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Lord Davies of Oldham: My Lords, that is an entirely reasonable question. As we intend the full asset register to come on stream over the next year, it will be possible in advance of the Games for that question to be answered definitively. I cannot do that at this stage, but we are four years from the Games and the Olympic authority is clear that the strategies in place and the structures that have been developed will guarantee what we need to do in terms of a successful Games that is within budget.

Lord Roberts of Llandudno: My Lords, will the housing development envisaged be affordable housing that can accommodate people in London who are not on the best wages and need essential accommodation?

Lord Davies of Oldham: My Lords, the noble Lord will recognise that the housing needed in the boroughs that adjoin the Olympic site is affordable homes. That is largely the intention.

Lord Brooke of Sutton Mandeville: My Lords, what was the record in Athens and Sydney for asset registers?

Lord Davies of Oldham: My Lords, I prefer not to comment on Athens. However, we are studying Sydney with care because the Sydney Olympic Games offer us some constructive lessons in the way that they were organised and the asset register was maintained. We are also studying Vancouver’s preparations for the Winter Olympics in 2010. Vancouver is two years ahead of us and has also made considerable progress. We are in touch with both, but I draw a veil over the Athens Olympics.

Baroness Deech: My Lords, is the Minister aware that there are as yet no plans to define and measure the carbon footprint related to public transport and the Olympic Games? It is already building up with people flying in and out for preparation, training and official business. While we are all being urged, for example, not to use plastic bags and to cut down on car use, it is very likely that the carbon emissions connected with transport will be enormous, and they are as yet uncounted.

Lord Davies of Oldham: My Lords, that is an important consideration. The intention is that the vast majority of people who attend the Games will do so through public transport. That is why significant developments are taking place in Stratford, particularly with regard to the rail system. We all know the significance of the seven-minute journey from King's Cross/St Pancras to Stratford via the Javelin train, but other aspects of public transport are being reinforced. The mayor's intention is that people expect to visit the Games by travelling by public transport in London.

Financial Services Authority: Northern Rock

12.30 pm

Lord Marland: My Lords, I beg leave to ask the Question standing in my name on the Order Paper and, in so doing, I declare an interest as a director of several FSA-regulated companies.

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The Question was as follows:

Lord Davies of Oldham: My Lords, the Financial Services Authority is responsible for the recruitment and management of its own executive staff.

Lord Marland: My Lords, the reality is that, had this report been about one of the FSA’s regulated entities, there would have been wholesale resignations and blood on the carpet. Instead, we have rewarded failure again by not seeking people’s jobs. Is it not time to overhaul the FSA with fewer and better thought-out regulations and fewer and better qualified individuals, so that we can get value for money for the £230 million salary bill we incur every year?

Lord Davies of Oldham: My Lords, the report to which the Financial Services Authority committed itself early in the first week of October to deliver in March has been delivered. The House will recognise that the report is a frank and accurate appraisal of the weaknesses that occurred in the FSA’s supervision of Northern Rock. The Financial Services Authority in no way seeks to avoid the criticism that is attendant on that report. Five out of the seven supervisors directly concerned with Northern Rock and one senior manager have left the FSA. If it is blood on the carpet that the noble Lord wants, changes have occurred. I should have thought that we are much more concerned with whether the Financial Services Authority has accurately identified its weaknesses and whether what will be put in place is effective change to eliminate those weaknesses. That is what the Government are committed to.

Lord Borrie: My Lords, will my noble friend recommend to the Financial Services Authority the recruitment to its staff of people from the financial services industry by way of secondment, which is a method of recruitment used by the self-regulatory City Takeover Panel and has been a great success over many years?

Lord Davies of Oldham: My Lords, that is an important and constructive suggestion. It will also be appreciated that, as a non-governmental public body, the Financial Services Authority has difficulty in meeting some of the salary levels expected by those serving in the City in other capacities.

Lord Newby: My Lords, does the Minister accept that there is much more public concern about the fate of the former senior staff at Northern Rock than the former senior staff at the Financial Services Authority? Does he consider it acceptable that Mr Applegarth should be walking away with many hundreds of thousands of pounds-worth of compensation when the shareholders in the business that he ran into the ground have lost all their money?

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Lord Davies of Oldham: My Lords, Northern Rock was a private bank, and the shareholders and directors are responsible both for the decisions that led to its difficulties and the way in which the chief executive has been able to avail himself of some advantages from the position that he held. Of course, the Northern Rock management has gone and it is under new management.

Baroness Turner of Camden: My Lords—

Baroness Noakes: My Lords—

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, the noble Baroness, Lady Noakes, has been trying to get in and has been very patient. If my noble friend will give way, it ought to be the turn of the noble Baroness, Lady Noakes.

