To ask Her Majesty's Government what is their assessment of the role played by the Royal Horticultural Society's Britain in Bloom campaign, and similar schemes in communities, in their Big Society agenda.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I commend the Royal Horticultural Society for its Britain-in-bloom campaign. I know that the campaign inspires an enormous number of people to act as volunteers and to get involved in caring for and improving their neighbourhoods for the enjoyment of everyone who lives in them. It brings communities under the horticultural banner and brings local people into a new sphere.
Baroness Gardner of Parkes: My Lords, I thank the Minister for that. This is a long-standing scheme. At the present time, when lots of people face major difficulties, it is particularly important for people to feel a sense of achievement in what they are doing and a sense of community. Local authorities should be asked or encouraged to help this to continue. As I understand it, they are not asked to contribute financially. Can the Minister comment on that?
Baroness Hanham: My Lords, as I understand it, the Royal Horticultural Society is very generous in supporting local authorities and people within them who want to take part in the competition. I have absolutely no doubt that all noble Lords would agree that the work that is done and what is produced as a result of the competition makes London and local authorities look much better. I have no difficulty at all in agreeing with the noble Baroness or in again congratulating the Royal Horticultural Society on what it does in this initiative.
Lord Hunt of Kings Heath: My Lords, I am sure it is right to congratulate the Royal Horticultural Society, but is there not a wider point about local authorities and support for voluntary organisations? What does the Minister say to Birmingham City Council-a Lib Dem-Tory council-which is withdrawing all funds from the citizens advice bureaux? How on earth can that support the big society?
Baroness Hanham: My Lords, that is a bit off the Question, which is about flowers and gardens. I thought that such matters might come up under the next Question, so I do not know whether the noble Lord will want to ask it again. The straight answer is that Birmingham City Council, like other councils, has to make its own decisions on its expenditure. There has been and will continue to be considerable pressure on councils to ensure that the voluntary sector is protected from such reductions. If I may bring the noble Lord back to the Question, there is no doubt that people will make a plea to ensure that they can plant their gardens and have them competitively looked at.
Lord Palmer of Childs Hill: My Lords, may I bring the Minister back to the original Question by asking whether she believes that colourful flower displays have a good-feel factor for people and they should be encouraged? Will she deprecate the fact that in so many areas of public life flower-beds are being replaced by shrubs? I am not against shrubs, but colourful flowers do produce a good-feel factor. Would the Minister like to comment?
Baroness Hanham: Well, my Lords, we all like flowers and we like to see them in public places. It gives life to areas if there are planted flowers rather than bushes, which can be rather drab. I agree very much with that and with any other schemes that are taking place. Indeed, as I am sure noble Lords know, local authorities run their own schemes. The Royal Borough of Kensington and Chelsea, which is my borough, runs Kensington and Chelsea in bloom and has its own competitions, there is the wider London in Bloom competition, and there is the green flag award, which is run for public open spaces and provides an incentive for people to beautify the areas.
Baroness Hanham: My Lords, as I said in response to a previous question, that issue perhaps moves us on to the next Question. It is entirely up to each local authority to make its own decisions. If a council decides that it wants its borough or council area not to look very prepossessing and very nicely flowered and bushed, that is up to that council.
Baroness O'Cathain: My Lords, has my noble friend the Minister heard of the seed exchange scheme? This is happening in very small communities throughout as part of the big society on a small society level. People do not have to spend money on plants and flowers because those who have seeds left over from the previous year give them to others. The results are amazing and competitive and look fantastic.
Baroness Hanham: Yes, my Lords, you can do that with plants as well, if you are clever enough and can work out how to make them grow. Anything that improves and makes places look beautiful is to be greatly encouraged. A seed takes a little longer to grow than a plant, so perhaps a plant is more effective.
Viscount Montgomery of Alamein: Although this Question is about flowers, will the noble Baroness not agree that there are beautiful trees, and their foliage is equally beautiful and changes with the seasons as well? Therefore, they should be encouraged as well as flowers.
Baroness McIntosh of Hudnall: My Lords, I am sure that the Minister is aware of the excellent work done by the Royal Horticultural Society and others in education and schools. Does she agree that, for example, the value of learning about the connection between what we eat and how it is produced is extremely important in the way in which children are educated? Will she pass on to her colleagues in the Department for Education my hope-which I hope is shared by other Members of this House-that any reorganisation and cuts in education will not fail to take account of the importance of that work?
Baroness Hanham: My Lords, I am willing for messages to be heard and I am sure that my colleagues in the Department for Education will hear what has been said. However, I do agree that the training schemes that help people into jobs around horticulture are to be encouraged.
Baroness Farrington of Ribbleton: My Lords, would the Minister care to comment on the fact that, given the differential depth of the cuts for the north of England, many local authorities will not be able to take on trainee young people in their parks departments? Would the Minister, who has a fine record in local government, please resist the pressure that is put on Ministers opposite to say on every question that it is purely a matter for local authorities? The Government have stolen the flexibility with the differential cuts.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, we have no plans to make any changes to the current arrangements that allow for the exportability and uprating of UK state pensions. The UK state pension is payable worldwide but is uprated outside the UK only when there is a legal requirement or reciprocal agreement to do so.
Lord Shipley: My Lords, is the Minister aware that there are some 500,000 UK pensioners in the USA and the European Union whose pensions are uprated,
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Lord Freud: My Lords, the figures for non-frozen pensioners are 610,000 and for frozen pensioners 550,000. The difference in payment is currently between £57 for the non-frozen and £32.70 for the frozen. I am satisfied, as are the courts, that what we have is objective and justifiable in this area.
Baroness Golding: My Lords, I have had a letter from a friend of mine who lives in Spain and has lived there for 20 years, and who is in his eighties. The letter from the Department for Work and Pensions says: "I am writing to tell you that we cannot pay a UK state pension at the moment. This is because we cannot be sure that the amount of money that we pay you is correct. Payment of state pension has been stopped from 24 January". There is no right of appeal against this decision. Is this how we are going to treat our pensioners?
Lord Freud: My Lords, clearly I will not be familiar with the facts of this particular case, but if the noble Baroness would like to write to me with those details, I shall make sure that they are looked into thoroughly.
Baroness Gardner of Parkes: I have asked about Commonwealth pensions both in writing and verbally over many years because, as noble Lords will appreciate, I get lots of letters. No Government have at any time ever considered it feasible to try to upgrade the pension, because so many people are involved. However, it is important to appreciate that in some countries it is different. In Australia, the national Government see that pensioners have the means to survive.
Lord Freud: My Lords, this is a much more complicated issue than it seems on the surface, because it is not a question of making a payment to a pensioner the entirety of which they then put into their pocket. The country where they are living will often supplement their pension, so it can often be a case, for instance, of us making a higher pension payment and the equivalent
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Lord McKenzie of Luton: My Lords, I agree with the Minister that now is not the time to change the uprating of pensions paid abroad. The priority should be to push back against the aggressive acceleration of the state pension age for women. However, does he agree that British pensioners overseas have the benefit of the reduced number of years of contributions to receive a full basic state pension, which came in under our legislation in April 2010, and still have the ability to top up entitlements by class 3 buy-backs on a basis whereby for £655 you can buy extra pension of about £170 a year for life? That seems a pretty generous deal.
Lord Freud: My Lords, I am happy to congratulate the noble Lord opposite on those changes, which I know that he was involved with. I think they have been valuable. The point about costs in the current environment is that this change to uprating in the frozen areas would cost us £620 million a year, and in the context of the austerity position that we are in-all noble Lords will be very familiar with the terrible dilemmas that we face as we look to get the budget under control-we should consider how much that £620 million represents.
Lord Skelmersdale: My Lords, would my noble friend accept that what matters when paying British pensions to pensioners in places such as Canada is reciprocity? In other words, if the Britons in Canada are paid the Canadian pension and the Canadian pensioners in this country are paid British pensions, that would be regarded as a fair deal. What discussions on reciprocity are going on at the moment between his department and overseas Governments?
Lord Freud: My Lords, there are currently no discussions on reciprocity. That is not a strategy that we have. The reciprocity agreements are, if you like, a little like a double tax treaty network of agreements. We are not going into that at the moment. There are 30 countries with which we have reciprocal agreements, and currently we are not planning to expand that. However, this is a policy that we keep under review.
To ask Her Majesty's Government what is their estimate of the redundancy costs to be met by local authorities in the current and next financial years; and what they forecast to be the impact on local authority budgets of the proposed restriction to £200 million of permission to capitalise those costs.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, the Government do not make any estimates of redundancies in local
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Baroness Hanham: My Lords, capitalisation impacts directly on deficit reduction plans. Capitalisation is capital being used for revenue so there is no doubt, I think, that what my noble friend said in his letter was correct. The permission for capitalisation-which has now been increased from £200 million to £300 million, largely because of representations being made-is not intended to be the full way of meeting redundancy costs. Councils are meant to look to their own resources to make up most of what they need when there is a reduction of staff through either voluntary or compulsory redundancies.
Lord Vinson: My Lords, will the Minister agree that no Government can enjoy making cuts? It must be difficult to watch when some cuts are made inappropriately by local authorities, but the fact remains that, without these cuts, council tax would rise exponentially as it has done in the past. Would the Minister make it clear that the alternative to cuts is a rise in council tax? I wonder how popular that would be with the British public.
Baroness Hanham: My Lords, I point out immediately that the Government have made it possible for a council tax freeze for the next two years. Indeed you cannot have numbers of personnel rising exponentially every year, which happened under the previous Government, under which there was a widening out in the number of people employed in local government. There have to be, and there will be, rationalisations of services and new ways of doing things. Not all councils are lost in the depths of despair about what is happening, because this is opening up opportunities for them. However, I do not deny that it is a great hardship for people who are losing their jobs without the benefit of having anywhere to go, and none of us would reject that.
Lord Tope: My Lords, the Minister said in answer to the Question that it was for local authorities to make their own decisions on spending. Given that there is no additional public expenditure involved in this, will she say why the Government will not allow local authorities to decide for themselves how they will meet these redundancy costs?
Baroness Hanham: My Lords, they can make their own decisions about it. All that the Government are doing at the moment is providing some flexible resources with the £300 million capitalisation for those that are finding it particularly difficult. They will have to implement that capitalisation against criteria, and if they do not meet those criteria they will not be given permission to do so.
Lord McKenzie of Luton: My Lords, is the Minister aware that the tired mantra that she keeps trotting out that it is all down to local authorities is growing very thin? People are well aware that it is the Government that are responsible for making these cuts and that they are simply hiding behind local authorities and local councils.
Baroness Hanham: My Lords, I suppose I could also produce the statement that I have made frequently in this House that if it were not for the previous Government's mess we would not have to make these reductions. I point out that the previous Government had also seen the ill of the way in which they were going about this, as they were also making provision for substantial reductions in the budgets for local government in this financial year. The fact that this Government have had to make slightly more reductions than expected should not have been totally unexpected by local authorities-they knew perfectly well that they were going to have to make reductions.
The "tired mantra" that the noble Lord refers to is not a tired mantra; it is just a truth. The truth is that all the money for local government has now been given to local government by this Government. It is no longer ring-fenced-there are now only two areas that are-so local government can use every bit of money that the Government get, except in the areas of education and health, and can decide how to use it. Local government can decide how to provide its services and how to provide the most value to its own communities with all the resources that it has.
Lord Hamilton of Epsom: My Lords, does my noble friend have any figures for natural wastage in local government? Does not natural wastage contribute to the reduction that there will be in the number of jobs-although obviously it will not contribute all of them?
Baroness Hanham: My Lords, I do not have the figures, but the noble Lord is correct. There is always natural wastage-amazingly, people do leave jobs voluntarily-and there are ways of leaving jobs other than through redundancy.
