and they are already borrowing money anyway for various things because that is the only way that they can afford them, so they already have that debt and now they have lost more. The point I am making is that we are dealing here with some of the more vulnerable families in our society, and we are reducing their resilience.

7.30 pm

Every family is challenged, maybe by bereavement, ill health or a flood, and we are challenging them further by taking money out of their pockets by doing this. I challenge the Government to think more about this. I encourage their Back-Benchers particularly to do so; I hope that, having listened to what has been said today, they might go away with some concerns that they want to sleep on, think about and take up with the Minister, because whatever they say will be particularly important and, I am sure, helpful. Maybe I am mistaken in my concerns, though, and maybe they will wish to put the other position.

I will give another example. I have spoken with homeless parents in the past. Barnardo’s used to run a project called Families in Temporary Accommodation. Something that came out of speaking with the mothers there was the importance for them of contact with others—being able to visit their family, friends and community. One of the issues of living in temporary accommodation is that when one is shunted around the place, one loses contact with all those human connections. Things such as bus fares are important, for instance, as is being able to use a mobile phone and having the money to pay for it. Again, if you impoverish these families and take money out of their pockets, where are they going to find the money to pay bus fares, which seems very basic, to go to see their friends and families, and for their children to see their friends and so on?

7 Dec 2015 : Column 1379

To my mind, this is a very harsh way of treating some of our poorest, often working families. I very much regret that the Government are taking this step. I hope that we can reduce the harm in the way that the noble Lord, Lord Kirkwood, referred to. Having listened to this debate with its very well-informed contributions, though, I feel more concerned than I did when it began.

Baroness Hollis of Heigham: My Lords, this is a Bill that my noble friend Lord McKenzie has gone on record as saying—and I certainly support him in this—is one of the most wretched that he has known in this House. Most of it deals with cuts that many of us find objectionable because they fall on the poorest and most vulnerable in our society. We will oppose those, and on Report we will try to persuade the Minister to make some mitigation if that is possible.

However, the two-child policy is of a different order from the issue of cuts, primarily because it is saying to those families who have a third child, “We are hugely increasing the odds that you as a family will descend into poverty, that your poverty will be persistent, that you will not be able to get out of it and that your children will carry that poverty into the next generation”. We know this to be the case, yet the Government, and the Minister on their behalf—I cannot believe that his heart is in this—are actually willing to go down a policy route that knowingly sends poor children into longer, deeper and more persistent poverty, not only for their childhood but for a substantial chunk of their adulthood as well. We know that the children of poor parents are twice as likely to be poor at the age of 30 as others of the same age, yet the Government are going down a route that, to me, is deeply morally offensive. As opposed to the cuts, over which we have argued and will continue to argue, this seems to be a knowing castigation of poor children into permanent poverty for sums of money that we do not even have any evidence for. I say to the Government that they really should not go down this path: it is a damned path to go down.

The Lord Bishop of Portsmouth: My Lords, I express my strong concern about these clauses remaining part of the Bill. I offer three straightforward and, I hope, succinct comments: first, about the implications of these clauses; secondly, about the motivation of parents that is implied; and, thirdly, about where responsibility lies.

First, the Government place great emphasis on choice and personal responsibility for family size. I have to say that that assumes a remarkable assumption about the fail-safe effectiveness of contraception—or, if not, an apparent willingness for abortion to be appropriate as a sort of emergency contraception to keep family size to two children. I doubt the assumption, and would deeply regret driving people to seek termination on economic grounds. Is that really what the Government wish?

Secondly, over 35 years now I have played some part alongside others in preparing engaged couples for marriage and have often heard myself saying, “If you wait until you are sure you can afford children, you will never have them”. Religious traditions other than

7 Dec 2015 : Column 1380

my own go further and specifically enjoin the blessing of children and family life. Are the Government aware of how these clauses will be received?

Thirdly, as I mentioned earlier in Committee, we—that is, a number of faith groups and organisations—made clear, in a letter circulated to all Members of the House prior to Second Reading, our belief that children are a blessing and not burdensome, a problem or a difficulty. To consign a child to being a financial problem over which the child himself or herself has had, and has, no control is indeed a singular responsibility—a responsibility for the mother and father indeed but, if these clauses go forward, it is a responsibility in which we shall all share. How sad it will be that a child growing up, becoming increasingly aware, will one day hear or discover that he or she is responsible in part for the family’s level of income simply by having been born. Although the Government seem to place that responsibility wholly on parents, I fear that the responsibility for this change would rest with us all. Is that what the Government want, and are we all prepared to accept that responsibility?

Lord Freud: My Lords, Clauses 11 and 12 introduce the Government’s reform to the child element of child tax credit and universal credit, which was announced by the then Chancellor in the Summer Budget of 2005. The purpose of child tax credit is to provide support to low-income families to help them with the cost of raising children, while universal credit, which replaces the child tax credit, is a unified benefit that provides support to low-income families both in and out of work. As it is being rolled out across the country it is providing a clearer and simpler system of support for families and provides real incentives for work. However, it is important that universal credit is kept on a sustainable basis and encourages families to make similar decisions to those who support themselves fully through work. The Government believe that child tax credit has become unsustainable, with expenditure trebling in real terms between 1999 and 2010, and going up the income scale to a level where a family with three children earning up to £40,000 will still be eligible for support. Last year the Government spent almost £30 billion on tax credits.

I will deal with the issue raised by the noble Baroness, Lady Sherlock, on the dependency ratio. In recent decades Britain has had a higher total fertility rate than the average of the older EU member states. Most families will not be affected by this measure. The mean number of dependent children per family is 1.7, and 86% of families have one or two dependent children. In fact, those families with two or fewer children are remarkably stable, whether they are lone parents, at 88%; opposite-sex cohabiting couples, at 87%; or married couples, at 84%.

Baroness Hollis of Heigham: My Lords, the point my noble friend was making was not just about replacement fertility rates. Given the time all of us hope to live longer, one of the responses of government has been to say that unless we can improve the worker-to-pensioner ratio we have to defer the age at which people begin to draw their state pensions, even if they have had hard lives previously. We do not have the

7 Dec 2015 : Column 1381

resources to pay for it from existing workers as we do not have enough of them to sustain that pensioner support in the future. Nothing the Minister has said has challenged that.

