2 Feb 2016 : Column 1713

House of Lords

Tuesday, 2 February 2016.

2.30 pm

Prayers—read by the Lord Bishop of Norwich.

Land Registry

Question

2.36 pm

Asked by Lord Lea of Crondall

To ask Her Majesty’s Government whether they have any plans to privatise the Land Registry.

The Earl of Courtown (Con): My Lords, in the Autumn Statement last year, my right honourable friend the Chancellor announced the Government’s intent to consult on options to move operations from the Land Registry into the private sector from 2017. The Government are currently looking at the best options to achieve their objectives. No final decisions will be made on the future of the operating model of the Land Registry until a public consultation has been completed.

Lord Lea of Crondall (Lab): My Lords, Ministers have referred to the rationale for this decision in terms of asking the public and ourselves what overriding reason there is for the Land Registry to stay in the public sector, which is an ideological position. Two questions arise from that. First, I return the compliment and ask: on what grounds is the noble Earl parting company with William the Conqueror who, in 1086, ordained the compilation of the Domesday Book of all land holdings, successfully completing this as a state function? Indeed, it is a natural monopoly like tax collection, and as such is identified in all economics textbooks as the classic exception to the normal case for competitive and profit-maximising private enterprise. Secondly, there was nothing on this in the Government’s manifesto and according to a recent poll it is opposed by 95% of the British people, so how come the Government announced their intention—as the Minister said—to sell it for a sum of £1 billion, according to the FT, with only the flimsiest lip service paid to protecting the integrity of the register?

The Earl of Courtown: My Lords, I am not sure I have any relationship with William the Conqueror. Seriously, the noble Lord asked a number of questions but in essence asked why we are doing this. As he is aware, the Government continually review all their assets to ensure that public services operate efficiently and effectively for the taxpayer. A sale of part or all of the Land Registry operations is expected to deliver a capital receipt for the Government. That can be invested elsewhere for the benefit of the taxpayer. Where there is no strong policy reason for continued public ownership of an asset, it is right that the Government look at the merits of sale.

Lord Rooker (Lab): My Lords, why cannot the Land Registry do more to stop London becoming the money-laundering capital of Europe by at least ensuring that all property transactions—all of them, but particularly

2 Feb 2016 : Column 1714

from abroad—have the beneficial owner listed rather than just corporate ownership, as is the case with properties purchased by companies inside the UK, so that it is fair for all? Lastly, why can it not publish all the purchase prices of properties where they are purchased from abroad? It publishes only 70% of the purchase prices of properties purchased from abroad and that leaves us, as a country, wide open to massive money-laundering.

The Earl of Courtown: The noble Lord makes some very interesting points. He must also be aware that we are going to have this open and public consultation in which he will have the opportunity to make those points.

Baroness Butler-Sloss (CB): My Lords, are the Government entirely appreciative of the enormous importance of the integrity of the Land Registry? Having worked for many years as a lawyer, I would like to be sure that before the Government take the step of privatising it, they understand the implications and that whoever takes it over must have the same degree of integrity as the people who run it now.

The Earl of Courtown: My Lords, I thank the noble and learned Baroness for that point. She is quite right—the integrity of the Land Registry has to continue; it has to be trusted by customers, people selling property, conveyancing bodies and the law societies. At an early stage, the project team engaged with officials across Whitehall, and outside government we have been in contact with the Land Registry Advisory Council, which includes the Building Societies Association, the Law Society and the Conveyancing Association, among others.

Lord Anderson of Swansea (Lab): My Lords, the danger is surely that the Government will see the changes as an opportunity for a job-cutting exercise. In evaluating the options, what weight will be given by the Government to the preservation of jobs in areas of high unemployment?

The Earl of Courtown: My Lords, there will be no immediate change for Land Registry staff; no decisions will be taken until, as I said earlier, public consultation has taken place. In the case of a change, we will look to make all changes compliant with employment law and, after appropriate communications and engagement, with the trade unions. I should add that in the Land Registry 63% of employees are represented by the PCS and the FDA, and I know that they have regular conversations with the management and that even at the most senior level that happens as well.

Lord Cormack (Con): My Lords, in view of Google's incredible photographic survey, can my noble friend assure the House that there will be no selling to Google?

The Earl of Courtown: My Lords, my noble friend, as ever, poses an interesting point. I am not sure whether this is an area that the company mentioned is involved in.

2 Feb 2016 : Column 1715

Lord Stevenson of Balmacara (Lab): My Lords, if the Land Registry is purchased, I assume that the Government will put in place measures to prevent a new commercial owner exploiting access to the register for commercial gain. If so, will that not reduce the price?

The Earl of Courtown: My Lords, obviously, as the consultation has not taken place and we do not actually know how the sale will be established, we cannot even talk about the price. But the noble Lord makes a point about exploitation, and he is quite right that those aspects must be guarded.

Lord McNally (LD): My Lords, I declare an interest in that the Land Registry was the first organisation to offer me a job at the age of 16, so I have always had a fondness for it. Is the Minister aware that the reason why the noble and learned Baroness, Lady Butler-Sloss, is so right is that Land Registry is a key part of the most important thing that most people ever do, which is to buy a house? The public trust the Land Registry. If the public consultation that the Minister has proffered as a way forward shows overwhelming hostility to the Government’s plans by the general public, will the Government accept that decision?

The Earl of Courtown: My Lords, I cannot possibly pre-empt what is said in the consultation and what Her Majesty’s Government will say in response. As I said earlier, the consultation will be taken very seriously by the department.

Energy: Carbon Capture and Storage

Question

2.45 pm

Asked by Lord Teverson

To ask Her Majesty’s Government what assessment they have made of the potential in the United Kingdom for the development of carbon capture and storage.

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con): My Lords, the Government believe carbon capture and storage has the potential to play an important role in the long-term decarbonisation of the United Kingdom’s power and industrial sectors.

Lord Teverson (LD): I thank the Minister for that very short reply. In the Committee stage of the Energy Bill this Session, he stated that,

“CCS is central to what we are seeking to do on decarbonisation”.—[

Official Report

, 7/9/15; col. 1230.]

Given the cancellation of the projects in Scotland and Yorkshire earlier this year, is that still the Government’s view, or is this a new vision of CCS and decarbonisation?

Lord Bourne of Aberystwyth: My Lords, a decision was taken to cancel the competition rather than the projects to which the noble Lord referred. CCS remains vital to what we are seeking to do in decarbonisation. There are many ways in which we are pushing it forward, not least with industrial carbon capture and storage, innovation and, with our partners, looking at joint research and joint sharing of information.

2 Feb 2016 : Column 1716

Lord Howell of Guildford (Con): My Lords, I am sure that the noble Lord, Lord Teverson, is right in theory that, if CCS can be made to work, it will be the means of continuing to burn oil, gas and coal in a low-carbon way and thus preventing the looming power crisis that seems all too likely in the near future, but would not my noble friend agree that, in fact, it is impossibly expensive and that the technique of storing in North Sea oilfields is slightly dubious and not fully proven? Would it not be much better to divert resources, such as they are, to carbon capture and utilisation—a cheaper method of carbon capture and sequestration—and to increased energy efficiency?

Lord Bourne of Aberystwyth: My Lords, my noble friend is right to address the enormous cost of the competition. It was going to cost £1 billion. We remain very active in sharing information and data with the United States, Canada, Norway, South Korea, Japan and China, all of which are pushing forward on this, and we are sharing research and information.

Lord Framlingham (Con): My Lords, although methods of capturing and storing carbon are becoming more and more sophisticated, the simplest, pleasantest and most efficient way of doing it is still by the use of trees. Can I urge the Minister to do all he possibly can to urge the Government to apply maximum energy on the care of trees and planting of trees, particularly in our towns and cities?

Lord Bourne of Aberystwyth: My Lords, my noble friend is absolutely right on the vital nature of this. It was a leading part of the discussions in Paris and was spearheaded by His Royal Highness the Prince of Wales. The United Kingdom is very much of the same view, as was the rest of the world at Paris.

Lord Broers (CB): My Lords, getting back to the cost of CCS, I think at the moment the strike price for it is about three times the reference price, which means that if we went that way, the cost would increase three times. We are hoping the price may come down in the 2020s to only twice the cost, but should we not get on with anything we can to understand that situation and the costs more? As the noble Lord, Lord Howell, said, it may not be feasible at all. It is a surprise to most of us that this competition was cancelled.

Lord Bourne of Aberystwyth: My Lords, I agree with most of what the noble Lord said, except about the cancellation. The cancellation was of an extremely expensive project. He is absolutely right that our role, along with others, is vital. We are a leading part of the Carbon Sequestration Leadership Forum internationally and, as I indicated previously, we are talking with key allies about what to do in this area.

Lord Grantchester (Lab): My Lords, key organisations have written jointly to the Prime Minister deeply concerned about the Government’s decision to withdraw £1 billion of funding for CCS. This decision is no way to encourage businesses or investor confidence and is undermining the development of a low-carbon economy. Will the Government accept that they have perhaps made a mistake in axing this programme, recommit the funds and come up with a new strategy?

2 Feb 2016 : Column 1717

Lord Bourne of Aberystwyth: My Lords, I agree with the noble Lord about the importance of CCS, but I disagree with him in relation to the cancellation of the project. As I have indicated, we are looking at other ways of advancing CSS, including an innovation budget, possibly a contract for difference and international co-operation. This is the right way forward with value for money.

Baroness Featherstone (LD): My Lords, as the UN’s Intergovernmental Panel on Climate Change concluded, CCS is a hugely important part of tackling climate change, particularly with regard to cost-effectiveness. Without the crucial £1 billion investment in the cancelled CCS project—as the Government themselves phrased it just a year ago—how else are binding carbon targets to be met? I urge the Government to reconstitute the £1 billion pioneering project.

Lord Bourne of Aberystwyth: My Lords, the noble Baroness is wrong: it is not £1 million but £1 billion. This is the whole point. It is a massively expensive project. We have to look at value for money and at achieving the best ends for the best value. As I say, we recognise the importance of CCS. That is why we are carrying it forward in so many other ways.

Lord Hain (Lab): My Lords, if the Minister is as positive about carbon capture and storage as he has indicated with his warm words, why is he slashing its budget so savagely?

Lord Bourne of Aberystwyth: My Lords, I have indicated that it is an issue of value for money. We do not believe that £1 billion spent on a competition is the right way forward. We are spending money elsewhere, such as on industrial carbon capture and storage; we are working with allies; and we have a powerful innovation budget. This is a key area, but we must get value for money.

Lord Teverson: My Lords, surely this cancellation—this U-turn, this emergency brake—has taken away our reputation as decarbonisation leaders in the world, and has taken away investor confidence in the sort of low-carbon energy projects that we want in this country.

Lord Bourne of Aberystwyth: My Lords, anyone who was present in Paris for the conference at the end of the year, post the decision on the cancellation, would recognise that we are seen as having a leading role on decarbonisation. That is the reality.

Railways: South East Flexible Ticketing Scheme

Question

2.51 pm

Asked by Baroness Randerson

To ask Her Majesty’s Government what is the expected date for the full implementation of the South East Flexible Ticketing Scheme.

2 Feb 2016 : Column 1718

The Parliamentary Under-Secretary of State, Department for Transport and Home Office (Lord Ahmad of Wimbledon) (Con): My Lords, we are completely committed to the introduction of smart ticketing as set out in our manifesto. The South East Flexible Ticketing programme is proceeding with its existing contractual obligations and I fully expect these to be delivered by the end of 2016. We want to accelerate progress, support programmes where necessary and challenge operators to do more.

Baroness Randerson (LD): My Lords, £37 million has been spent on the scheme so far but now it appears that the Government have abandoned completing it. Last November they were blaming train operating companies for delays, but now they say that they will leave the rest of the scheme to those same companies to complete as part of their franchise requirements. This will slow down implementation, affecting all passengers but particularly part-time workers, 75% of whom are women. When do the Government think smart ticketing will now be fully introduced across all lines? Will future franchises require full integration of ticketing with other train operators, not simply a paperless system?

Lord Ahmad of Wimbledon: I remind the noble Baroness of the Answer I just gave: we are looking to complete that by 2016. The five operators that have already signed cover 73% of the network. With regard to part-time season tickets, through the franchise competitions we are ensuring that operators develop appropriate proposals for pricings within that.

Lord Bradshaw (LD): My Lords, might the Minister consider the fact that, I believe, smart ticketing now depends on contactless cards? These require an enormous back-office facility to adjust the money between operators. The operators cannot agree to share the information with one another. Would it not be better if ATOC, the independent association of train operators, which deals with revenue matters now, addressed this?

Lord Ahmad of Wimbledon: We are seeing increased co-operation across train operators and we are working closely with the industry to ensure just that. As I have already indicated, there is 73% coverage with the existing operators. In one case, for season ticket holders we already have 22% of the market covered through smart ticketing.

