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House of Lords

Monday, 22 July 2013.

2.30 pm

Prayers—read by the Lord Bishop of Birmingham.

Introduction: Lord King of Lothbury

2.37 pm

Sir Mervyn Allister King, GBE, having been created Baron King of Lothbury, of Lothbury in the City of London, was introduced and took the oath, supported by Lord Burns and Lord Stern of Brentford, and signed an undertaking to abide by the Code of Conduct.

Personal Statement

2.42 pm

Lord Selsdon: My Lords, with the leave of the House, I would like to make a personal statement. In my speech at the Second Reading of the Littering from Vehicles Bill on Friday, I unintentionally suggested that I might have been provided with the personal data of motorists by the DVLA. I should like to confirm that I have not at any time asked for, or been given, from the DVLA any information which is not in the public domain. In particular, I have not been given the names of keepers of vehicles. I much regret that my speech, made without text or notes, should have given rise to press speculation to the contrary, and I apologise to the House.

Schools: Admission Policies


2.43 pm

Asked by Baroness Bakewell

To ask Her Majesty’s Government whether they have plans to encourage religiously selective schools to adopt more open admission policies.

The Parliamentary Under-Secretary of State for Schools (Lord Nash): My Lords, the coalition supports inclusive admission arrangements. New faith academies and free schools may admit only half their intake based on faith where they are oversubscribed. The Government also remain strongly committed to faith schools, which play a long-established role in our diverse education system. They allow parents to choose a school in line with their faith and they make a significant contribution to educational standards in this country.

Baroness Bakewell: I thank the Minister for that Answer. However, in the light of the government announcement last week of a funding initiative for 6,000 new schools, and given that this year the Department

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for Education has already accepted 16 new Christian schools and six Muslim schools, and that the Cantle report into the 2001 riots cited religious and ethnic fragmentation as an underlying cause, will the Minister tell us whether this Government believe that the children of this country should be integrated or segregated?

Lord Nash: This Government believe strongly that one of the secrets for success in this country is that children should be integrated and that all schools should teach a balanced all-faith curriculum, even if they have a particular faith-based thesis. We will not make a long-term success of this country unless we can succeed in doing what the noble Baroness has mentioned.

Baroness Cumberlege: My Lords, my interests are in the Lords’ register. Is my noble friend aware that Catholic schools are ethnically diverse—more diverse than community schools—that they serve some of our most deprived areas, that they make a major contribution to community cohesion and that they often have higher academic standards? Does my noble friend agree that it would be a mistake to tamper with a system that has served us so well and for so long?

Lord Nash: My noble friend is quite right. According to the five A* to C statistics, including English and maths, 65% of pupils at Catholic schools achieve five A* to C grades, as opposed to non-faith schools, where the figure is 58%. At level 4 of key stage 2, 85% of pupils at Catholic schools achieve a pass mark, as opposed to 78% for non-faith schools. I agree that Catholic schools and all faith schools contribute strongly to our diverse education system.

Baroness Whitaker: Will the Government ensure that the duty to promote community cohesion works in religiously selective schools now that that responsibility has been taken away from Ofsted and the governors themselves may not value it?

Lord Nash: All state-funded schools are required to promote community cohesion. Under the draft citizenship curriculum, pupils will be taught about diverse national, regional, religious and ethnic identities in the UK and the need for mutual respect and understanding. Schools are also free to teach pupils about such issues in PSHE. All state-funded schools are also required by law to teach a broad and balanced curriculum that promotes the spiritual, moral, social and cultural development of pupils, and Ofsted’s inspection framework includes a focus on this.

Baroness Richardson of Calow: Is the Minister aware that not all schools of religious character select on faith grounds? The Methodist Church has 65 primary schools that are state-funded and 17 independent schools, none of which select according to the faith of the parents, although all are organised on Christian principles, but they are offered to society for the good of society as a whole.

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Lord Nash: The noble Baroness is right that it is important to distinguish between faith schools and the selection criteria of those schools.

Baroness Brinton: My Lords, I am grateful to the Minister for confirming earlier that some religious free schools can select up to 50%. How does the department monitor the percentage of admission by faith in schools, particularly in those previously independent religious schools that are now free schools.

Lord Nash: We are very keen that, under the free schools programme, all schools have as open an admissions policy as possible, consistent with the general policy on faith. I will need to write to the noble Baroness with full details to answer that question.

Baroness Massey of Darwen: May I ask the Minister about the curriculum? In every Education Act that I can remember, certainly in the past few years, it has been stated that children should be permitted or encouraged to have a broad and balanced curriculum. How will faith and free schools enable pupils to have such a broad and balanced curriculum?

Lord Nash: We are very keen that all schools, including free faith schools, are open to all faiths and teach all about the major religions practised in this country. They are obliged to do so, and Ofsted will inspect against that, as we would expect it to do.

The Lord Bishop of Birmingham: Does the Minister agree with the Secretary of State that Church of England schools are most often found in very challenging areas in our communities and provide excellent education? Would he encourage the expansion of religious schools of that kind in oversubscribed areas?

Lord Nash: Where we have areas of basic need, we are keen to encourage all comers to help us. I entirely agree with the right reverend Prelate about the performance of Church of England schools. Again, in respect of achieving five A* to C grades, including in English and maths, they score 62% versus 58%, and at level 4 of key stage 2 they score 82% as opposed to 78%. We would welcome expansion of these schools as they provide an excellent education.

Lord Dubs: My Lords—

Lord Cormack: My Lords—

Lord Avebury: My Lords—

The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford): It is the turn of this side, but we shall be very quick and then we shall hear from the other side.

Lord Cormack: My Lords, does my noble friend agree that throughout this country church schools, Church of England schools in particular, make an enormous contribution to the cohesion of their local

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communities, and that Church of England clergy play a big part in this, both by what they teach and by serving as governors on the boards of such schools?

Lord Nash: I agree with my noble friend. A 2009 independent report commissioned by the Church of England analysed Ofsted’s judgments on schools’ promotion of community cohesion. The report found that for secondary schools, faith schools contributed more highly to community cohesion than community schools and had higher average grades than community schools for promoting equality of opportunity and eliminating discrimination.

Lord Dubs: My Lords, will the Minister look at the situation in Northern Ireland where more than 90% of the children are in schools that are segregated on religious lines? Whereas that is not the only factor contributing to the historic difficulties in Northern Ireland, there are ominous lessons for us. Surely, the right way is to move, as in Northern Ireland, towards integrated education, which is what the majority of people in Northern Ireland want and what I believe most people in Britain would want.

Lord Nash: We need a diverse education system that, as I say, is open to all faiths and teaches tolerance of all faiths. Indeed, there are good examples of faith-based groups running schools or sponsoring schools in Muslim areas, where the co-operation is working extremely well.

Armed Forces: Pension Scheme


2.51 pm

Asked by Lord Touhig

To ask Her Majesty’s Government how many soldiers made redundant since the Strategic Defence Review have reached full pension age.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, no soldiers fall into this category as full pension rights are granted only at the completion of a full military career. Personnel within the last three years of their engagement were ineligible for consideration under the redundancy scheme. The redundancy scheme that we have implemented is designed to ensure that all those made redundant leave by 31 March 2015, and personnel requiring full pension rights by that date would therefore normally leave anyway.

Lord Touhig: My Lords, following our last exchange on this matter on 20 June, I received an e-mail from a 35 year-old soldier who joined the Army as a boy of 16. He served in Northern Ireland, Sierra Leone, Iraq and Afghanistan and was told that he had a future in the Army. Indeed, two months ago, he was promoted to WO2.

While he was convalescing following surgery, his wife attended an army wives’ event to discover by chance that he was to be made redundant; he had not been told. Further inquiries revealed that he was to be

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made redundant 24 days before he qualifies for full pension. He is set to lose £10,000 a year in pension. I am sure that the whole House will join me in wishing him well in his appeal against redundancy.

Noble Lords: Hear, hear!

Lord Touhig: When he returns to his department this afternoon, will the Minister review the redundancy package and, if necessary, come back to the House and reassure us before we break next week that no soldier who is prepared to put his life on the line in defence of our country will be made redundant in this cheapskate sort of way in order that the Treasury can save what amounts to no more than a few bob in petty cash?