Lord Freud: We are going way off the core issues by looking at the times people retire. A lot of things are changing, and it is almost impossible to fine-tune for that.

I will address the challenge set by the noble Baroness, Lady Sherlock, on what our rationale for this is. It is very simple: the Government want to ensure that the system is fair to those who pay for it as well as those who benefit from it. That is the government position. I should add that the Bill should not be taken in isolation. We are introducing a number of measures to support households in work by reducing income tax through increasing personal allowances, increasing wages and increasing free childcare.

The right reverend Prelate the Bishop of Portsmouth and the noble Baroness, Lady Sherlock, raised the issue of those areas where there is a cultural disposition for larger families. To that, we make the point that all families need to think carefully and ensure that they can afford to provide for a new child in their household.

I make it clear that these changes will not mean a reduction in entitlement for those families already receiving child tax credit for children born before the 6 April 2017. In universal credit, for families already receiving the child element of universal credit, the changes will apply only to children joining the household on or after that date. I think that we have another amendment on which we can go into that in more detail.

Families moving to universal credit from child tax credit and receiving child tax credit for more than two children, and families claiming universal credit within six months of a previous universal credit or child tax credit claim that included the child element, will continue to be able to receive the child element for those children.

On the point raised by the noble Baroness, Lady Lister, on the EHRC, as she knows, the Government set out their assessment of the impacts of the policies in the Bill on 20 July, and the memorandum to the Joint Committee on Human Rights was published on 8 September. Ministers have considered impacts with regard to all the relevant legal obligations when formulating the welfare policies announced in the Bill. The intended impact of these reforms is to incentivise work and ensure that work always pays.

Baroness Lister of Burtersett: Subsequent to that, the Equality and Human Rights Commission has produced its own assessment, which says very clearly that it believes that the human rights statement from the Government was inadequate. I welcome the fact that the DWP produced such a statement but given its inadequacy, will the Minister now respond to what the EHRC is saying?

Lord Freud: I believe there has been correspondence with it, which I think is public.

Baroness Lister of Burtersett: That is not an answer.

7 Dec 2015 : Column 1382

7.45 pm

Lord Freud: That is the best I can do at this stage. However, I accept that that is a bit tentative as an answer, so I will look to get the noble Baroness a better answer, or as full an answer as I can provide after talking this through with colleagues.

The Government believe that these changes strike the right balance between protecting the vulnerable—we have discussed the extra support for families with disabled children—while encouraging families which receive both child tax credit and universal credit to make the same financial decisions about the number of children they can afford as are made by those families who support themselves solely through work. They help to make the welfare system sustainable and the move towards a high-wage, lower-tax and lower-welfare country. Clauses 11 and 12 should therefore stand part of the Bill.

The Earl of Listowel: Before the noble Baroness responds—and I do not wish to keep the Committee from its dinner—while I thank the Minister for reminding us about the very welcome new higher minimum wage that the Government are introducing, looking at figures from the Institute for Fiscal Studies on projections for the difference that that will make, it has been clear to me that the complex way in which the tapers work will often mean that, for instance, lone working parents will not benefit that much more from this new, very welcome offer. Therefore I encourage your Lordships to keep that in mind. It is a very welcome offer but it may not make that much difference to the families that we are concerned about today.

Lord Freud: I will just deal with that. In universal credit we are producing something very clearly tapered, without the trap at the 16-hour point, which is in the current legacy welfare system. Therefore we have a pathway. One of the things we are doing, particularly for lone parents, is that once you are freed from that tyranny of the 16-hour rule, it is interesting how firms in the north-west, where that is already happening, are able to work with those people and start moving them up the earnings progression—not just as regards the number of hours but earnings progression—and we are beginning to see signs of a transformation. That is behind some of these changes—we want to make people independent of the state as much as we can.

Baroness Sherlock: My Lords, I have debated a lot of subjects with the Minister over the last few years, and I am not sure I have ever been as disappointed in a Dispatch Box performance as I have been today. I know that the Minister knows these issues very well, and that he normally comes back. When noble Lords take a lot of care to mount arguments, take apart his arguments and engage, as many have done today, he normally does us all the courtesy of taking them on and responding to them carefully. He simply has not been doing that today.

I asked him only two questions and he did not answer either of them. I deconstructed the argument, and all he did was repeat it. He did not even engage with it. This is only a suspicion, and I am sure I am wrong, but it may just be that the Minister does not

7 Dec 2015 : Column 1383

have any more enthusiasm for these provisions than I do. However, I am sure that that cannot be the case, and we will find that he comes back from supper enthused with zeal to take on and defend these proposals—which, frankly, has been sadly lacking so far.

I will say a couple of things. One is to reassure the noble Lord, Lord Kirkwood. He mentioned worrying about constitutional implications. He need not worry, of course, as he will well know, being much longer-serving than I am. Since this is primary legislation there is absolutely no reason why we should not send matters back to the House of Commons. The Companion makes this very clear at paragraph 8.181, where it says that,

“with regard to Commons financial privilege, the Lords may properly make amendments to Commons bills (other than supply bills) which, when they come to be considered by the Commons, are deemed by them to infringe their financial privileges. It also follows that the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to”,

that. I hope that as a result he will sleep more easily tonight and will feel able to pursue this at a later stage.

I will make just one final point. I agree with the point made by many noble Lords that this two-child policy is qualitatively different from all the other measures. What we have traditionally done in support is to recognise in social security that children are a public and a private good and therefore that the costs of raising them should properly be shared between the taxpayer and the family. Traditionally, in the case of child benefit, we have said that we should all contribute something to the raising of all children; that where there are particular needs—for example, for disabled children—we should all contribute more; and that where people’s needs are greater, we should contribute more through means-tested benefits. This is a very dangerous day indeed if we move away from that and I hope very much that we will return to it at a later stage in the Bill. But I beg leave to withdraw my opposition.

Clause 11 agreed.

Clause 12: Changes to child element of universal credit

Amendments 8 to 10 not moved.

House resumed. Committee to begin again not before 8.50 pm.

NATO and the European Union

Question for Short Debate

7.51 pm

Asked by Lord Wallace of Saltaire

To ask Her Majesty's Government what plans they have to strengthen defence and security co-operation, bilaterally and multilaterally, with their European partners in NATO and the European Union.