Lord Liddle: My Lords, does the Minister accept that because of the Government's refusal to be more flexible on the capitalisation of redundancy costs, cuts
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Baroness Hanham: My Lords, we have made it clear that we expect the voluntary sector to be part and parcel of the future of local government. If local authorities do not wish to do that-although they will be put under great pressure to do so-they will cut voluntary sector grants, but in doing so they will be cutting off their nose to spite their face. Much good work is done by voluntary organisations. Under the Localism Bill, there will be a greater expectation that they will be able to take part in running and managing services.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Green of Hurstpierpoint): My Lords, we continue to believe that the assessment of all export licence applications on a case-by-case basis against the consolidated EU and national arms export licensing criteria is the right approach. In the light of the rapidly changing events in Libya and north Africa, we acted to revoke licences where there was a clear risk that the equipment might be used for internal repression or human rights abuses.
Lord Alton of Liverpool: My Lords, I welcome the Minister to his first appearance at Question Time. What are the Government doing to prioritise a legally binding arms trade treaty, and will they now support the enactment of my Re-Export Controls Bill, the provisions of which have been endorsed by three separate Select Committees in another place and supported throughout proceedings in your Lordships' House? It has also been reintroduced as a Bill in another place by Mr Tony Baldry MP. Have not recent events in north Africa and the Gulf demonstrated that we have a clear duty to do all we can to prevent British weapons and munitions being used to crush dissent, to attack unarmed civilians, to destabilise whole regions, and to kill and maim those who are trying to give birth to democratic institutions?
Lord Green of Hurstpierpoint: My Lords, I think the whole House shares the instinct that lies behind the noble Lord's questions. It is absolutely imperative that we conduct our defence and security sales business on the basis of high standards and under strict controls. Those controls are in place, but we always need to make sure that we take account of new experience. As for the proposal on the re-export of arms and control
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An arms trade treaty is a priority of the Government. We are committed to agreeing a strong and comprehensive arms trade treaty. We have a unit in the Foreign and Commonwealth Office that provides official support. We are working with key partners, such as the European Union, the United States and the co-authors of the treaty proposal-Argentina, Australia, Costa Rica, Finland, Japan and Kenya.
Lord Judd: Does the Minister agree that the real issue of concern is the underlying drive in policy? Armaments should never be another useful export unless there is some specific reason for not exporting them. Surely the culture in the unstable world in which we are living, with all the recent experience, should be that arms are an extremely dangerous export to promote, and should be exported only when there is a specific strategic purpose that can be monitored and held to account in the context of our relationship with the people who are receiving those arms. At the moment, we need to bring the emphasis in that direction, instead of the one that has prevailed.
Lord Green of Hurstpierpoint: I thank the noble Lord, Lord Judd, for that question. It is important to keep a balance. Every country has a right to self-defence. We live in an imperfect world; if it were a perfect world we would have no need of defence industries, needless to say. It is clearly extremely important that sales of defence and security equipment are conducted to the highest possible standards, and that we work with recipient Governments to ensure the proper use of such equipment and services. We must also make sure that we learn from experience. We would all acknowledge that we have some things to learn from the terrible events in Libya.
Lord Razzall: My Lords, does the Minister agree that the question goes slightly beyond the sale of military equipment and arms referred to in the Question asked by the noble Lord, Lord Alton? Will he confirm that the sale of such items as Taser guns, tear gas and other material, which are clearly being used in north Africa and the Middle East to suppress legitimate democratic uprisings, will be banned by this Government?
Lord Green of Hurstpierpoint: I thank my noble friend but, as I said earlier, we believe that the right approach to defence goods is a case-by-case one. There are legitimate uses of many defence products and services. Some we do not market or manufacture in compliance with international restrictions, but in general the right thing to do is to follow a case-by-case approach.
Lord Mackay of Clashfern: My Lords, is there any harm in the Bill to which the noble Lord, Lord Alton, referred? It seems to me that it could do good. When
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Lord Green of Hurstpierpoint: I thank my noble and learned friend for the question. The point is not whether it could do any harm but the fact that there is real concern about whether it could do any good as it is effectively unenforceable. We do not want any distraction from the important focus on thorough pre-licensing scrutiny.
Lord Elton: My Lords, a question at the back of many minds, which we do not much like to ask, is this: if we are going to be engaged in a no-fly zone and in enforcing it, is there any prospect that British pilots will face air defences supplied by British companies?
Lord Green of Hurstpierpoint: I thank my noble friend. This is clearly a very difficult position. The situation is evolving from day to day. It is tragic; civilians are being killed and the outcome is unclear. The right thing for Her Majesty's Government to do is to work with the international community to try to find a way forward that protects the citizenry of Libya.
Lord Roberts of Llandudno: My Lords, I remind the House of the great struggle to establish a Welsh-language television channel. A Member of the other place who was highly respected in Wales, Mr Gwynfor Evans, even fasted in order to ensure that we would have a Welsh-language channel. We owe a tremendous debt to my noble friend Lord Roberts of Conwy, who overcame many obstacles in order to make sure that S4C-S Pedwar C-went on to the statute book and became a reality. We say to my noble friend, "Thank you, again".
There are many English-language channels. You can switch from one to another and spend most of your evening doing it, but if you want a Welsh-language channel, there is only one, S Pedwar C. It serves the 600,000 or so viewers who speak Welsh, for many of whom Welsh is their first language. In an age of high technology and digital advances, it is a poor nation indeed that does not have its own television channel in its own language. We owe so much to this channel. The previous census recorded an increase from 18 per cent to 21.5 per cent in the number of folk in Wales who spoke Welsh; 28 per cent said that that they might not speak the language but had an understanding of it. We should look at what has happened for the past generation or two-the establishment of Welsh-language schools, major cultural advances in the Welsh language and S4C, the Welsh-language television channel. As a result, there has been a larger increase in the number of people who speak Welsh than there has been for many generations.
S4C, with its full range of programmes, is the natural channel for all who cherish living much of their lives with their own language. S4C starts with children's programmes in the morning and continues until 11 or 11.30 pm. If you are Welsh and live in a Welsh area, you can receive all your entertainment, information and news programmes on this Welsh-language channel. S4C is not so much the icing on the cake for us in Wales; it is very much the cake itself.
S4C is not a static but a developing entity. It has changed and needs continually to change. Including it in the Bill would very much undermine that change and would be a backward step. We do not dispute the fact that S4C has had a turbulent past couple of years, with resignations and oustings. It needs time and the breathing space to get itself in order again to create different and more modern structures to perform its task. It needs different people with different directions. If the Bill included the Welsh-language channel, immense harm could be done. The channel needs time to develop in its own natural way.
I question whether the issue of the channel really belongs with the Department for Culture, Media and Sport. Surely its proper place today would be with the Wales Office. It is the Welsh channel and it serves the people whom the Wales Office also seeks to serve. Many others may also be uncertain and consider that this is the wrong time to give the last word on S4C's character and funding to a Minister here in Westminster. Before long, there will be a full consultation about the media in the United Kingdom. Surely that would be the time for us to determine the future of S4C, not today. The day before yesterday, I read a letter in which the leaders of the four parties in the Assembly in Cardiff all said that they needed breathing space and time before there was any change in the status of S4C. I am sure that they are right. If Plaid Cymru, the Conservatives, Labour and the Liberal Democrats all agree, surely this is the wrong place to say that Wales cannot take the avenue that it wants.
I was singing the "Hallelujah" chorus last Friday morning after the yes vote in the Welsh referendum. I hope that people will keep voting yes in referenda, because it is a good habit to maintain and develop. The result of the vote means that the 20 devolved areas do not now need to come to Westminster for any approval. Is this not another reason to move with great caution in making any change to the status of S4C? I know that noble Lords will agree with me and, if it comes to a vote, will vote with me to say that the future for S4C is in Wales. I urge the Minister to spend the time between Committee and Report on formal, meaningful discussions with the Welsh Assembly Government, so that on Report we will have the assurance regarding the future of S4C that the amendment seeks to ensure. It is my pleasure-mae'n bleser gen i-to move Amendment 83.
Lord Morris of Aberavon: My Lords, I support the amendment moved so ably by the noble Lord, Lord Roberts of Llandudno. I hope that the House will forgive me if I elaborate a little on the matters that he raised. I never thought when I became a Member of your Lordships' House that I would take part in two debates on matters crucial to the nation of Wales and its nationality within weeks of each other. The result of the debate on the appropriate parliamentary representation for Wales was disappointing. Wales has every reason to believe that it was let down by the Benches opposite. I hope that when this Bill completes its journey through the House-and I take the hint of the noble Lord, Lord Roberts-Wales will not again feel let down and we shall see the withdrawal at some stage of S4C from the Bill.
The setting up of the fourth channel to meet the needs of the Welsh language is the jewel in the crown of the Conservative Party in Wales. After a ghastly and monstrous U-turn and universal national protests, including that of Gwynfor Evans, the Tory Government were persuaded to provide for Wales's needs. I was glad that the noble Lord, Lord Crickhowell, made the point a few weeks ago that the visit of the three wise men-Lord Cledwyn, the Archbishop of Wales and Sir Goronwy Daniel-came at a crucial moment. The
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Having paid tribute to the Tory Government's decision, perhaps I can reveal that for six years as Welsh Secretary I battled for the Labour Government to meet their commitments, despite the difficulties of the IMF crisis. Ultimately, on 6 March 1979, weeks before the election, Lord Merlyn-Rees was able to move the Second Reading of the Independent Broadcasting Bill permitting the setting up of transmitters generally, and particularly for Wales, so that broadcasting could commence by the autumn of 1982. This was the vital building brick that the new Government seized upon and operated.
All this work, of which we can all be proud, is now in real jeopardy because the Government, without any consultation, decided to offer this piece of saving to the Treasury. There was no consultation with the Welsh Assembly, and the plea of all the party leaders in the Welsh Assembly for an independent review, referred to by the noble Lord, was ignored.
S4C has not been without its faults. I happen to listen to some of its programmes most evenings, even in London. I have complained as far back as 2002 that the mix of programmes on any particular evening, the overdependence on cheap football matches in remote parts of Europe and the overreliance on some performers, good though they may be, are not enough. S4C has failed to realise that Wales is no longer an agricultural country. It was no surprise to me to discover that the viewing figures had dropped substantially, although they do not include people such as me in London, or those in Liverpool or elsewhere across the border. I do not think that the board of S4C has served Wales well in recent years. There are individual talents on the board but they obviously failed to work with the chief executive and agreed to an organisational structure much criticised in Sir Jon Shortridge's report on governance.
In 50 years in politics, I have had only one dispute with a broadcaster, which was regarding a major programme celebrating the 10th anniversary of the setting up of the Welsh Assembly. I fear that the whole programme had to be withdrawn. The conduct of S4C was pathetic. However, there is much to be done within S4C and I hope that, with the vision of a new chairman of standing in Wales and a new chief executive, we can see better things.
None of this exonerates the Government from the process employed in riding roughshod, and in the face of an Act of Parliament, by demanding and getting back £20 million from S4C, denying long-term financing to S4C in the future and transferring most of its responsibilities for finance to the BBC.
I was grateful to Mr Vaizey for seeing me twice last year, whatever his relations with the Welsh Assembly. He listened very carefully to what I had to say and seemed seized of the importance of the points that I had made. Reading his evidence to the Welsh Affairs
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What of the future? How is the relationship to work? There is only a short-term guarantee of finance. How is the independence of S4C, as promised by the Government, to be fulfilled? The accounts that I get, though disputed, of a lack of input at present by S4C into the 10 hours a week of broadcasting provided by the BBC do not augur well.