Lord Astor of Hever: My Lords, I am sorry to disappoint the noble Lord, but we have no plans to review this. When selecting personnel of the Armed Forces for compulsory redundancy, no consideration was given to the proximity of the immediate pension point. I can tell the noble Lord that only 1.2% of those made redundant are close to their immediate pension point. As we reduce the size of the Armed Forces, our priority is to ensure that the services maintain the correct balance of those skills and experience across rank structures that are required to deliver operational capability now and in the future. That is what has determined our redundancy criteria.

Lord Ribeiro: My Lords, what support will be made available for members leaving the Armed Forces, in particular for those members who are in danger of committing suicide?

Lord Astor of Hever: My Lords, my noble friend asks a very important question. The majority of service personnel make a successful transition to civilian life. All service leavers are entitled to some form of resettlement assistance. The Career Transition Partnership has proved successful in assisting service leavers to find work and a recent defence statistics survey shows that of the service leavers in 2011-12 who have a known employment outcome, around 85% are employed within six months of leaving the Armed Forces. Our resettlement arrangements are kept constantly under review to ensure the needs of service leavers are met.

Lord Hughes of Woodside: My Lords, did I hear the Minister correctly? Did he really say that, in making people redundant, no account was taken of the proximity of the retirement date and that only 1% were so affected? How can he have the bare face to come to this House and make a statement like that?

Lord Astor of Hever: My Lords, I did say that only 1.2% are affected. The redundancy schemes recognise those who miss out on immediate incomes by paying them significant enhanced tax-free redundancy compensation lump sums. Those who leave before the qualification point will get preserved pensions and further tax-free lump sums at the age of 60 or 65, depending on the pension scheme they are in. Armed

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Forces pensions remain among the most generous in the public or private sector. We recognise the unique role and sacrifice of the military, which is why the Armed Forces continue to benefit from non-contributory pension schemes.

Lord Palmer of Childs Hill: My Lords, what impact does the Minister consider has been made to Army morale since the announcement of the third round of redundancies on 18 June this year? What conclusions about morale does my noble friend the Minister draw from the increased proportion of voluntary redundancies in the recent tranche of Army redundancies, up, reportedly, from 72% to 84%?

Lord Astor of Hever: My Lords, there is no evidence that morale in the Armed Forces has been adversely affected by the redundancy programme. The number of applications for redundancy is not an indicator of the state of morale because the Army has deliberately set out to maximise applications. Recruiting for the Armed Forces remains buoyant.

Lord Elystan-Morgan: My Lords, it is the Minister’s case that no cognisance is taken of the proximity of a decision in relation to redundancy and a pension date. How does it come about that the Ministry is able with such precision to say exactly what proportion is applicable in this case?

Lord Astor of Hever: My Lords, because of the complexity of pensions calculations, establishing the exact number of Army personnel who fall into this category would require manual analysis of the records of those selected for redundancy. This could be undertaken only at disproportionate cost. However, to ensure the redundancy programme is fair, selection criteria have been published by each service and, while rank and seniority are reflected in selection criteria, length of reckonable service is not. This means that individuals might be made redundant either just before or just after the length of service at which they qualify for an immediate pension. Redundancy criteria are based on the future needs of the Army. Exempting personnel because of proximity to pension point would be contrary to this principle and would mean selecting others instead.

Lord Grocott: My Lords, the mood of the House in response to the Minister’s answers is one of considerable concern. It is no answer to the serious example spelt out in detail by my noble friend Lord Touhig, which seems to show a grave injustice, to say that this grave injustice applies to only 1.2% of the people affected. It is a grave injustice to them and, at the very least, I would appeal to the Minister—who listens carefully to what is said by the House—to go back to the department and say that there has been a very unhappy response to the answers he has given today.

Lord Astor of Hever: I will take on board what the noble Lord says. I cannot make any promises, as we have spent a lot of time considering this scheme and it has been very carefully thought out.

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Air Pollution


2.59 pm

Asked by Lord Winston

To ask Her Majesty’s Government what measures they are taking to mitigate the health risk caused by air pollution in London.

Baroness Northover: The Government have invested more than £1 billion in measures that will help to improve air quality, including incentives for low-emission vehicles and sustainable transport. In London, the mayor is responsible for working towards national air quality objectives. The Government work with the mayor and London boroughs to improve air quality and help support the health needs of people across the capital.

Lord Winston: My Lords, I am sure we are grateful to the Mayor of London for the initiatives he has taken, even though their implementation seems to be rather slow. However, is the noble Baroness aware that the WHO has calculated that there have been something like 29,000 premature deaths due to air pollution in the United Kingdom? Will she be kind enough to let me have details of the like-for-like figures, by region, for people dying as a result of air pollution compared with those dying as a result of obesity, alcohol or smoking?

Baroness Northover: The noble Lord is quite right to give the figure of 29,000 premature deaths per year because of pollution. I will get him the information that he requires from the department.

Baroness Gardner of Parkes: My Lords, the area in which I live in London is considered one of the worst in the UK. Is it not a fact that we have been in breach of the European Union directives for many years and that the EU keeps extending the time before we have to pay the penalty? Does that not seem to be a very unsatisfactory position?

Baroness Northover: The noble Baroness is not quite right. There are a number of measures and the United Kingdom has worked incredibly hard to try to meet these; for example, on particulate matter, which is very significant, the UK met EU requirements for the PM10 measure in 2011. In addition, 22 out of 27 states are struggling to meet the nitrogen dioxide directive, largely because of problems with diesel vehicles. So across the board countries are finding this a challenge. We are working very hard to ensure that we comply, aiming for later this decade.

The Earl of Listowel: My Lords, is there particular concern about the welfare of cyclists, and are they being given advice, particularly about wearing masks?

Baroness Northover: My brief tells me that cycling is actually a safer means of transport and that the risks from pollution highlighted by the noble Earl are not of major significance. However, clearly it would

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depend which roads those cyclists are cycling along. We want to do our very best to encourage people to cycle and walk, for the general benefit to themselves and the wider public, but it is true that there are greater risks in certain areas than in others.

Lord Berkeley: My Lords, could the Minister explain how we are to know whether or not this reduction in pollution is correct, when the Government no longer require local authorities to measure pollution officially? We had this last year, before the Olympics, when it was reported that many measuring stations around London were covered with plastic bags so that we did not know that the pollution in London was actually worse than in Beijing before its Olympics.

Baroness Northover: In fact, pollution levels were and are carefully monitored. The challenge is to tackle that and we are trying to tackle that at all levels: national, across London and in the boroughs. The noble Lord will note also that Public Health England, which has recently been set up, is taking this forward, working with local public health specialists. He may also wish to contribute to the local air quality management review, which is occurring at the moment and is looking at what is being done locally and consulting on how best to take this forward.

Lord Tope: My Lords, do the Government accept that the biggest public health risk after smoking is air pollution? Is the Minister aware that the House of Commons Environmental Audit Committee concluded that,

“a public awareness campaign would be the single most important tool in improving air quality”?

What plans do the Government have for such a public awareness campaign?

Baroness Northover: I noted the reports from The Lancet which cited air pollution as being the second greatest cause of lung cancer after passive smoking, so the noble Lord is right to flag its risks. The Government are working very closely to raise awareness. We are providing funding for this to local authorities. The public health outcomes framework includes an indicator on air pollution which enables public health professionals to address this. We are providing a forecasting service on levels of air pollution and information to vulnerable groups. There are some trials at Barts on how best to get information to vulnerable groups.

Lord Knight of Weymouth: My Lords, in reply to the noble Lord, Lord Berkeley, the Minister, referred to the consultation Local Air Quality Management in England. In that consultation, the Government’s preferred option is to remove the requirement for local authorities to report and declare air quality management areas. How then do the Government propose to monitor air quality if their preferred option is chosen—or are the Minister’s warm words just hot air?

Baroness Northover: The noble Lord refers to hot air on a day like this. The consultation is a genuinely open one, and I am sure the noble Lord’s views will be

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taken into consideration. Many of these Acts date back a long way, including of course the Clean Air Act which had a fantastic effect in earlier decades. We need to make sure that these Acts are brought up to date, and I am sure the noble Lord will feed in his very cogent views.