Lord Wallace of Saltaire (LD): My Lords, my aim in putting down this Question for Short debate is to draw attention to the constructive co-operation in defence which the UK now pursues with its neighbours within the context of NATO and the European Union.

7 Dec 2015 : Column 1384

I am conscious that much more co-operation is going on than is reported in the British media—or even reported to Parliament. The gap between the rhetoric of national sovereignty and the realities of international interdependence has been demonstrated by the admission that French maritime patrol aircraft have been searching for non-NATO submarines in the Irish Sea, protecting the access routes to the UK’s submarine base for us while we lack maritime surveillance aircraft of our own.

The British public, and indeed most Members of both Houses of Parliament, remain unaware of how far Franco-British defence collaboration has moved since the Lancaster House agreement of 2010. Several major exercises between the two countries have been conducted—well covered in the French press but scarcely noted in the British. Co-operation in nuclear research and facilities is moving forward. Co-operation in defence procurement has continued to prove more difficult, but joint work on drones and missiles continues. It is a matter of regret to both Governments that the construction of the new British aircraft carriers reached a point in 2010 beyond which it proved financially unjustifiable to install catapults to permit the flexible operation of aircraft between British and French carriers. I remember the efforts that Liam Fox made to achieve this, sadly without success.

Small British contingents are working with their French counterparts in the Sahel, and the two air forces,

“work closely together on operations in the Middle East and North Africa”.

Also, a,

“Combined Joint Expeditionary Force, which will be operational in 2016, will provide a potent combined reaction force of up to 10,000 personnel available to plan for and respond to crises, including beyond Europe”.

I am quoting from page 52 of the SDSR White Paper. I wonder whether the Government will wish to celebrate the achievement of this significant step forward through any public ceremony or joint parade, to catch the attention of the public, or whether they will leave awareness to the tiny number of us who actually get as far as page 52 of the SDSR paper, with Ministers hoping that the Daily Mail and the Telegraph will not notice and that the French Government will not complain that our Government appear to want to keep its existence as private as possible.

I am struck that the SDSR paper makes no mention of the oldest and most closely integrated joint force in which we share with a close partner: the British-Dutch marine Amphibious Force, through which Dutch troops train in the UK and are integrated for operational purposes into the UK marine brigade. This was, after all, established in 1973, although I know from its website that joint operations between British and Dutch marines stretch back to the joint operation that captured Gibraltar in 1704. British and Dutch troops served together in Iraqi Kurdistan in 1991, and train together regularly in Arctic warfare. Yet I would guess that at most a dozen MPs are aware of the existence of this force, and I am not aware of any occasion on which the British Government have wished to publicise, let alone to celebrate, this pattern of shared defence that has been going on for more than 40 years.

7 Dec 2015 : Column 1385

The SDSR paper does mention,

“our partners in the Northern Group”.

However, it does not explain what the northern group is or how it operates. I have heard from Swedish and Baltic officials that the UK has played a very helpful and constructive part in assisting the development of integrated forces among the Nordic states, and in working with them to strengthen shared defence capabilities in the Baltic Sea, across the Baltic states and into the Arctic north. It is good to learn from others how much they appreciate the quiet work that British officers and men have undertaken over an extended period to assist states that are members of NATO and the EU, and some that are not formal members of one or the other of these two closely linked bodies. However, again, I regret that so few people in the UK have been told by our own Government what has been achieved.

Quietly, German tank forces and aircrew have trained in Britain over many years. The SDSR paper commits the Government to,

“intensify our security and defence relationship with Germany”.

That includes closer collaboration in procurement of equipment and common support facilities for common aircraft such as the Typhoon and the A400M transport. There is a passing reference to the withdrawal of the remaining British forces from Germany by 2020, and efforts that will be made to continue, nevertheless, joint training exercises with German forces. But there is no indication that our Government cherish the close collaboration that we have built up with the German armed forces in the 50 years since they were recreated, while a substantial proportion of the British Army and Air Force was stationed in Germany.

When in government, I argued that the withdrawal of British forces from their garrisons and bases across Germany, after 60 years and several generations of soldiers and airmen, with much interaction and some considerable intermarriage, should be marked by joint parades and ceremonies to celebrate the transformation of our relations and our commitment to future partnership. I was told by a Conservative Cabinet Minister that something like this was entirely unnecessary, that the Germans “are very transactional” and unemotional, and that in the circumstances a silent and unceremonious withdrawal was the best way to let sleeping dogs lie.

I welcome the slow but real progress that successive British Governments have made in developing closer co-operation with our European partners since Tony Blair first signed a bilateral treaty with the French in 1998. I actively supported the further moves forward made during the coalition Government between 2010 and 2015. I hope that these moves will go further: towards more common procurement, and the shared training and maintenance economies that go with it; towards more effective combined forces, both bilaterally and multilaterally constituted; and towards greater specialisation, rather than each European state struggling to hold on to smaller and smaller units in every military field. We all recognise the problems of sovereignty and command that follow such efforts, but they are not insuperable and not novel.

7 Dec 2015 : Column 1386

I recall meeting Liam Fox as I came out of an exchange in the Lords in which a Cross-Bencher had declared that it was unthinkable that British troops should serve under foreign command. His response was to list all the different NATO member states under whose rotating command British troops had served in Afghanistan, adding that some of our forces had also served under French command in the last year of the First World War, in 1917 to 1918.

I recall the French and German Governments building mutual confidence out of previous hostility through joint military parades and ceremonies, as well as through efforts at practical co-operation. The depth of German inhibitions over defence deployment has held that practical co-operation back until recently, although the recent German decision to deploy significant air, sea and land forces to the Middle East suggests that at last that inhibition is giving way.

Practical co-operation between the British and the Dutch has, as I have said, been close since the 1970s, and practical co-operation between British and French forces has developed with, I am told, growing mutual respect since contingents worked closely together under very difficult circumstances in Bosnia in the 1990s.

