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House of Lords

Monday, 12 May 2008.

The House met at half-past two: the LORD SPEAKER on the Woolsack.

Prayers—Read by the Lord Bishop of Liverpool.

Education: Chevening and Commonwealth Scholarships

Baroness Warwick of Undercliffe asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, we obviously face hard budgetary choices, not least to find resources for new priorities such as climate security. We have consolidated our scholarship programmes and are focusing on the Chevening and Marshall schemes. While the FCO’s support to Commonwealth scholarships is ending, the Government’s overall contribution is increasing through funding from the Department for International Development.

Baroness Warwick of Undercliffe: My Lords, I thank the Minister for his reply. I also declare an interest as chief executive of Universities UK. How does he reconcile the cuts made by his department with the Prime Minister’s initiative, which is intended to enhance higher education globally and not just in certain countries? In taking that decision, did his department make any assessment of the impact of these cuts on the competitiveness and reputation of British higher education?

Lord Malloch-Brown: My Lords, my noble friend speaks to a subject with which I think all in this House are deeply sympathetic. I am sure that many of us benefited from scholarships of these kinds. Certainly I was lucky enough to go to the United States on such a scholarship. There is a growing number of sources of such scholarships both from the British Government but more generally from foundations and others, and we felt it important to consolidate the programme at this point and to focus on countries that are not so well imbued with such opportunities and where the prospect of bringing students from those countries to the UK would contribute to strategic relationships in the long term. I mean countries such as China and Brazil.

Lord Howell of Guildford: My Lords, the Minister is putting up a brave defence. As I understand it, the Chevening scholarships are not affected by the announcement on 13 March that there would be cuts. At any rate, they do not have the Commonwealth as their priority, but the FCO scholarships did, and it

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seems absolutely crazy at a time when we are trying to establish strong links with the fast-growing, high-tech counties, many of which are in the Commonwealth and in rising Asia, that we should be cutting our scholarship arrangements with them. If the United States took that view, the Minister would not have been awarded a scholarship to go there because it would have said, “Oh, Britain’s a developed country and it doesn’t count any more”. Could we please rethink a system that will work very badly against this country’s interests?

Lord Malloch-Brown: My Lords, let me reassure the noble Lord that the funding for Commonwealth scholarships will not in fact decrease, but increase slightly because DfID funding is being substituted for FCO funding. It will, however, be targeted more at developing countries. Until now, 90-plus per cent of the funding went to the old Commonwealth countries whereas the DfID funding will be aimed at new ones. Therefore, while there will be losses in countries such as Canada and Australia, we will be targeting those Commonwealth countries where the need is the greatest.

Baroness Finlay of Llandaff: My Lords, will the Minister confirm that funding will be transferred for medical courses? I declare an interest as it costs less than £9,000 to educate a specialist in palliative medicine or in dermatology using distance learning and supervision. In many cases, they have been the only specialist in their country following education from the UK.

Lord Malloch-Brown: My Lords, I may need to get back to the noble Baroness with more detail on that. However, supporting training of that kind is a DfID priority in its public health programme.

Lord Wallace of Saltaire: My Lords, we on these Benches appreciate the Foreign Office’s delicacies in a relationship in which DfID’s funding is increasing rapidly and the FCO’s funding is being held down. We understand that the previous Chancellor of the Exchequer did not like the Foreign Office and that that is part of the shift. However, we have important political relationships with a number of other developed countries in the EU in what we have to call the developed Commonwealth. The small political investment required for those seems to be worth while and in the national interest in building relationships with future political, economic and social elites in those countries. Will the Minister encourage his Secretary of State gently to remind the now Prime Minister that these matters are politically important?

Lord Malloch-Brown: My Lords, I do not know about the former Chancellor but I know that the now Prime Minister strongly supports the Foreign Office. We all recognise that the relations that these programmes have given us with countries such as Canada and Australia are critical and we need to find ways to make sure that scholars go back and forth between them. However, I am not sure that a Foreign

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Office programme, whose strategic purpose is not links in general but targeting countries with which we do not enjoy such historical relationships, is necessarily the vehicle for that.

Lord Judd: My Lords—

Lord Hannay of Chiswick: My Lords—

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, I think that the noble Lord, Lord Hannay, stood up earlier than my noble friend Lord Judd. However, if we are quick, we can get both in.

Lord Hannay of Chiswick: My Lords, the noble Lord spoke about Marshall scholarships in his first reply and gave the impression that all was fine as far as they were concerned. However, will he confirm that the FCO funded 40 Marshall scholarships in 2006, is offering to fund only 31 in 2008 and, on present assumptions, that the figure will drop to 28 by 2010? Is it not shameful to repay the single most generous act in this country’s diplomatic history by such penny-pinching economies?