Critical National Infrastructure: Ownership


3.07 pm

Asked by Lord Harris of Haringey

To ask Her Majesty’s Government what proportion of the United Kingdom’s critical national infrastructure is owned by foreign-owned companies; and what assessment they have made of the benefits and disbenefits of that level of ownership.

Lord Wallace of Saltaire: My Lords, although detailed ownership figures are not held, much of the UK’s infrastructure is foreign owned. More broadly, as a nation the UK has a pipeline of more than £310 billion of potential infrastructure projects over the next five to 10 years. Investment will need to come from a variety of sources, foreign as well as domestic. The UK welcomes all investors, irrespective of nationality, particularly those bringing additional capital into the UK, provided that they meet our corporate governance standards and do not represent an unacceptable national security risk.

Lord Harris of Haringey: My Lords, I note that the Minister does not know what proportion of our national infrastructure is owned by foreign interests, but he does acknowledge that most of it is. Our ports are owned by Dubai, the BT network is controlled by the Chinese and London’s electricity is supplied by the French. Does he not think that it is about time that the Government started to take our national sovereignty, and our freedom of manoeuvre, seriously?

Lord Wallace of Saltaire: There are several points there. To say that the BT network is controlled by the Chinese is, to say the least, a considerable exaggeration. The issue of the dependence on the supply of equipment from China is a rather different one, and that, as noble Lords will know, is the subject of a recent ISC report. British sovereignty has traditionally and in recent years been debated much more in terms of threat to English common law, and the existential threat which Brussels and the European courts are thought to provide to Britain, than in terms of the threat from foreign investment. I should welcome the noble Lord banging on about one rather than the other—it would make a nice change.

Lord Spicer: My Lords, surely one of the good things about foreigners owning bits of our infrastructure is that they cannot take these bits away with them—

Lord Bilimoria: My Lords—

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The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford): We shall hear from the Cross Benches first.

Lord Bilimoria: My Lords, today the former Governor of the Bank of England has taken his seat, and we welcome him. His successor is a Canadian. How many other countries would have a foreign national as the governor of their national central bank? We do. Do not the Minister and the Government think that we should be proud that we are one of the most open economies in the world, and that that is a great strength to this country? Regardless of that, and on the other hand, how much longer are the Government going to dither and procrastinate about increasing our airport capacity in London?

Lord Wallace of Saltaire: I shall exclude the second half of that question from my response. I rather hoped that the noble Lord would welcome the degree of foreign investment in our automobile industry. Ten to 15 years ago, many would have sneered at the whole idea of Indian investment in our automobile industry. The recent announcement of the expansion of investment in Jaguar Land Rover is extremely welcome for the prospects for British exports.

Lord Smith of Clifton: My Lords, how many of our former nationalised public utilities, having been privatised, are now owned or largely controlled by nationalised industries abroad?

Lord Wallace of Saltaire: My Lords, a number of French, German and Dutch companies which are partly or wholly state owned participate in our electricity, gas and railway industries. I hope that I shall not upset noble Lords by adding that 10% of Thames Water is now owned by Chinese investors. I hope that that will not make your Lordships worry a bit as you clean your teeth tomorrow morning.

Baroness Smith of Basildon: My Lords, the Intelligence and Security Committee has raised its concerns about the degree of foreign ownership of the UK’s telecommunications infrastructure. What assessment have the Government made of its report and how do they plan to tackle the problem?

Lord Wallace of Saltaire: My Lords, the Government published a response to that report a few days ago, announcing that they will instigate a review of the Huawei cell, which is the issue very much at stake here. I emphasise that we are talking about a global supply chain in which there are, at most, two potential suppliers of some of the highly sophisticated equipment available—I believe that the other is Swedish. The dependence which we all have on each other for critical national infrastructure in telecommunications is a great deal more complicated than we previously understood. However, Vodafone owns a number of large mobile networks in other countries which are part of their critical national infrastructures, so this is not a one- way trade.

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Lord Spicer: My Lords, surely it is a win-win situation. We get their money and, because of the infrastructure, they cannot take it away.

Lord Wallace of Saltaire: That is a very good comment. I remember, many years ago, when Mrs Thatcher was Prime Minister and an architect of free-market economics nevertheless phoning the Japanese Government to insist that they pressure Japanese banks to make their partial investment into funding Eurostar and the Eurotunnel project.

Lord Stirrup: My Lords, I am sure that the Minister shares the concerns about the vulnerability to cyberattack of some elements of our critical national infrastructure. So far, the Government’s approach to this problem has been to seek a consensual solution with the industries involved. To what extent is such an approach likely to be successful with foreign companies?

Lord Wallace of Saltaire: My Lords, GCHQ and a number of other government agencies are actively engaged in mitigating the large and, to some extent, unknowable risk of cyberattack. This is a growing problem for all Governments in the world. I emphasise again that the specific issue at stake in the ISC’s recent report was the dependence on foreign equipment and the computer codes which come with it. That is something which GCHQ is much engaged with and which it has now been agreed the National Security Adviser will conduct an inquiry into.

Lord Kennedy of Southwark: My Lords, does the £310 billion of projects which the Minister said was in the pipeline include the extension of the Tube to south-east London, which has been waiting since the Second World War for such an extension?

Lord Wallace of Saltaire: My Lords, I am answering for the Cabinet Office on the question of critical national infrastructure. I do my best to cover all other aspects of government when challenged, but my knowledge of Tube projects in south-east London is a little more limited than of some other subjects.

Mutuals’ Redeemable Shares Bill [HL]

First Reading

3.14 pm

A Bill to enable the law relating to societies registered under the Industrial and Provident Societies Act 1965 or the Friendly Societies Act 1992 and certain mutual insurers to be amended to permit and facilitate the use of a new and additional class of redeemable share capital; to provide consequential rights to members of such societies or insurers; and to restrict the voting rights of certain members who hold such shares.

The Bill was introduced by Lord Naseby, read a first time and ordered to be printed.

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Education (Amendment of the Curriculum Requirements) (England) Order 2013

Motion to Approve

3.15 pm

Moved by Lord Nash

That the draft order laid before the House on 10 June be approved.

Relevant document: 4th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 8 July

Motion agreed.

Coroners and Justice Act 2009 (Consequential Provisions) Order 2013

Motion to Approve

3.15 pm

Moved by Lord McNally

That the draft order laid before the House on 8 May be approved.

Relevant document: 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 10 July

Motion agreed.

Apprenticeships (Alternative English Completion Conditions) (Amendment) Regulations 2013

Motion to Approve

3.15 pm

Moved by Baroness Garden of Frognal

That the draft regulations laid before the House on 3 June be approved.

Relevant document: 3rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 15 July

Motion agreed.

Extension of Franchise (House of Lords) Bill [HL]

Order of Commitment Discharged

3.16 pm

Moved by Lord Dubs

That the order of commitment be discharged.

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

Motion agreed.

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Mesothelioma Bill [HL]

Third Reading

3.17 pm

Clause 2 : Eligible people with diffuse mesothelioma

Amendment 1

Moved by Lord Freud

1: Clause 2, page 1, line 16, leave out paragraph (c) and insert—

“(c) the person has not brought an action for damages in respect of the disease against the relevant employer or any insurer with whom the employer maintained employers’ liability insurance at the time of the person’s exposure to asbestos,

(ca) the person is unable to bring an action for damages in respect of the disease against any employer of the person or any insurer with whom such an employer maintained employers’ liability insurance (because they cannot be found or no longer exist or for any other reason), and”

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, in speaking to these amendments I hope noble Lords will not mind if I open with a few thanks. First, I thank noble Lords for their consistent and invaluable dedication to this important Bill. The Bill looks quite different now to how it did at Second Reading and it is certainly in better shape for its passage through this House. I never cease to be amazed by the attention to detail and rigour that noble Lords apply when examining a Bill and I admit that I have ruthlessly stolen as many noble Lords’ ideas as I could over the past few weeks.