The first requirement in the new relationship between the BBC and S4C is for firm guidelines as to who does what. Perhaps an independent person-someone such as Sir Jon Shortridge, who is much respected-should be asked to draw up the guidelines on the relationship between the two parties; otherwise, a much larger BBC will overwhelm the tiddler that is S4C.
Secondly, there should be proper and adequate financing over a longer period of time than is envisaged at present. After all, careers are at stake and individuals are entitled to know, with as much certainty as possible, what sort of S4C there will be and whether there will be jobs for them.
Thirdly, money for S4C must come direct from the licence fee and not through the BBC. The licence fee is not the property of the BBC; it is our money. The BBC in the past has strenuously fought against top-slicing and it might well do so again. Should it succeed, we are back to the accounting officer problems that I posed earlier. In any event, a question has been raised as to the legality of the BBC paying money to a body that is not a subsidiary company of the BBC. Can the Minister assure us that the arrangements proposed have been legally approved?
Lastly, in the absence of an effective Act of Parliament continuing to guarantee S4C's existence, I would seek to ensure that part of the BBC's new charter, coming about in a few years' time, should set out the terms and duties of whatever body operates Welsh-language television. The alternative is a separate charter for S4C. After all, it had a special Act of Parliament promising and guaranteeing it revenues each year, but all that has been brushed aside-so much for the rule of law. It would have been wiser and more prudent to have had a proper and more independent review first. If there was a case for change, it should have been evidence-based.
I close by saying that it is a matter of regret to me that the Welsh Assembly, when economic conditions were so much better, did not propose that Welsh-language TV should become part of its responsibilities. I fear that there were two reasons why it did not do so. First, it feared taking over financial responsibility, although at that stage, when we were in better economic climes, that could have been negotiated. Secondly, I think that S4C preferred to be answerable to a distant Whitehall, with very few Welsh speakers overseeing it, than to neighbouring Cardiff, which would see exactly what was going on. This may be part of the reason why so much has gone wrong in recent years. It was a missed
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Lord Wigley: My Lords, perhaps I may first declare an interest. Between 2003 and 2006, I was a member of the S4C authority, and my son, daughter, son-in-law, daughter-in-law and my wife-and I occasionally-receive some benefit from participating in their programmes. My great interest by far, however, is as a Welsh speaker and a television viewer in Wales.
As has been said, this is a very sensitive subject in Wales. When I entered the Commons in 1974 the structure of television in Wales caused immense frustration to both language camps. Welsh language television programmes were carried by both BBC and ITV main channels in Wales, a small proportion of which were at peak viewing hours. Non-Welsh-speaking viewers were frustrated at having programmes they could not understand thrust upon them. Equally, Welsh speakers were frustrated that at best they received a fragmented service, with BBC and HTV duplicating news and current affairs programmes. The sum of the parts just did not add up to a comprehensive service. Most of the programmes were away from peak hours. There were protests; many language activists refused to pay their television licence fee; and some went to prison.
Before the 1979 general election, the Conservative Party promised a dedicated channel for the Welsh language. A few weeks after the election, the then Home Secretary, in a speech in Cambridge, announced that the Conservative Government had done their first U-turn, abandoned their election promise and were not going to provide a single-channel solution. This led to massive protests, which culminated in Plaid Cymru's former leader, Gwynfor Evans, announcing that, unless the Government kept their word and provided a Welsh channel, he would starve himself, if necessary, to death. Thousands protested, including many senior people in Wales. Hundreds of us refused to pay our television licence; I myself went to court for so doing, as did many colleagues.
Cutting a long story short, the Government realised that they had badly misjudged the situation. People from all parties intervened. The noble Lords, Lord Crickhowell and Lord Roberts of Conwy, both Welsh Office Ministers at the time, pressed colleagues with the strength of representations they were receiving from figures such as the Archbishop of Wales, the former chief civil servant in the Welsh Office, Sir Goronwy Daniel, and the former Secretary of State for Wales, Cledwyn Hughes, later Lord Cledwyn of Penrhos.
It matters not for the purpose of this debate whose representations carried most weight or for what reason. Suffice it to say that the Thatcher Government recanted.
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However, understanding the significance of that history is essential to understanding the situation which faces us today, which seems almost like a rerun of history. For the first time since 1979, last May we had a new incoming Conservative Government. The Conservatives had during the preceding election campaign made no reference whatever to their intention to restructure S4C. As in 1979, with no consultation in Wales, policy was reversed after the election. Need I say more?
As has been said, the Welsh language is spoken by 20 per cent of the 3 million people living in Wales, amounting to about 600,000 people. There are probably a further 100,000 Welsh speakers living in the rest of the UK. It has been estimated that 57 per cent of homes in Wales have at least one person who understands Welsh. S4C is watched by more than 600,000 people in the course of an average week.
That figure is less than the reach of almost 1 million people which existed six years ago, which has been mentioned. There are two reasons for the change, both associated with the changeover to digital television. First, while it undertook analogue transmissions, S4C broadcast English-language Channel 4 programmes during off-peak hours when it was not transmitting Welsh programmes. Clearly, when those were no longer available, many English monoglots no longer tuned in to S4C. Secondly, digital switchover led many viewers of all four old analogue terrestrial channels to migrate to explore the offering available elsewhere. S4C was not immune to that trend. The drop in viewers was predicted by the DCMS as far back as 2005. Having suffered those setbacks, I am glad to say that the graph has turned over the past 12 months, with an increase of 10 per cent in the channel's reach across the UK to an average level of 616,000 in 2010. In the week ending 23 January, almost 1 million people tuned in across Britain-no doubt aided by the fact that the Cardiff City against Stoke City FA Cup match was being broadcast live.
It is also worth emphasising that the average programme viewing figures have been affected by the setting up of the brilliant toddlers' space called Cyw, which provides programmes for the under-fives on weekday mornings between 7 am and 1 pm. Those programmes can never aspire to more than the few thousand viewers: the available cohort is probably no more than 15,000 and the likely viewership under 5,000.
Some people have poured contempt on figures as low as that, yet as a service it is critical for language transmission, particularly in households in English-speaking parts of Wales. I am glad that Cyw was awarded international recognition in New York earlier this year. The facile use of statistics by DCMS Ministers to denigrate S4C has been unworthy and reflects a failure to understand the reality of the Welsh language, the channel and its role.
I make one thing quite clear. There is no question of saying that everything has to stay exactly as it has been over recent years. Indeed, S4C has in recent years
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Everyone in Wales realises that, in the current financial constraints, all services funded by the public purse are likely to face cutbacks and S4C cannot be immune from these. To that extent, the funding formula of RPI, which has looked after S4C for two decades, cannot be regarded as sacrosanct. We did, however, note last weekend the emphasis of the Prime Minister, David Cameron, in Cardiff when he stated that Wales was being protected from the worst level of the cuts hitting other parts of the UK because of our difficult economic position, and that the average cuts would be 2 per cent per annum over the next four years. I am sure that S4C, however reluctantly, could live with cuts of that order, but not with the 24 per cent cuts in real terms that have been predicted-or more likely some 40 per cent in cash terms over that period.
The importance of securing guaranteed funding for the channel, removed from the annual political dogfight, was the reason it was safeguarded in legislation by the RPI formula. Unpicking that legislation, however inevitable in today's climate, is not something to be undertaken lightly. There is, however, a feeling that any cash cutbacks to be faced by S4C should be no greater than those faced by other public services.
The worst aspect of this saga is probably the way in which it has been handled by DCMS Ministers. Decisions were taken without any meaningful discussion with those in Wales who have a legitimate interest in these matters, and without any engagement with S4C itself, its audience, or its stakeholders in Wales. We should also remember that some 40 private companies are dependent to a greater or lesser extent on S4C and will be affected by the changes which were unilaterally announced by the DCMS last year. S4C, in fact, paid over £88 million into the Welsh economy in 2010-money that has been vital in building up the private sector television and film industry in Wales so that it can compete in world markets.
The initial discussions with the BBC were overwhelmingly at a UK level, with even BBC Wales out on a limb. Involvement with S4C itself has been less than open, with the channel finding out at second hand what DCMS Ministers had in mind. The DCMS seems to have studiously avoided engaging directly with the Government of Wales, despite the fact that both the Welsh language and education are fully devolved functions and that S4C has a significant contribution to make to both those portfolios. Furthermore, when the junior DCMS Minister in another place, Mr Vaizey, appeared before the Select Committee on Welsh Affairs on 18 January, he admitted-he almost boasted-that no, he had not ever watched a single S4C programme. This was despite the fact that he had ministerial responsibility for the channel and that 80 per cent of S4C's output could be watched with subtitles.
Your Lordships will hardly be surprised that over recent weeks there has been growing demand for responsibility for S4C to be transferred from the DCMS to the National Assembly. This has been augmented following last Thursday's referendum. To my mind, there appear to be three elements which are essential
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It should be noted that those in the Assembly recognise that there must be change. Reference has already been made to the letter sent to David Cameron dated 29 October 2010 and signed by all party leaders in the Assembly, which proposed,
That was a very positive proposal, but it does not seem to have led to anything. Whatever new structure might eventually transpire, I would urge that the corporate and commercial independence of S4C should be guaranteed. I am not persuaded that this can be done by bolting S4C on to the structure of the BBC. If it was, the campaigning target in Wales will inevitably switch to securing that what is currently BBC Wales becomes more independent from the BBC in London. I know that there is sympathy for such restructuring in Scotland and in some quarters in Northern Ireland. However, such fundamental changes should be part of a comprehensive new communication Act, not matters that arise from the ill thought-out schedules to a rushed Public Bodies Bill.
Secondly, whatever the model of the constitutional governance of S4C, there is also the question of the editorial independence of the channel. If the corporate independence of S4C is guaranteed, then of course its editorial freedom should per se be implicit in such a solution. If anything less than full independence is provided, the editorial freedom of S4C becomes a pressing issue, and it would have to guarantee the right of S4C to reject the editorial line taken by the BBC or, indeed, by politicians.
Thirdly, and crucially, there is the issue of the guarantee of finance. I have no objection whatever to S4C being funded from the licence fee because the proposal has much logic. However, if it is to be funded from the licence fee, that must-it really must-be done through a route that is independent of the BBC, as has already been mentioned. Once S4C becomes a supplicant of the BBC, it is finished. He who pays the piper calls the tune. It is my belief that S4C should have a proportion of the licence fee safeguarded by statute, perhaps around 2 per cent of the total licence fee take for the UK. The present formula gives S4C £90 million a year from the DCMS budget. The department sees its contribution dropping from £90 million down to £6.7 million by 2013, a 90 per cent cut in its contribution. Perhaps the Government of Wales might be able to contribute a sum similar to that £6.7 million and thereby secure an equal voice in terms of the channel's future. Securing an acceptable financial deal is basic to S4C and to retaining any meaningful independence for the channel.
Whatever way things move forward, there is a pressing need for the Government to clarify how they see the channel being funded post 2015. At present, there is a vacuum and great uncertainty, and frankly that is unacceptable to the small private companies in the sector which may be reluctant to invest if they feel that there is no ongoing financial certainty. But it is not enough to guarantee funding for the independent producers, important though that is. S4C itself needs some £20 million a year to maintain essential services such as transmission costs of over £7 million a year, subtitling costs, programme and viewer research, promotion of the channel and its legal and administrative responsibilities.
Securing a stable, practical and sustainable model for the future of S4C is immensely complicated and not something to be decided on the margins by unamendable orders in Parliament. It is therefore my preferred option for your Lordships' House to cut S4C entirely from this Bill and, if necessary, for the Government to bring forward new proposals after proper consultation in Wales and elsewhere as part of the development of a communications Bill in a few years' time. I hope that the Minister will accept at least the spirit of Amendment 113D on such a basis, but if she is not prepared to give a commitment to explore these possibilities and to come back with the necessary amendments on Report, I hope very much that the noble Lord, Lord Roberts of Llandudno, will press Amendment 83 to a vote and that it is supported by noble Lords on all sides as an indication made by this Chamber that the Government really must give further thought to this matter. Whichever way, I urge the Government to think again long and carefully on such a sensitive issue.