Lord Rosser (Lab): The Rail Delivery Group has recently had discussions with the Rail Minister, Claire Perry. She was going to send a formal letter to the group setting out the Government’s expectations on ticketing. In order to clear up any doubts about the current situation and the position with the South East Flexible Ticketing smartcard scheme, and indeed with other schemes, can I ask whether that letter has been sent? If so, will the Minister place a copy in the Library?

Lord Ahmad of Wimbledon: I have just enjoyed a sandwich lunch with my honourable friend the Rail Minister, and I asked her that question. That letter will be sent shortly, and as soon as it is issued I will ensure that a copy is put in the Library. The noble Lord

2 Feb 2016 : Column 1719

pointed to wider arrangements. Through the Smart Cities Partnership, nine additional regions are looking at smart ticketing.

Lord Geddes (Con): Does my noble friend agree with the leader of Her Majesty’s Opposition in another place that the railways should be renationalised?

Lord Ahmad of Wimbledon: I do not think I agree with anything the leader of the Opposition in the other place says.

Lord Christopher (Lab): My Lords, will the noble Lord confirm or deny the very strong rumours reaching me—I declare an interest in that I travel on Southern trains—that there are plans to transfer Southern to Transport for London? Can he also confirm that, if that is true, it would be quite legal for Transport for London to exceed the boundaries of London?

Lord Ahmad of Wimbledon: I will write specifically on that issue to the noble Lord. I believe that the noble Lord was referring to the awards of franchises; it is true that we are working very closely to ensure that there is an open competition. However, I will write to him on his specific question.

Lord Tomlinson (Lab): The Minister has declared to the House that he does not think that he would agree with anything said by the leader of the Opposition in the other place. Is he really saying that as a Minister in the Government he is declaring himself opposed to the referendum that will take place on our membership of the European Union?

Lord Ahmad of Wimbledon: My right honourable friends have made clear their position on the EU referendum; we are negotiating. I am a member of my right honourable friend the Prime Minister’s Government and stand with him. He is ably leading negotiations and it is in the interest of everyone, both in the other place and this House, to show full support for our Prime Minister of Great Britain.

Commercial Debt: Late Payments

Question

2.56 pm

Asked by Lord Harrison

To ask Her Majesty’s Government what action they plan to take, in the light of the report by the Groceries Code Adjudicator regarding Tesco’s supplier payment policy, to address the late payment of commercial debt.

The Earl of Courtown (Con): My Lords, the Government are implementing a package of measures to help create a responsible payment culture, where larger companies recognise the benefits of having a sustainable and robust supply chain and smaller businesses feel able to challenge poor behaviour. A new reporting requirement on the UK’s largest companies this year will compel larger companies to report on payment practices and policies. Our proposed Small Business Commissioner will help small businesses resolve payment disputes with larger businesses.

2 Feb 2016 : Column 1720

Lord Harrison (Lab): Given that the Groceries Code Adjudicator found in one case that a supplier was owed a multimillion pound payment for two years, and given that many smaller suppliers find the risible Prompt Payment Code entirely useless when it comes to getting their rights, will the Minister say what powers and resources both the adjudicator and the newly created commissioner will be given to help the 5.4 million small businesses, which have laboured for too many years under this imposition of slow and late payment of commercial debt?

The Earl of Courtown: My Lords, the noble Lord is quite right in what he says about late payment to SMEs. From my own experience in that area, having jointly run an SME, I know how difficult it is for a profitable and competitive SME if you get late payment from your customers and have to pay early to your suppliers. I should also make the noble Lord aware that the Government are taking significant steps to tackle late payment. In addition to the measures I have already outlined, we have strengthened the Prompt Payment Code to promote 30-day payment terms as a norm. The code will also enforce maximum 60-day payment terms for all signatories. At the moment, there are over 1,700 signatories to the Prompt Payment Code, many of which are some of our largest companies.

Baroness Sharples (Con): Will the Minister tell us whether all government departments are paying their debts on time?

The Earl of Courtown: My Lords, as far as the public sector prompt payment measures are concerned—to pay 80% of undisputed invoices within five days and all within 30 days—my department, BIS, exceeded this target and paid 99.5% of its invoices on time in 2014-15.

Lord Stevenson of Balmacara (Lab): My Lords, we all applaud that. The Groceries Code Adjudicator’s report definitively establishes that Tesco has been in breach of all 10 of the undertakings required of members of the Prompt Payment Code. The Enterprise Bill is still in the other place, so would it not be sensible for the Government to bring forward an amendment to that Bill that would make a statutory Prompt Payment Code, backed by significant penalties for those who are unable to meet it?

The Earl of Courtown: My Lords, as the noble Lord is aware, because he took a leading role on the Enterprise Bill in your Lordships’ House, the Groceries Code Adjudicator does have weapons and is able to fine companies up to 1% of turnover, which is a considerable amount of money. The Government welcome the findings of the first investigation by the GCA. The report highlights that we still have some way to go to create a responsible payment culture in the UK. The Government remain committed to tackling the poor payment practices that hinder our small businesses.

Baroness Jenkin of Kennington (Con): My Lords, I understand that the terms of reference are shortly to be finalised, but will my noble friend confirm that,

2 Feb 2016 : Column 1721

in the forthcoming statutory review, there will be full consultation with the grocery supply chain, including farmers, NGOs and Civil Service organisations?

The Earl of Courtown: My Lords, my noble friend refers to the performance review in the Groceries Code Adjudicator Act. My noble friend will be glad to hear that consultation will be as wide as possible.

Baroness Burt of Solihull (LD): My Lords, this report lifts the lid on the abuse suffered by suppliers at the hands of Tesco. On late payments, the Liberal Democrats urged the Government to impose statutory fines for repeat offenders in the Enterprise Bill, which was alluded to by Labour earlier. The Government refused, and the Small Business Commissioner, who the Minister has already mentioned, has barely any powers to tackle this scourge. In the light of this report today, and if the Government do not want to be perceived as having a deferential attitude towards big business, will they think again?

The Earl of Courtown: My Lords, I cannot answer for part of what the noble Baroness says, but, basically, the whole issue is for companies to treat their suppliers in a way that cuts down late payments. However, the noble Baroness is quite right to say that we are not going to impose sanctions as she described.

Baroness McIntosh of Pickering (Con): Will the Minister congratulate the Groceries Code Adjudicator on this her first decision? Will he insist that a proportion of the fine be used to increase her resources to enable her to do more such investigations? Will she be allowed to take own-initiative investigations, off her own bat, rather than wait for a referral from small producers that simply are too timid to do so?

The Earl of Courtown: My noble friend is quite right that support has to be given to small producers and SMEs in this instance. As far as more powers for the adjudicator are concerned, I feel that those will be part of the performance review. However, if there is anything more that I can add to that, I will write to my noble friend.

Lord Rooker (Lab): Does the code cover the cases that I came across in my early days as a Minister, where big companies did not just squeeze their suppliers but found out who the suppliers to their suppliers were and squeezed them, too? The big companies know they have the supplier over a barrel, and the suppliers do not complain about it because they are scared stiff. This is not a straightforward A to B; it is A jumping over B to get to the supplier’s supplier and squeeze them as well.

The Earl of Courtown: The noble Lord is quite right. I do not know the answer to his question, I am afraid, but I will write to him. It goes back to the issue that I talked about before, where SMEs are being squeezed at both ends of the job. They are being squeezed by the people they have to buy from, sometimes they have to pay money upfront, and if they find that they have to pay 90 days later, they are being squeezed by their customers.

2 Feb 2016 : Column 1722

Lord Foster of Bishop Auckland (Lab): When will the Government be as tough on companies behaving badly as they are on benefit claimants?

The Earl of Courtown: My Lords, we are being tough on companies. The Groceries Code Adjudicator, as I said earlier, has had powers for all investigations since April 2015, when the order went through, and to fine these companies up to 1% of their turnover, which in anybody’s language can be a considerable amount of money.

Lord Lexden (Con): Do the Government believe that supermarkets are treating our milk producers fairly?

The Earl of Courtown: My Lords, milk production is going through a difficult position at present, but I will have to write to my noble friend about that issue. I can say that any mistreatment of the suppliers by the large supermarkets is basically unfair.

Lord Empey (UUP): The Minister may be aware that, certainly in Northern Ireland this year and I suspect elsewhere, farm incomes dropped by 41%. I am sure that that is the case in many other areas. How is it possible to ignore the fact that large companies are screwing these small farmers because they can? There needs to be a more vigorous approach by his department. Does he agree?

The Earl of Courtown: My Lords, farmers who are being squeezed in the middle by the low price of milk and high seed costs have great problems. I am afraid that I am slightly out of my knowledge area here, but I will write to the noble Lord to see if I can give him any more information.

Access to Palliative Care Bill [HL]

Order of Commitment Discharged

3.06 pm

Moved by Baroness Finlay of Llandaff

That the order of commitment be discharged.

Baroness Finlay of Llandaff (CB): My Lords, I understand that no amendments have been set down for the Bill and that no noble Lord has indicated a wish to move a manuscript amendment or speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

European Union

Statement

3.06 pm

The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, with the leave of the House, I will repeat a Statement made a short while ago in another place by my right honourable friend David Lidington. The Statement is as follows:

“Mr Speaker, at about 11:35 this morning the President of the European Council, Mr Donald Tusk, published a set of draft texts about the United Kingdom’s

2 Feb 2016 : Column 1723

renegotiation. He has sent these to all EU Governments for them to consider ahead of the February European Council. This is a complex and detailed set of documents that MPs will understandably wish to read and study in detail. With that in mind, subject to your agreement, the Prime Minister will offer an Oral Statement tomorrow following PMQs to allow MPs to question him, having first had a chance to digest the detail on the papers that have been issued in the last hour.

The Government have been clear that the EU needs to be reformed if it is to meet the challenges of the 21st century. The British people have very reasonable concerns about the UK’s membership of the EU and the Prime Minister is determined to address those. He believes that reforms that Britain is seeking will not just benefit Britain but the EU as a whole. So our approach in government has been one of reform, renegotiation and then a referendum. We are working together with other countries to discuss and agree reforms, many of which will benefit the entire EU, before holding a referendum to ensure British people have a final and decisive say about our membership.

The House will recall that the Prime Minister made a Statement after the December Council. At that meeting, leaders agreed to work together to find mutually satisfactory solutions in all four areas at the European Council in February. The Prime Minister’s meetings in Brussels on 29 January and his dinner with President Tusk on 31 January were steps in that negotiation process.

We are in the middle of a live negotiation and are now entering a particularly crucial phase. The Government have been clear throughout that they cannot provide a running commentary on the renegotiations, but I am able to say that much progress has been made in recent days, and it appears that a deal is within sight. The publication of the text is another step in that process, but I would stress to the House that there is still a lot of work to be done. If the text tabled today is agreed by all member states, it will deliver significant reforms in each of the four areas of greatest concern to the British people.

On sovereignty, the text shows significant advances towards securing a UK carve-out from ever closer union. On relations between the euro-ins and euro-outs, the document offers steps towards significant safeguards for countries outside the eurozone as euro members integrate further. On competitiveness, we are seeking a greater commitment by the entire Union for completing single market trade and cutting job-destroying regulations on business. On free movement, there are important ideas in President Tusk’s drafts for reducing the pull factor of our welfare system and on action to address the abuse of freedom of movement of persons. We believe that real progress has been made, but I would stress that more work still needs to be done and more detail to be nailed down before we can say that a satisfactory deal has been secured”.

3.11 pm

Baroness Smith of Basildon (Lab): My Lords, I am grateful to the Minister for repeating the Answer to the Urgent Question and for her diligence in keeping your Lordships’ House informed. We understand that

2 Feb 2016 : Column 1724

it must be embarrassing that this was not a Statement from the Government to Parliament. The Prime Minister is today making his statement to journalists and Ministers had to be summoned to the Dispatch Box through an Urgent Question in the other place to ensure that Parliament is properly informed. I realise that the Minister says that there will be an Oral Statement tomorrow, but she also said that this is a complex set of documents that MPs will understandably wish to read and study in detail. I hope they are able to do that overnight, because most of them will not be able to look at and absorb such a complex and detailed set of documents in order to hold a full debate tomorrow. It would have been helpful if the Government could have made a process Statement today.

Perhaps I may ask the Minister a few questions. First, given that the Prime Minister has himself emphasised in all his negotiations the role and power of national Parliaments, why have the Government sought to bypass Parliament today? Secondly, I know that the noble Baroness understands the importance of this issue to your Lordships’ House, so when will we have a proper opportunity—not just tomorrow, but a proper opportunity, having considered all the evidence—to debate and discuss the Prime Minister’s deal and the case to enlist widespread EU support?