We all know why successive Governments—from Tony Blair in 1990-91 onwards—have shied away from spelling out to the British public the implications of unavoidable, mutually advantageous, defence co-operation with our neighbours. In 1990-91, the Daily Mail mounted a campaign against Franco-British and wider European co-operation, labelling it “the European Army”, and first Blair, and then those followed him, shied away. Eurosceptic myths have sunk into so many aspects of British public policy that it takes courage to disentangle reality from fantasy. Some in Brussels, and others in Berlin, have wanted to create fully integrated European forces with a common European command, but their national Parliaments would without doubt have refused to vote for their proposals, and issues of sovereignty and legitimacy would have blocked their overseas deployment.

Over the past 20 years or more, therefore, British Governments have found themselves in the uncomfortable position of pressing for closer practical military co-operation, spending more money on the defence of Europe than most of our partners and neighbours, while at the same time working desperately hard to downplay the significance of what they were doing for fear of domestic misrepresentation.

There are now, as the 2010 SDSR has already spelled out, no security threats to Britain that we do not share with our neighbours, so it makes sense to share our military response, as far as we can without abandoning the principles of national sovereignty and accountability, with our neighbours. It makes for more effective use of scarce resources and expensive weapons systems. Liberal Democrats have supported these efforts as they have slowly moved forward. However, our partners and neighbours read our newspapers, and some even watch our TV—the disadvantage of English as an international language is that it is easy for others to follow our domestic debate—and note the almost clandestine way in which our Government operate on defence co-operation, hiding its extent from Parliament and the public.

7 Dec 2015 : Column 1387

Having sat through innumerable interventions from the noble Lord, Lord Forsyth, and others, insisting that NATO has nothing to do with the EU and the EU has nothing to do with defence and security, I was glad to see on page 53 of the SDSR White Paper some substantial paragraphs on the security dimension of the European Union, and the several EU operations in which British forces have played an active—sometimes even a leading—part. These included, most strikingly, the various operations around the Horn of Africa, such as Operation Atlanta, the anti-piracy force directed from the UK Joint Operations Centre at Northwood. That was another shared operation of which our Government should have been proud, but which they have made too little of.

If we are to move further along this path towards more effective co-operation, as the SDSR White Paper quietly recommends, we have to engage more widely with political elites in our partner countries to make sure that we build their support. It was, for example, a mistake for the FCO to cut its grant to the Franco-British Council by 80% in the latest spending review, when that council, among other activities, sponsors one of the most useful dialogues on defence and security between British and French Parliamentarians and outside experts. The Government are right to wish to take European defence co-operation further— bilaterally and multilaterally—but wrong not to publicise it or celebrate it, which would help to build a broad base of public support both within the UK and within our partner countries.

8.02 pm

Lord Selsdon (Con): My Lords, I am most grateful to the noble Lord, Lord Wallace of Saltaire, because it brings to an end a most interesting period I have had of some six months of sitting through presentation after presentation, as a member of the House of Lords defence group, from the various parts of our Armed Forces. Over the years I have seen these presentations, but I have never been so impressed as I have been in the past six months. I believe that we might possibly end up with the best Armed Forces in the world.

The question is: what do we do with them and what is the bureaucracy that keeps us at bay? We have 22 member states of the EU and 22 members of NATO. It is quite interesting, however, that members of NATO are also members of the EU, so there is an interrelationship that I find quite interesting. The position that we are facing now is that we are a global nation, and perhaps one of the most global in the world, without actually realising it. We have had historic co-operation with our neighbours, but not within the Armed Forces area until recently.

I would like to draw your Lordships’ attention to the interesting position in which we find ourselves under the UN Convention on the Law of the Sea. The territorial land area belonging to the United Kingdom extends outwards to 200 nautical miles and is known as the economic exclusion zone—the EEZ—and this also applies to overseas territories. Just for fun, I looked at the world’s EEZs of some 45 million square kilometres, and found that 60% of this area, or 26 million square kilometres, is represented by the EEZs of the United Kingdom together with those of

7 Dec 2015 : Column 1388

the Commonwealth and the British Overseas Territories. Some 16% of the EEZ area is represented by France and its overseas territories. Thus, together with France, we have an interesting control of the waters of the world. These zones account for the area almost from heaven above to hell beneath. On the other side, 15% of the EEZ area belongs to the United States, and a further 10% to NATO. In our future thinking on our Armed Forces, therefore, we must look at the maritime sector very closely. The world shipping fleet includes 21,000 Commonwealth vessels. That is about the same as those of Japan, Greece, Germany, China, USA, Russia, Norway and the Netherlands combined. We are therefore, to some extent, a very great maritime nation.

When we come to our trade, one of the fascinating issues when regarding it—and I was on the Trade Board for many years—is that we have always had a deficit on manufactures and a surplus on services that has made up for that. That is because we do not make as many things as we used to, and our raw materials, in general, are sourced from abroad. This deficit on manufactures, therefore, is supplemented by a surplus on services. It means that we have played, and should continue to play, a global role.

This makes me look at the situation with France—and I declare an interest because I am technically a French peasant farmer, as I grow a small amount of wine in France and have been attacked by wild boars, the biggest one of which weighed 300 kilos. There is therefore a certain sensitivity and I have worked closely with French companies over many years. The relationship between the United Kingdom and France is particularly good at this time, and there is much more co-operation and going together in various territories.

I turn, inevitably, to Africa—that vast continent that has many problems—and to the “pays francophone” in Africa, which were very substantial providers of raw materials for France. We cannot look at the defence of the world or of the realm without looking at the requirement to solve the problems in some of these territories, particularly Africa, where migration has occurred, production has fallen and raw materials have been left in the ground. Therefore, if you go back to the past and look at the scramble for Africa and such, there should be a new scramble for these areas, where we, with the protection of our Armed Forces, could help to regenerate much of the production of the past.

In looking at some of the recent migration figures, and trying to determine how accurate they might be—on who came from where to go where for what reason—it seems strange that much of the migration comes from countries that were originally colonised because of their raw materials and the capabilities that they had for produce and products that were required in the western world. That still applies. However dreamy it may be, it would be nice to think that a review of all the production areas of central Africa and others today might be undertaken, and consideration given as to how some of the mines might be reopened or the agricultural production put in place by those immigrants that we have here.

7 Dec 2015 : Column 1389

It is a very interesting time for us, and I am very proud of my belief that we have, man for man, the best Armed Forces in the world.

8.08 pm

Lord Davies of Stamford (Lab): My Lords, I congratulate the noble Lord, Lord Wallace, on bringing this Motion forward, and he could not have found a more pertinent moment to have done so. We all need the Armed Forces, and we have had a reminder in horrifying terms just recently of how much we need them.