The Bill as it stands is a collaborative piece. I have listened with great interest to the concerns of noble Lords and responded to the pressure points. Since the Bill was introduced we have been able to renegotiate the rate of payment to 75%, which is in no small part thanks to the pressure exerted by this House. We have pledged to explore the creation of an oversight committee to ensure that the scheme may operate in the most efficient and just way, an idea that I cannot claim credit for. For that, and indeed much more, I must thank the noble Lord, Lord McKenzie, and the noble Baroness, Lady Sherlock. The noble Lord and the noble Baroness have been kind enough to give their time frequently and I am grateful for their supportive approach and their expertise.

Returning to the issue of scheme management, we have announced that the scheme administrator is to be selected through an open-tender route. I am confident that the scheme that will be set up as a result of this Bill will be the best it can be and will offer financial support to those who, through no fault of their own, have contracted this terrible disease yet cannot sue for damages. This represents a substantial achievement and, once again, one for which I cannot claim all the credit; so I thank noble Lords. My particular thanks go to those who have given so much of their time to contribute to the comprehensive debates we have had.

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The continued support and attention of the noble Lords, Lord Howarth, Lord Wigley and Lord Avebury, have been key.

One issue that we have discussed at length, and I know that many noble Lords feel strongly about it, was research into mesothelioma. As noble Lords will remember, I mentioned that when negotiating the terms of this Bill, I really hit a brick wall at every turn regarding research. A great debt of thanks must therefore go to the noble Lord, Lord Alton, for raising the awareness of the lack of research in this area and, although we disagreed on the mechanism, the pressure of his amendment has helped me, jointly with my noble friend Lord Howe, to form a strategy for how we might encourage proposals for high-quality research into mesothelioma. On Report last week, my noble friend Lord Howe outlined this strategy, and I thank the noble Earl once again for his support and collaboration on that point. The momentum in this area created by his efforts and the efforts of this House should not be underestimated.

I have tabled one amendment for today and I apologise to the House for its tardiness. The amendment is minor and technical in nature and we will come to it in a moment, but I will quickly say that further thanks are due, this time to the noble Lord, Lord Browne. The purpose of the amendment is simply to add further clarification to Clause 2. It was the noble Lord’s careful scrutiny of that clause that alerted us to a possible source of confusion. The amendment was deemed necessary in cases where an individual had tried but failed to bring a claim against a relevant employer but, where any other relevant employer existed, the individual must attempt to bring a claim against that employer also before being able to come to the scheme. It has always been the policy intention that this scheme must be one of last resort and that all other avenues should be exhausted first. The object of the amendment is only to avoid any misinterpretation of Clause 2.

Before I conclude, I will briefly mention the sterling work of the team behind the scenes. There have been many working in DWP, MoJ, the Department of Health and parliamentary counsel to whom I extend my thanks, including, in the Box, Rose Willis and Fiona Walshe of the Bill team. I pay especial thanks to the tireless work of our redoubtable Bill manager, Lee Eplett, with whom I know many noble Lords have worked during the passage of this Bill.

I know that noble Lords have wished for the Bill to go even further than it does but I hope that they can agree with me that it is a major step forward. The issue of poor record-keeping in the industry has for far too long prevented mesothelioma sufferers from receiving the compensatory payments due to them. The Bill represents substantial progress in rectifying this injustice, and I once again thank noble Lords for their role in this achievement. I beg to move.

Lord Browne of Ladyton: My Lords, I speak in support of these amendments to the extent that they improve the Bill. I am pleased to have been of some assistance to the noble Lord, Lord Freud, in improving the Bill. I venture to suggest that at one stage he

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thought that I was perhaps more of an irritation than an assistance on Clause 2. However, important issues still need to be addressed and, if your Lordships’ House will bear with me for a couple of minutes, I shall explain.

My noble friend Lord McKenzie of Luton first raised concerns about Clause 2 when he moved Amendment 12 in Committee on 5 June. My noble friend’s contribution spurred my interest, and I recollect making some points of observation in debate. In his response the noble Lord, Lord Freud, initially dismissed these points, but as the debate became more engaged he promised to write. That was because he found himself—I think I quote him properly—“in deep legal territory”, or he was concerned that he might find himself in deep legal territory. He promised to write, and on 7 June he did so. He dismissed my concerns again, but I persisted. Thanks to the engagement of the Bill team, in particular the Bill manager, I was able to find a route of communication with parliamentary counsel about my concerns in relation to Clause 2.

I will not take up the House’s time by going into these in detail, but I remain unconvinced that even an amended paragraph (c) of Clause 2(1) is necessary, except in the most remote, hypothetical circumstances. I commend the ingenuity of those supporting the Minister in trying to find sets of circumstances which justify the words in the first draft of the Bill. In my view, the justifications which I was given were either wrong or showed a repeated misunderstanding of the interaction of other parts of Clause 2 with that very paragraph or, as we got deeper into the weeds in this, a misunderstanding of the relationship between Clause 10 and Clause 2, and then a misunderstanding of the relationship between Clause 2 and its provisions, and the draft set of rules which we were then given. I presume they will now form the template for the regulations which will set out the scheme.

At every point at which a justification was made for the wording there was an inconsistency, which I pointed out. However, having said that, the clarification which the Minister gave in his letter of 7 June that the phrase “the relevant employer” in Clause 2(1)(c) was a reference to the same “a relevant employer” in paragraph (a) of the same subsection, perhaps deals with the issue, at least to some extent. If the Minister finds some way of putting that explanation on the record, it may be sufficient to see off my concerns in the short term. In any event, at this stage I do not intend to persist, now that the paragraph has been divided and recast.

Amendment 1, which would put new paragraph (ca) in Clause 2(1), and Amendment 3, which would put new paragraph (ba) in Clause 3(1), are improvements. I support them without any qualification because they deal directly with my concerns about cases where an employee had multiple employers. It is a simple necessity that at the time of application the employee-applicant, or an eligible dependant, must be unable to bring an action against any of the employers or relevant insurers.

I move now to the consequences of Amendment 5. Amendment 5 is extremely interesting. It would amend Clause 18(3) so that it reads as follows:

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“The scheme may specify circumstances in which a person is, or is not, to be treated as able to bring an action for the purposes of section 2(1)(ca) or 3(1)(ba)”.

This is potentially a very significant provision. Remarkably, despite all of the scrutiny it has remained totally unscrutinised. It has now been brought to my attention because of this amendment. I presume that these circumstances will now require to be set out in the regulations which will apply to the scheme—in other words, what were the draft rules that we were given copies of. I went through the draft rules in detail after I received this amendment and could find no references at all to any such circumstances. It seems therefore that a very important part of the structure of this scheme has not been subject to any form of parliamentary scrutiny. I hope that this will be corrected when the Bill goes to the other place. If this provision is necessary, the circumstances that are to be in the scheme ought to be shown to Parliament before parliamentary scrutiny of the Bill is concluded, which it has not been.

Finally, the most important point that has arisen from my engagement beyond Parliament with the Bill team is that during my conversations and in correspondence with those advising the Minister it was explained to me that it was the Government’s intention that, when a person was diagnosed with diffuse mesothelioma on or after 25 July 2012 but before the Bill comes into force as an Act, application to the scheme would have to be made and received by the scheme administrator not later than three years after the date on which it comes into force, not three years from 25 July 2012. That would be a very welcome relaxation of the limitation rules, given the nature of this dreadful disease and how quickly it can become fatal.

Unfortunately, the draft rules make no mention of that relaxation and there is no such relaxation anywhere in the Bill. However, there is a very specific relaxation in draft rule 7, where a person has died on or after 25 July 2012 and the claim is made by an eligible dependant. That very significant concession is known to me and is now known to all Members of your Lordships’ House. It requires some parliamentary acknowledgement or commitment, at the very least. More than that, it requires some commitment that the regulations will deal with this in an explicit way.

3.30 pm

Lord Howarth of Newport: My Lords, if it is in order to make some brief remarks in the debate on these amendments which go a little wide of them, as the Minister has just done, I will do so now rather than on the Motion that this Bill do now pass. In the absence of the noble Countess, Lady Mar, I will take a chance and hope to have the indulgence of the House. In our proceedings on the Bill, we have considered very closely the predicament of people who have suffered the tragic misfortune of contracting mesothelioma. This predicament has elicited strong feelings of sympathy all around your Lordships’ House. It is the role of your Lordships’ House to advise our elected colleagues in another place and I would like to reflect for just a moment on what the essence of that advice should be.