Baroness Anelay of St Johns: My Lords, the Government do not bypass Parliament. In one breath the noble Baroness berates the Prime Minister for not being here to deliver a Statement, but with the next she berates him, it seems, for wanting to make a Statement tomorrow on what is a complex issue, and therefore it is too soon. I sympathise with all Members of the House, in that I know they pay a great deal of attention to the renegotiations, as we should as parliamentarians. They have done so throughout the process and I will continue to do my very best to update them. Of course, it is as ever for the usual channels to determine when there are debates, and I know they are listening carefully to me because the need for Parliament to be closely involved in discussions on these matters is as dear to them as it is to me. However, the papers refer to a work in progress.

Baroness Smith of Newnham (LD): My Lords, it is welcome to note that progress appears to have been made in all four of the important areas for reform that the Prime Minister has identified. Would the Minister reflect for a moment on one aspect of the sovereignty basket and the role of national Parliaments? As someone who hopes very much to campaign to remain in the European Union, and that the Prime Minister will be leading that campaign, I ask whether the Minister can explain how a red card system that requires 55% of Parliaments to make a case is really an improvement on the current yellow card system, which requires a third of Parliaments to do so. Might not an inter-institutional agreement that deals with and strengthens the current system be somewhat better?

Baroness Anelay of St Johns: My Lords, I appreciate that the noble Baroness has done a lot of work on the academic detailed background to this, which is an advantage that many of us do not have. The 55% figure,

2 Feb 2016 : Column 1725

which the BBC has reported, is not in the text released by Mr Donald Tusk, so the proposal for a majority depends on how that is defined. This is a working document, not a final agreement. The noble Baroness asks a very reasonable question about how a red card system is more effective. Those on a football pitch know what happens when they have a red card.

Baroness O’Cathain (Con): My Lords, first, I want to thank my noble friend for making these papers available to us. I recommend that everybody in the House get a copy of them and read them. They should read them in a spirit of tolerance—

A noble Lord: Oh!

Baroness O’Cathain: Well, because tolerance should be our reaction. The whole issue has been so hyped up that we do not know where we are. The letter by President Donald Tusk is the most generous and accommodating letter I ever expected to see from the EU. Not only that, he pays tribute to us. He says:

“To be, or not to be … that is the question”.

And:

“Nothing is agreed until everything is agreed”.

The whole tenor of this letter is good. Will the Government use this to try to lower the tension between those who want to stay in and those who want to go? Let us have a period of calm.

Baroness Anelay of St Johns: My noble friend is absolutely right. The British public will be facing the greatest decision they have had to make in a generation, and it is right that Parliament retain its approach of careful scrutiny, which is a model in this House, through the European Union Scrutiny Committee. My right honourable friend David Lidington said that he has written to the chairs of the European Union Select Committees of each House, and he will provide them with that letter before Friday. I understand he is also offering to send a memorandum of explanation so that they can better reach their own decisions. All papers have been deposited for scrutiny—not just partially but all of them—so that we may have the measured debate my noble friend calls for.

Lord Grocott (Lab): As these negotiations continue seemingly interminably towards a conclusion we all know—the Prime Minister declaring that he has achieved a triumph in his renegotiations and will be recommending a “remain” vote—is not one thing obvious to any neutral observer? It really is bizarre that the leader of a sovereign state—our Prime Minister—in order to make a relatively minor change in our social security system, should require the agreement of 27 other leaders of sovereign states. It sounds a bit like a sledgehammer to crack a nut.

Baroness Anelay of St Johns: My Lords, as the noble Lord knows—for some years, he was Chief Whip in this House—the European Union has rules to which we all adhere if we are to enjoy the benefits of membership. When we discuss the details of the proposals, I have no doubt that noble Lords will take different views about the benefits. Clearly, great steps forward have been made. We will have the opportunity to discuss that.

2 Feb 2016 : Column 1726

Lord Howell of Guildford (Con): My Lords, obviously the main debate on the detail of these arrangements will take place tomorrow, and indeed in the coming days and weeks, in profusion. Will the Minister accept that what many people are also waiting for is evidence of the profound rethink in the EU’s methods and aims, which an increasing number of voices from all quarters—Eurosceptics and Europhiles—are calling for? I am referring to the reform of the European Union that people are hoping for and want to see evidence of.

Baroness Anelay of St Johns: My noble friend is right. Of course, in the renegotiation talks that have been carried on by my noble and right honourable friends, we have concentrated very much on economic governance, competitiveness, sovereignty, social benefits and free movement—the very reforms that I think the British people want to see.

Lord Stoddart of Swindon (Ind Lab): My Lords, I have to confess that I have not read the document yet, but I had understood that there was to be a fundamental reform of the European Union, with significant powers returned to the United Kingdom. Would the noble Baroness tell me what those powers are?

Baroness Anelay of St Johns: My Lords, I should first say that the documents have been deposited in the Library and, I understand, in the Printed Paper Office. Although they were published only a short time ago by the President of the European Council, we have made them available.

It would be wrong of me to try to summarise the document here. All I can say to the noble Lord is that we will have an opportunity to discuss in detail those advances set out here. It has been made clear—not only by the President, Mr Donald Tusk—that this is still a work in progress, but clearly it is important that all other members of the European Union have a chance to consider this before we get to the February Council and, possibly but not definitely, a decision at that stage.

Lord Garel-Jones (Con): Does my noble friend agree that perhaps one of the reasons why we have seen a number of extremist parties, of both the left and the right, across Europe is that there has been too much centralising of decision-making in Brussels in recent years? If the Prime Minister can return through the red-card system a certain amount of real sovereignty to national parliaments, that will be one of the most important achievements of the last decade.

Baroness Anelay of St Johns: I agree entirely with my noble friend.

Zika Virus

Statement

3.21 pm

The Parliamentary Under-Secretary of State, Department for International Development (Baroness Verma) (Con): My Lords, with the leave of the House, I will repeat in the form of a Statement the Answer to an Urgent

2 Feb 2016 : Column 1727

Question given earlier today in the other place by my honourable friend the Parliamentary Under-Secretary of State Nick Hurd. The Statement is as follows.

“The World Health Organization is working with the Governments of the countries worst affected to lead the response to the Zika virus. We welcome the recommendations of the WHO emergency committee on Zika and the UK Government are assessing our response.

The UK has been at the forefront of global efforts to ensure that the WHO has the funding, expertise and systems to respond to emerging disease threats such as Zika. As the second-largest national funder of the World Health Organization, the Department of Health met the UK’s £15 million commitment to WHO core funding in 2015, alongside political and technical support to strengthening the organisation and its preparedness. In addition to this, the Department for International Development made a discretionary contribution of £14.5 million in 2015. As part of the UK effort to strengthen global health security, DfID contributed an additional £6.2 million to the WHO’s contingency fund for emergencies, which can be used for the management of Zika.

In response to this outbreak, the first thing to say is that the risk to the UK population from the Zika virus remains extremely low. We have already taken a number of steps to ensure that the UK public are protected, but, of course, we are not complacent and we will review our approach in the light of the WHO’s decision, both in terms of actions to mitigate the risk to the UK and considering what additional support the UK could offer to the countries and regions affected.

The Department for International Development is working with Department of Health and colleagues across government on our response at the highest level”.

That concludes the Statement.

3.23 pm

Lord Collins of Highbury (Lab): My Lords, I thank the noble Baroness for repeating the Answer to the Urgent Question. I welcome, too, the Government’s response, working with Public Health England and the Department of Health to ensure that the public in this country receive clear and proper guidance, particularly those who travel. However, our thoughts must be with those affected, with 16,000 cases of microcephaly occurring. There is no test, no cure and no vaccine. People are facing a life of disability and poverty.

Ebola has shown the limitations of the global community’s approach to heath emergencies and it triggered a huge debate on how we should reform the WHO to make it fit for purpose. While I, too, welcome the speed of the emergency committee’s response to Zika, what steps have the Minister’s department taken in pressing for a review of the international approach to health emergencies, incorporating the function, structure and funding of the WHO? I am particularly concerned about the expectations and role of major donors. I note what the Minister said about Britain’s contribution but our part in this must be to encourage others to do more. This crisis also underscores the importance of investing in a strong system of research and development

2 Feb 2016 : Column 1728

for global health. We had a debate on neglected tropical diseases in which we highlighted this issue. On a point of clarification, in relation to the additional funds being made available through the Ross fund and the Gates Foundation, it was not clear whether there would be additional money for the development of vaccines. I would be grateful for an answer on that.

Baroness Verma: My Lords, I am grateful to the noble Lord for welcoming the work that DfID is doing in responding to this outbreak. He referred to the response to Ebola and the lessons we have learned from that: for example, that health systems on the ground needed to be strengthened. Since then, we have worked to ensure that there is strong reform of how the WHO responds.

The noble Lord also referred to funding. While the UK plays its role, other major donors must also raise their own contributions. As the noble Lord is aware, we work very closely with partners to ensure that we get appropriate funding. We have learned many lessons. Part of that was ensuring that people on the ground are able to respond fully, with trained people in place. Therefore, we have concentrated on looking at how the systems are responding, particularly in Brazil, where we have seen the larger outbreak. This outbreak has elevated itself into people’s minds. The Zika virus is well known in Brazil. Research is being undertaken in a number of areas. Public Health England has offered support through the Pan American Health Organization. We are waiting for that offer to be taken up. The Ross fund, to which the noble Lord referred—the £1 billion that was announced by the Chancellor—will provide funding for research and development. Included in that will be the UK vaccines network, which will have £120 million of funded support and will be headed by the chief scientific adviser from the Department of Health, Professor Chris Whitty. The UK is doing a range of things and is responding. We know very well that we do not have antiviral for this virus at this moment in time. Those exercises are currently taking place.

Baroness Walmsley (LD): My Lords, 80% of those infected show no symptoms. However, a test is about to be made available all over Brazil. It is effective as long as it is given within five days of infection. Therefore, will the Government ensure that the test is available immediately for any pregnant woman returning from one of the 24 infected countries who thinks that she may have been exposed? Is the UK planning to follow the US by banning anyone who has travelled to one of the infected countries from donating blood until it can be determined that they are not carrying the virus?

Baroness Verma: My Lords, on the issue of testing when pregnant ladies come back, if anyone has a concern—whether they are travelling to or from the country—the best advice is to go and see their doctor. It is really important that people who have a concern go and see their doctors. However, the actual virus does not travel well because the climate in the UK is not consistent with its doing so; nor is it passed from person to person. So the risks in the UK are low, but my advice would be to see a GP if there are concerns.

I do not have a response to the noble Baroness’s second point about blood donors. I will have to find out the answer.

2 Feb 2016 : Column 1729

Lord Patel (CB): My Lords, the virus, having been found in 1947 with low infectivity to humans, has now gradually spread to larger populations. Three things are important. The first is surveillance: what surveillance measures need to be undertaken to identify where the disease is spreading? The second is vector control. It is a daytime mosquito, so insecticides and self-protection are important. However, in the long term, the vector itself must be controlled and this is where Britain has an important role to play. While vaccines will take a long time to develop, modern techniques of gene editing and gene modification of insects are the way forward. Britain leads the world in this science and Brazil is the next country that has expertise in it. The two countries can work together to produce, in a very short time, modification of these mosquitos so that the incidence of the disease is reduced. Will the Ross fund be used to help our scientists do this?

Baroness Verma: My Lords, as I have said, the Ross fund will be used for research and development. On the noble Lord’s point about doing research with Brazil, only last week the UK announced a £400,000 Newton fund Zika research project between Glasgow University and Fiocruz in Brazil, which is in the hotspot area of the outbreak.

Lord Trees (CB): My Lords, Zika is the latest of a series of infectious diseases to have emerged in recent years in humans and animals. Some 75% of new infectious diseases emerging in humans are derived from animals. Does the Minister agree that, at this time, when our biosecurity is threatened by globalisation, we need to strengthen national surveillance capabilities for infectious diseases in humans and animals?

Baroness Verma: My Lords, the wider point is, as the noble Lord, Lord Patel, said, that the rate of spread of this particular virus is low. However, I agree with the noble Lord that we need to understand better why this virus and others are suddenly increasing at a greater rate than the normal pattern in the past. The UK is showing leadership by putting money behind research and development. Working with countries where outbreaks are taking place will not just benefit our own understanding but will build resilience for those countries.

Viscount Ridley (Con): My Lords—

Lord Taverne (LD): My Lords—

Lord Gardiner of Kimble (Con): My Lords, we have not heard from the Conservative Benches yet.

Viscount Ridley: My Lords, I have a feeling that the noble Lord, Lord Taverne, and I were going to say much the same thing, so I will have a go at it. Will the Minister undertake to look at the report on genetically modified insects by the Science and Technology Committee, under the chairmanship of my noble friend Lord Selborne? This came out in December, which was extremely timely, and examined the fact that a British company, Oxitec, has managed to suppress mosquito populations in Brazil by 90% in some areas. This is a fantastic new technology which could be much more helpful than other approaches in this case.

2 Feb 2016 : Column 1730

Baroness Verma: My Lords, I am aware of that research.

Charities (Protection and Social Investment) Bill [HL]

Bill Main Page

Commons Amendments

3.34 pm

Motion on Amendments 1 to 7

Moved by Lord Bridges of Headley

That this House do agree with the Commons in their Amendments 1 to 7.