Lord Roberts of Conwy: My Lords, first, I thank those previous speakers who have referred to my part in the birth of S4C when I was a Minister in the Welsh Office. Since we began our proceedings on this Bill, my noble friend Lord Taylor of Holbeach has tabled some very welcome amendments, in particular the new clause in Amendment 114 requiring consultation on any draft order proposed under Sections 1 to 6. The new clause set out in Amendment 118 specifies the detailed procedure to be followed. That differs, of course, from the normal procedure with orders, but is not quite the super-affirmative procedure in full. These new clauses and the amendments tabled to them are yet to be discussed, so they are not in their final form. But whatever the final outcome, these clauses allow ample opportunities for consultation on a proposed order by Welsh Ministers, interested parties and parliamentarians. The many organisations and individuals who have written to us about S4C will, I hope, have the chance to have their say on the future of the channel in the consultation on whatever orders may eventually emerge.
The inclusion of a body in Schedule 4, in this case Sianel Pedwar Cymru or S4C, means that the Government have the power to modify its funding arrangements by order. Its removal from the schedule would mean that the power was removed from government. I am not
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It is well known to most of us that the Government have advanced quite far in their plans for the future financing of S4C. We know this from a letter, which has been made public, from the Secretary of State at DCMS, the right honourable Jeremy Hunt, to Sir Michael Lyons, chairman of the BBC Trust, dated 21 October last year. A subsection of the letter, headed "New partnership and funding model for S4C", states:
This statement of principle is repeated later in the subsection in the context of future funding of the service after 2015 when the comprehensive spending review period has ended and the funding situation of S4C is again under review.
Quite frankly, the critics have not given the Government the credit due for this very clear affirmation of their commitment to sustaining the Welsh language service. It has been reiterated by Ministers on a number of occasions, but it goes unheeded by those who do not wish to hear. A reduction in funding for S4C is not an attack on the Welsh language, as some have alleged, any more than a cut in defence spending is an attack on our forces.
The letter makes it clear that the DCMS will continue to fund S4C in 2011-12 and 2012-13 at agreed levels. The current level is not sustainable because, under the Broadcasting Act 1990, the channel's annual grant increase is tied to the retail prices index. It is clear that that link must be broken to effect the deficit reduction programme which is fundamental to the coalition Government.
I understand that S4C will receive some £90 million from DCMS next year, plus £20 million of cost-free programmes from BBC Wales as well as some £3 million of revenue from advertising and commercial activities. It also has some £27 million in reserves. Therefore, S4C is not facing an imminent financial crisis. Indeed, it appears to have financial security for four years ahead, which is not to be deprecated. After this two-year period of DCMS funding, the BBC will contribute £76.3 million in 2013-14 and £76 million the following year, 2014-15, from licence-fee money collected from the public by the BBC. One must stress, as has already been done, that those moneys do not belong exclusively and as of right to the BBC, although it is responsible for them. DCMS will give a further £6.7 million and £7 million in those two years respectively. S4C will also have funding again from the sale of advertising and other commercial operations.
Why is all that spelt out in a letter to the BBC? It is because S4C is part of the new funding package negotiated between DCMS and the BBC whereby the BBC World Service, some local TV services and BBC Monitoring will be funded from the licence fee as well as S4C from 2013 on. It is worth noting that only
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All this provision for S4C funding-I stress that funding is all I am referring to-makes reasonable sense to me in our current, straitened national circumstances. Some have said that there is no provision beyond 2015, but four years of certainty as regards funding is not to be despised. Furthermore, we are promised a review in good time before that period comes to an end. There is also a thinly veiled threat to the BBC that if the new partnership with S4C does not work for any reason, the Government will not take the licence fee money themselves but nor will the BBC have it either, except to reduce the licence fee.
There is strong pressure on all sides to make the funding system work and it probably will. I cannot see any other satisfactory alternative being produced in time. Of course, if the final order to implement the new funding scheme is grossly unsatisfactory, both Houses have the power to reject it-rarely used though that power may be in your Lordships' House. Where the problems will arise is in the inter-relationships between the organisations involved, but these cannot properly be resolved in the context of a Schedule 4 order and belong more properly to another schedule, possibly Schedule 3, which relates to the power to modify constitutionally in the sense of internal arrangements of public bodies. Clearly, the Government have not yet decided the detailed arrangements for the governance of S4C, which has come in, as the noble Lord, Lord Wigley, said, for some hefty criticism recently from Sir Jon Shortridge, formerly Permanent Secretary of the National Assembly and the Wales Government. It is understandable therefore that the UK Government placed S4C in the pending tray of the purgatorial Schedule 7, now to be abolished with certain exceptions.
S4C may well need to adapt its internal organisation, not only because of the new situation that will result from its new funding arrangements, but also because of recent events and public concern about its governance, which is the subject of Sir Jon Shortridge's very thorough report. The present position, as it has developed, is that there is a supervisory authority and an executive team which manages and provides the day-to-day service. To put it mildly, this system has not worked satisfactorily in recent years, possibly because of the curious, and I believe wrong headed, separatist policy pursued since 2006 of keeping the authority and the management of the service as far from each other as possible. I shall not go into the painful consequences, which have become all too public, but I shall quote from the Shortridge report:
"Too many decisions were taken by management which should have gone to the Authority; there was too little transparency; when members of the Authority were invited to take decisions they too often felt that they were not given sufficient time and that they were denied the information they needed to enable them to make the necessary judgements; and they also lacked the information they needed to assess the decision taking and performance of management".
Clearly, that was an unhappy state of affairs and it is surprising that it was allowed to continue as long as it did. A new authority will, I hope, have learnt lessons from the past and will be constituted differently, with a fresh mandate, mission statement and declaration of duties and responsibilities. The foundations are clearly laid down in Sir Jon's excellent report. I am glad to say that some of his recommendations have already been acted upon by the existing authority.
I turn to the new partnerships scenario implied by the new funding arrangements agreed between the DCMS and the BBC Trust, incorporated in the same letter from the Secretary of State to the chairman of the BBC Trust, dated 21 October last. The key principles are clearly stated:
That similar partnership would not be acceptable in Wales. It is difficult to see how that could be reconciled with the independence of S4C. It is not that the BBC's extensive contribution to Welsh language programming on radio and television is not recognised and highly valued, but pluralism is all important in Wales as elsewhere, especially in news and current affairs. We do not like to see all our eggs in one basket.
The Secretary of State's letter describes a fairly complex bipartisan series of negotiations, beginning with the BBC Trust and the authority setting out the strategic goals and broad editorial requirements of the service. Then, a combined board of the authority and the trust would oversee delivery of the same and, finally, there would be a joint management board to operate the service with its own commissioning structure and composed with a majority of independent directors appointed by the trust and the authority. It is no wonder that the Secretary of State's next sentence is that,
What is the alternative? If possible, the licence money which is to provide the bulk of S4C's money from 2013-14 should be allocated alongside the DCMS grant and be subject to the same accounting procedures. Could the Minister say whether this is possible now or in the context of the BBC licence renewal negotiations? It is crucial to split the BBC from the dispersal of the licence fee moneys that it gathers. At present, as Sir Michael Lyons, chairman of the BBC Trust, pointed out in a letter dated 10 November to the then-chairman of the S4C Authority, John Walter Jones, the trust is accountable to Government for the use of the licence money and that would extend to such moneys as were received from the licence fee by S4C in future years. This puts the BBC in a very dominant position vis-à-vis the S4C Authority.
The S4C Authority, on which the BBC-which, as I have said, contributes some 10 hours of free programming-and independent producers should be represented, along with the general public, should set strategic goals and broad editorial requirements within indicative legislative parameters. The management board should be the supplementary executive of the authority, with a chief executive and officers responsible to the authority for the provision of the service. Because of the substantial contribution of BBC programmes, it would clearly be advisable to have a BBC Wales programme liaison representative on the programme committee, which would be a subsidiary body to the management board. Of course, this bare structure that I have outlined would need further discussion and refinement, but it would make for a more cohesive, tighter, stronger, independent organisation capable of providing an attractive and worthwhile service for the Welsh people.
Lord Rowlands: I support this amendment. The noble Lord, Lord Wigley, was right to remind us of the situation before S4C was first created. The bitter, divisive nature of the arguments that surrounded Welsh language broadcasting in my days as a Member in the other place were some of the most violent and angry ones that I had ever heard from constituents. They were split right down the middle. It ended up with people taking extreme positions. There were those who did not want to see a single Welsh language programme on either BBC or what was then HTV, and those who wanted to see a lot more and realised that these channels were not going to provide it. The creation of S4C has been an extremely important aspect in developing a consensus around broadcasting in Wales. Even with the best of intentions, we would be very foolish to break that consensus unnecessarily by one means or another. First of all, the consensus was built in establishing S4C, as has been described by my noble and learned friend Lord Morris and by others, and gained enormous cross-party support.
Despite all the problems that S4C has had since, I believe that one of its successes has been to maintain or sustain a degree of consensus around broadcasting and that we have not had the divisiveness that accompanied some of the broadcasting of earlier times. The Government ought to be very careful, in the way that they handle all these issues, that they do not break the consensus and reopen some of the old divisive arguments that were injurious to Welsh broadcasting as a whole. That is the first point that we have to get across to Ministers: that they cannot take a blunderbuss approach to this issue because it is too important that it be maintained. The consensus was created and developed as a result of careful consultation and bringing everybody along together. This has not happened so far in relation to the proposals now being floated.
I hope noble Lords do not mind if I mention, in a personal sense, that I had an opportunity for quite a period to watch closely the affairs of the S4C Authority because my wife was a member for a number of years. I realise what my noble and learned friend Lord Morris has said and what the noble Lord, Lord Roberts of Conwy, has said about the more recent problems of
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All this is part and parcel of a very important situation. My fear is that, in an effort to try this or that solution, if the S4C Authority loses its measure of independence and is seen to be subsumed within the BBC empire in one form or another, that will do harm, not good, to the future of Welsh language broadcasting. I ask the Committee and Ministers to ponder on this: we created a consensus to establish the authority, and a consensus is needed now on essential changes that need to be made, but that consensus has to be worked at. A blunderbuss approach of this kind, trying to promote an order of this kind as a solution, is not the way forward. It is the most inappropriate process by which to develop the change necessary in Welsh language broadcasting. The Minister will not lose any face. He has already made amazing changes to this Bill, and I suggest that this could be one more change that the Government could accept.
Lord Elystan-Morgan: Everybody who has spoken in this debate already and very probably everybody present in the House would probably agree with the proposition that if the Government make a mistake in how they deal with this matter, a death blow could be struck at the very existence of the Welsh language. S4C is a unique body charged with a unique commission to safeguard the very existence of the Welsh language. Well, you may say, that is nothing very much-but I doubt whether many Members of this House would take that view. A living language with a living literature is a jewel in the treasury of human culture, and the Welsh language no more and no less than any other living language is such a jewel. It is 1,500 years old and was in existence at least 500 years before the French language came into being. The French language came into being only at the end of the first millennium; up till then it was a patois of Latin. That shows something of the pedigree of the language that we are talking about.
If anybody thinks that those of us who are Welsh-speaking or committed in some way or another to a loyalty to the Welsh language are overdoing the case, I ask humbly of each and every Member of this House whether, if the English language were in such jeopardy, they would not take up honourably and gallantly exactly the same position. If you thought that the language of Milton, Shakespeare and Chaucer was in jeopardy and that its very life was in doubt, I know exactly what you would do. We are prepared to say exactly the same of the Welsh language.