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In the Bill, we are attempting to deal with the consequences of what should certainly be regarded as a major scandal. Of course, among employer’s liability insurers there are many honourable and conscientious people, but in their ranks there have also been, I regret to say, a significant number who have been deeply dishonourable and reckless. Some of the employer’s liability insurers have behaved as badly as the worst of the bankers and the worst of the touts of mortgage loans did in the run-up to the crisis of 2008.

Because of the long latency of mesothelioma and the three to four decades that the disease takes to incubate, there was scope for genuine administrative confusion, but a significant proportion of insurers have managed to lose the documentation that would have enabled mesothelioma sufferers to make a claim against their employer, or their employer’s successor, and perhaps to make their case in the civil courts. Within that number, it is very clear that there were also significant numbers of insurers who wilfully destroyed that documentation. Such negligence and criminality in relation to people who are doomed to suffer from this most horrible illness and to die of it seems peculiarly cynical and, I would say, depraved. There has been the inhumanity of that but there is also another fundamental issue at stake; the proper administration of contracts is fundamental to the functioning of a free-enterprise economy and to the maintenance of trust in society.

We have all admired and applauded the Minister who, building on the initiative of my noble friend Lord McKenzie of Luton, negotiated with employer’s liability insurers the scheme that this Bill would legislate. The Minister and his officials have invariably been helpful to us, and he was most generous in his remarks just now about noble Lords who have participated in these proceedings. As he said, it has been a collaborative process. We recognise and thank him for the improvements that he has made to this scheme during the passage of the Bill—the raising of the rate of payment to 75%; his agreement that details of the scheme should be brought in by regulation; his acceptance of the principle of an oversight committee; and his decision that the scheme should go out to open tender. I am sure that he will continue to give attention to the significant issues raised just now by my noble friend Lord Browne. The noble Earl, Lord Howe, made a very constructive set of proposals in response to the noble Lord, Lord Alton, on how to facilitate and fund further research into mesothelioma.

The difficulty that the Minister has had, and one that we entirely understand, is that having conducted his negotiation with the industry and reached an agreement with it, he has found it very difficult to budge from the exact terms of that agreement. I do not think that Parliament is bound by the terms of an agreement negotiated between the Government and the industry. Indeed, it is the responsibility of Parliament to improve the scheme further if we can in the public interest. There is therefore a small number of issues which we should commend to our colleagues in the House of Commons for their further consideration. I hope that they will want to look again at the rate of payment and the date for eligibility. I very much hope that they will want to look at the plight of people who are at the moment excluded from the scope of the scheme, such

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as members of the households of people who were employed and exposed to asbestos, where the employee has not so far contracted the disease but the household member, perhaps someone who did the household laundry and washed the contaminated overalls brought back from the workplace, has contracted it. People in that situation are not covered by the scheme. The self-employed too, even if self-employment was something of a technicality, will not be eligible to benefit. I hope also that the Government will after all agree that there should be an annual report on the progress of the scheme to assist Parliament in its necessary further vigilance in the interests of mesothelioma victims.

I know the Minister has been fearful that if such refinements to the scheme were to be brought in by way of amendments to the Bill, the insurance industry would take away its bat and ball and revert to its customary position of taking legal action to prevent the Government from requiring it to do what in decency and justice it ought to do. Of course, we do not want to see any delays to the implementation of the Bill. I hope that Members of the House of Commons will take the view that a legal case by the employers against minor improvements of this kind to the Bill would be very weak indeed, given that they have accepted the principle that there ought to be a scheme of this kind which they should fund. My noble friend Lord McKenzie of Luton has demonstrated that the costs of such improvements would be affordable, and I do not believe that the employer’s liability insurers would be so shameless as to go to court to try to prevent these modest further improvements and further advance of justice for mesothelioma victims.

In the course of our proceedings on this Bill in your Lordships’ House we have defined the issues and laid out arguments and I very much hope that our colleagues in the elected House will wish to pursue these issues.

Lord James of Blackheath: My Lords, I had not expected to rise at this stage of the debate but, having listened to the noble Lord, Lord Howarth, I feel compelled to do so on behalf of the insurance industry, as he has made a serious allegation of fundamental dishonesty within it. I remind the House that I myself have stood trial in the USA on a charge that would have got me 24 years in the slammer, and was acquitted. At issue was the integrity and honesty of the British insurance industry, for which I signed the audit certificate that led to the ultimate creation of Equitas. The noble Lord should remember that we are a very public arena, and that there are many in the world with other motives who will look to get any crumb of comfort that they can to mount an action that would lead to a financial advantage for them.

The issue on which I was arraigned in the Justice Courts in New York was that, with the fundamental insolvency of Lloyd’s of London totally at issue, I had signed an audit certificate that said it was solvent when it was not. I had seven days’ non-stop interrogation on the subject, but I won. I would like to go on the record to this gathering, for the outside world as well, about why I won so that we may not find that we are undermining the integrity and financial security of the insurance industry on which this scheme will depend.

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There is no point in us busting the world of the insurance industry for the sake of the Bill and getting nothing.

The point was that I had signed an audit certificate to say that Lloyd’s of London was solvent and could meet all its liabilities, at a time when most people believed that it could not. I relied upon Section 18(1) of the Insolvency Act, which by the greatest irony I wrote when I was assistant to Sir Kenneth Cork in drafting it. The Act makes very specific statements about what justifies a claim for solvency, and I claimed that those conditions were met in the case of Lloyd’s. The ultimate proof that it was is the fact that Equitas, whose creation by Lloyd’s of London I chaired, has been sold to Warren Buffett for an enormous amount of money, with a guarantee that he will fulfil Equitas’s entire liabilities. In the process, he will pick up about £3 billion in pocket money for himself, and good luck to him.

The events of those days cast a very long shadow. The noble Lord, Lord Howarth, may be right in his comment that there was dishonesty in the loss of documentation and the avoidance of liability by those devious means, but there is no question of integrity in the industry with which we are dealing. It is adequately funded and has adequate backing, and it is completely solvent for the discharge of all the liabilities that we want to meet, including those that we are discussing in the Bill. It would be an outrageous act of complete disregard for the facts of history and the integrity of the industry if we were to cast any doubts on its ability to stand behind its liabilities. The issue is that there are these liabilities but there are the reserves in the world for them—you just have to find the key to unlock them, and the Bill is a wonderful part of the process of doing that. There is no question of the integrity of the industry regarding its solvency.

Lord Howarth of Newport: I hope that the noble Lord will accept that I did not in any way impugn the general integrity of the industry, let alone cast doubt on its solvency or its capacity to meet its obligations. I asserted, and I believe this to be correct, that there were within that industry at one time people who behaved dishonestly and, because it was convenient to them, allowed that documentation to go missing.

Lord James of Blackheath: I thank the noble Lord for that. I hope that he will appreciate that my concern was that I did not want to start the forthcoming Session by doing the perp walk down the middle of a 747 on an extradition order back to the USA.

Baroness Masham of Ilton: My Lords, I thank the Minister for what he has done for these unfortunate people, but I very much hope that there will be an increase in research. If there is a will, I am sure that there will be a way of finding a cure.

Lord Alton of Liverpool: My Lords, before the Bill passes and goes on to another place, I want to add a few words to those that have been spoken. I specifically support what the noble Lord, Lord Browne of Ladyton,

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said earlier about the limitations and relaxations that may well occur in Amendment 5. Like him, I hope that when the Bill goes to another place it will be subject to further scrutiny.

3.45 pm

Like the noble Lord, Lord Howarth, I hope that the other place will look further at those who will be eligible under the scheme because of the start date. These are questions we debated in Committee and on Report, and I am sure that Members of another place will want to look at them. In particular, I hope that they will look at those people who will not qualify because the scheme was introduced on the last day of the last Session last year instead of on the commencement date of the consultation period and, in particular, at those people who contracted mesothelioma during that period. Even if small numbers are involved, it would be good if people who fall outside the scheme as currently drafted could be brought in.