1: Clause 1, page 2, line 15, at end insert—

“( ) The Commission may vary or withdraw a warning under this section.

( ) Subsection (2) applies to the variation or withdrawal of a warning as it applies to a warning.

( ) Subsections (3) to (6) apply to the variation of a warning as they apply to a warning, except that—

(a) in subsection (5)(a) references to the warning are to be read as references to the warning as varied, and

(b) the matter to be specified under subsection (5)(b) is any change as a result of the variation in the action previously proposed by the Commission.”

2: Clause 9, page 7, line 1, leave out Clause 9

3: Clause 10, page 8, line 3, at beginning insert “it relates to the management of the charity, and”

4: Clause 11, page 10, line 15, at beginning insert “it relates to the management of the charity, and”

5: Clause 11, page 12, line 16, after “spent” insert “or, where condition B applies, would become spent if it were a conviction for the relevant disqualifying offence”

6: After Clause 14, insert the following new Clause—

“Reserve powers to control fund-raising

(1) The Charities Act 1992 is amended as follows.

(2) In Part 2, after section 64A (reserve power to control fund-raising by charitable institutions) insert—

“64B Reserve power in relation to fund-raising regulators

(1) Regulations under section 64A may, in particular, impose on charitable institutions requirements to do any of the following—

(a) to comply with requirements imposed by a regulator; (b) to have regard to guidance issued by a regulator;

(c) to pay fees to a regulator of an amount determined by the regulations or determined by the regulator in accordance with the regulations;

(d) to be registered with a regulator for the purpose of its regulation of charity fund-raising.

(2) “Regulator” means a body specified in the regulations as a regulator for the purposes of this section.

(3) A body may be specified as a regulator for the purposes of this section only if the regulation of charity fund-raising appears to the Minister to be a principal function of the body.

(4) A body maintained out of money provided by Parliament may not be specified as a regulator (and this section does not confer power by regulations to establish a body to act as regulator).”

(3) In Part 2, after section 64B insert—

“64C Reserve power to confer additional powers on CharityCommission

(1) In the case of charity fund-raising which—

(a) is carried on by a charity, a person managing a charity or a person or company connected with a charity, or

2 Feb 2016 : Column 1731

(b) involves soliciting or otherwise procuring funds for the benefit of a charity or a company connected with a charity, or for charitable purposes,

regulations under section 64A may, in particular, make provision conferring functions on the Charity Commission, including provision applying or reproducing, with or without modification, any provision of the Charities Act 2011.

(2) The regulations may provide for a power that is exercisable by the Commission by virtue of the regulations to be exercisable by a person appointed by the Commission for the purpose.”

(3) Where regulations by virtue of this section apply in relation to charity fund-raising by institutions that are not charities, section 19 of the Charities Act 2011 (fees and other amounts payable to Commission) applies in relation to the regulations as it applies in relation to the enactments relating to charities (but that is without prejudice to the application of other provisions by virtue of this section or section 77(3)).”

(4) In section 64A(2) after “this section” insert “and sections 64B and 64C”.

(5) In section 77(4) (regulations and orders) at the end insert “and, in the case of regulations made by virtue of section 64B or 64C, shall in particular consult the Charity Commission.””

7: Clause 17, page 20, line 34, leave out subsection (6)

The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con): My Lords, it is a pleasure to be back at the Dispatch Box to debate the amendments made in the other place to this important Bill. It is good to be in the final lap, so to speak, with the chequered flag fluttering in the distance. I will try to keep my comments brief.

Commons Amendment 1 is a sensible tweak which would enable the Charity Commission to withdraw or vary an official warning issued under Clause 1. The Charity Commission already has powers under the Charities Act 2011 to vary, revoke or discharge its orders, and we consider that the commission should have a similar ability to vary or withdraw an official warning. Any variation of a warning would be subject to the same processes and safeguards as issuing a new warning.

Commons Amendment 2 would remove Clause 9 from the Bill. This is perhaps one area where there has not been the same degree of agreement across the House as is the case for most of the Bill—a rare exception. But the Government’s position on this remains that Clause 9 is unhelpful and could have damaging unintended consequences for charities. The rationale for Clause 9 when it was introduced into the Bill on Report in this House was that it would send a clear signal to the Government about concerns relating to our manifesto commitment to extend right to buy to housing associations. The principal concern was that charitable housing associations could be compelled to sell their assets in a manner incompatible with their charitable purposes.

The Government listened to the concerns raised and, rather than legislate to deliver the right to buy, we reached a voluntary deal with the housing associations. Under the voluntary deal, there can be no question of housing associations being compelled to sell their assets in a manner incompatible with their charitable purposes; nor is there anything in the Housing and Planning Bill that would compel this. I also point out to noble Lords that the Housing and Planning Bill has been brought to this House and this represents the right place to make points about the Government’s housing policy.

2 Feb 2016 : Column 1732

Putting to one side the points about right to buy, our main concern about Clause 9 was that such an attempt to reflect the case law in a simple statutory provision would simply not work and would have potentially damaging unintended consequences for charities. For example, it was not clear how the clause would affect compulsory purchase orders or other court or Charity Commission orders. It was not clear what impact the clause might have on charity financial assets and investments. It was not clear how it could impact existing rights such as the preserved right to buy or right to acquire, which benefit 1.4 million housing association tenants. Some of your Lordships may wish to repeat or echo concerns about this issue but, for the reasons that I have just set out, I strongly encourage the House to support Commons Amendment 2.

Commons Amendments 3, 4 and 5 relate to the disqualification provisions in the Bill. Clause 10 extends the effect of disqualification to the most senior executive roles in a charity, normally the chief executive officer and, where there is one, the chief finance officer. We became aware that there was a risk that under the unamended provision, a person employed by a charity but who did not exercise any management function could still be caught. This may be the case in small charities in which only the trustees are involved in the management of the charity. Commons Amendment 3 addresses that in relation to automatic disqualification. Commons Amendment 4 makes the same change in relation to the proposed Charity Commission power to disqualify in Clause 11, where the same problem could otherwise arise.

I should point out that in response to various concerns raised by rehabilitation charities in relation to the Bill’s disqualification provisions, the Minister for Civil Society committed to a period of at least 12 months before the automatic disqualification provisions would be commenced. The Government and Charity Commission will work with rehabilitation charities ahead of implementation to assess the impact of these provisions on such charities, and will seek to ensure, where possible, that the provisions do not undermine their important work.

Commons Amendment 5 was another concession that responded to a point raised by rehabilitation charities. Under the proposed power to disqualify in Clause 11, one of the conditions for the exercise of the power—condition B—is that the individual has been convicted outside the UK of an offence against a charity or involving the administration of a charity, which, had it been in the UK, would have automatically disqualified the individual. Under Clause 11, the commission would be able take into account only an overseas conviction that is not spent under the law of the territory concerned, where the conviction took place. Rehabilitation charities pointed out that it would be more proportionate if this limitation related to the UK rehabilitation period for an equivalent UK sentence, rather than the rehabilitation period of the overseas jurisdiction. Commons Amendment 5 makes that change.

When the charities Bill was last discussed in your Lordships’ House, there was much interest in and support for strengthening the regulation of fundraising. Noble Lords will remember that in response to last

2 Feb 2016 : Column 1733

year’s fundraising scandals my honourable friend the Minister for Civil Society, Rob Wilson, asked Sir Stuart Etherington, the chief executive of the National Council for Voluntary Organisations, to chair a cross-party panel tasked with exploring whether the system of fundraising regulation as a whole is the right one. I once again express my particular thanks to my noble friend Lord Leigh of Hurley, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace of Saltaire, who all forsook their deckchairs to spend much of last summer deliberating on this question.

I am pleased to say that the Government accepted the recommendations of the Etherington review. Charities have one last chance to show that self-regulation is the appropriate way to govern fundraising. I am very grateful to my noble friend Lord Grade of Yarmouth for agreeing to act as interim chair and set up the new fundraising regulator. I am sure that noble Lords will join me in congratulating him on his new role and wishing him well for this important endeavour. I also take this opportunity to draw your Lordships’ attention to the Public Administration and Constitutional Affairs Committee report on charity fundraising, which was published last week. I welcome its main finding, namely that charities must seize this opportunity to show that self-regulation can work effectively. The Government will consider all the committee’s recommendations and respond in due course.

That brings me on to Commons Amendment 6, which seeks to extend the existing reserve power to regulate fundraising in Section 64A of the Charities Act 1992 and should act as a safeguard if self-regulation fails. It would do so in two main ways. First, new Section 64B would enable regulations made under Section 64A to prescribe a fundraising regulator with which charities must register and pay fees, which would have to be set in line with regulations, comply with the regulator’s requirements and have regard to its guidance. The second element is in new Section 64C, which would enable regulations to confer the power to regulate fundraising on the Charity Commission. It would enable the commission to subcontract day-to-day delivery of fundraising regulation while retaining overall control, and enable fees to be charged under Section 19 of the Charities Act 2011.

As the Minister for Civil Society said in the other place, he hopes that these powers will not be needed and that charities will get behind self-regulation and make it work. I am happy to report that many of the largest fundraising charities have already said that they will commit to the new system by registering with the new body which my noble friend Lord Grade is setting up. I commend them for their initiative and dedication to reforming charitable fundraising in such a way, which will safeguard the interests of the public and beneficiaries alike. The extended reserve powers sought in Commons Amendment 6 send a clear signal regarding the Government’s intention to see better regulation of fundraising in future. Fundraising regulation can no longer be allowed to be governed by vested interest or to turn a blind eye to free riders and those seeking to exploit the extraordinary generosity of the British public. The changes made to the Bill in Commons Amendment 6 will ensure this and I hope that noble Lords will join me in supporting it.

2 Feb 2016 : Column 1734

Finally, I turn to Amendment 7. This is the standard-form provision added on Third Reading in this House to avoid issues of privilege. Privilege issues would otherwise arise because the Bill authorises expenditure and charges, which are set out in the Ways and Means resolution. In accordance with standard procedure, the privilege amendment was removed at Commons Committee stage. There ends my canter through these amendments. I hope that your Lordships will support the Commons amendments, and I beg to move.

3.45 pm

Baroness Hayter of Kentish Town (Lab): My Lords, I thank the Minister for that very fast canter—it was almost a gallop. We on this side of the House continue to welcome the Bill, especially with the changes, some of which were made in your Lordships’ House and some by the Government in the Commons, most of which we applaud. The Bill strengthens the power of the Charity Commission and gives charities the power to make social investments which provide both a financial and social return. Importantly, in what we termed Olive’s law, in memory of that poppy seller, it now improves the regulation of fundraising by charities.

I want to make just three points as we bid this Bill farewell. The first is, unsurprisingly, on Commons Amendment 2, which overturns your Lordships’ vote by 257 to 174 to repeat what is, as the Minister said, current case law so that charities could not be,

“compelled to use or dispose of their assets in a way which is inconsistent with their charitable purposes”.

We feared then, and still fear now, that forcing housing associations to sell their properties to sitting tenants, where this is not allowed for in their charitable purposes, will fall foul of charity law. We will not seek to reinsert this clause today, but we tell the Government, and indeed the Charity Commission, that we will be watching to make sure that, as this part of the Housing and Planning Bill is implemented, it does not force trustees to breach either their trust deed or charity law.

The greatest wickedness, of course, is the selling off of the family silver, forcing councils to sell off their best council houses to fund £100,000 subsidies, not to housing associations but to the lucky few tenants who, within a few years, will be able to sell off that house and pocket the £100,000. We have yet to understand which part of charity law, or indeed general fairness, this meets.

Secondly, I turn to the Charity Commission’s regulation of charities and the increased powers in the Bill. Given that the lobbying Act restricts what charities can do in the way of campaigning and that, as we learned last week, the Department for Education is to stop “civil society”—usually charities—intervening on issues such as fair admissions, we see such restrictions on charities challenging government as part of a piece, alongside other attempts to curtail any opposition, whether from this House, through freedom of information or from other political parties.

The Government rejected our amendments to add the Charity Commission’s own guidelines to the Bill on charities having the right to campaign, thus leaving discretion on this with the Charity Commission. We will therefore look to the Charity Commission, in exercising

2 Feb 2016 : Column 1735

its new powers, to enhance charities’ abilities to achieve their charitable objectives in the best way possible. We urge the commission to pay rather more attention to poor practice—for example with Kids Company, where it failed to grasp the extent of the financial mismanagement—rather than seeking to crack down on the legitimate activities of charities.

Thirdly, I turn to the Government’s amendment on fundraising, which we warmly endorse and which arose partly from our amendments in this House. I know the Minister had much sympathy with the approach then and tabled some of his own amendments on Report, which we were happy to support. We withdrew ours when the Government set up the Etherington inquiry. Even better, Sir Stuart and his three wise Peers reported in record time, and the Government adopted all their recommendations. Not stopping even to draw breath, they then appointed the noble Lord, Lord Grade, to chair a reinforced fundraising regulator.