The next question is about how unique the circumstances were in which S4C was set up. They have already been dealt with in some detail. There was a very ugly situation in Wales; there had been massive civil disobedience, and I have no doubt that Gwynfor Evans would have given up his life. A very wise, statesmanlike Englishman who had great experience of conflicts not dissimilar to these, William Whitelaw, made an agreement with the Welsh people. He said that if they called off their protests he was prepared to give them this channel. That is exactly what happened, to his eternal credit. I think that we should be very careful with this legislation that we do not go back upon the word of that splendid statesman and gentleman.
Indeed it was an agreement. A very great jurist, many centuries ago, spelt out in Latin the principle of agreements: pacta sunt servanda-agreements are binding. This agreement is binding and I would have thought that is the strongest possible case that one could have for not including it in Schedule 4. There are two jeopardies that S4C faces: it could be starved of a sufficiency of funds so as not to allow it to be able to carry out its true purpose; and it could be so boxed in with any form of association with a greater, more powerful body, the BBC, that it would render its independence something utterly unreal.
We have heard regarding finance how a 24 per cent cut might very well reduce S4C to the point when its very existence is placed in jeopardy. I am sure I am not exaggerating the situation. The other side of it is what would happen if it was brought under the aegis of the BBC. I am not entirely sure under what authority the Government have in fact suggested that there should be such a merger-Clause 4 deals entirely with funding; nothing else. Clause 7(1)-I will not go into the detail of it-might touch upon that but I doubt it. Are there any other statutory authorities that allow the Government to do this? I doubt it. Maybe the Government are relying only on the financial pressures brought about-not in relation to S4C alone-by the general economic situation to box S4C into a corner that it would not wish to be in.
Lord St John of Fawsley: My Lords, I have been entirely convinced by the noble Lord's eloquence in support of Welsh as a living language which it would be a tragedy to have lost. However, I think I detected,
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Lord Elystan-Morgan:It is very late in this debate but I wholeheartedly agree. A survey carried out about 100 years ago showed that of words in general common parlance in the English language, 75 per cent were of Latin derivation. In Wales, it was well over 85 per cent. I believe that Latin should be revived, not as a dead language and not as a part of history, but as part of the building blocks of the languages that we use from day to day. I am very grateful to the noble Lord for that intervention.
I wish to raise a very narrow lawyer's point. It would be ideal if the licence fee or an appropriate and guaranteed part of it could be diverted across to S4C straightaway without passing through the hands of the BBC at all, but I doubt very much whether that would be possible under the 2006 charter. I will not go into great detail about that now. If you try to deal with the licence fee then a price has to be paid. The Government, not cynically, but I think quite deliberately, are acting in a mercenary way. They are saying that they would be saving 94 per cent of the DCMS's expenditure on S4C by transferring it to the licence payer. That is exactly it. In so far as the effect of that is concerned I will refer only very briefly to Article 47 of the 2006 charter, which sets out, almost like the main clause in the memorandum of a company, the main purposes. Article 47(4) says:
In other words, is the price of diverting part of the licence fee to S4C the fact of making S4C a subsidiary and slave of the BBC? As a lawyer, or an ex-lawyer, I have grave doubts that that is exactly the case; if so, it is a price that simply should not be paid.
I endorse what has been said about the lack of consultation. There was no consultation between Her Majesty's Government and the Welsh Language Board or S4C, or indeed the Welsh Assembly. This is not the first time that we have commented on such matters within the past few months. Were these snubs deliberate, or were they a mere lack of imagination and foresight? I do not wish to say this offensively, but the Minister will appreciate that the Welsh people have not been incandescently committed to the Conservative Party over the past 140 years since the passing of the Ballot Act. It may well be that they will not change a great deal now.
Baroness Morgan of Ely: I support the amendment put down by the noble Lords, Lord Roberts, Lord Elystan-Morgan, Lord Rowlands and Lord Morris,
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We are discussing a serious situation that, let us face it, has arisen due to some last-minute haggling before the comprehensive spending review was announced last year. That is why we are in this position. To place in question the future of a channel that had such a traumatic birth is naive in the extreme. We have heard how that came about; it was traumatic and divisive. The Welsh language in particular has been a divisive issue, but it has been put behind us with the establishment of S4C. I do not want to see that awful box reopened, but the danger of this action is that it could do exactly that.
We have to understand the historical context. The current proposal to include S4C in the Public Bodies Bill places a serious question mark over the channel's future. There are lots of reasons for that, not least the 24 per cent cut. That is a dramatic cut, more extensive than many of the other already extensive cuts that we have seen from the Government. People should be reminded that the number of speakers of the Welsh language had been on a substantial downward spiral over the past century. The stabilisation of the language has been due in part to S4C, not just in allowing the language to be perceived in a modern context through new media but in helping to keep young, talented Welsh speakers in Wales who have contributed to the economy and might otherwise have left, denuding the language of Welsh-speaking young families of the future.
The economic aspects of the channel should not be underestimated. This investment, which until now has amounted to about £100 million a year, has helped to establish Wales as a key cornerstone of the media industry in the UK. The knock-on impact on the economy has been immense.
Is it going too far to suggest that including S4C in the Public Bodies Bill will place a serious question mark over the future of the channel? I do not think so, largely because now there is no legal certainty for the channel, which there was prior to the spending review. There is the principle of the matter to consider. It is an extremely serious matter to decide via secondary legislation on the structure, budget and very existence of a channel that was established by statute. There is now no guarantee for the channel beyond 2015. I know that the noble Lord, Lord Roberts, suggested that four years gives an amount of certainty. That is typical of the short-sightedness of the view that the Government are taking on the economy. We must look to the long term; that is where our future is. If we do not invest now, we will be in serious trouble in the future. It is a serious situation for the autonomy and political independence of a TV broadcaster.
You have to remember that in Wales there is already very limited media plurality. The European Charter for Regional or Minority Languages, to which the Government are a signatory, notes under Article 11
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Finally, it is worth noting that S4C has been poorly run of late. Comprehensive political oversight of the channel has been lacking over the past two decades of its existence. It is now clearly an anomaly that S4C's political oversight is based in London when Wales has its own political Chamber. The Welsh Assembly has clearly been concerned about being passed the responsibility without the budget in the past; that is why it has not asked for it. There needs to be a serious, comprehensive and detailed discussion about the channel and its future, particularly if the proposed new structure-whereby S4C's budget comes from the BBC licence fee-is to continue. It was wrong to rush this through because of a comprehensive spending review deadline.
I would like the Minister to assure the House that the channel's long-term financing, economic impact, editorial autonomy and independence, and political accountability mechanism were considered prior to the proposal that it should be included in the Public Bodies Bill, or is the treatment of the channel simply part of a slashing strategy which we saw as part of the comprehensive spending review and which was undertaken without any reference to these issues or the historical background of the channel? I would like the Minister to comment on that.
Lord Nickson: I apologise for speaking in this debate. I did not come into the Chamber expecting to speak today. My sympathies are very much with the Minister for having to reply to a debate that has inspired such eloquence and passion and will inspire great feeling. When I listened to the first three speeches, I found myself persuaded by the noble Lords, Lord Roberts of Llandudno and Lord Wigley, and by the noble and learned Lord, Lord Morris. Had this amendment been put to a vote, which it may yet be, I was minded-with an open mind-to vote in favour of it. I then listened to the noble Lord, Lord Roberts of Conwy, and began to change my mind.
Now, why on earth should I wish to contribute to this debate? My contribution is emotional, rather than rational or economic. I live in Scotland and have been there all my life. I know more about the Gaelic language than I do about the Welsh language. However, I was brought up as a boy in the Conwy valley. My father taught himself to speak Welsh as a schoolmaster in middle age. He thought that, living in the Conwy valley, he should speak Welsh. The noble Lord, Lord Roberts of Conwy, may remember him. I should also say that my middle name is Wigley. For those reasons, I am deeply moved by this debate and feel strongly that the emotion inspired should-I hope-bring the Minister to dwell in her reply on the words "consideration" and "consensus", and to give careful thought to what is happening here.
I still have not made up my mind which way to vote, should the amendment be put to a vote, and will not do so until I hear what the Minister has to say. It is only one vote but I will listen with great care to what the Minister has to say.
Lord Howe of Aberavon: My Lords, despite my Welsh ancestry and, indeed, my part-Welsh title, the House will have noticed that I do not frequently take part in debates on this subject. That perhaps uncharacteristic diffidence is because I do not speak Welsh. It does not mean to say that I have failed to take account of the language. I can add to the satisfaction of my noble friend Lord St John by saying that in my last year at Winchester College-I will come back to that later-one of the tasks that I undertook was to write a thesis on the influence of Rome on Wales and the Welsh language. That inspires me to enter this debate.
I am, indeed, Welsh. My father was Welsh and Welsh speaking. He had the wisdom to marry a Scottish/Cornish bride, so I am a completely Celtic creature. I speak in support of the amendment with that in mind. I understand, and have sympathy with, the arguments on both sides but my clear view is that-as the noble Baroness, Lady Morgan, said-S4C does not require, and should not have, a place in this legislation. I do not begin to understand the complexities of the discussions that have taken place with the authority in recent years, but to put it in a Bill of this kind, which is designed to sweep away organisations of broadly this kind by ministerial signature, is not the right approach.
Familiarity of Latin by the Welsh is demonstrated by the choice of the Welsh word for the Welsh Assembly. The Scots have been left with the Scottish Assembly but the Welsh word for the Welsh Assembly is "Senedd". If you look that up in a Welsh-English dictionary, you will find that it means a law-making body. That is a pretty firm undertaking on behalf of the independence of Wales, the Welsh language and, indeed, the Assembly.
Considering my Welsh origin, I have not contributed a great deal to the structure and politics of the Principality. Tom Hooson was the cousin of the noble Lord, Lord Hooson, who, alas, is not with us and is unwell-we send him our best wishes. Tom Hooson was for some time-not long enough-the Member for Brecon and Radnor. In 1959, we together wrote what I think was the first booklet on the Welsh economy to be written by a political party, entitled Gwaith iGymru, or Work for Wales. One of the propositions that we rather tentatively put forward in that booklet was one that I was able to advance, together with Tom Hooson, at the Welsh area conference at Llandrindod Wells, when Mr Henry Brooke was the Secretary of State for Wales. It was that we should have referenda-we did not call them that-in Wales on a county basis to vote yes or no for the continued closure of Welsh public houses on Sunday. We had those referenda every seven years for 35 years until my noble friend Lord Howard-Michael Howard-was able to repeal that legislation because Wales had been completely liberated. That is the way in which to achieve an objective in this case.
It would be prudent to meet the sincerity and the concentrated position of all those who have spoken in this debate and realise that the inclusion of a body of this kind in legislation of this kind misjudges the legitimacy of the case and the way in which it should be dealt with. I say that-and it is a point that I have made previously-because when I became Chancellor of the Exchequer a long time, although not 100 years, ago, I set out in search of a bonfire for the quangos. The other day, I discovered a letter to the Times, published on 28 January 1980, from a gentleman who said:
"As a member of two Quangos which have both been disbanded, I refuse to be made to feel guilty about being an expensive luxury or usurper of Ministerial powers. Indeed, until I began to read that I was a form of contemporary parasite, I was happily living in the mistaken belief of actually giving a form of service to my country".
I confess that the gentleman who wrote that letter, David Hobman, was complaining about the abolition of the Metrication Board-one of the quangos that I was able to put on my bonfire. To add insult to injury, he pointed out that it was I, as Minister for Trade and Consumer Affairs, who appointed him to the very quango that we were abolishing at that time. The noble Baroness, Lady Morgan, said that we might have to wait five years to see the consequences of what is happening. The point is that we have had to wait, and are still waiting, for the consequences of abolishing the Metrication Board. Nothing could have been more stupid, or done more damage to paralyse our country, in the context of almost every other country in the world. However, that is a by-the-way.