Baroness Noakes: My Lords, I thank the Leader of the House. The FSA's internal report into Northern Rock is truly shocking, although I do not think that it will surprise many in the financial services industry. Do the Government not think that it is time to have an independent review of their great experiment in setting up the FSA?

Lord Davies of Oldham: My Lords, it is scarcely a great experiment when the FSA has been in existence in the tripartite structure for a decade of unparalleled growth in the British economy and huge success. Of course, a serious weakness has been identified here in the supervisory role of the FSA in relation to Northern Rock. Those lessons have been learnt. It was said at the time that an independent inquiry might be necessary because the FSA could not be trusted to produce a thorough report, which would inevitably be self-critical. It has produced the most trenchant criticism of its own actions, and indicated where it needs to be strengthened. The Government intend to act on that.

Baroness Turner of Camden: My Lords, does my noble friend agree that it does not seem very equitable that the chief executive of Northern Rock should be leaving with a very substantial sum when the ordinary workers are facing redundancy? The ordinary workers at Northern Rock have not been responsible for the policies that have led to the present situation. They are members of my union, Unite. In the situation that many of them face, alternative jobs are not readily available. So what about the workers?

Lord Davies of Oldham: My Lords, I am grateful to my noble friend, because it sometimes seems that in the further reaches of discussion about Northern Rock, what is forgotten is the impact on ordinary families, who may be small investors and those who work for Northern Rock. The business plan that is being developed involves some redundancies at Northern Rock; it would be surprising if, in Northern Rock's scaling back of its operation, which is necessary—and the necessity of repaying the loans from the Bank of England—there were not redundancies. My noble friend is right to call attention to the fact that some people pay the price where others, who are in a rather more favourable position, seem to get away with it. That sometimes happens with the collapse of private companies.

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Lord Renton of Mount Harry: My Lords, surely the matter is a great deal more serious than whether a few people have been sacked. Is it not clear that in finance, and in life, you cannot have three chiefs—one in the Treasury, one in the FSA and one in the Bank of England—all responsible for doing the same job? Once there was real trouble, as in Northern Rock, the system failed. Would it not be much better now to wind up the Financial Services Authority and return its responsibilities to the Governor of the Bank of England, where they truly belong?

Lord Davies of Oldham: My Lords, the noble Lord is right to say that it is the strategic issues that count most, because they affect the whole of the country and, potentially, every household. We all know that the taxpayer has made a significant contribution to sustaining Northern Rock at present and will need to be repaid. I agree with the noble Lord on that.

On the question of three chiefs, they are not doing the same job. The idea that the Chancellor of the Exchequer should be the supervisor of individual companies is quite absurd. The Chancellor of the Exchequer plays one role and the Governor of the Bank of England plays another with regard to the broader financial structure, but we need careful monitoring—much more careful monitoring than was obtained with Northern Rock—of individual financial institutions. That is what we must get right for the future.

Refreshment Committee

12.37 pm

The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That Baroness Fritchie be appointed a member of the Select Committee in place of Baroness Darcy de Knayth, deceased.—(The Chairman of Committees .)

On Question, Motion agreed to.

Health and Social Care Bill

Baroness Thornton: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Darzi on the Order Paper.

Moved, That it be an instruction to the Grand Committee to which the Health and Social Care Bill has been committed that they consider the Bill in the following order:

Clause 1Schedule 1Clauses 2 and 3Schedule 2Clauses 4 to 48Schedule 3Clauses 49 to 62Schedule 4Clauses 63 to 91Schedule 5

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Clauses 92 and 93Schedule 6Clause 94Schedule 7Clauses 95 to 106Schedule 8Clauses 107 to 118Schedule 9Clauses 119 to 121Schedule 10Clauses 122 to 124Schedule 11Clauses 125 to 134Schedule 12Clauses 135 to 139Schedule 13Clauses 140 to 152Schedule 14Clauses 153 to 158Schedule 15Clauses 159 to 165.—(Baroness Thornton.)

On Question, Motion agreed to.


Baroness Royall of Blaisdon: My Lords, given the number of speakers at today's Second Reading, I should say that if Back-Bench contributions were no more than 10 minutes, the House should rise at a reasonable hour. It might also be useful for me to confirm that the usual channels have provisionally agreed six days for Committee. Days one and two have already been advertised in the Forward Business as Tuesday 22 and 29 April. Days three to six have been pencilled in for Wednesday 7, Monday 12, Wednesday 14 and Tuesday 20 May.

European Union (Amendment) Bill

12.40 pm

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, I beg to move that this Bill be now read a second time.