Last week, as the Minister said, the Public Administration and Constitutional Affairs Committee, in its report, The 2015 Charity Fundraising Controversy, reiterated that this really is,

“the last chance for self-regulation”.

It commented:

“It would be a sad and inexcusable failure of charities to govern their own behaviour, should statutory regulation became necessary”.

We concur with that judgement as clearly as the Government. We also congratulate the Government on meanwhile tabling Amendment 6 in the Commons, which backs the new regulator and, vitally, includes that backstop reserve power for the Charity Commission should self-regulation fail. I congratulate both the Minister and his colleague in the Commons, Rob Wilson, on their fast footwork and firmness of purpose on this.

Finally, I thank the Minister, his Bill team and the Charity Commission for their help and hard work throughout this process. I add my thanks to those of the Minister to my noble friend Lady Pitkeathley and the noble Lords, Lord Leigh of Hurley and Lord Wallace of Saltaire, who sat on the Etherington committee. I also thank my noble friend Lord Watson for his input, and our legislative office colleague, Molly Critchley, for steering us calmly and expertly through the process.

Lord Grade of Yarmouth (Con): My Lords, I thank both Front Benches for the warmth of their greeting to me as the chairman-designate of this new fundraising regulator. I hope that the depth, sincerity and warmth of their kind remarks bear no relation to the level of lethal poison in the chalice that I have inherited. I join the thanks expressed to the noble Lords, Lord Leigh and Lord Wallace, and the noble Baroness, Lady Pitkeathley, for the incredible work that they put into the Etherington review, which has been so unanimously welcomed.

It might help the House if I gave a short update on where we have got to in the fast-track creation of the new regulator. The show is on the road: the chief executive has been appointed and began work on 4 January. Within four weeks, we now have an office,

2 Feb 2016 : Column 1736

generously provided by the Charities Aid Foundation, and six staff. Appointments to the board will be announced in the next few weeks, and we will also need to put in place a standards committee and, to hear and resolve complaints, an adjudication committee.

I do not think I underestimate the task ahead if we are to deliver on our intention to be fully operational in the early summer, but we are on track at the moment. At the point of handover from the Fundraising Standards Board, we will take ownership of the code of guidance from the Institute of Fundraising, and the rule book on street and door-to-door collections from the Public Fundraising Association. We are working very closely with both organisations, and I welcome their endorsement of the new regulatory arrangements. At handover, the arrangements for registration—obviously, we want as many charities as possible to sign up to the fundraising regulator, although that will not stop us from investigating those which may not sign up—and for levy payments by the larger fundraising charities will need to be in place.

Our proposals for the fundraising preference service will also be ready. The working group developing those proposals, serviced by the NCVO on our behalf, is already well under way. Let me emphasise that until the point of handover, the 2,000 member charities of the Fundraising Standards Board will need to continue to support that organisation, financially and otherwise, while it retains responsibility for fundraising regulation, until we are absolutely ready to go. We and the Fundraising Standards Board are committed to a seamless transition, which is essential if the purposes of the Bill are to be realised, and we want to inherit its experience and learn from what has worked well.

There is general acceptance, however, that the Fundraising Standards Board was somewhat under -resourced. We will have the levy resources necessary to do the job. We will be independent, with ownership of the code of guidance, and we will not hesitate to apply sanctions where appropriate. We will liaise closely with the Charity Commission, taking full account of its revised fundraising guidance for trustees and, if all else fails, referring to it contentious cases that may breach the guidance.

The Etherington review, the Fundraising Standards Board’s excellent but deeply worrying report on the sad, sad case of Olive Cooke and the recent report from the Public Administration and Constitutional Affairs Committee in the other House have all demonstrated serious shortcomings in the fundraising practices of many larger fundraising charities. That is why this Bill is such an important and timely contribution. The public’s very negative view of this was confirmed last week in the YouGov poll published by the Information Commissioner’s Office.

The British public are as generous as anybody on this earth when it comes to putting their hands in their pocket to help those in need. However, charities cannot take that generosity for granted. There have been serious breaches in terms of the ethical way in which fundraising practices have begun to grow up in this country. We must take steps, which this Bill provides with the creation of this fundraising regulator, to make sure that that generosity is not taken for granted.

2 Feb 2016 : Column 1737

The fundraising regulator now has a responsibility to the general public and, for the future of charities, to donors and potential donors, not least when they are vulnerable, to ensure that they are protected from undue pressure and unacceptable fundraising practices. That protection will be our first priority and these amendments and the Bill will, we hope, go a long way to ensuring that the public are protected and their generosity not taken for granted.

Lord Hope of Craighead (CB): My Lords, as the Minister will recall, I had the privilege of chairing the Joint Committee that conducted pre-legislative examination of what was then called the Protection of Charities Bill. I cast my mind back to a year ago, when our committee was still sitting and considering the terms of our report. It is a pleasure to see some members of my committee in the House this afternoon. It is against that background that I pay my own tribute to the Minister and his Bill team for bringing the Bill to this stage: we are now truly at the last lap. One of our main concerns was that there should be no delay in the legislation we were examining. It is a great pleasure to see that matters have been taken this far forward with the changes made.

The only amendment I wish to comment on—I do not want to arouse too much controversy about this—is Amendment 2. I listened with great care to what the noble Baroness, Lady Hayter of Kentish Town, said and I appreciate the concern on the point she mentioned. However, the one feature I stress is that we did not as a committee have the chance to examine Clause 9. As the noble Lord said, that was introduced to the Bill on Report. It is the kind of clause that, speaking for myself, we would have wanted to examine with great care because of not only its implications on the point that the noble Baroness made but also its width. It is completely unqualified. If it had been more precisely targeted, we might have been a little more inclined to support it. I rather suspect that a clause as general as this would impose a very great burden on the Charity Commission. To a large extent, because of the protection of charity law generally, the clause would not be needed. I stress that I speak only for myself but I am relieved, against the background of what I have mentioned and having heard the Minister explain the reasons for it, that this amendment has come forward. I very much support it. My main point in rising to speak at all was to express my thanks and appreciation for the fact that we are now at this stage, in effect bringing the matter to an end.

Baroness Barker (LD): My Lords, I, too, congratulate the Minister on getting his first piece of legislation through to its conclusion. I thank him also for the way in which he took us through the amendments today.

I will concentrate initially on one aspect of these amendments that has not so far been discussed: Amendments 3, 4 and 5, dealing with matters to do with the rehabilitation of offenders. I and other members of the committee had great sympathy with the case made to us by the charity Unlock about the problems that this Bill would pose particularly for charities that specialise in the rehabilitation of offenders. Their great concern was that up to approximately 50,000 people in this country with past convictions would find themselves

2 Feb 2016 : Column 1738

now unable to take part in the process of being a trustee, even though they had committed those offences some considerable time ago and had managed to rehabilitate themselves. Last week in court there was a ruling on the matter of the severity of minor offences and their duration in relation to people having to make declarations. I rather suspect that, if that judgment is upheld, this legislation will have to be revisited fairly swiftly. I simply draw that to noble Lords’ attention.

4 pm

On the matter of fundraising regulation, I wish the noble Lord, Lord Grade, well. He is about to live in very interesting times, as they say in the Chinese proverb. I say that not least because I went to an academic lecture last week about public perceptions of fundraising in charities, and the noble Lord will not be surprised at all to know that the great British public, as represented in focus groups, are all thoroughly in favour of charities having their fundraising activities absolutely and thoroughly regulated—but they do not want to see them paying any money for that, because they would like all their charitable donations to go direct to beneficiaries. So on the one hand I wish him well, but when the chips are down about who pays for the services of his inestimable organisation, he may well have an interesting time, as do all regulators. None the less, this is a right response to what happened last summer. It will need to be kept under review. I look forward to seeing the Charity Commission having the appropriate responses to deal with this and the fallout from Kids Company, as referred to in the committee’s report last week.

Lord Hodgson of Astley Abbotts (Con): My Lords, I should like to join others and pour a little more honey over my noble friend’s head and over the head of the Bill team, which has worked hard to bring the good ship into harbour. I shall focus on Amendment 6 and I congratulate the Government on that amendment and the fundraising aspects of it. I urge them to keep up the pressure and wish my noble friend Lord Grade every success in this difficult task.

It is important that we are trying to strike a balance here, which is quite rightly focused on the public not being unduly hassled and being asked in the right way. That is absolutely appropriate, but we must not lose sight of the charities’ right to be able to ask, because if they cannot do so, the effect on our charitable sector, which is vital to our civil society, will be quite extreme. When I carried out the review for the Government a few years ago, it was clear that that balance had not been reached appropriately, given the alphabet soup of regulatory bodies and the different types of fundraisers who blame each other for their bad reputation, along with the fact that the public were confused and wanted a single point of contact. In my report, which was sent to Ministers in July 2012 and accepted by Ministers, I suggested a six-month deadline. Three years later, last summer, as the noble Baroness, Lady Hayter of Kentish Town, pointed out, we had the flashpoint over fundraising, caused by the sad case of Olive Cooke. I congratulate Sir Stuart Etherington and the Members of your Lordships’ House who took part in that review. I think they have come up with some excellent proposals. But this is the last chance of the last chance of the last chance saloon; we have been around this now two or three times.

2 Feb 2016 : Column 1739

I am not in favour of statutory regulation against a rapidly changing scene. However, I have to say to my noble friend and to the Minister that in my conversations with the sector there remains a distressing tendency still to see this as somebody else’s problem—still to say, “We are a charity and our reputation is everything, therefore we wouldn’t do anything wrong and how can you possibly think that we are doing anything wrong?”. It is an issue that has still to be hammered home in certain parts of the charity sector to make sure that the message gets over. The reputation of the sector is as strong as the weakest link in the chain, and there remain too many weak links in the chain, which I hope that my noble friend and his colleagues will be able to tackle.

My noble friend has to keep fingering the trigger marked 64C. We have to see his knuckle tightening around the trigger to make the sector understand that this is really important because the distressing tendency to think it will all go away remains. Last week, one charity said to me, “We don’t need to worry about it because we’re good. We’re a charity and the Government don’t want to pull the trigger anyway”. My noble friend must be ready to pull that trigger and make it clear that he will do it. I want to see his trigger finger whitening over the next few months.

Lord Bridges of Headley: My Lords, I am extremely grateful for those incredibly kind words. The Bill has been through a long journey of consultation, pre-legislative scrutiny and parliamentary scrutiny and has emerged all the better for it. I thank a number of noble Lords for all they have done, not just in this parliamentary Session but well before it to make the Bill such a success. The Bill has seen this House at its very best. Where we have differed, we have managed to iron out our differences on the Floor of the House and off it. We have made concessions in the light of very good points that were made by a number of noble Lords. The Bill is all the stronger for it.

I will keep my remarks very brief, but I associate myself with a lot of what my noble friend Lord Hodgson said. I thank him in particular for what he has done to make the Bill what it is today. We can get into lots of clichés about having last orders in the last chance saloon with my finger on the trigger. I think we all agree that the charitable sector must heed the measures now before it. It must act and show that it is acting in short order. We will all be keeping our eye on what it does.

On that point, I thank my noble friend Lord Grade for his update. We are right behind him as well as alongside him. I urge him to make all the use he can of the expertise and good will on all sides of this House as he ventures out on his enterprise. There is a lot of wisdom to be drawn from this House and a lot of good will to make sure that his regulatory flourish produces the results we all want.

Before I finish, I will say a couple of words of thanks. I thank the Whip, my noble friend Lord Younger of Leckie, the noble Baronesses, Lady Hayter and Lady Barker, and the noble Lord, Lord Watson of Invergowrie, all of whom have helped me on this, my first Bill. I repeat my thanks to the noble and learned Lord, Lord Hope of Craighead, and my noble friend

2 Feb 2016 : Column 1740

Lord Hodgson of Astley Abbotts. I thank again my noble friend Lord Leigh of Hurley, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace of Saltaire, who helped me a lot during the summer, enabling us to make fast progress on the fundraising front. I thank the Cabinet Office and Charity Commission officials in the Bill team for their work in supporting the passage of the Bill.

We will soon hand over the Act to be implemented by the Charity Commission. I know that noble Lords will be watching closely to ensure that the powers in the Act are used fairly and proportionately. I am sure that they will be, and I look forward to a positive report when the Act comes to be reviewed in three years’ time. Charities’ life-blood is public trust and confidence, which have been undermined by several regulatory failures. The Bill will do much to support the effective protection and regulation of charities and will help restore the public trust and confidence on which charities rely.

Motion agreed.

Childcare Bill [HL]

Bill Main Page

Commons Amendments

4.09 pm

Motion on Amendments 1 to 3

Moved by Lord Nash

That this House do agree with the Commons in their Amendments 1 to 3.