I seriously urge my noble friend and the Government to refrain from including S4C in any part of this legislation. It is manifest from the quality and nature of this debate that S4C is something more significant than a mere instrument. The matter could be readily resolved by a response to that.
I finally revert to my Wykehamist paradise. A fellow Wykehamist, who is, alas, no longer with us, was Lord Whitelaw. As we have heard, it was he who established the body about which we are talking. Others have wisely said that every Prime Minister needs a Willie. That was my noble friend Lady Thatcher. We need a Willie now who will take account of what the real Willie said not all that long ago. He created S4C and would be turning and revolving in his grave, whether speaking Latin or English, in his denunciation of this proposal. I am not very good at Latin, but he would repudiate altogether a decision by this Government to include this organisation in this legislation.
Lord Richard: My Lords, I detect that the atmosphere in the House is that we are anxious to get on, listen to the Minister and hear what the Government have to say. I therefore wish to give her two or three sentences of advice and then sit down.
First, I say to the Government: do not underestimate the importance of this issue in Wales. Do not do that, because the whole idea behind Lord Whitelaw establishing S4C was to take the sting out of the argument about the position and the future of the Welsh language. Like the noble and learned Lord, Lord Howe, I was
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All that I can say to the Government is that this matters in Wales. It is not a question of pounds, shillings and pence or the cash. It matters to Wales that there is now a television channel that broadcasts in the natural language of the Principality and our nation and it needs to be preserved. The idea that in a Bill dealing with quangos the Government can come along and suddenly thrust in this proposal regarding S4C is frankly ludicrous. The Government should be ashamed of doing it in this way. If they have views about S4C, they should produce a Green Paper or a White Paper, or whatever, and consult the people in Wales who are interested-in particular, the National Assembly. To strike a potential blow at the Welsh language and its future in Wales in this way is absolutely disgraceful.
Lord Sanderson of Bowden: My Lords, I had not intended to take part in this debate because I come from Scotland. However, I was encouraged by the noble Lord, Lord Nickson, putting his foot in the water. I appeal to the Minister, whom I know from times past has had a very successful time in party politics, to think very carefully before he jumps into this deep water. I remember only too well the times when Lord Whitelaw was dealing with this very tricky issue. Something about Lord Whitelaw that we all appreciated was that he would say: "Hold on a minute, let us see what the outcome is going to be. If there is a real case to be answered, let us hear it". He heard it and took his decision thereafter-and persuaded the Prime Minister, Mrs Thatcher, to take the same view. I urge the Minister, in the words of the Scottish anthem, "tae think again".
Baroness Finlay of Llandaff: My Lords, I will speak briefly. The history and complexities of the issue have been eloquently outlined by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Morris, and by others. As a non-Welsh-speaking person who adores living in Wales, I impress on the Minister that this goes beyond language. It concerns the cohesiveness of the people living in Wales. I watch S4C. I do not understand all the language but I love some of the programmes. They provide a unique opportunity for people to start and develop their careers. They provide a sense of community and society that you do not get in any other television broadcast in the UK. There is something quite special in the depth of the culture that comes through, which is far beyond language. My concern is that if we look only at the language, we will miss some of the essence of the feelings expressed in this debate.
Baroness Gale: My Lords, it gives me great pleasure to speak in the debate. I say to all noble Lords who have taken part a great big diolch yn fawr. I am not a
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S4C is a unique example of public service broadcasting devoted to representing Wales through the medium of the Welsh language. The status of the language and culture of Wales is of great importance to Welsh speakers and non-Welsh speakers alike. My noble friend Lady Morgan of Ely spoke of the importance of the Welsh language channel for young people.
Baroness Gale: I was commenting on what my noble friend Lady Morgan of Ely said about the importance of the Welsh language channel in respect of young people who speak Welsh, and children in particular. It is the only channel that caters for Welsh-speaking children. My noble friend Lord Rowlands spoke about the development of the medium schools in Wales. They have been a great success in Merthyr and in all the valley constituencies. I speak from experience as I sent my children there and I am proud to say that they are fluent Welsh speakers. Their children are, too. My children, grandchildren and great-grandchildren all speak Welsh, so, although I cannot speak it myself, I can say that I have done my bit for the language. S4C has also helped to develop their language skills. Many of the pre-school children's programmes are absolutely great, and children do not have to be Welsh speakers to listen to them. Therefore, S4C plays a very important role at all stages of a Welsh person's life.
From the views that have been expressed this afternoon, I think that the Public Bodies Bill is perceived as a threat to the very existence of S4C. That view can also be seen in the many letters that I, and I am sure many other noble Lords, have received from individuals and organisations in Wales. Of course, they have all been bilingual letters. Understandably, small businesses in Wales, particularly those in the creative industries, are very anxious about what this decision means for them. Therefore, there is much concern about the future of S4C in Wales.
In his evidence on S4C to the Welsh Affairs Committee on 18 January, the Culture Minister, Ed Vaizey, admitted that he had no specific Welsh-based adviser giving him a Welsh overview, although he said that he had had informal discussions with former Secretaries of State for Wales. He also admitted that he had not spoken on this matter to Nick Bourne, the leader of the Welsh Conservatives in the Welsh Assembly. When asked whether he had ever watched S4C, he said that he had watched "Fireman Sam". As this is a children's programme in English, I do not think he would have gained much knowledge from it if that was his only viewing of S4C. With the Culture Minister having so little knowledge about Wales and the importance of S4C to the culture and language of Wales, is it any wonder that we are having such a debate today, showing, as it does, the strength of feeling on this matter?
Does the Minister agree that there has been no consultation with the Welsh Assembly Government or with S4C itself? It has been mentioned that the four party leaders in Wales wrote to the Prime Minister in October calling for an independent review commissioned jointly by the UK Government and the Welsh Assembly Government. The four leaders were seeking a review into the future of S4C because, as we have heard this afternoon, there seems to have been a problem with the Government's approach. Such a review would examine all aspects relating to the governance and regulatory oversight of S4C, including the question of where political responsibility should lie, and it would seek to ensure that the channel remained independent. The review would also seek to secure a substantial funding stream for the channel. I do not know what has become of this letter or whether there has been any discussion with the Minister on it. Perhaps he will be able to tell us.
Surely there must be a much better way of going forward than the way in which the Government are dealing with S4C in this Bill. I think that there is general consensus around the Committee that S4C should not be included in the Bill. Can the Minister allay fears that these measures, if implemented, could mean the end of S4C as an independent broadcaster? Many have mentioned the funding issues. They will of course need to be looked at and some solution will need to be found.
I hope that the Minister has listened carefully to the grave concerns that have been expressed all around the Committee. I am sure that by now he will understand the strength of feeling that Welsh people have regarding S4C. It is seen as one of the national assets of Wales. Therefore, I hope that, as others have mentioned, the Minister will be able to have discussions with all of us between now and Report with a view to finding a solution to this matter.
This has been an impassioned and eloquent debate. We all agree on the importance of Welsh-language television broadcasting. It is not in doubt, as we have heard from a very full debate this afternoon.
This Government remain committed to making certain that Welsh programming is a key part of the UK broadcasting landscape and that a dedicated channel for Welsh language broadcasting is maintained. The amendment of my noble friend Lord Roberts, Amendment 83, would remove S4C from Schedule 4. This would prevent us amending the funding formula. Following the point made by the noble Lord, Lord Wigley, that in the current economic climate it is not possible to have funding linked to the RPI, I say that the Secretary of State needs the flexibility to allow the funding settlements appropriate to the prevailing fiscal climate, so that all relevant factors are taken into account. The Government have had to make some difficult decisions about the organisations they fund directly, and S4C is no exception. The comprehensive spending review made a firm commitment to funding
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Lord Rowlands: The noble Baroness mentioned the need for the particular order-making power to change the financial arrangements. Does that mean there is nothing in the original Act which would allow that?
My noble friend Lord Roberts of Conwy is absolutely right in his well argued speech. As he started S4C, he rightly said that no order can be laid without consultation. Broadcasting is reserved as part of the Welsh devolution settlement and is, therefore, not devolved. This Bill does not represent an opportunity to reopen what was agreed as part of the devolution settlement-
Lord Howe of Aberavon: I wonder if my noble friend would allow me to intervene for a second? I understand that she may be making a very good point about the need for financial readjustment, but I should have thought that any sensitive Chancellor of the Exchequer or Treasury Minister, without needing to be Welsh, would recognise that relying on legislation of this nuclear kind to address the issues that she is rightly focusing on would be politically unwise and disastrous. I am quite certain that it would be possible to find a method of adjusting the financing without continually mentioning it.
Baroness Rawlings: I understand the concern of my noble and learned friend Lord Howe, but we go back to the current economic climate. It is not possible to have funding linked to the RPI. The reason for doing this is to secure the funding through the DCMS and the BBC. If we do it in that way it will be secured; otherwise it will not.
Lord Thomas of Gresford: Is the Minister ready to listen? Her Majesty's Opposition have suggested that there could be discussions between this stage and Report; indeed, some very important points have been made with great force and with great vigour, from all sides of the House. Is the Minister saying she is not prepared to move from this position? That would help my noble friend decide what to do.
The reservation of broadcasting is for sensible reasons. We have both European and international broadcasting obligations, and it is appropriate for those obligations to be secured on a UK basis, largely because of the
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The Secretary of State for Culture, Media and Sport works closely with the Secretary of State for Wales on S4C matters to make certain that a Welsh perspective is fully taken into account. The interests of S4C will be protected by the coalition Government and the new arrangements. In addition, to make certain that the Welsh aspects are fully taken into account, the Secretary of State for Culture, Media and Sport and the Secretary of State for Wales have agreed new arrangements whereby Wales Office Ministers will be involved in all ministerial meetings relating to S4C. Wales Office officials will be involved in the drafting of all submissions on S4C matters. I hope that that satisfies the noble Lord, Lord Rowlands.
In recognition of the importance of Welsh language programming and in the light of the changing financial situation, the Government believe that the best way for the audience to have a high-quality service is through a partnership with the BBC. My officials are currently in talks with the BBC and S4C about the arrangements for such a partnership. A review of the service, which should cover both its funding and output, will be conducted towards the end of the current spending review period. It is important that we give the partnership some time to grow and to deliver the efficiencies and increases in quality that we fully believe can be achieved.
I assure the noble Lord, Lord Wigley, and the noble Baroness, Lady Morgan, that DCMS is in discussion with the BBC and S4C to develop the new partnership arrangements. DCMS officials have engaged with Welsh independent producers as part of that process, and we continue to do so.
Lord Wigley: I am grateful to the Minister. Can she confirm that the discussions that she mentioned-DCMS officials discussing with the BBC, S4C and the independents-took place before the decision was made?
Baroness Rawlings: These discussions have been ongoing throughout. The noble Lord also asked whether there was prior consultation with the Welsh Assembly Government. Given the scale and pace of the spending review and the licence fee settlement discussions, it was not practical to have in-depth discussions with all the interested parties ahead of the announcement. The timeframe reflected the Government's desire to put the UK finances in order.
Lord Morris of Aberavon: If the sole or main problem for the inclusion of S4C in the schedule is the problem of the RPI formula, will the noble Baroness go back to consider by Report whether S4C should be withdrawn from the schedule and the Government table in its place a particular amendment dealing with the problem of the RPI formula?
The noble Lord, Lord Roberts of Conwy, asked whether the licence fee money could go directly to S4C from DCMS. Discussions between S4C and the BBC are ongoing. However, the BBC Trust is the established guardian of the licence fee, as set out in the royal charter and the agreement, and we do not see this position changing.