The Bill will allow the United Kingdom to ratify the treaty of Lisbon, which was signed by heads of state and government on 13 December 2007. The treaty will not enter into force until it has been ratified by all 27 member states of the European Union. The Lisbon treaty is an amending treaty, like the Maastricht, Amsterdam and Nice treaties before it. As such, the Government believe that it should be ratified following debate and decision in Parliament. In order to facilitate that debate, the Government have published as Command Papers the full text of the Lisbon treaty and the consolidated treaties as amended by the Lisbon treaty. I expect it is the latter Command Paper, together with the shorter paper explaining the changes from the current treaties, that noble Lords will find most helpful.

The aim of the Lisbon treaty is to reform and streamline the enlarged European Union’s institutions and decision-making. A Europe of 27 countries, with more to come, faces the challenges of globalisation:

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defending and extending free and fair trade, climate change, energy security, migration and terrorism. The European Union has the potential to deliver for our citizens on these challenges, but to do so it needs strong, effective and accountable institutions. The treaty introduces reforms to help to achieve that. Indeed, that is its primary purpose. As the Law Society guide to the treaty says:

I begin by outlining what the reforms mean in practice and how they help to deliver the UK’s European Union objectives. The benefits of the Lisbon treaty can be summarised in three broad points. First, the treaty sets clearer objectives for the European Union to act within Europe and globally—objectives that we have shaped. Secondly, the treaty streamlines European Union institutions and European Union decision-making, so that the objectives that we share can be more effectively delivered with our EU partners. Finally, the treaty makes the European Union more transparent and accountable to the member states and to national Parliaments.

The case for the Lisbon treaty becomes clearer when we look at the policy agenda that we want to deliver through a reformed and streamlined European Union, so I shall look ahead to how that agenda can be more effectively delivered as a result of the treaty. European Union action can help to tackle terrorism and organised crime. The treaty provides the next step in the evolution of justice and home affairs at European Union level. By making qualified majority voting and co-decisions the norm, the treaty will unblock decision-making, allowing the Council to make greater progress in an area that is of great benefit to UK citizens: combating international crime and terrorism; ensuring greater legal certainty for European Union citizens and for business; and bringing criminals to justice. The justice and home affairs chapter of the treaty reflects these priorities and the importance that we attach to co-operation in this field. My own experience of the Justice and Home Affairs Council reinforces my support for such co-operation. However, the treaty also provides the flexibility to ensure that when something is not in the UK’s interests, we will be able to choose whether to participate. The treaty extends our opt-in right to each and every justice and home affairs proposal.

The European Union is crucial to promoting security and stability in neighbouring countries and beyond, helping us to deliver our foreign policy objectives. We need the European Union not as an alternative to UK foreign policy but as an important means of implementing it. The Lisbon treaty strengthens the framework for co-operation without undermining the role of member states. It does not change the fundamental nature of foreign policy co-operation. Common foreign and security policy continues to be in a separate treaty and agreed through the Council, acting unanimously. The new high representative, appointed by the heads of state and government and linking the Commission and the Council, will enhance the efficiency, effectiveness and coherence of the current arrangements. The Lisbon treaty says that he or she,

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Nor does the treaty change the fundamental nature of defence co-operation. Again, however, there are important improvements to encourage our partners, through what is called permanent structured co-operation, to meet one of the UK’s priorities on defence: to shoulder more of the international security burden. The Lisbon treaty strengthens our ability to deliver on our foreign and defence policy objectives, while maintaining our independence in these areas. It makes the European Union better able to support an effective multilateral security system. That is why it is supported not only by 27 European Union governments but by the United States and NATO.

We also want the European Union to continue to address issues of global poverty and development and to strengthen the protection of human rights through a fresh effort to deliver the millennium development goals. For the first time, the Lisbon treaty will ensure that development aid,

That mirrors UK policy.

Lord Forsyth of Drumlean: My Lords, I am grateful to the Minister, who has given a clear exposition of the treaty. Will she explain how this exposition differs from that on page 87 of the Labour Party’s manifesto, which went on to say that, should the Government be successful in winning the election, they would provide a referendum and campaign for a yes vote in it? I see no distinction between the treaty as described in the manifesto and the treaty as described today.

Baroness Ashton of Upholland: My Lords, let us be clear. The Companion is very clear about interjections in speeches. I referred to this rather recently on a Friday in your Lordships’ House, as I am sure the noble Lord has read. The purpose of interjections, particularly in opening speeches in a debate of this length, is to ask for clarification of something I have just said. The noble Lord makes a much broader point, which I have no doubt many speakers will make this afternoon and evening. I will certainly respond to it in my closing remarks, which the noble Lord will be here to hear.

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