1: Clause 1, page 1, line 2, leave out Clause 1

2: Clause 2, page 2, line 25, leave out from “about” to end of line 26 and insert “—

(i) the form of a declaration and the manner in which it is to be made;

(ii) the conditions to be met by the person making a declaration; (iii) the period for which a declaration has effect.”

3: Clause 2, page 2, line 26, at end insert—

“(4A) For the purposes of assisting the Secretary of State in the discharge of the duty imposed by subsection (1), the Commissioners for Her Majesty’s Revenue and Customs may carry out functions in connection with the making of determinations as to whether a child is a qualifying child of working parents.”

The Parliamentary Under-Secretary of State, Department for Education (Lord Nash) (Con): My Lords, I am pleased that the Bill brought back to this House today for our consideration is in such good shape. As a result of the scrutiny in both Houses, I believe that the Bill now presents the right framework to deliver the 30 hours of free childcare for working parents of three and four year-olds.

As we have discussed at length in this Chamber, for too long childcare has been the issue and the barrier for parents deciding whether to return to work or work more hours. The Bill, and the entitlement that it creates to 30 hours of free childcare, will support working parents to make real choices about how they balance raising their children and working to provide for their families. We are clear that parents need and expect the childcare provided under this Bill to be high quality and delivered in settings where they know their children are safe and well cared for.

2 Feb 2016 : Column 1741

I hope that after the debate today noble Lords will agree that this Bill is fit for purpose and that, while our discussions should continue, our focus should move on to implementation and ensuring that the details of regulations and statutory guidance are right. I hope noble Lords agree that turning this Bill into action is an exciting opportunity for parents, providers and local authorities, beginning later this year with early implementation.

I am delighted that today the Department for Education has announced the areas that will benefit from 30 hours of free high-quality childcare places a year earlier than planned, taking pressure off parents and helping children to fulfil their potential. Around 5,000 children residing in York, Northumberland, Newham, Hertfordshire, Portsmouth, Swindon, Staffordshire and Wigan will benefit early from this entitlement. In addition, the Department has announced today that it has set aside £4 million to support an additional 25 local authorities to develop innovative flexible childcare for working parents, and to ensure that we can meet the needs of children with special educational needs, in homeless working families and in rural communities.

Amendment 1 in this group removes the funding review clause that was inserted as Clause 1 to the Bill on Report in the Lords. Debate on funding in the other place prompted by the clause was extensive. Members in the other place were able to use all stages of the Bill to scrutinise, challenge and support the evidence presented by the Government’s review into the cost of providing childcare and the outcome in the spending review settlement. The amount of detail and certainty about the funding settlement for early years has increased significantly since your Lordships last debated this Bill, most notably the announcement in November’s Autumn Statement that the Government will invest an additional £1 billion per year by 2019-20 to fund the free entitlements in the early years. This funding includes £300 million per year for a significant uplift to the rate paid for the two, three and four year-old entitlements, fulfilling the Prime Minister’s commitment to increase the average hourly rate that providers receive to deliver the free entitlement.

These decisions on funding are underpinned by the review into the cost of providing childcare, published on 25 November. I hope that noble Lords have been able to look at this review document and the wealth of evidence and information it provides. I hope noble Lords agree that this is a thorough and comprehensive piece of work, and that all Peers who were able to meet the funding review team in October and again in January found these discussions helpful.

It is really important that the department is now able to build on this generous settlement and ensure that every pound is used as effectively as possible. This is why the Government have committed to introduce a new national funding formula in the early years to ensure that funding is fairly and transparently distributed across the country. It is also why we will also be ensuring that as much funding as possible reaches providers and that it is fairly distributed between different types of provider.

I am also pleased that the Government have confirmed that £50 million of capital will be allocated to support the creation of early years places for the free entitlement.

2 Feb 2016 : Column 1742

We believe strongly that the childcare market will grow to deliver the extended entitlement, but we are not complacent and are taking steps to build capacity—for example, through the free schools programme, which could create at least 4,000 places, building on provision available in free schools such as Reach Academy in Feltham, which offers free entitlement places for two, three and four year-olds. This capital investment, combined with an attractive increased rate to providers, will enable providers to seek investment to expand if they want to.

I hope that based on this significant amount of new information and detail, noble Lords will agree that the funding review clause inserted on Report is no longer required. That clause prompted debate in the other place on the important issue of funding but Members have signalled clearly that they do not believe that a further funding review upon Royal Assent is necessary, nor should it hold up the important next steps needed to ensure that early implementation can begin this year. The sooner we can tell local authorities about their funding allocations, the sooner they can begin to plan with their local childcare providers. A further review would simply delay this whole process. I hope your Lordships agree that this is the best way forward.

4.15 pm

Amendments 2, 3 and 6 relate to the role of HMRC in relation to the extended entitlement, and to a consequential amendment that would enable this to come into force immediately on Royal Assent. I am pleased that in considering the Bill in the other place, the Secretary of State for Education was able to confirm at Second Reading that parents will be able to apply for the extended entitlement as part of a simple, joint online system that is being developed by HMRC for tax-free childcare. This means that parents will have to provide information on their personal circumstances only once to apply for both schemes, which will create a simple and smooth customer journey for parents and minimise burdens on providers. I hope that noble Lords will welcome this.

Amendment 2 would enable regulations to be made under Clause 1 to set out the conditions to be met by a person making a declaration as to a child’s eligibility for the extended entitlement. For example, the person making the declaration will need to be the person who is responsible for the child, as is also the case for tax-free childcare. It is crucial that we are able to provide clarity for parents about the declaration they will have to make, and to ensure that HMRC will be provided with the information it will need to decide whether a child is eligible for the extended entitlement. Regulations, which will be brought to this House for consideration, will say more about these matters in due course.

Amendments 3 and 6 are linked. They will make it clear in the Bill that HMRC will verify and make a determination as to a child’s eligibility for additional free childcare, and will allow for this provision to come into force on Royal Assent, so that HMRC can begin to build the technical aspects of the joint eligibility checking system. Ensuring the operational aspects of the extended entitlement are in place in good time will enable us to test that the eligibility checking system runs smoothly for parents. I wish to be clear that the

2 Feb 2016 : Column 1743

responsibility for the 30 hours’ free entitlement programme remains with the Department for Education, and local authorities are under a duty to secure places and fund providers. HMRC’s role will be restricted to providing the joint application and eligibility checking process for parents.

The debate on these amendments in the other place was technical, reflecting the nature of the changes. Members of the other place were reassured about the role of HMRC and agreed that it was necessary that the building of the systems to support eligibility checking should begin in earnest, so that they can be tested as part of the early implementation phase. I hope that noble Lords will be able to support those amendments today.

The Government recognise the importance of Parliament having the opportunity to scrutinise the details which will be set out in secondary legislation, so Amendment 5 in this group requires that the regulations made under the Bill be subject to the affirmative approvals process on their first use. Subject to parliamentary timetabling, we hope that this will take place later this year, ahead of early implementation. The Government believe that the affirmative procedure for the first use only is the right approach, particularly given that, since we introduced the Bill over the summer, we have provided much more detail about how the Government intend to deliver their manifesto pledge and have committed to undertaking a formal public consultation on the draft regulations in 2016 before they are laid before Parliament.

If the Government are required to timetable a debate in both Houses when details need to be amended in regulations, this will be likely to have a detrimental impact on the successful delivery of the new entitlement. We want the Secretary of State to be able to respond efficiently and effectively, where necessary, to support local authorities, providers, parents and their children without seeking and receiving the approval of Parliament to do so. Once the fundamental principles have been agreed, we do not believe that it would be a good use of the parliamentary timetable to make changes that would ordinarily be dealt with under the negative resolution procedure—for example, if consequential changes were made to the current entitlement to reflect the introduction of the education, health and social care plans and the replacement of residence orders with child arrangements orders. Such changes are straightforward and not controversial, but if the regulations were subject to the affirmative resolution procedure, then these amendments would require a full debate in both Houses.

In the other place, after a debate on this issue, all sides of the House agreed with the Government’s proposal. The shadow Minister for Childcare said:

“The Minister has given assurances for the first time that the regulations will get full debate in both Houses, and the negative procedure is normal practice in other areas, so I am happy with that”.—[Official Report, Commons, Childcare Bill Committee, 10/12/15; col. 119.]

I hope noble Lords will agree with this approach today.

2 Feb 2016 : Column 1744

The Government recognise the expertise of this House, particularly on the details of how the entitlement will be delivered in practice. I would therefore like to meet interested Peers in March to begin an ongoing dialogue on the draft regulations and policy details ahead of public consultation. I look forward to having detailed discussions at that meeting and, quite probably, subsequent meetings.

Amendment 7 is a technical amendment to remove the privilege amendment made in this House before the Bill passed to the other place. As noble Lords will be aware, this standard formula of words is incorporated into a Bill as it moves from your Lordships’ House to the other place to avoid infringement of financial privilege. A money resolution has been passed conferring parliamentary approval for financial expenditure incurred as a result of the Bill, and the removal of the privilege amendment is a formality.

I hope that the significant progress made on this Bill since it was last debated in this place in October will be welcomed. The detail on the wider policy and funding to deliver 30 hours of free childcare for working parents of three and four year-olds shows that the Government are committed to delivering their manifesto pledge in a way that works for parents, providers and local authorities. I hope that noble Lords are able to support the Government’s amendments today.

Baroness Jones of Whitchurch (Lab): My Lords, I am grateful to the Minister for his progress report and for introducing the government amendments this afternoon. I am also grateful to him for the many meetings he has arranged since the Bill left this House, and in particular for the briefings on the outcome of the financial review.

As we stated at the outset and continue to make clear, we support the aims of the Bill. Our concern was that what could have been a more effective, ambitious and streamlined initiative to deliver free childcare has been let down by a lack of foresight and planning, and we continue to have that concern. So we were disappointed that the Government chose to reject our amendments in the Commons, because we believe that they would have enabled a more detailed analysis of the childcare funding system to take place, with properly costed long-term solutions to be put in place.

The amendments would also have ensured a proper degree of parliamentary scrutiny for a Bill which, as we rehearsed at the time, is skeleton in nature and relies on a raft of regulations to bring it to fruition. Instead, we will be reliant on debating secondary legislation —over which, quite clearly, we do not have the same influence—to agree the fundamentals of what the future childcare offer will be. I have listened carefully to the Minister’s outline of the next steps, and I am very grateful for the offer of continuing involvement in the regulations. I hope they will be as meaningful as he has now suggested, and let me make it clear to him that we will hold him to his word on this matter.

In the mean time, sadly, we are left with a Bill which is a pale shadow of its original ambition as set out by the Prime Minister at the election. The truth is that lots of parents who believed the election promises now stand to be disappointed. In order to bridge the funding gap, which, incidentally, we told the Government all

2 Feb 2016 : Column 1745

along was a problem, the Government have now squeezed the eligibility for free places, so that less than half of all three and four year-olds will be eligible. The original plan was that 630,000 children would be eligible, and now that figure has been reduced to 390,000. It is the poorest parents who will lose out the most—those on the edge of the labour market with short hours, part-time work and zero-hours contracts. As we know, it is those parents, the most disadvantaged, whose children would benefit the most from the provision of quality childcare to help them to close the attainment gap. That is a fundamental regret of the Bill.

At the same time, despite the welcome injection of extra funds, the Government still do not appear to have squared the funding crisis. Research by the House of Commons Library has revealed a shortfall of £480 million over the Parliament, which means up to £470 per child per year. I am not sure that the latest figures announced by the Minister will square that figure. Those figures, which are backed by Ceeda research from the Pre-school Learning Alliance, make the case powerfully that the impact on the capacity in the system may lead to fewer rather than more places becoming available. In addition, as in the past, there appears to be no uprating mechanism, so that funding runs the risk of falling further behind over time. Will the Minister clarify how future costs will be evaluated year on year? He mentioned the national funding formula, but I am not sure that that will address those concerns.

I also regret that the Government did not pay more heed to our concerns and those raised by numerous stakeholders across the sector on these matters. Nevertheless, we do support the Bill. It clearly represents a step forward. For many parents, it will provide a welcome lifeline back into paid work and for many children it will become a new route into quality care, which will obviously give them a much better start in life. It addresses one segment of a much bigger problem of affordable childcare for all and the need to close the attainment gap between children on free school meals and their peers. In the mean time, we will continue to press this case. We will watch the rollout of the Bill with interest and we will participate in the scrutiny of the regulations with vigour. I thank the Minister for his commitment up to this point.

Baroness Pinnock (LD): My Lords, I thank the Minister very much for what he said today and for the discussions that he organised during the course of the Bill. The Bill is very different from the one that first saw the light of day in this House, which was only notable by its lack of detail. It has certainly gained considerable flesh on the original skeleton, and I am grateful for that. However, it is not necessarily a fully formed being just because it has grown throughout its progress. We still have some concerns about the detail that the Minister has finally given the House today.