In Committee, I paid tribute to the noble Lord and said that it would be unfair to criticise him for omissions in the Bill because in his discussions with the insurance industry he has done all that he possibly can to bring into its scope as many groups of people as humanly possible and to set the bar at whatever figure he was able to negotiate. Indeed, I join other noble Lords in expressing gratitude to him for being able to lift it from 70% to 75% during our proceedings. I, too, feel this is an issue of justice, and for those who believe that 100% compensation should have been given to them because of a disease that is not just life-threatening but life-taking, there will still be disappointment in some quarters.Although some of the victim support groups that have done huge amounts of work in supporting Members of your Lordships’ House as the Bill has gone through its various stages will be disappointed, I think many would agree that for those who would fall through the net—probably 300 people a year among the 2,200—this offers real hope. It would be grudging, curmudgeonly even, for me not to pay tribute to the noble Lord as others have done for what has been achieved, and I am indeed grateful for that.

The noble Lord referred to the oversight committee that will be established. That is a good step forward. We all owe a debt to the noble Lord, Lord McKenzie, for the work he has put in, not just now but previously in trying to shape legislation before the previous general election, to do something about a horrendous disease which, as we know, takes more than 2,000 lives every year in this country and which official figures predict will take a further 56,000 lives. As I mentioned on Report last week, new research from Cambridge University suggests that a combination of the BRIC countries and new forms of fibres that are coming into being could lead to a second wave of mesothelioma in future.

That takes me to the amendment that I moved last week which was lost by seven votes. I was obviously disappointed that the amendment was not passed. I am sure the issue will be returned to in another place, and I wish my friend and colleague Mr Paul Goggins

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MP well. I am sure he will try to build a cross-party coalition on this issue when another place returns to this question.

Another way of looking at the issue is by the Government being asked to look at the creation of a national research centre, a centre of excellence, specifically geared to the study of mesothelioma. I cannot think of any other disease that has taken so many lives and that will take so many lives in future that affects ordinary British citizens up and down the length and breadth of this land which has had such zero-sum funding. I know that the Minister and I are at one on this. We both agree that it has been a scandal that it has been so badly funded, so while congratulating the noble Earl, Lord Howe, on securing the defeat of my amendment last week—it is good to see him sitting below the gangway for today’s debate—I hope that the proposals he laid before us will be implemented. For me as a parliamentarian, my desire is always to see something written in a Bill. Statutory provision is the one guarantee we have in bringing and holding Ministers to account. Even good Ministers have their day, and they are succeeded by others who might not be quite so well intentioned or so committed to the cause as the two Ministers who have been dealing with this Bill and this question.

Therefore, I am sorry that it is not in statutory provision, but I am glad that an increased emphasis will be placed on finding resources and ways forward in combating mesothelioma. We could not possibly remove asbestos from every public building and private home in the land, and people will contract mesothelioma for years to come through exposure to asbestos. The answer is surely to find out why this disease, which we have known about since 1930 and which has this horrendous hibernation period, affects people in the way it does and whether there is a way to combat it. Obviously the fact that it hibernates for so long suggests that there might be ways to neutralise it. This is surely where we should put our resources in the future.

I join other noble Lords in thanking not just the Minister but the Bill team and all those who have been so courteous throughout our proceedings. During the meetings I had with the Minister and with members of his Bill team I was struck by their commitment and their professionalism and dedication. Your Lordships’ House is extremely well served.

Lord Selsdon: My Lords, last time I declared an interest as someone who had worked in the asbestos industry and I made a suggestion to the noble Lord, Lord Alton, which I have researched further. That is that the amount of clean-up that will have to take place over many years is the perfect target for a levy that might be placed upon it for research purposes.

Lord German: My Lords, before I seek the same dispensation that the noble Lord, Lord Howarth, sought at the beginning of his speech, I will say a few words about the amendments which are before us in order to give my noble friend time to locate the answers to them.

I appreciate all the work that the noble Lord, Lord Browne, has done to get to this point. He referred to remote and hypothetical places where things might

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occur. I hope that what I will say is not hypothetical, although I suspect that it will be remote. I am worried about the omission of the words,

“at the time of the person’s exposure to asbestos”,

from the new provisions now proposed as Clause 2(1)(ca) and Clause 3(1)(ba). The hypothetical, or rather remote situation, is the following. A company at the time of a person’s exposure did not have employer’s liability insurance—it was behaving negligently—and subsequently, when that person had left that company’s employment, it secured employer’s liability insurance in order to become compliant. As this is written, that would mean that there could be a possible—or not possible—claim against that employer’s liability insurance, which was subsequent to that person’s period of employment. That very remote case leads me to wonder about the omission of those words from the second part of each of those clauses and whether they need to be inserted, or rather made clear. Of course, maybe this could occur in the regulations that may follow from the rules of the scheme that pursues this.

I will quickly say a few words about the Bill. As regards the achievements that noble Lords have made in this House and the work they have done towards the changes that have been made to the Bill, in each of those three or four key issues there has been a change and a degree of success which we ought to recognise. I will first address independence and oversight, which was raised by noble Lords from all sides of this Chamber. They are both very important: the first ensures that the people who manage the process do not rule the way it operates, and the second ensures that there is a degree of observation of how it is run by all those who are, if you like, the actors on the stage who are affected by this dreadful disease.

The second issue is that of research. The noble Lord, Lord Alton, has already referred to the work which is being done by the two Ministers present today, my noble friends Lord Howe and Lord Freud. Clearly, there are differences of view as to how that might happen—statutory versus non-statutory. That is probably the way this House deals with issues: they have been raised, and although the solutions may not be the same ones that noble Lords wanted, they are, none the less, an approach to doing research into this disease.

One way in which we can keep track of what is happening in this area is by scrutiny of Ministers. It is not a matter of whether the Minister who follows is a good Minister—to rephrase the words of the noble Lord, Lord Alton—but of being able to hold Ministers to account. That is what Parliament can and should do. These things should not be kept from the public eye. I am sure that, in years to come, noble Lords will pursue this issue strongly with Ministers of whatever persuasion, from whichever part of the House they come, in order to ensure that we better understand this dreadful disease and how it can be treated and ameliorated. It is important also to take an international approach and work with those who suffer from this dreadful disease in other parts of the world.

The third area that has been of importance to your Lordships’ House during the course of the Bill is the level of compensation. Clearly, a major issue at the

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beginning was the percentage of civil damages that was to be given, according to a ratio or tariff. Noble Lords sought to raise the bar. There was some success, and, given the public interest in these matters, clearly on one side you wish to ensure as much compensation as you can, quite rightly, for sufferers who cannot trace their employer or their employer’s insurance company. However, you do not want to put another burden on companies that are not responsible for what happened, which would in turn pass on the costs to customers, who would have to pay them. We may not have reached the right balance but I pay tribute to the Minister for moving the bar upwards against all the pressure he was put under during the passage of the Bill.

There are ways in which the Bill can become a model for dealing with other forms of industrial illness relating to asbestos, and with other industrial diseases. The situations may not be exactly the same because, appropriately, this measure is directed at a unique and terminal illness that is dreadful in every aspect. However, it may be that we can derive other models from some of the work that has been done in the Bill.

Finally, I congratulate the Minister on his personal commitment. Many noble Lords will know that he has personally taken this as a challenge that he will see to its conclusion. The job was started by the previous Government, and the noble Lord has obviously taken it a step forward from where it was left by that Government. I pay tribute to the starting point. However, to see it to its completion, having undertaken what must have been horrendous negotiations with people who were not responsible but who had to pay for the people who were responsible and had disappeared off the scene, cannot have been easy. When eventually the fly on the wall in those meeting rooms publishes its memoirs, I am sure that we will be able to see the level of pressure brought by the Minister. From these Benches, I congratulate him and say that it was a job well done. We have taken a step that will lead us in future to deal with problems associated with this disease in an appropriate way. I hope that we will see an early start to implementation, so that people will no longer have to wait for compensation in cases where their former employer, or its insurance company, has gone out of business.

4 pm

Lord Empey: My Lords, perhaps, in summing up, the Minister could address two matters that were raised last week, one by the noble Earl, Lord Howe, and one by him. First, I think it is true to say that during the proceedings a cocktail of suggestions were made by the noble Earl, Lord Howe, as to how research could be opened up, extended and encouraged. Secondly, I believe that it was the noble Lord, Lord Wigley, who sought from the noble Earl an undertaking to look at a reporting mechanism so that we might have some way of following progress. Can the Minister say when he feels that it will be possible to initiate this process, and can he keep us informed of the progress being made with regard to the research, which is so critical for the future?