We do not just need Armed Forces; we need the best Armed Forces. That is to say that we need to select people very carefully, pay them decently, look after them properly, and, above all, give them the best training and equipment that we possibly can. We cannot ever fight in this country, or in any democracy, labour-intensive warfare; it must be capital-intensive warfare. We must make sure that, to the greatest degree possible, human lives are protected and that we achieve maximum effect through the capitalisation of the equipment that we provide. That has been the principle on which we have based our defence policy and defence procurement policy for quite a long time, and it was certainly the principle we adopted when I was Defence Procurement Minister during the Iraq and Afghanistan engagements.

The trouble, of course, is that such a policy is extremely expensive. The defence cuts that we have had over the past five years have been egregious and quite disgracefully irresponsible—thoroughly irresponsible. Reference has already been made this evening to the problems raised in the maritime surveillance area. Of course, we always have constraints. We had financial constraints in our time, and there will always be financial constraints. At present, the RAF supposedly has eight squadrons of combat aircraft. That should mean 96 combat aircraft. What have we actually been fielding in theatre? For a long time, there have been eight Tornado jets and there may be two Typhoons as well—a tiny proportion of the aircraft that should be available. That shows how much our defences have been, sadly, run down. We cannot now sustain deployment of more than about 5,000 men—a brigade, really, with various supporting units. I am afraid that, as a result of the defence cuts, we are in a very thin situation.

Nevertheless, there will always be financial constraints and we have to think intelligently about how we can save money. Far and away the greatest potential for saving money in defence—and this has never been properly exploited—is international collaboration. That is a field of which I know something. When I was Defence Procurement Minister, I negotiated some substantial projects involving international collaboration in procurement. For example, I negotiated tranche 3 of the Typhoon programme, which has been a great success, and the renegotiation of the A400M programme, which had run into problems but is now doing very well and will be the greatest turboprop transport aircraft in the world for the next 30 or 40 years—replacing the Hercules in that important role. In my time, although I did not start it, I was also concerned with the F35 programme, which is a splendid piece of co-operation

7 Dec 2015 : Column 1390

with the United States in which we provided, for the first time, $2 billion towards the R&D cost. That programme is also going well, although I am afraid to say that our uptake of the aircraft is much lower than it should be.

I had a particularly good relationship with my American counterpart, who was then Ash Carter, and with my French counterpart, Laurent Collet-Billon. Laurent and I managed to do together quite a lot of things in terms of common collaboration and providing various naval systems. As a result of that, I was the first Minister—probably the only British Minister—invited to go to Île Longue, the French SSBN base. Of course, I invited my counterparts to Faslane with the full knowledge and support of the Americans. We entered into a collaboration in that area, of course not involving anything to do with the weapons or the weapon delivery systems, which has been very promising. I also brought the French into the Mantis programme to develop an unmanned interceptor. We started to discuss with them something that has always been close to my heart, which is a theatre or tactical anti-ballistic missile capability. That project was completely buried when the new Government came to power in 2010, but I was delighted to see it revived and mentioned again in the SDSR the other day.

So a lot has been going on, but we have not really done more than scratch the surface in terms of getting those very valuable savings. The Typhoon programme, like all previous programmes, was based on a system known as “juste retour”, which meant that each participant in the programme expected to get back, in terms of the work on the project and the employment that flowed from that in his own country, exactly the proportion that corresponded to the money that he put up front to pay for the development of the particular system or platform concerned. That is a very inefficient system. It means that you deprive yourself at the outset of the benefits of competition and the economic pressures on suppliers that you can get through competition, so that is no good. We then set up a body called OCCAR, which is supposed to be an objective body based in Paris, which had some good civil servants from various EU countries seconded to it. It was supposed to act as an agent on behalf of procuring countries to deal directly with suppliers and solve their problems. The trouble was that countries had very little inclination to give major projects to OCCAR because they wanted to go back to the juste retour system.

This matter should be taken very seriously. Although I have never done a study of it myself, it is quite clear that savings to be made by intelligent joint and collaborative procurement run into the tens of millions. They are enormous and it is utterly irresponsible for us not to do what we can to try to secure them. Two things need to be done, and in the time that I have I will mention them. They are both very important and both politically extremely difficult. They are both obstacles in front of us, and we must find a way to surmount them.

One is that, in due time, we need to aim to remove the protection that exists in the treaty of Lisbon—in the Treaty on European Union—for defence procurement,

7 Dec 2015 : Column 1391

which protects it from the principles of public procurement policy, which apply in every other sector. In other words, we should be prepared to lift all protection of our defence industry. Our defence industry is extremely capable, productive and innovative. Of course, there would be losers along the way, but, on balance, we would do very well from that. I do not know why we are so reluctant to go down that route. We should be championing such a move. It would have enormous economic benefits and dividends for us all.

The second very difficult thing that we need to do, which we must grasp in good time—I hope in my lifetime that we see some real progress towards it—is to go in for defence specialisation to make sure that we do not all have to have exactly the same parallel range of equipment. We can actually expect certain of our allies to deliver certain inputs. It is perfectly all right if we have that sort of relationship with the French for them to provide maritime surveillance aircraft, and we might be permanently out of the business. It would be very unsatisfactory to do that on a unilateral one-off basis, but as a general rule it could have been a practical possibility. We have so many helicopter systems, most of which I bought—I bought 22 Chinooks, and the new Government cancelled 10 of them. We have Pumas, which I got re-engined. We have the Wildcat, which I ordered. I think we still have some Sea Kings but we have got rid of the Lynx. We have Merlin—even I can hardly remember all the types of helicopter. It represents a fantastic logistical cost to keep all those different systems going and to keep men and women trained to operate them. It is very inefficient and something that should be spread over a much wider range of countries.

That is a very difficult thing to do politically, and initially everyone has 10,000 arguments why it cannot and should not be done, but it will be have to be done if we want to go on being able to defend our civilisation effectively, be able to make a success of our alliances and go on being able to respect that essential principle that our young men and women in uniform go into battle with the best possible support that money can buy.