Lord Malloch-Brown: My Lords, the noble Lord will be relieved that my right honourable friend the Foreign Secretary committed to not reducing the moneys available for Marshall scholarships in this coming budgetary period. However, the increased cost of providing them due to the increase in tuition and other fees in the US means that the same money will buy slightly fewer scholars. However, the numbers are coming down from around 43 to 38 and, therefore, it is not the rapid descent that the noble Lord described.

Lord Judd: My Lords, I must again declare an interest as an honorary officer of the Council for Education in the Commonwealth. Does my noble friend agree that, whatever the Government’s intentions, this will enhance scepticism in many quarters about real political commitment to the Commonwealth? Does he further agree that, if the Commonwealth is not to be anything but a hollow and expensive edifice, it is essential that in its declared commitments to human rights, democracy, the rule of law, good governance and to being a world leader in this respect, the interchange of education at the university level is an absolutely essential priority?

Lord Malloch-Brown: My Lords, again, I reassure my noble friend that we are not cutting Commonwealth scholarship funding. DfID moneys mean that the budget will increase, not shrink. I acknowledge that this is leading to a deployment of scholarships away from old Commonwealth to new Commonwealth countries in the hope that other sources of funding will be available to make up the difference. I completely agree that scholarships of this kind are not only a critical part of this country’s future in a global world but critical for students everywhere.

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Questions for Written Answer

2.45 pm

Baroness Miller of Chilthorne Domer asked Her Majesty’s Government:

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, under the terms of the Ministerial Code, Ministers are directly accountable to Parliament for the accuracy and relevance of their Answers to Parliamentary Questions. Ministers take their duties to Parliament seriously and ensure as much as possible that Answers are informative, helpful and timely. To try to evaluate the quality of Answers across departments would cut across that direct accountability of Ministers to Parliament.

Baroness Miller of Chilthorne Domer: My Lords, I thank the Lord President for her reply. I know that she is aware of the importance of this matter, so will she undertake to evaluate the different departments to ensure that my recent experience, particularly with the Home Office, is not repeated? You get three kinds of Answers: first, “We do not know but we will not say that”; secondly, “We will not tell you, so we will give you some policy waffle instead”; and, thirdly, in regard to timeliness—and the noble Baroness will have seen on the Order Paper my Question from 5 March, which was eminently answerable—“We will not tell you for such a long time that the Answer will be irrelevant”. Does she accept that this prevents the Opposition from undertaking their perfectly reasonable scrutiny role?

Baroness Ashton of Upholland: My Lords, if that has been the experience of the noble Baroness, I must apologise on behalf of the Home Office. One of the functions that I have undertaken—as indeed did my predecessors—is to try to ensure that Answers are given within the correct timetable. I do not always succeed, but I certainly try. If the noble Baroness and any other Member of your Lordships’ House bring me examples, I will be more than happy to pursue particular Answers directly. I completely agree with the noble Baroness that it is not acceptable if Answers are not given as fully as possible.

The Countess of Mar: My Lords, the noble Baroness knows of the difficulties that I have had getting Answers from the Department for Environment, Food and Rural Affairs and the Environment Agency Wales. How can I get through to them that giving a non-answer is not an Answer? I will keep asking Questions, regardless of the cost to the taxpayer, because if they do not give me the truth—and I know what the truth is because I do not ask Questions without knowing the truth beforehand—they will eventually be found out. As my granny used to say, “Be sure your sins will find you out”.

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Baroness Ashton of Upholland: My Lords, noble friends behind me are asking whether it is the best use of taxpayers’ money to ask Questions to which one already knows the answer. I know of the particular case to which the noble Countess refers and we have tried to deal with it. I reiterate that this is the responsibility of Ministers. As noble Lords will know, the noble Lord, Lord Jopling, has been assiduous over the years in examining this matter. He did me the honour of attending a Front-Bench meeting and making the point clearly that it is the role of your Lordships to hold the Government to account via Questions, debates and so on. My colleagues were keen to hear from the noble Lord, Lord Jopling, who put the case very well. If there are issues that noble Lords wish to raise with me, I shall be happy to take them up.

Lord Maclennan of Rogart: My Lords, does the Leader of the House recognise that, in the previous Session of Parliament, 4,107 Questions out of 5,702 Questions tabled took longer than the 14-day deadline to answer and that, at the end of the Session, 25 Questions were unanswered? These facts have already been revealed. What do the Government propose to do to deal with this untimeliness of Answers?

Baroness Ashton of Upholland: My Lords, I have sought to deal with it within my private office by making sure that, when the Answer to a Question is overdue, the department and the Minister are notified. Noble Lords who have been in departments will know that a process has to be gone through, which relies on civil servants, and often other Ministers who are not in your Lordships’ House, to clear and deal with policy Questions. As noble Lords will know, sometimes Questions are complicated. In the 1996-97 Session, there was a total of 1,247 Questions. That figure has now risen to 5,702 Questions, so there is also the issue that we have to deal with many more Questions. That is a good thing—it is a sign of a healthy House of Lords in operation—but it puts on pressure. It is no excuse, but I wanted to mention that in passing.