There has been a broad welcome across the House, which we agreed with, for the Government’s additional childcare offer. I will comment on two particular aspects of the Bill in its final form, in the light of the discussions that we had in this House. First, we have always been concerned about the funding. There were wide discussions in Committee and on Report about

2 Feb 2016 : Column 1746

the viability of providers if there were no adequate recompense for the hourly rate, and we welcome the additional funding that the Government have put into that, albeit that it is 30p an hour. I have great concerns that it will not up be upgraded annually by either RPI or CPI. If it is not, that will put additional stress on the financial viability of providers.

An issue that we on this side particularly raised in the course of the discussions was that of the additional capital that should be made available to enable providers to offer the further 15 hours, and there were many discussions about how that could be achieved. I welcome the Government’s capital fund that they have set aside for just that purpose, which demonstrates that some of the arguments we made have been recognised, albeit perhaps not enough, in my view.

4.30 pm

The second amendment that I want to talk about relates to eligibility. In relation to the Government’s policy statement published in October last year, it was stated that:

“Eligibility for the free entitlement will include households where … both parents are working or one parent working in lone parent families, for their children aged three- or four-years-old. This will be defined as earning the equivalent of 8 hours per week on national minimum wage and this can includes self-employment”.

All our deliberations were on that basis. Whatever the Government’s current thinking, the original concept was to include those families with the lowest incomes, because providing childcare has to have more than the single aim of helping more parents into work—it should also be about helping to prepare young children for school.

Much of the early discussion in this House focused on the need for quality of provision and on the qualifications of those delivering it, so it is much to be regretted that the Bill has returned to us with the eligibility criteria substantially changed so that parents are required to work 16 hours before accessing the additional hours. I hope that the Minister will be able to justify this significant change, which means that almost 350,000 children will not have the benefit of the full 30 hours a week that will be enjoyed by other children. That has enormous social and educational consequences.

What we are saying in this Childcare Bill is that the offer will be accessed only by those parents who are already more advantaged, because they are in full-time or substantial part-time work, and are able to support their children’s development. However, those parents who are struggling the most financially, because they are in low-paid, very part-time work, are the ones who will be omitted from this scheme—albeit that they will be able to access the current entitlement of 15 hours. When compared with more advantaged families, they will be left out. It seems to me that those are often the children who the Government and we as a country ought to be putting more focus on rather than on the children of other more advantaged families.

I suppose that it is a stark contrast, really. What the Government are saying is that parents whose household income is £200,000 a year will qualify for the additional 15 hours of free childcare, while parents whose income is less than £10,000 a year will not. That tells the full

2 Feb 2016 : Column 1747

tale. I am very disappointed that we are not putting more focus on offering greater support to the families who need help the most. I would urge the Minister to explain to the House why the eligibility criteria have been changed so dramatically and perhaps give us some hope that in the future they will be revised.

Baroness Howarth of Breckland (CB): My Lords, I thank the Minister for the work that has been put into this Bill and I welcome it. I also thank him for the meetings that he arranged, which were extraordinarily informative and helpful, together with the documentation, which I have looked at but needs quite a lot of study to get a grip on the numbers.

I have two points. Like the Minister, I am keen to see implementation, so I am delighted that there will be projects moving forward early. How will the lessons that are learned from these early projects be applied to looking again at regulations, and how can we improve any further projects, which look rather like pilots, if I can use that word? I should be pleased to know how that learning is carried forward.

Listening to the noble Baroness, Lady Pinnock, I, too, have a concern that some of the poorest and most disabled children will not gain access to this funding. I have spoken to the Minister on a number of occasions about autistic children and children in specialist care provided by the non-governmental sector where it is very much at the whim of the local authority as to whether someone gains funding for their project. Can we at some point look at that? As far as I can see, the eligibility criteria have been changed because of the financial ceiling that is available for this work to go forward. Knowing how keen the Minister is on children and their education, and on giving them a good start, maybe in the lifetime of this Parliament, more children will be able to enjoy the benefits of early childcare places. When we learn about the benefits, maybe another childcare Bill will be introduced in the future.

Lord Nash: My Lords, I thank the noble Baronesses, Lady Jones, Lady Pinnock and Lady Howarth, who have spoken in the debate. Their contributions in today’s debate emphasise the extensive knowledge and experience of childcare policy across the House. This is a widely supported manifesto commitment, much anticipated by parents who want the Government to provide more help with their childcare costs. It is very pleasing to hear support across the House and the other place for the aims of the Bill and the Government’s commitment.

As has been highlighted during the passage of the Bill, we all recognise the benefits that free childcare can bring. This includes supporting those who are most disadvantaged by increasing their social mobility through providing opportunities to work or work more, rather than the availability of quality affordable childcare being a barrier to getting on. The amount of detail and certainty about the funding settlement for early years has increased significantly since noble Lords last debated this Bill, as I said earlier. As we have heard today from the announcements of the spending review, we are looking at a really positive position for early years. We have gone over and above our promise

2 Feb 2016 : Column 1748

by investing a record amount in childcare and making a clear commitment to paying more to those providers who wish to deliver the free entitlement.

We want the increased rate to enable and encourage providers to deliver the entitlement. Following our comprehensive review of the cost of childcare and our significant additional investment, we are confident that this will happen. We firmly believe that we have established a sustainable rate for providers, taking into account the evidence that we gathered throughout our cost of childcare review. The upfront nature of our funding uplift, coupled with the introduction of a national funding formula, will help providers to manage future cost pressures, such as the introduction of the national living wage. We are confident in the work of the cost of childcare review, and there is no case for establishing a bureaucratic and costly process that repeats the review on an ongoing basis. The Government will monitor the implementation of 30-hour free childcare, for example, through the early implementers, and if any issues arise relating to funding they will be considered in the context of delivery of the whole policy.

The noble Baronesses, Lady Jones and Lady Pinnock, talked about eligibility. Parents will be eligible where they work the equivalent of 16 hours at national minimum or national living wage, whichever applies to them. The Government have also taken the decision to introduce a higher earnings threshold, so that where parents earn more than £100,000 per year each, they will not be eligible for the additional hours. I remind noble Lords that all three and four year-olds remain eligible for the first 15 hours of free childcare, which remains universal. We estimate that the additional 15 hours will benefit around 390,000 children.

As noble Lords will be aware, the free entitlement hours sit within a wider package of childcare support available to parents. This package includes the universal 15 free hours for three and four year-olds and disadvantaged two year-olds, tax-free childcare, and universal credit, under which parents can receive up to 70% of their childcare costs, increasing to 85% from April this year.

The noble Baroness, Lady Jones, is quite right about the 600,000 figure. This was the original estimate of the families who could benefit from the extended entitlement, but that included children in reception classes who could choose to stay in an early-years setting. The effect of the revised eligibility criteria is nowhere near as dramatic as the noble Baroness, Lady Pinnock, referred to. It is a reduction of 50,000 places, of which 9,000 are as a result of the income cap. Parents on zero-hours contracts will be included if they meet the minimum income requirement. In addition, part-time workers may well be able to access the entitlement and remuneration. It is important to note that they will all access the existing early education entitlement.

I thank the noble Baroness, Lady Howarth, for her remarks. The intelligence from early implementation will inform us about operational issues and market challenges as we finalise the functioning of the operational delivery system, enabling us to adjust our plans as we move towards full rollout in September next year. Shared learning from early implementation will provide

2 Feb 2016 : Column 1749

us with early intelligence on how we can refine the system ahead of that time. The department has established a local authority working group, which the Minister, Sam Gyimah, met with in January. They will feed real-time intelligence back to the department on learning from the early implementers.

The noble Baroness also raised the case of disabled children, which is obviously an extremely important issue that was discussed at length by the Bill Committee in the other place and which I know is of interest to many noble Lords. The review found that the nature and level of support required by children with special educational needs and disabilities can vary significantly for each child, as does the prevalence of additional needs across each setting. The cost estimates reported in the review made allowances for these factors, but the review is very clear that that funding for children with additional needs in the early years cannot be solved with a one-size-fits-all approach. In response, the Minister for Childcare has committed to consider early-years funding for children with special educational needs and disabilities as part of our wider consultation on allocation and a fairer funding system. The department is now working with the sector and local authorities on how this might work.

The message is clear: the Government are on the side of working parents, helping them to get on and supporting them at every stage of their life. That is why we are pressing ahead with these reforms, going further than ever before to help with childcare costs, help hardworking families and give people the choice to get into work or work more hours. This will all lead to having the right childcare in place, which will mean more parents can have a genuine choice, security and peace of mind when it comes to being able to support their family. The Bill clearly delivers on those objectives, and I hope that noble Lords will support the Government’s amendments.

Motion on Amendments 1 to 3 agreed.

Motion on Amendment 4

Moved by Lord Nash

That this House do agree with the Commons in their Amendment 4.

4: Clause 3, page 3, line 46, leave out subsection (3)

Lord Nash: My Lords, I shall speak to Amendments 4 and 4A in this second group. Amendment 4, and Amendment 4A, tabled by the noble Baroness, Lady Pinnock, relate to flexible childcare provision for working parents. When we debated the amendment on Report, I was clear that the Government are fully committed to ensuring that sufficient flexible provision of childcare is made available to support hard-working parents. Indeed, if the new additional free hours are to support parents to work, they need to be delivered in a way that meets parental demand. We know that a large number of parents, particularly those on low incomes, work all year round and outside nine to five. We want to ensure that the new entitlement provides childcare to support their working patterns.

2 Feb 2016 : Column 1750

4.45 pm

I will come on to explain why we think that the amendment to the Bill the noble Baroness, Lady Pinnock, proposes would not deliver a flexible system in practice but I would first like to thank her for highlighting this very important issue, and reiterate that the Government strongly agree with the principle of this amendment. We have made good progress on flexibility since Report stage in October. As a result, I am pleased to confirm that regulations will cover the need for childcare to support parental working patterns, and that we will review statutory guidance to remove any barriers to flexibility and clearly set out the types of flexibility that local authorities should consider.

In developing the regulations and guidance, we need to work closely with local authorities and providers to look for innovative ways to meet the needs of parents, and to encourage new providers to enter the market to give parents more choice. We need to build on the existing best practice of local areas offering flexibility in the childcare system—for instance, Brighton & Hove City Council, where 82% of year-round nurseries offer a stretched entitlement; Bradford council, which offers a community nanny scheme, providing flexible childcare for lone parents struggling to access work or training; and Swindon council, which has started offering weekend sessions. The department is already working with local authorities and the Local Government Association through a newly established local authority working group to identify and address any barriers to offering flexible provision.

It is clear that the market will need to adapt to support a flexible childcare offer in the extended entitlement, and we will encourage different types of providers to offer the additional hours. Childminders, for example, will have a very important role to play. More than 46,000 childminders are registered on the Early Years Register and we want carefully to consider how to encourage more of them to offer the free entitlement, as we know that they can contribute to flexible delivery in a way that many other providers cannot—such as providing childcare overnight and outside term time.

This Government have removed many of the previous restrictions to childminders offering the free entitlement. We have seen significant increases in the number of childminders offering funded hours as a result, and we want this to continue. From this January, childminders are able to spend up to half their time working from non-domestic premises. This is opening up new opportunities for them—for example, in working with schools—and will further enhance their role in the 30-hours delivery.

I am pleased that the Government have today announced the successful early implementer areas, where the extended entitlement will be introduced a year early, and will look at ways to provide flexible childcare for working parents. All the early implementers will test innovative approaches to encourage flexibility, and four out of eight of the early implementers will have a specific focus on it. When I met the noble Baronesses, Lady Pinnock and Lady Tyler, last night, I slightly sold ourselves short when I said that the figure was three out of eight. It is, in fact, four out of eight. The noble Baroness was pleased with three; I hope that she is even more pleased with four.

2 Feb 2016 : Column 1751

There are some very exciting proposals. For example, York will test a “banking system” to enable parents to access the extended entitlement during the school holidays, and Portsmouth will trial a stretched offer over 51 weeks supported by sessional providers and childminders working in partnership. The Government have also announced £4 million of funding for early innovators to test flexible and different approaches to delivering the extended entitlement with a number of providers across the country.

While the Government agree with the principle of ensuring that the 30 hours is delivered flexibly, we have been clear that placing requirements around flexibility in primary legislation—as the noble Baroness sought at Report stage, and again today with her Motion to disagree with the Government’s amendment—is not the right approach, and the other place agreed. I would like to be very clear that such requirements in primary legislation would simply not work in practice. Dare I say that her amendments to increase flexibility would, we think, be very inflexible? Local authorities are dependent on the market to supply childcare places and it would not be reasonable to place a statutory duty on them to guarantee out-of-hours and holiday provision for every parent who wants it, since their local childcare market may not be able to deliver this.

There are a number of local authorities, particularly in the north-east, where the majority of childcare is delivered by sessional providers, such as maintained schools or nurseries. These providers cannot offer out-of-hours or holiday provision and placing a duty on local authorities will not change this overnight. It is also important to note that local authorities, rightly, cannot require private providers to deliver childcare. Therefore, it is simply not right to give them a legal duty to secure flexible provision for every parent in their area.