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We keep repeating the mantra about how 56,000 people in this country may yet contract this disease. However, I remind noble Lords that western countries are exporting the disease to south-east Asia, where I believe it is a disease of the future, not a disease of the past. Together with our colleagues in the European Union, we ought to be looking even harder at whether there are certain things that can be justified.

I join in the thanks to the Minister and the noble Earl, Lord Howe, as well as to the Bill team, for the work that they have put into this. Whatever shortcomings some people may feel there are, I believe that significant progress has been made with this legislation.

Lord McKenzie of Luton: My Lords, we support these amendments, which were spoken to by the Minister some little while ago. We do so in the confidence of having received advice from my noble friend Lord Browne, to whom I pay tribute for his tenacity in pressing certain points, even at Third Reading, and for the food for thought that he has left for colleagues in another place, added to that suggested by my noble friend Lord Howarth and the noble Lord, Lord Alton.

We have heaped praise on the Minister for all his efforts in developing and bringing forward this scheme, and we should do so again this afternoon—in particular, for his determination to have a co-operative approach to a scheme which, sadly, will have to last for many years. This has been reflected in the welcome approach of the Bill team, for which we are very grateful, and indeed in the attitude adopted by all noble Lords who have participated in this debate. I thank my noble friend Lady Sherlock in particular.

Of course, we would have hoped that the scheme would go further, especially in terms of the level of payment. However, we have something solid and substantial to build on in both another place and with a future Government.

I have a final word for all those who have campaigned on behalf of people who are or will be affected by this terrible disease. They, too, can be justifiably proud of what has been achieved so far. It will be their efforts that continue to remind us of what we still have left to do.

Lord Freud: My Lords, I shall just tidy up the questions that noble Lords have raised. I turn, first, to the concerns about the scheme rules raised by the noble Lord, Lord Browne, who takes pride of place in terms of specificity. He was looking at the draft rules, and we will update them to reflect the points that he has made. I do not have an answer for him right now concerning the discrepancy between “a relevant” and “the relevant” employer but I will write to him over the summer. If possible, I should like to borrow his expertise in the coming months. We are still seeing the Bill through and I retain overall responsibility for making sure that it gets through in good shape. Perhaps I may borrow the noble Lord to go through some of these points with the Bill team, because he seems to have been most effective and helpful.

My noble friend Lord German raised related points concerning a company which is uninsured at the point of exposure and which later moves on. If the employer

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still exists, a claim would have to be made against that employer. If the employer no longer exists and no employer liability insurer can be identified, the person could come to the scheme. That is relatively straightforward to address.

I should take up the points raised by the noble Lord, Lord Howarth, who has been utterly assiduous in looking through the Bill, for which I thank him. I will touch on some of the points that he commends to another place. These issues are very specific, so the rate that we can pay is tied very much to the risks that the costs get passed on to British business. The start date is very much tied to the structure of the smoothing that we have, so that would be very difficult to change. We also have a problem with the household member concerned because it is cover not from employer liability but from public liability. We look at the point on annual reporting in the context of how the oversight committee works.

On the point made by the noble Lord, Lord Empey, on research, we are having a meeting later this week on this issue with key players, launched by the British Lung Foundation. My noble friend Lord Howe and I will be there, and it might be a useful place to discuss how we might look at the progress of research. While we did not agree with the amendment of the noble Lord, Lord Alton, we very much agree with the sentiment behind his motivation for raising the issue because something most disturbing was happening with the lack of research. We are looking for the very best way of making sure that we have quality research. I know that my noble friend Lord Howe went through that in great detail and that he has put a lot of energy into ensuring that we transform that situation. With that, I beg to move.

Amendment 1 agreed.

Amendment 2

Moved by Lord Freud

2: Clause 2, page 2, leave out lines 16 to 18

Amendment 2 agreed.

Clause 3 : Eligible dependants

Amendment 3

Moved by Lord Freud

3: Clause 3, page 2, line 26, leave out paragraph (b) and insert—

“(b) no one has brought an action for damages in respect of the disease under the fatal accidents legislation, or on behalf of the estate of the person with the disease, against the relevant employer or any insurer with whom the employer maintained employers’ liability insurance at the time of that person’s exposure to asbestos,

“(ba) no one is able to bring an action for damages in respect of the disease under the fatal accidents legislation, or on behalf of the estate of the person with the disease, against any employer of the person with the disease or any insurer with whom such an employer maintained employers’ liability insurance (because they cannot be found or no longer exist or for any other reason), and”

Amendment 3 agreed.

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Clause 18 : Defined terms used in more than one section of this Act

Amendments 4 and 5

Moved by Lord Freud

4: Clause 18, page 10, leave out line 32

5: Clause 18, page 10, line 47, leave out “2(1)(c) or 3(1)(b)” and insert “2(1)(ca) or 3(1)(ba)”

Amendments 4 and 5 agreed.

A privilege amendment was made.

Bill passed and sent to the Commons.

Care Bill [HL]

Care Bill [HL]

Committee (7th Day)

4.08 pm

Clause 34 : Deferred payment agreements and loans

Amendment 92ZZV

Moved by Lord Lipsey

92ZZV: Clause 34, page 28, line 31, leave out paragraph (b)

Lord Lipsey: My Lords, I think all five of the non-governmental amendments in this group are down to me, so I crave the Committee’s forgiveness if I am not the soul of brevity on this occasion. All the amendments refer to the Government’s proposed universal deferred payment scheme.

I start by reminding the Committee of the background to this scheme. Its origins lie in the proposal made by a minority of the royal commission of 1999. We—my noble friend Lord Joffe and I—were concerned with one clear defect of the means-tested system. It meant that people were forced to sell their homes to pay for care. The Daily Mail banged on about this practically every week, and it was right—I never thought that those words would escape my lips—to do so. However, we also felt that it would be wrong that people needing care could simply hang onto their homes and eventually bequeath them to their families without spending any of the capital that those homes represented to pay for their own care. Therefore, we proposed deferred payments—local authority loans secured against the value of people’s homes and repayable only when the home was sold, often after the person had died.

Every politician that I have ever discussed this with sees this as a no-brainer. Unfortunately, officials at both local and national levels over the years—I do not of course make this charge against any officials on the current Bill—have taken a rather different view. They could not understand why anyone would hang onto their house when they were living in a care home and they did not want to see valuable homes left empty. The emotional side occasionally escaped them.

The Labour Government nevertheless brought in a scheme to allow deferred payment, but it was essentially sabotaged. A decision was made that no interest should be paid on the loans, and that gave local authorities a financial incentive not to make them. Then many local

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authorities refused to put schemes in place. If they were challenged in the courts, they lost, but how many people wanted to mount such challenges? Or they denied individual applicants who could succeed only if they showed stamina and determination and lived long enough to see them through.

The result is that the deferred payment scheme has been, if not a complete failure, not by any means a success. There are about 8,000 deferred loans outstanding, which is around 2% of the number of people in care and maybe twice that for self-funders. Most of the schemes are short-lasting in practice. The old person takes out a deferred loan and maybe they hope they will get home after a spell a little longer than the 12 weeks allowed in law to make a decision. Eventually they see that they will not be able to return to their own homes and the deferred loan is brought to an end. It performs a very useful function for the old person in giving them time to think, but the schemes are fairly short-lasting.

I am delighted that the Government have decided to complete the work that was half-botched in the 2000s and which Dilnot endorsed—a universal deferred payment scheme that actually works. The amendments in my name and one in my name and that of my noble friend Lord Warner are designed to refine the Government’s proposals to make them work even better still.

Amendment 92ZZV gets rid of a suggestion in the Bill that people should in some circumstances require third-party guarantees on the loans as well as their being secured against the value of the home. That is belt and braces and I do not see why families should be providing braces when there is a perfectly good belt in place. It would particularly apply when the deferred payment is secured on where somebody else—perhaps the old person’s son or daughter—lives. At the moment, case law provides that a local authority cannot in those circumstances force the sale of a property in order to redeem a mortgage on that property when somebody else lives there. However, if a guarantee was sought from the co-owner, the guarantor could be in a position where they are expected to repay the individual’s care costs based on an unrealisable value of half of the property they live in. This provision may put off people who would otherwise have taken advantage of the scheme and I ask the Minister to look at it again.