8.16 pm

Lord Lee of Trafford (LD): My Lords, there were two crucial votes last week. There was the vote in the House of Commons to support air strikes against Daesh and there was the vote in the Bundestag to commit German forces in support. I was particularly pleased with the decision and position taken by my party, the Liberal Democrats, in the Commons. Had my party gone the other way, I would have had to very seriously consider my position.

I speak in this debate as a very committed European. Indeed, one of the prime reasons I left the Conservative Party was that in the 1990s that party became, very sadly, increasingly Eurosceptic. I think that going as far as having a European army is probably going too far, but I believe that we need much more multilateral integration of army units across Europe, as was referred to a little earlier. Similarly, there has to be a much greater rationalisation of procurement. We have far too many production facilities in Europe. Obviously, one is conscious of the sovereignty arguments. Until

7 Dec 2015 : Column 1392

we have greater integration in military units and consolidation and rationalisation of defence companies, the problem of procurement excess will remain. It was very disappointing to me and to others when there was an immediate outcry when it was suggested, some years ago, that there might be a merger between EADS and BAE.

In my short time allocation this evening, I should like to focus on the UK-French relationship. I have to say that a failure to support France in Syria would have been a near disaster in relationship terms; indeed, in my view it would have been a national humiliation, so I repeat how pleased I was at the decision that was taken in the other House. The truth, of course—it was referred to by my noble friend a little earlier in his excellent opening contribution—is that co-operation between ourselves and France is far greater than is acknowledged and the public is aware of. We are conscious of what we did to help the French in Mali, in terms of heavy lift, and, more recently, the reciprocal help by France in maritime patrols, where we are currently sadly deficient.

I remember a very early briefing that the current Secretary of State gave to a number of us when he told us that the one thing that had really surprised him was the degree of co-operation that he found existed between our military and the French. He almost implied that he was speaking daily to his French opposite number, but there is a great reluctance by the Government to acknowledge just how much and how deep co-operation there really is, as my noble friend said.

I have a number of questions to put briefly to the noble Baroness arising from the SDSR. If she cannot answer the points tonight, perhaps she could write to me. Paragraph 450 says of the SDSR:

“We will … collaborate on complex weapons”.

Can she indicate what these complex weapons are?

Paragraphs 512 and 535 refer to the UK-France Combined Joint Expeditionary Force. Paragraph 535 says:

“Our Combined Joint Expeditionary Force, which will be operational in 2016, will provide a potent combined reaction force of up to 10,000 personnel”—

a crisis-responding force. We are nearly in 2016 now, so what is the latest situation with this force?

Finally, reference is made in Paragraph 535 to “shared opportunities” when our new carriers enter service. In a number of briefings that I have been at over the years there have been very strong hints from the Navy that we will be looking to our allies—and, I suspect, particularly France—to provide escort support for our carriers, given the sadly inadequate number of escorts that we have. Can the noble Baroness give some indication of current thinking in this area?

8.21 pm

Baroness Ludford (LD): My Lords, I, too, thank my noble friend Lord Wallace of Saltaire for initiating this very timely and important debate. The European Council only had its first discussion on a common security and defence policy since the Lisbon treaty in December 2013—so only two years ago—but it had another fairly quickly, in June this year, when it vowed to keep security and defence policy regularly on its

7 Dec 2015 : Column 1393

agenda. There are preparations under way to renew both the EU internal security strategy and the global strategy on foreign and security policy. It is clear that there is considerable overlap and convergence between those two: where does the fight against ISIS/Daesh as a terrorist organisation stop and that against it as a military threat start? European cyberdefence against organised criminal hacking networks shades into defence against cyberespionage and cyberwarfare conducted by states.

Indeed, the way that internal and external security are intertwined is shown by France invoking Article 47.2 of the Treaty on European Union on mutual assistance. It suffered a terrorist attack but the response is a mixture of intelligence policing and military capabilities. None of this means a European army, even if that aim has been supported fairly recently by the Commission President, Mr Juncker. Indeed, to quote Mrs Mogherini, the high representative, the convergence of internal and external security has,

“led to a renewed impetus in the EU-NATO relationship”.

She meets regularly with NATO Secretary-General Jens Stoltenberg.

European states are facing common threats. Europe needs a common response through the pooling of resources and equipment, joint procurement and interoperability so that EU and NATO capabilities and operations are increasingly integrated. The European Defence Agency is getting into its stride with a number of effective pooling and sharing projects, including pilot training, satellite communications, medical capability and air-to-air refuelling. I think that there was a Conservative pledge, possibly in the 2010 manifesto, to review UK membership of the European Defence Agency. Can the Minister confirm that that has been quietly shelved?

As my colleagues have mentioned, there are informal examples of co-operation through the French maritime patrols off the coast of Scotland, and indeed the UK offer of the use of RAF Akrotiri in Cyprus to France. It was most welcome that the strategic defence and security review vowed to further strengthen the UK-France defence and security relationship, and was perhaps a little unexpected. The plans include, as my noble friend mentioned, a combined joint expeditionary force of up to 10,000 personnel, collaboration on equipment, including the procurement and development of missiles, the exploitation of shared opportunities with the new aircraft carriers, and stronger links between the Army’s 16 Air Assault Brigade and its French counterpart. Obviously the joint working in Iraq and Syria against ISIS, although the subject of a particular vote, is part of that trend.

Mention is also made in the SDSR of the relationship with Germany. That makes sense as Germany seems to be emerging from its chrysalis on defence. Germany and Poland should take on more of the role in NATO territorial defence, leaving the UK and France, which are more willing to deploy forces outside Europe, to continue to fulfil a wider range of responsibilities.

All this is taking place against a background of historic weaknesses in terms of waste and duplication, and a reluctance to co-procure and specialise. That is

7 Dec 2015 : Column 1394

for a variety of well-known reasons: loss of strategic autonomy and sensitivity of the defence sector, along with a reluctance to give up the strategic industrial base which is seen as a matter of national prestige. Then there is nervousness about specialisation, including whether others are going to pull their weight in funding. I think that we need to look at the dangers of free-riding.

While there has been considerable bilateral co- operation, there is no invoking of the facility for permanent, structured co-operation under Article 46 of the Treaty on European Union to develop “differentiated integration”, to use the EU phrase, among member states. Can the Minister tell us if there is any prospect of invoking this structured permanent co-operation so as to streamline the variety of initiatives taking place?