Every parent’s needs are individual, and while the priority for some parents is to be able to access childcare during the school holidays, for others the pinch point is between them leaving work and collecting their child from a childcare provider. Different local authorities need to work with their local childcare providers to ensure that these needs can be met; a one-size-fits-all approach in primary legislation will not allow them to do this. As the Local Government Association has said:

“We are pleased the Government listened and has removed clauses which would have allowed the Secretary of State to prescribe the types of and times at which childcare is provided. The clauses would have placed duties on local authorities that they have little control over.”

I know that one of the issues which the noble Baroness, Lady Pinnock, is rightly concerned about is ensuring that there will be transparency on how the entitlement is delivered and that flexible childcare is available for parents. I reassure the noble Baroness that this is really important and that is why we have included a requirement in the Bill for local authorities to publish information to parents on their local childcare offer, which will include information on the availability of childcare and how that fits with parental need. I hope the noble Baroness will find this reassuring.

2 Feb 2016 : Column 1752

On the basis of the work that the department has under way with local authorities to remove barriers to delivering flexible childcare, and the commitments made in the other place around regulations and statutory guidance, I hope that noble Lords are content to support the Government’s position. I beg to move.

Amendment 4A to the Motion on Amendment 4

Moved by Baroness Pinnock

Leave out “agree” and insert “disagree”.

Baroness Pinnock: My Lords, noble Lords will recall that, on this side, we secured the support of the House for our amendment to include a flexible approach to the implementation of the additional 15 hours of free childcare. We did so because parents and providers told us that the main barrier to their working hours was access to childcare after school hours and during school holidays. Indeed, many parents—especially mothers—expressed to us the horror with which they viewed forthcoming school holidays, particularly the long six-week summer holiday, because of the difficulties they had in either affording childcare or dealing with it in some other way through family and friends. I have read with interest, and noted with satisfaction, that the Minister in the other place conceded the need for flexibility when he said:

“I completely agree with the principle of the amendments tabled in the other place”.—[Official Report, Commons, Childcare Bill Committee, 10/12/15; col. 103.]

I have listened very carefully to the Minister today and welcome his statement in support of the need for flexibility. We are, at last, all agreed: flexibility is important. Although we can all agree on the principle, it is the implementation that interests me. I also welcome and thank the Minister for his concessions towards implementing a flexible childcare offer. I am glad that, on this side, we have continually raised the issue of flexibility, which has put that bit of pressure on the Government to think about it and come up with an approach to dealing with it. It is absolutely vital to the lives of many working families that we address their difficult daily conundrums of “Am I going to get back from work in time to pick the children up?” or “What am I going to do in the school holidays?”—in fact, to have an offer which enables people to go to work with the worries of childcare not first and foremost in their minds.

I really do thank the Minister for what he said today. I will summarise it and then I will have a think about whether it is enough. First, he said that he will put in the regulations the need to support local authorities in developing a flexible approach. That seems to have it written down and, as long as the regulations are up to scratch, seems something that will work in providing flexibility. He also said that four out of eight of the early implementers—the pilot schemes, in my phraseology —will test this out. That also seems a very positive and constructive approach. He mentioned extra funding. I did not quite hear how much he said it would be. Perhaps he could repeat that in his response. If there is extra money, I am always in favour of that, especially if it is for childcare. I think he said that local authorities would be required to be transparent in their offer.

2 Feb 2016 : Column 1753

Using the examples he gave of Bradford, Brighton and Hove, Swindon and so on would show other local authorities what they could follow and replicate. If that is transparent and open, that would also be positive.

I welcome the approach to childminders, who play an enormously important role in the provision of childcare in this country. To encourage them to do more than in their own domestic setting is very much to be welcomed because it will enable a more flexible offer to lots of working parents, who often use more than one provider to enable their working lives to continue. They drop their children off with childminders before work; then the childminder takes them to a professional provider and collects them; the childminder has them at the end of the working day and the school day, and they are collected from there. To envelop all the providers into one—I hope—coherent package is very much to be welcomed.

It seems that great strides have been made towards enabling a more flexible approach, both out of school hours and during the school holidays. I hope that will, first, enable more parents to develop their own skills in the workforce without those constant worries that their children are not being properly and adequately cared for; and, secondly, enable more families to become financially secure, albeit not the families that I mentioned earlier. Given that the Minister has made such a great stride towards meeting the thoughts that I had on the flexible offer in childcare, I will hear what other noble Lords say but I thank him for the movement he has made. I beg to move.

Baroness Jones of Whitchurch: My Lords, I will speak very briefly on these amendments. As noble Lords will know, we agreed with and very much supported the amendment originally proposed by the noble Baroness on Report and we still think that the principles behind it are important. We also noted, both on Report and in the Commons, Ministers’ wording when they agreed with what was proposed; that is, they agreed with the concept of flexibility and the need to build more flexibility into the system, so obviously that is very welcome. I suppose that my one remaining concern is that “flexibility” may be all things to all people. It can hide a thousand sins. I would like to drill a little more into what is meant by that word. The noble Baroness’s original amendment specifically referred to flexibility being in the context of extending opening hours beyond nine to five and making provision in school holidays. It would be very helpful if the Minister could confirm that “flexibility”, in his terms, is about those sorts of issues and not some weaker concept.

5 pm

I have another concern. If that flexibility is there and if the local authorities embrace it in the way that we hope they will, surely there will be funding issues. To provide a more flexible arrangement which may go into the evenings, weekends and school holidays would be an added cost. I am not clear how the scheme that the Minister is proposing would provide that extra funding for the flexibility that we all see as important. If the pilots work and show that that flexibility is welcome, can the Minister clarify what extra funding will follow those extra hours?

2 Feb 2016 : Column 1754

Finally, I have one more question. The funding review seemed to identify that one of the ways of making the scheme pay would be the spare capacity in the system. In other words there were nurseries which were not running at 100% capacity for 100% of the time, for example, and we could therefore ensure that they used their staff more effectively to increase the ratios and provide more capacity in that way. That is fine and I think we can all understand it although, for all the reasons that we also understand, I do not think that we would ever reach 100% capacity. But if we are to have flexibility with longer hours—some people might want school holidays and others would not—that would seem to run counter to it. We go for either maximum capacity or more flexibility; I do not quite see how those principles can run in parallel. I hope that the Minister is following my line of argument here. It would be really helpful to have some answers on that.

We do not want to delay the Bill by wrangling over this issue and we seem to have quite a lot of agreement. However, we want to be confident that the understanding with which we are going forward is a real one that will embrace the concepts in the noble Baroness’s amendment and is not just something very general around “flexibility”. As I say, that word could mean 101 things to people. I look forward to the Minister’s response.

Baroness Tyler of Enfield (LD): My Lords, briefly, I support Amendment 4A. I reiterate my strong support for the principle behind the Bill: to help parents, particularly mothers, to enter and stay in the workforce by ensuring that their children have access to high-quality and affordable childcare.

My key concern today, which is something that we have pressed throughout the passage of the Bill, is that the extended free childcare should be available to everyone who needs it including those who work atypical hours. As we have heard, those might be early in the morning, late in the evening, at weekends and during the school holidays. The question that I ask myself is: does this Bill help low-income families and single parents—usually mothers—to enter and stay in the workforce? To be able to answer that with a resounding yes, we must be confident that the free childcare will be available on a flexible basis which matches the working patterns of all parents. I am thinking particularly of those people struggling at the very bottom of the income scale, who are generally in no position to negotiate their working patterns in the way that, thankfully, many parents working in professional and managerial positions or those in more stable jobs can.

We know from all sorts of surveys that there is much demand for flexible childcare outside of standard hours. We also know that the supply of it is currently very scant. The only figure which I will quote is from the Family and Childcare Trust’s annual childcare costs survey of last year. It found that only 14% of local authorities in England said that they had sufficient childcare for parents working atypical hours.

I know that the Minister understands this issue very well and I welcome the plans that he outlined earlier in this debate to ensure that low-income families needing flexible childcare will actually be able to find it at hours that suit their needs. It will be vital that the strong focus on flexibility of hours is reflected in the

2 Feb 2016 : Column 1755

pilots and the regulations, and the Minister has made clear that it will be. I am pleased about that, but would press him to go a little further. He talked about transparency and the monitoring arrangements, all of which I welcome, but at what point will he decide to review whether those things have worked and whether the approach he has set out has delivered the intended results?

Lord Nash: My Lords, I thank all noble Lords who have participated in this debate for their contributions. I particularly thank the noble Baroness, Lady Jones, who has provided scrupulous challenge from the other side of the House throughout the passage of the Bill. She has seen the Bill through to the end of its passage, even though she has changed her responsibilities during that time. I also welcome the meetings and sessions we have held outside the Chamber, particularly on the funding review, which I hope noble Lords found useful.

I also pass on my thanks to the noble Lord, Lord Touhig, and the noble Baronesses, Lady Pinnock and Lady Tyler, who have provided a constant source of challenge to this policy, as they have today, always with the best of intentions. I pay special thanks to the noble Lord, Lord Sutherland, who provided support throughout the passage of the Bill, ensuring the relevant Peers were involved in the crucial steps we took to guarantee the Bill is the best that it can be to deliver this well-intentioned policy to support working parents. I look forward to continuing to work with him and other noble Lords as we produce regulations to make this policy a reality, and I welcome the important scrutiny I know they will provide.

Although we have not had an extensive discussion today on the quality of the entitlement and the workforce, I am thankful for the discussions I have had on these throughout the passage of the Bill, particularly with the noble Earl, Lord Listowel, and the noble Baroness, Lady Howarth. The Parliamentary Under-Secretary of State for Education and Childcare and I also thank all the officials in the Department for Education who have supported the passage of the Bill. Our particular thanks go to the excellent Bill managers who have so ably supported the Bill through both Houses: first Jenny Preece, then Katy Weeks.

The noble Baroness, Lady Jones, asked me to be a little clearer about what I meant by flexibility. She is always very suspicious and I am sure she thought that I was trying to use some mealy-mouthed words in that definition—I had hoped she would know me better by now. It covers all the things that she mentioned and others. It will of course depend on the particular needs in the area but it is meant in the widest sense: we are not trying any fastballs here. We believe that the funding we have come up with will be sufficient, including in terms of flexibility, but I note the quite technical points that she makes about the workings of this in relation to flexibility, as well as those made by the noble Baroness, Lady Tyler. I would be very happy to host a meeting when we have had feedback from the early implementers, particularly on this point, and to have further discussion about this. The points they raise are very important to making sure that this does actually work in practice.

2 Feb 2016 : Column 1756

As for the points made by the noble Baronesses, Lady Pinnock and Lady Tyler, the summary given by the noble Baroness, Lady Pinnock, was spot-on—it is delightful to see that the art of precis is still alive and well. As I have said, noble Lords will be involved in drafting the regulations in this regard. As to the money, £30 million has been announced for the eight areas mentioned to deliver the 30 hours of free childcare to 5,000 children from September 2016. Four of these, as I said, will focus on flexibility. In addition, we have announced £4 million to support an additional 25 local authorities in testing innovative approaches to flexibility. We agree and understand that balancing capacity and flexibility is complicated, which is why the Government have announced these issues today. I hope that the noble Baroness does not have to think very long and hard whether what I have said today and the assurances that have been given will enable her to withdraw her amendment to the Motion.

Baroness Pinnock: I thank all noble Lords who have contributed to this amendment on a flexible approach to the childcare offer and I thank the Minister most sincerely for the important offer that he has outlined today, which will take us very much in the direction of travel that I hoped we could achieve. With that, I beg leave to withdraw the amendment.

Amendment 4A to the Motion withdrawn.

Motion agreed.

Motion on Amendments 5 to 7

Moved by Lord Nash

That this House do agree with the Commons in their Amendments 5 to 7.

5: Clause 5, page 5, line 30, leave out subsection (4) and insert—

“(4) A statutory instrument containing (whether alone or with other provision) regulations mentioned in subsection

(5) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. (5) The regulations referred to in subsection (4) are—

(a) the first regulations made under section 2;

(b) the first regulations made under section 3(1); (c) any regulations under section 3(7);

(d) any other regulations that amend or repeal provision made by an Act.

(6) Any other statutory instrument containing regulations is subject to annulment in pursuance of a resolution of either House of Parliament.”

6: Clause 8, page 6, line 8, leave out from beginning to “come” in line 10 and insert—

“(1) The following provisions come into force on the day on which this Act is passed—

(a) section 2(4A); (b) section 7;

(c) this section;

(d) section 9.

(2) The remaining provisions of this Act”

7: Clause 9, page 6, line 19, leave out subsection (2)

Baroness Jones of Whitchurch: My Lords, I do not know whether this is the appropriate time to do so, but before the Bill passes, I wanted to extend my thanks to the Minister and his civil servants for their courtesy

2 Feb 2016 : Column 1757

throughout its passage. I know that it will continue to be extended to my noble friend Lord Watson for many months to come.

Motion agreed.