Following the Government's decision to table an amendment to remove Clause 11 and Schedule 7 from the Bill, S4C will not appear in Schedule 7 as previously tabled and referenced in Amendment 164. Consequently, we are now exploring further options for how S4C's proposed constitutional arrangements can be given legal effect. I can reassure the noble Lord, Lord Elystan-Morgan, that it is the clear view of the Government that we have no intention of abolishing S4C.
Lord Elystan-Morgan: My Lords, I hope I make this point sincerely and in an attempt to assist the situation. At the moment, the funding of S4C is tied to RPI under Section 61A of the Broadcasting Act 1990. That can be changed without putting S4C into Schedule 4. That is the short point. Speaking for myself and, I suspect, many others, I will be delighted to support such an amendment on Report. It can be done quite simply and effectively.
Baroness Rawlings: I will come to the point made by the noble Lord. I appreciate the way in which the noble Lord, Lord Nickson has approached this debate; it is to be commended. He has arrived open-minded and will be persuaded by the strength of the argument. It is an example of your Lordships' House at its best and I hope that he has been persuaded. This has been an impassioned debate, but not on party lines, as the noble Baroness, Lady Finlay, said. It has been on the actual subject. We fully recognise, as the noble Lord, Lord Richard, rightly said, the iconic status of the channel and the contribution it makes to the cultural and economic life of Wales and to the Welsh language.
We have had a really good and interesting debate today. We are all united here in the Chamber in wanting a secure future for S4C. We have had lengthy dialogues with Cardiff to secure the future of S4C within the BBC partnership with DCMS funding. The problem lies, as had been mentioned by many noble Lords, with the index-linked funding, which is not viable anymore. Public service broadcasting is for all parts of the United Kingdom and it is not devolved. S4C's editorial independence and its distinct entity, as the noble Baroness, Lady Morgan, said, are of paramount importance. I share the passion of my noble friend Lord Roberts and all noble Lords who have supported
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Lord Roberts of Llandudno: My Lords, I thank the Minister for replying to these points. I am in a dilemma. We could go to a vote today and we might win it for the amendment, but we might not. I understand that the Minister in the other place, Mr Vaizey, is in the United States and that he would have to consult Ministers in the upper House before giving authority to drop S4C from the Public Bodies Bill. Of the many speakers, we have had one and a quarter who were uncertain about the amendment, which means that something like 14 speakers have all spoken in favour of it.
If we wait until the Report stage, that will give Ministers time to consult Ministers in the other House and they themselves can then come forward and, I hope, remove S4C from the Bill. I would rather do that than press the issue to a vote today because it might be very close. We could also have discussions not only with Peers and those in the other House but also with the Welsh Assembly Government in Cardiff. We have two or three weeks in which to do that. We can all see that those who have spoken today would vote very strongly to drop S4C from the Bill. I am sure that if nothing has been done by the Report stage then we will be doing just that. I beg leave to withdraw the amendment.
(a) conferring the function of Groceries Code Adjudicator upon the OFT; and
(b) transferring that function to another person.
( ) In this section, the function of "Groceries Code Adjudicator" is to enforce the Groceries Supply Code of Practice as specified in the Groceries (Supply Chain Practices) Market Investigation Order 2009."
The Earl of Sandwich: My Lords, I can promise the Minister that we will move more swiftly on this amendment, which obviously has a much lower standing in the House. In moving Amendment 85A, I shall speak also to Amendments 174A and 174B in the names of the noble Lord, Lord Borrie, and the right reverend Prelate the Bishop of Wakefield, although I welcome the right reverend Prelate the Bishop of Exeter to this debate. I look forward very much to their contributions.
This is intended to be a helpful amendment, which is the first concerning the Office of Fair Trading in Clause 5 and Schedules 5 and 7, which I will come to later. It could be said to be a Cross-Bench amendment, since the proposal already has the approva1 of all political parties. It is simply a question of when and how the Government intend to act on this matter.
The background is as follows-I will be as brief as I can. A decade ago, in 2001, following a report by the Competition Commission, the four largest supermarkets signed up to a voluntary supermarket code of practice designed to encourage smaller suppliers and growers to enter the groceries market and to remove some of the obstacles in their way. However, those suppliers were unwilling to make formal complaints because of their effect on their relationship with the supermarkets and there was no means of enforcing the code. The Competition Commission was therefore asked to investigate further and, as a result of its report published in April 2008, the code of practice was updated last year as the groceries supply code of practice. All three political parties agreed to appoint an ombudsman, the groceries code adjudicator, as he is known, to monitor and enforce the revised code.
The new body, although independent of the Office of Fair Trading, is due to be housed within the OFT. Some confusion as to how this can be achieved if the Office of Fair Trading is to be abolished has already been expressed. I understand that functions of the Competition Commission and the OFT are to be merged. This has been confirmed to me by the Consumer Minister, Edward Davey, in a letter of reassurance. When he announced the Government's decision to go ahead with the legislation last August, he said:
"We want to make sure that large retailers can't abuse their power by transferring excessive risks or unexpected costs onto their suppliers. These sorts of pressures are bad for producers and bad for consumers-ultimately they can lead to lower quality goods, less choice and less innovation".
This is precisely why so many people would like the Government to go ahead immediately with the legislation. It has the backing of many organisations, which I shall not name today. It is also in line with the Conservatives' new philosophy of stronger trading links with other countries. The reason for my interest in this is that I have for more than 30 years supported the efforts of charities and others concerned with fair trade, whether with developing countries or with smaller producers and farmers in this country. I also speak as someone who was involved in a small business in a rural community.
Why cannot the Government move a little faster on this? Is there some hesitation because of the power of supermarkets, which of course will have to provide the funding for the new office? The British Retail Consortium has consistently opposed the idea, but I remind the Minister that three major supermarkets, Marks & Spencer, Aldi and Waitrose, have now accepted that there will have to be a degree of monitoring and enforcement. Another cause for delay, as I have mentioned, may be the siting of the new office within an organisation that is being dismantled.
It is more than a year since the new code of practice came into force; it did so on Thursday 4 February 2010. I realise that this amendment is not the appropriate vehicle for this important proposal, but it carries a message from a wide section of the business and farming community. I therefore suggest that today would be the right time for the Government to give an early indication of the timing of this legislation and, better still, to accept these amendments, which would establish a groceries code adjudicator. I beg to move.
The Lord Bishop of Exeter: My Lords, I am pleased to speak to this group of amendments. I do so in the absence of the right reverend Prelate the Bishop of Wakefield, who regrets being unable to be in his place today. Five years ago, after a debate in the General Synod of the Church of England in which wide-ranging concerns were raised about the problems being experienced by farmers as a result of the buying practices of supermarkets, the church's Ethical Investment Advisory Group agreed to investigate. In 2007, it produced the report Fairtrade Begins at Home: Supermarkets and the Effect on British Farming Livelihoods. I declare an interest because I wrote the foreword.
The report identified damaging practices around labelling, promotions, payments and contracts as well as other areas of dysfunctionality within the market. It carefully documented the harm inflicted on farmers and agricultural businesses by supermarkets' buying practices. Pressure on price was identified as a particular problem in the UK dairy industry, an issue that is still of primary importance today, with the cost of production of a wide range of agricultural and horticultural products remaining significantly above the price received.
The report was submitted as evidence to the Competition Commission inquiry on the operation of the groceries market and the EIAG called on the Competition Commission to mandate the creation of an ombudsman-the case for that appointment has continued to be made-while at the same time pressing the Government, the Opposition and supermarkets to address the wide range of issues raised in our report.
Since 2007, there has been continued and systematic engagement with the major supermarkets in an attempt to encourage better practice and a more imaginative response to proposed regulation. There have been some improvements, such as supermarkets paying a premium for milk, working collaboratively to improve the efficiency of farmers in the supply chain and developing local sourcing initiatives for small suppliers. However, there is much evidence that serious problems remain, with examples of barriers to new products coming to market, or to scaling up supply, such as
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When the Government announced in August 2010 that it would establish a new groceries complaints adjudicator, an ombudsman, in the Office of Fair Trading, to adjudicate complaints from suppliers of breaches by supermarkets of the new groceries supply code of practice, many in agriculture and the food supply industry were encouraged to hope. That hope was further strengthened when we were further told by the Department for Business, Innovation and Skills that a draft Bill would be published later in 2010; that the Bill would be introduced in the second Session of Parliament; and that it would have teeth, including allowing for the possibility of introducing financial penalties if the naming and shaming of supermarkets was not working.
As the noble Earl, Lord Sandwich, has said, we are still waiting for action. The groceries supply code of practice has been in force since February 2010 and there is still no enforcement mechanism for it. Contrary to the intentions announced last August, no Bill has yet been published to establish the GCA nor has parliamentary time this Session been allocated. The issue is slipping. The noble Lord, Lord Henley, will recall that when I asked a question about this on 7 February, he replied that,
I am aware that the Consumer Minister has since announced plans to release a draft Bill on the groceries complaints adjudicator before the Easter Recess begins on 6 April, yet it remains a fact that difficulties in the groceries supply chain, which were identified more than a decade ago, are still waiting to be addressed as a matter of urgency. These amendments offer an opportunity for the Government to commit themselves to action and to put real flesh on the bones of their promises and to do so now.
I fully expect the Minister to resist these amendments but, should he do so, I hope that at the same time he will be able to give very clearly to this House further details of the nature and scope of the legislation that the Government have in mind and a clear statement of the timescale to bring such legislation into practice.
Lord Borrie: My Lords, I have been very happy to put my name to all the amendments standing in the names of the noble Earl, Lord Sandwich, and the right reverend Prelate. I should declare that I was the director-general of the Office of Fair Trading for 16 years, but that was some time ago. There is a certain shadow over the Office of Fair Trading at the moment through other parts of the Bill.
Leaving that aside, for some years there has been concern about the growing power of major retailers, especially supermarkets, in relation to their suppliers.
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The rise of supermarket power has also been, as the right reverend Prelate emphasised, at the expense of suppliers, particularly farmers, who lack the clout to ensure that they can secure a fair price for their products. Supermarkets can play off one supplier against another. The Office of Fair Trading and the Competition Commission have wrestled with this problem in a number of references and studies in recent years. In 2009, the Competition Commission first proposed the appointment of a groceries ombudsman to assist fair dealing between farmers, suppliers and supermarkets.
Both the Labour Government and the present coalition Government have broadly accepted the need for such an appointment. Consultation concluded on 30 April last year; Members of the Committee will appreciate the significance of that date, because the matter was clearly left for the coalition Government coming into office in May to determine. They determined-it is in the coalition agreement-that there should be a groceries ombudsman within the Office of Fair Trading to enforce the groceries code of practice, of which the earlier speakers have spoken, and to curb the abuses of power that undermine farmers and are against the long-term interests of consumers.
In response to the right reverend Prelate the Bishop of Wakefield, on 7 February, the noble Lord, Lord Henley, whom I am delighted to see in his place on the government Front Bench and who has already been quoted in part, said:
"It is important that large retailers cannot abuse power by transferring excessive risks or unexpected costs onto their suppliers. We therefore propose to establish a groceries code adjudicator to monitor and enforce the groceries supply code of practice".-[Official Report, 7/2/11; col. 1.]
That was the noble Lord a month ago. These amendments seek to put the Government's own propositions into legislative form. The Government may of course have plans that have not yet borne fruit for some other legislative vehicle to carry forward these proposals. The suggestion of those putting forward the amendment is that the Government might find it convenient to use the Bill before us now as a convenient vehicle already available to them. The amendments are here for the Government to run with as they wish.
Lord Cameron of Dillington: My Lords, I support this series of amendments. It is a pleasure to be speaking on this Bill in the early hours of the evening rather than in the early hours of the morning.