Finally, I shall quote Professor Malcolm Chalmers, the director of RUSI:

“Most of all, the UK needs to work to maintain and strengthen the partnerships on which its security and prosperity depends. The grand strategy which it adopted in the 1940s, anchored on a community of fate between the countries of Europe and North America, remains the right one for the country today. Those who argue for a return to nationalism, and for a fragmentation of European institutions, remain on the fringes of politics”.

I hope that that remains the case. Can the Minister elaborate on an intriguing mention in the SDSR of the formation of a cross-Whitehall joint Euro-Atlantic security policy unit, apparently to bring together diplomatic and defence expertise and foster EU and NATO co-ordination and co-operation? I would be interested to know how this encouraging initiative will work and whether personnel from our allies will be somehow associated with this unit.

8.28 pm

Lord Collins of Highbury (Lab): My Lords, I, too, want to thank the noble Lord for initiating this debate and for his introduction, which as usual was an excellent lesson in history. I welcome much of the new national security strategy, with chapter 5 setting out how the Government will use diplomats, development assistance, the Armed Forces, the security and intelligence agencies, law enforcement and soft power to protect and promote our interests and values. If we are to have the international security and stability that we seek, development, defence and diplomacy have to go together.

The SDSR needs to demonstrate a joined-up, whole-government approach. Of course, this is also recognised in the new policy statement, UK Aid: Tackling Global Challenges in the National Interest. My noble friend Lord McConnell referred to that statement in the debate last week, and welcomed the new £1 billion fund for conflict stability and security. However, as he remarked, the strategies for these new funds are far from clear. Although he failed to get an answer from the noble Earl, Lord Howe, I hope the Minister will respond today to my noble friend’s request that the Government consider allocating time in the new year for a debate on the strategies behind these two critical new commitments.

The Government’s commitment on defence spending and to the 0.7% for development spending is also welcome, but cutting back on diplomatic analysis and research strength may in the long run cost us more. Better understanding foreign societies at risk of instability

7 Dec 2015 : Column 1395

and improving the UK’s ability to respond intelligently and appropriately to international crises are vital, as the Ukraine crisis taught us. The UK now spends less per head on diplomacy than the US, Germany, France, Australia, Canada and New Zealand.

To multiply what we can achieve alone, the Government talk of investing more in our relationships with our traditional allies and partners and building stronger partnerships around the world. Since we joined the European Union many years ago, British foreign policy has had two key pillars. The first is exercising a leading role in Europe and the second is being the principal ally of the United States. As President Obama made clear, leaving the EU would have an impact on not just one but both of those pillars.

Unfortunately, the strategy section on the European Union is weak, failing to mention the potential of the External Action Service and the Development Commission to build stability in the world. One Eurosceptic myth often repeated is that we were never told when we joined the European Community that it had implications for foreign policy and that it was just a common market for trade. In the debates we have had on the EU Referendum Bill we have heard from the Eurosceptic side of the Conservative Party about the sort of future relationship they would like us to have with the European Union and its leading member states.

One model we heard about was, of course, Norway’s, although the Prime Minister now appears to have decided against that. Whatever model is considered, to turn away from our closest neighbours in the rest of Europe who share our democratic values hardly seems credible when determining what our place and role in the world should be. As the strategy points out, Russia’s illegal annexation of Crimea and the destabilising activities in Ukraine directly challenge European security and the rules-based international order. In challenging Russia over Ukraine, the European members of NATO have worked closely together, imposing EU sanctions to parallel those NATO measures.

Of course, as the strategy states, we need to keep open the possibility of co-operation, seeking to engage with Russia on global security, including international efforts to tackle the ISIL threat and building on the successful co-operation that we shared in negotiations on Iran’s nuclear programme. But one of the difficulties that we have in assessing the long-term sustainability of the review is that we have yet to conclude what future relationship we wish to have with our nearest neighbours. As recent tragic events have taught us, the threats—as the noble Lord, Lord Wallace, said—that we face as a nation today, such as international terrorism, migration and cross-border crime are all shared with our closest neighbours. Key to this debate is understanding that Britain shares values and interests with our European neighbours, and that any coherent British foreign and security strategy has to be founded on that European strategy.

8.34 pm

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, this has been a short—QSDs always are short—and wide-ranging debate. I am certainly grateful for the

7 Dec 2015 : Column 1396

contributions of noble Lords. I shall seek to address some of the main issues raised tonight. Indeed, the noble Lord, Lord Collins of Highbury, in asking for time in the new year for two more debates put into context what we have had here tonight, which is a debate that has gone far wider than the subject put to us by the noble Lord, Lord Wallace of Saltaire. Some of the questions about material, which the noble Lord, Lord Lee of Trafford, addressed, are absolutely key issues, but we will have to wait for that because they need to be considered across the whole issue of procurement. I hope to be able to answer one or two of the questions posed by the noble Lord, Lord Davies of Stamford, within the context of this debate.

It is clear that European security must respond to new and changing threats, from terrorist outrages such as those in Paris, to which noble Lords have referred, to state-based threats such as Russia’s illegal annexation of the Crimea. I am glad that the noble Lord, Lord Collins, referred to the importance of that. The Government’s strategic defence and security review builds on the unique strengths of the United Kingdom and it deepens our co-operation with our international partners. After all, we are the only nation to be at one and the same time a permanent member of the United Nations Security Council, a leading member of NATO, the EU, the Commonwealth, the G7, the G20, the OSCE, the OECD, the World Trade Organization, the IMF and the World Bank. Nobody can say we are not international in our co-operation.

We have the second largest defence budget in NATO and the largest in the EU. We are also the only country in the world committed to spending both 2% of our national income on defence and 0.7% on development assistance. This strength is vital in promoting peace overseas. However, as noble Lords have recognised tonight, the threats we face do not recognise borders. That is why we must indeed invest more in our alliances and make these relationships international by design—building our forces and capabilities in ways that complement and integrate with those of our allies. NATO is the bedrock of our national and collective defence. Last year’s summit in Wales saw new initiatives to tackle new threats and secured an unprecedented commitment from 28 Heads of State and Government to halt the decline in defence expenditure.