Lord Campbell-Savours: My Lords, is there any distinction in the treatment by departmental officials of Questions asked by Members of Parliament in Parliament as against Questions asked by Members of Parliament under the Freedom of Information Act?

Baroness Ashton of Upholland: My Lords, it is, of course, a different regime, as my noble friend will know. The two processes are not the same. The rules on Parliamentary Questions are very clear. There is a code for civil servants. Part of the Ministerial Code is that Ministers should answer their colleagues in Parliament as accurately, in as timely a way and as appropriately as possible. That is the basis on which Questions are answered in your Lordships’ House.

Lord De Mauley: My Lords, the Ministerial Code requires Ministers to give accurate and truthful information to Parliament but does not mention the completeness of the Answer. Surely the Lord

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President would agree with me that there is a case for amending the code to prohibit omission in answering PQs.

Baroness Ashton of Upholland: My Lords, if one is answering accurately, surely that would deal with the issue of omission. If noble Lords would like to bring me examples of where they think that things have been omitted, I will be more than happy to look at them. My personal view—and the way in which I have always acted as a Minister, or tried to—is that Ministers should give the information that actually answers the Questions that have been put before them as far as they are able to within the inevitable constraints that exist. If noble Lords have examples, my colleagues would like to know what they are as well.

Lord Swinfen: My Lords, the Leader of the House said in an earlier reply that information had to be got from Ministers in another place. Is she not aware that all Ministers in this House are answerable for the Government as a whole and not just for their departments?

Baroness Ashton of Upholland: Yes, my Lords, that had not escaped me. I said that, in order to make sure that the information is accurate, Ministers who have policy responsibility in another place are required to clear the Answer, as the noble Lord knows. I take responsibility for all departments in your Lordships’ House but I would not pretend that I had at my fingertips the detail of every aspect of government policy. Surely the most obvious thing to do in those circumstances is to ask the colleague who has responsibility to make sure that the information is accurate.

Consumer Credit

2.52 pm

Lord Dykes asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera): My Lords, we have no plans to place controls on access to consumer credit. However, the changes brought in with the Consumer Credit Act 2006 contain important new consumer protections and stronger powers for the Office of Fair Trading to take action against lenders that engage in irresponsible lending practices.

Lord Dykes: My Lords, I thank the Minister for that Answer. If the interest rate mechanism is not sufficient to stop the excesses in markets that we have seen recently with the bad debt mountain getting out of control and more and more people in financial distress—not only with the collapse of mortgages but also because of personal loans for consumption on

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hire purchase and credit sales—is it right that we, unlike some other countries, should have got rid of other controls such as the minimum deposit rate and maximum repayment period many years ago? Should not the Government look at this again?

Baroness Vadera: My Lords, I would rebut at least four or five of the points that the noble Lord makes but, on the specific Question, we believe that term control or interest rate caps, which were introduced in World War II and used intermittently in the 1950s and 1960s, are not appropriate for a liberalised market economy. They also lead to unintended consequences. In particular, they restrict access to essential credit for the poor and the vulnerable and therefore do not help the people that we are seeking to help. There is evidence from, for example, Germany and France, where these restrictions sometimes apply, of an increased resort to illegal lending with very inappropriate levels of interest rates. In states of the United States where there are caps there is evidence of decreased products for the poor and the vulnerable relative to states which do not have caps.

Lord Borrie: My Lords, when we had term controls in this country, were they not often readily evaded? For example, when a trader was selling a new car on credit he would artificially inflate the value of the old car that was being traded in. Such controls are really too easy to evade to make them worth while. Is it not much better, as the Minister implied in her first Answer, to use the increased powers under the Consumer Credit Act 2006 so that irresponsible lending is treated as an unfair or improper practice—I forget the appropriate word—and the licence is then at risk?

Baroness Vadera: My Lords, my noble friend is right: the real issue is the lack of transparency that arises out of these controls with increases in premiums elsewhere. In the 1950s and 1960s they were not really used for consumer credit but for controlling inflation and the balance of payments, and we simply do not live in that kind of economy right now. However, the Consumer Credit Act 2006 brought in a large number of powers, now in the process of being embedded in regulation, which will help with responsible lending and ensure that the licensing regime helps consumers.

Lord Campbell-Savours: My Lords, the Minister referred to the effects that this would have on the poor. Is the reality not that the poorest people in society, living on vast estates throughout the United Kingdom, are paying often the highest interest rates in a totally unregulated market? Is there not a requirement for the Government to intervene in that area to protect the very groups that we in Parliament are supposed to represent?

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