All three political parties have committed themselves to putting in place a groceries code adjudicator, and this seems to be a golden opportunity to do so. It would make the Government popular with farmers,
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More importantly, that balance of interest does not exist when the seller and supplier has to plan his cropping as much as 18 months in advance, within probably a five-year rotation, and organise the acreage, and buy the seed, the fertiliser and the spray, often with the seed variety and the treatment being specified in detail by the particular buyer. The farmer has to have his whole farm often audited and inspected by the particular buyer. Without this audited inspection he cannot sell his crop, or the buyer will not buy it. Furthermore, each buyer or supermarket has a different auditing system in place, so the farmer cannot easily change the buyer; certainly not without a long notice period. The farmer also may have to invest in specified capital and machinery. All this takes place 18 months to a year before the crop is sold and before a price is agreed.
Unfortunately there is ample room for the big boy to manipulate the sale to his advantage when the little man has nowhere else to go when the buyer's terms or the buyer's price turn against him. If the farming venture has involved borrowing the large sums of capital for irrigation, cold stores processing and the like, the smallholder farmer probably has nowhere else to go for the next year either.
The supermarkets may claim that an adjudicator is not necessary. In that case, there is no danger to them or to the consumer if one is put in place. In my view, it will be a great insurance policy for the farmer-and for the consumer-if one is put in place. Therefore, I urge all three parties to use this opportunity to fulfil their election promises. It is crucial for the future of UK agriculture and the fair balance that we need to achieve.
Baroness Quin: My Lords, I, too, welcome these amendments and am glad that they have been tabled. I welcome the comments that were made by the noble Earl, Lord Sandwich, in introducing the amendments and the helpful background that he gave us. I also welcome the comments made by my noble friend Lord Borrie and by the right reverend Prelate, who I know has taken a great interest in this issue. Like the noble Lord, Lord Cameron, I welcome the fact that on this occasion we are dealing with this important issue at a civilised hour rather than in the early hours of the morning.
I believe that the amendments are necessary to try to clear up the confusion surrounding where in government machinery the adjudicator, formerly the ombudsman, will reside. In answer to a question by the noble Earl, Lord Sandwich, on 7 February, the Minister said that he did not know where the adjudicator was going to be situated. That might have been a commendably honest reply, but now that we have had
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My noble friend Lord Sewel on that same day asked if the adjudicator could be part of this Bill. That is another reason why I welcome the amendments. Given all the controversial inclusions in this jumbo Bill, it would have been good to have something in it on which there is such clear, cross-party support.
When the Government announced in August last year that they were going to establish the adjudicator, the original expectation was of a draft Bill coming forward this past autumn. Given the strong cross-party support for this measure, the delay is regrettable. However, the Minister has said that the intention is to bring in a Bill this Session. In the other place, in Answer to a Written Parliamentary Question, mention was made of a draft Bill coming forward before Easter. Will there be a draft Bill first, and what will be the timing of the draft Bill and the full legislation to get the adjudicator's role and work up and running?
The establishment of a supermarket ombudsman was favoured and initiated by the previous Government following a recommendation from the Competition Commission. From these Benches, I reiterate our strong commitment to that, as the Minister will be aware. One issue that has surfaced in recent debates in this House has been the scope of the adjudicator's remit. I notice that the adjudicator is called the groceries adjudicator, and I assume that his main function concerns food. But I was interested that in a debate that we had a week or so ago in this House on the ethical clothing industry, the Minister said that consideration could be given to widening the adjudicator's remit. I welcome the fact that the Government are prepared to look at that, because supermarkets sell a great deal these days and have a strong position on their suppliers, whoever those suppliers happen to be. At the same time, while I welcome the Government's openness on this matter, I would not want to see that as the cause of any further delay in the establishment of the adjudicator, because a very clear message has come from this debate that speed is extremely important and uppermost in people's minds. Obviously, if there is a draft Bill, the scope and remit could be looked at-and perhaps the Minister could comment on that point.
The powers of the adjudicator, including naming and shaming and what further sanctions might be possible as a result, were mentioned by the right reverend Prelate. Again, any clarification from the Minister about that would be welcome.
This Bill must seem like a Christmas tree Bill to the many departments, with various items of business that they wanted to lumber on a jumbo Bill of this kind. However, while it might be a Christmas tree Bill for departments, it is a nightmare Bill for parliamentarians. I was very much taken with the phrase used by the noble and learned Lord, Lord Howe of Aberavon, who described it as a nuclear Bill. It abolishes and changes so many bodies, some big and some small, and rides roughshod over parliamentary procedures. However, this matter is one on which there is agreement between Parliament and Government and for which
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Lord Henley: My Lords, like other speakers, I am grateful that we are having this debate early in the afternoon. Sadly, I will also be doing the penultimate amendment that we are dealing with today, which might happen in the early hours of tomorrow morning-just as I did the penultimate amendment late on Monday, or early on Tuesday, a couple of days ago.
I should also say how grateful I was to hear quite such a large number of quotations from myself, from that relatively brief Question that we had on this matter on 7 February. It is gratifying to hear that so many noble Lords listened to what I had to say. I hope that I can add a bit to that in dealing with these amendments.
I start by repeating something that the noble Lord, Lord Borrie, said when he paid tribute to what the supermarkets have done for the consumer. That is very important to remember whenever we debate these matters; we forget it at our peril. They have given us greater choice, cheaper prices and, as the noble Lord, Lord Borrie, put it, possibly "improved the shopping experience", whatever that means, but I think I have quoted him correctly.
Nevertheless we all accept-and I think I made this clear when I responded to the question from the noble Earl-that there is an imbalance between the big four or the big 10 supermarkets, whichever way you want to count them, and the rest. Possibly something has to be done. I am grateful to the noble Earl for what he said in setting out his amendment and stressing that, as he put it, it was a Cross-Bench amendment in that he knew there was support from all sides including the Government and the Official Opposition, and it is one on which we can work. I am grateful to him also for setting out the history of this matter. I hope I can fairly briefly deal with this matter and say where we are at this moment.
We are committed to the establishment of a groceries code adjudicator to monitor and enforce compliance with the groceries supply code of practice. The main purpose of the groceries code adjudicator will be to ensure the code's effectiveness in stopping supply chain practices by retailers which transfer excessive risks and unexpected costs to suppliers, as set out in great detail by the noble Lord, Lord Cameron of Dillington. I am very grateful again for what he had to say. Its functions will include investigating potential breaches of the code as well as arbitrating disputes arising under the code. In this amendment the noble Earl and others seek to include this in the Bill. The noble Baroness, Lady Quin, said she would have welcomed this in the Bill. I have a sneaking feeling if we had put it in the Bill she would still have put down an amendment to take it out, but that is the nature of opposition and that is what Oppositions do. I have been there myself and I know. We will leave that and the noble Baroness need not respond.
I want to make clear that we do not think that it is appropriate for this Bill. What we will do is set out the roles, functions and powers in full in a draft Bill. I
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The Lord Bishop of Exeter: I hope that I might just make the point that this year Easter falls as late as it possibly can do in the ecclesiastical calendar, and I hope that we will not have to wait very much longer after Easter for this particular Easter egg.
Lord Henley: Some of us who have been here for some time remember the late Lord Airedale, who annually moved a Bill-my noble friend Lord Carrington will remember this-trying to fix the time of Easter. I accept what the right reverend Prelate has said about it being very late this year, but that will mean it will be even easier for my colleagues in the Department for Business, Innovation and Skills to get that draft right and get it on time. It will then be published, as I said, around Easter-the latest possible Easter. It will be introduced and debated in Parliament-again, this is all I can say-as soon as parliamentary time allows. There are certain things that Ministers discuss with some trepidation and one is the timing of parliamentary business without discussing it with the usual channels. Certainly, I would not want to make any commitment as to when that will be but as soon as time allows we will bring that forward. We will also be able to then consider a point that the right reverend Prelate made about what sort of teeth the groceries code adjudicator should have-whether it is just naming and shaming or whether naming and shaming might not be enough and whether one should move on to greater powers. I think that is something for Parliament to consider in due course.
I want briefly to comment on where the groceries code adjudicator will live on his creation. Again I cannot take the Committee much further than that, but we are considering all the options. We will set out our intentions on where he or she should be and that will be available when we publish the draft Bill for pre-legislative scrutiny around Easter.
I appreciate that the assurances-particularly in terms of time-have moved on somewhat from earlier occasions, but I hope that with those assurances the noble Earl will feel able to withdraw his amendment. I am certainly very grateful for having had the opportunity to offer those assurances to him on this occasion.
The Earl of Sandwich: My Lords, I detect that the House will not want to dwell long on this amendment but I will just take a minute or two to respond. It has already been said several times that there is some confusion about the location of the adjudicator. Although
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I am also grateful for the contributions of other speakers: the noble Baroness, Lady Quin, referred to the political consensus and that is important. My noble friend Lord Cameron reminded us of the precarious relationship between farmers and supermarkets at this time. The NFU, the CLA, the CPRE and others are all behind this idea because it is urgent. The fundamental point is that the legislation is needed now. A 2009 survey by Traidcraft showed that eight in 10 shoppers want a watchdog to monitor and penalise supermarkets which treat suppliers unfairly. They believe that an adjudicator would mark a step change in helping reassure consumers that all the goods they buy do not come at the expense of bullying tactics by retailers towards suppliers and provide a proper context where the working conditions for farmers and workers can improve.
Lord Hunt of Kings Heath: My Lords, we come to an important group of amendments, which are in part probing but in part really urge the Government to take a rather more transparent approach when an order under this Bill is used.
Clause 5 gives power to modify or transfer functions and on the face of it appears to give huge discretion to Ministers. I would really like to hear from the noble Lord, Lord Taylor, the circumstances in which he envisages the power being used. In our earlier debates on Monday in relation to Clauses 3 and 4, Ministers gave a great deal of comfort when they described the circumstances in which orders in relation to governance and financial arrangements would be used and it would be helpful if the noble Lord were able to give similar comfort in relation to Clause 5. If this clause is used, will the Minister describe how that use of it will then be made transparent? When the order is used, what will happen to the functions; who will be performing them in future; why are the changes necessary; what about the future performance of the transferred and modified functions; and what do the Government intend to do to track the performance of those transformed or modified functions to ensure that the decisions made by passing the order were and remain appropriate? What assurance can the Minister give about the information that will be given to Parliament at the time of the order, if it is used? What further work will be done subsequent to the order in relation to performance scrutiny?
It is fair to say that some of these concerns were raised by my noble friends during the UK Film Council/BFI debate on Monday. My noble friend Lord Stevenson noted in that debate that while some functions of the UK Film Council were clearly marked as transferred to the BFI and Film London, there were other central
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On Clause 7, I am looking for some comfort. We have been approached by the Royal Society for the Protection of Birds, which is concerned about the legal effect of Clause 7. While bearing the innocuous title, "Consequential provision etc", this clause appears to give Ministers the power to modify the functions of the transfer or transferee organisations. What appears to be missing is a qualifying element of consent. Where, for instance, the Government would like a body such as Citizens Advice, in the case of Consumer Focus, to assume functions, surely it would be a requirement of the Government first to obtain the organisation's consent to the changes. It would also be nice to know that the CAB was in a condition to accept those responsibilities. I point out to the Minister the dire situation in the great city of Birmingham, with the potential closure of all the CAB centres. As currently drafted, the clause essentially makes it permissible for the Government to change the constitution or funding arrangements of a body that is to assume those functions without consent or even bothering to consult that body. I have looked for comfort there.
The Minister will know of the quality of the briefing provided by the RSPB, since he used it extensively during the wonderful days when we debated the Marine and Coastal Access Bill. It is quite extraordinary that officials have found a defect in that Bill, given the extensive briefing that we received from bodies like the RSPB.
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