Under our commitments, the UK will invest more to counter cyberthreats. We will more than double our investment in our Special Forces and will contribute to NATO exercises, reassuring allies against the threat from Russia. In 2017, the UK will lead the very high readiness joint task force, again formed in response to Russia’s actions in Ukraine.

We are working closely with allies to ensure that the Warsaw summit in July next year delivers an alliance that is transparent, accountable and capable of responding to any threat. We will also continue to encourage our other allies to meet the NATO 2% commitment, as we have done.

In addressing modern security threats, it is important, as noble Lords have stressed tonight, to build greater co-operation between NATO and the European Union. It is a high priority of the United Kingdom. Good work has already been done, but we will work with High Representative Mogherini and Secretary-General

7 Dec 2015 : Column 1397

Stoltenberg of NATO, whom I met earlier this summer when I was at the Croatian forum, and other allies and member states—of course—to drive this agenda forward, particularly on hybrid, ensuring that both institutions’ strategies are consistent with a view to a joint exercise next year.

Cyber—the co-operation between the two organisations—was formalised through the enhanced NATO cyberpolicy agreed at the Wales summit last year, and we are pressing both sides to explore joint training and shared best practice—I hope that that will please the noble Lord, Lord Davies. Also we are building capacity in third states. Both organisations are developing capacity-building initiatives and have much to offer in security sector reform. We will encourage them to co-ordinate efforts where it makes sense to do so.

A secure and prosperous UK relies on a secure and prosperous Europe. As my right honourable friend the Prime Minister has said, meaningful reform of the EU in the areas that he has already set out would benefit our economic and national security. That is why he believes that Britain’s best future lies within a reformed EU if necessary changes can be achieved.

As for the European Union’s own work on security, I would highlight in particular what it has called its comprehensive approach—to which noble Lords referred this evening—which combines military, civilian, diplomatic and development tools. I was asked what this cross-Whitehall body was and how it would work. I have to encourage the noble Baroness to be a little patient with us: the report only came out less than two weeks ago. However, it is a signal of our intent to work across Whitehall and to deliver that combination of military, civilian, diplomatic and development work. Because of the work I do on the prevention of sexual violence in conflict, I already see joint working with the MoD in ways I never thought possible before and I find its response absolutely encouraging. People are prepared to share their experiences and enable me to meet the Armed Forces overseas. This is a way forward which will bring great benefits.

This approach offers the UK an effective way to project stability in our neighbourhood and across the world. For example, the successful EU missions in the Horn of Africa, referred to by the noble Lord, Lord Wallace, and in Bosnia and Herzegovina, in which the UK has played a leading role, have directly contributed to UK objectives. I am not backward in coming forward about praising co-operation with the EU. How could I be? Tonight I have the chance to put on the record my admiration for the work of EUFOR Althea in Bosnia and Herzegovina. When I visited there this summer, they enabled me to spend much of the day with some their forces in a helicopter. I was able, thereby, to see the challenges they face and the success they have in carrying out their task of overseeing the military implementation of the Dayton agreement. Co-operation with the EU works, but it is not the only co-operation that works. EU sanctions on Russia have also been an important element in our response to the illegal annexation of Crimea.

7 Dec 2015 : Column 1398

We will continue to press for improvements to the effectiveness of the Common Security and Defence Policy, with a focus on making existing structures work better, rather than creating new ones. The noble Baroness, Lady Ludford, the noble Lord, Lord Lee of Trafford, and other noble Lords mentioned some people being concerned about a European army. We are not, because it is not going to happen, but we do welcome closer co-operation between the armed forces of EU and NATO member states. However, that of course needs to be based on improving deployable defence capabilities across Europe, not creating new institutions. We have consistently made it clear that we would oppose any measures that would undermine member states’ competence for their own military forces or lead to competition and duplication with NATO.

I was also teased a little by the noble Baroness, Lady Ludford, about the European Defence Agency and whether we were silent on it. Silent no more: here we go. We welcome the reforms that the EDA has begun, in particular the addition of a three-year planning framework and the project management tool which is in development. This is encouraging progress which will support the agency in delivering greater transparency and enhanced stakeholder communication. We are encouraging the EDA to focus on the existing project areas of cyber, remotely piloted systems—commonly known as RPAS—air-to-air refuelling and government satellite communications, but not to embark on new projects unnecessarily. However we want to look at the budget involved. While we are making further reforms to meet our commitment to cut the budget deficit, and when the wider European economy is still recovering, it is not appropriate to increase UK taxpayer funding to the EDA. Subject to further reforms, we will review our position with a view to considering whether we support an increase to the budget in 2017.

Going further with regard to co-operation, the revised European global strategy, led by High Representative Mogherini, will be an important part of that goal. We welcome the strategy’s broad scope and believe that it should also form a basis for greater institutional co-ordination within the EU, particularly between the Commission itself and the EEAS, where there remains significant room for improvement. As I mentioned earlier, we will also use our influence as a leading member of the OSCE. Not only will we support the ongoing work of the special monitoring mission in Ukraine but we will work through implementation of the conventional arms control regime.

Bilateral engagement is, of course, crucial. It is important to note that the US remains our pre-eminent partner for security, defence, foreign policy and prosperity. We will strengthen co-operation on national security issues and improve interoperability between our Armed Forces, and we will deepen bilateral co-operation with European partners. Since 2010, we have built an exceptionally close relationship with France. Following the appalling attacks in Paris on 13 November, we have expressed solidarity and offered bilateral support, including personnel and logistical support. We are committed to strengthening this important defence and security relationship further. As agreed in the

7 Dec 2015 : Column 1399

Lancaster House treaties, the Combined Joint Expeditionary Force of 10,000 personnel will be operational next year.

Germany was rightly mentioned. The action it has taken in parliament is so important. Its technical assistance will be crucial and shows the joint European effort against Daesh. We will further deepen our co-operation with Germany, too, in areas ranging from intelligence-sharing, cyber and procurement of equipment to energy security and military support for humanitarian work and deployment.

We are working further with our wider European partners, including Norway, the Netherlands and Denmark—the noble Lord, Lord Wallace, rightly mentioned the northern group. In almost every aspect of our national security and prosperity we must work with others, not because we cannot work alone but because the threats, opportunities and challenges are global. That is what underlines my response tonight. We work together because that is the only way we defeat evil opponents such as Daesh.

8.47 pm

Sitting suspended.