Amendment 92ZZW limits the interest rates that local authorities can charge on deferred payments to MLR plus 2%. This is to prevent local authorities attempting to sabotage the new scheme as they sabotaged the previous scheme. They could otherwise do so by charging Wonga rates of interest and this amendment will prevent their doing that.

4.15 pm

Amendment 92ZZX concerns the administrative difficulties in the scheme for local authorities. At the moment, it seems that each local authority will have to design and implement its own scheme which, as well as being extremely wasteful, will lead to lousy schemes as well as good ones. The amendment requires the Government to design a model scheme and to provide

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with it the associated software to local authorities, otherwise the deferred loan may become a new kind of postcode lottery, where what you get depends on where you live and not on your needs.

Amendment 92ZZY requires that loans are made available not only to pay care home fees but to pay for private sector point-of-need insurance policies. Even with the cap in place, care fees can be expensive—individuals have to find not only hotel costs but the excess over what a local authority will pay for them in a care home—and point-of-need insurance policies are a form of protection against this if it goes on for a long time. They are policies that you take out when you go into a home and they go on paying out for however long you are in there. They are a sensible way for people to manage this expense. I believe that, over time, the standard recommendation of independent regulators and financial advisers for self-funders going into residential care will become, “You need this or you are still at risk, even with a cap”. However, they are expensive and, as their home is the main asset that many old people have, it is important that the local authority lends against its value under the deferred payment scheme to fund the purchase of such policies. If it does not, people will have a choice: either take out a point-of-need insurance policy, which means you have to sell your home; or do not sell your home but you cannot then have a point-of-need policy.

Finally, and perhaps most important, Amendment 92ZZZ, in my name and that of my noble friend Lord Warner, a member of the Dilnot inquiry, seeks to defer the start of the deferred payment scheme from 2015 to 2016. Conceptually, deferred payments are simple; practically, they are highly complex.

Let me give a brief digest of a speech that Chris Horlick of Partnership, one of the leading firms in this area, made recently about some of the issues which arise. Will a citizen be allowed to choose a care home even if it costs more than a local authority usually pays, and to what level? Is there a perverse incentive for local authorities to put citizens into a residential setting because the loan will be paid for by the DoH, whereas care at home would be a burden on the local authority? Who will value the home? Who will pay the cost of the valuation? Who is responsible for maintaining the home when the person is in care? Can it be let? By whom, to whom and at what rent? What about owners with dementia; who will sign the deferred payment agreement? If there is not a power of attorney in place, what happens then? Who pays if the house is burgled, squatted, burnt down? Whose responsibility is it to insure the property? Who provides financial advice? Who pays for financial advice?

Further important questions arise from the Government’s consultation paper Caring for our Future, published last week. Would noble Lords like me to go on? I suspect not. However, I have established the basic point that these schemes are not simple.

Moreover, there is another huge decisive advantage in deferring the new scheme until 2016 in that it will then come in simultaneously with the cap. The two schemes are intimately related and they need to start at the same time so that people can look at their position holistically. It might make sense for someone to take out a deferred loan in 2015 when they are

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available, but it will not make sense for the same person to take it out in 2016 when there is a cap coming into play. Really, the difficulties of comprehension defy imagination. You are talking about older people, some of whom will not be as mentally agile as they were in their younger days, and you are trying to explain to them two schemes, both extremely complex and with ramifications for their and their families’ futures that are very complicated to understand. At the end of it all, you have to explain that these are coming into effect at completely different times. It really is an unnecessary complication—“Election day looms, so rush”.

We know that the Minister has the interests of older people in mind. He really should think again about this and give it an extra year so that both schemes can be introduced at the same time. If there is a short delay, most older people who want to will be able to take advantage of the existing scheme anyway, at least to bridge the gap.

As I said, the proposal in the Bill is a good scheme and I welcome it warmly. But if the Government steam ahead regardless with the 2015 date, it could turn into a botched scheme, leading to confusion rather than relief for thousands of older people. This is a case where the adage “more haste, less speed” undoubtedly applies. I beg to move.

Lord Warner: My Lords, one of these amendments has my name attached to it. I certainly fully support my noble friend’s other amendments and perhaps should have added my name to them. This is an important group of amendments in relation to the deferred payment arrangements, which are an equally important part of the architecture of the new scheme.

I agree very much with the purpose of my noble friend’s Amendment 92ZZX. When the Dilnot report proposed the idea of a deferred payment scheme, it was to be a national scheme that was totally consistent with the minimum national criteria threshold and portability. I have to say that we envisaged it coming into operation at the same time as the cap. The Government’s proposal of universal payment arrangements is certainly consistent with our approach but it leaves unanswered the question of whether you want to administer such a scheme through 152 local authorities.

One could make a case for a central scheme or latching the management of a such a scheme on to some existing agency. I think that the arguments are relatively evenly balanced. My noble friend has come up with one way of doing it, which is a model scheme that would be required to be adopted by most local authorities. The worst of all worlds would be not to take hold of this issue and leave it to a marketplace of 152 different bodies without much guidance or assistance with compatibility of IT and issues of that kind. We need to hear from the Government how they intend to ensure that this scheme is operated consistently by 152 local authorities. I personally do not have an axe to grind one way or another but I fear that if the Bill is left as it is, we may end up with a bit of a mess, with a wide range of diversity among the different local authorities.

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I certainly see the sense of the first part of my noble friend’s Amendment 92ZZY. I shall be very interested to hear the Minister’s response. The second part raises a wider issue, which I still think we need to give more consideration to. There was considerable concern during the Dilnot inquiry about access to sound, independent financial advice, not just in relation to a deferred payment scheme but to some of the other financial products or major financial decisions on paying for care that people would be taking—often at a time of crisis in a family’s life. People would not necessarily be as clear-headed as they might otherwise be. There would be a lot of emotion, and it was important that people could feel confident about getting impartial advice. My sense is that as these major changes come closer, the financial services industry itself might well prefer some stronger statutory safeguards on accessing quality financial advice, if only to protect it from accusations that people had been misled.

I think that we need to come back to this issue. Can the Minister tell us more about discussions with the industry, and where the Government’s thinking is on a statutory requirement on accessing independent financial advice, not just in relation to deferred payments, but to a wider range of financial decision-making?

I added my name to my noble friend’s Amendment 92ZZZ because, like him, I have considerable doubts about whether by April 2015 we can get in place a well thought out and reliable universal deferred payments scheme in place, alongside all the other systems changes that have to be made. The new consultation document, at more than 100 pages, which came out last week on the new funding and payment arrangements demonstrates the complexity of what is involved. These changes will require a major public awareness and education campaign, as we discussed last week. By coincidence, last week I received a note, as other noble Lords may have done, from Saga. It suggests that there is still a mountain to climb in making the public aware of and well advised about these particular new arrangements.

As I have already mentioned, it is not at all clear to me whether we are talking about a nationally administered deferred payments scheme, or 152 separate schemes. That issue in itself will, I suggest, take some time to get sorted out. It is another powerful argument for not rushing our fences and trying to get this all in place by April 2015. We need some convincing chapter and verse from the Minister on readiness, because I, like my noble friend, cannot see how it is sensible to introduce a deferred payments scheme a year in advance of the new cap scheme, with all the interrelationships between these two schemes.

The good news is I perhaps slightly take issue with my noble friend, and give the Minister some comfort on Amendment 92ZZW. I am not sure about putting an interest rate into primary legislation. The ex-Minister in me would be saying, “I think we need a bit more flexibility than that”.

Baroness Barker: My Lords, I shall give some support to the noble Lord, Lord Lipsey. He has thought about this issue in greater detail than many, and that is very important. It is worth pointing out one thing which many people seem to have forgotten. We already operate

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deferred payments. We have done for a very long time; this is not new. My first question to the Minister is, what intelligence have the Government taken from the evidence which already exists about the operation of current deferred payment schemes—albeit not as part of the Dilnot scheme—in the assumptions they have made about how this legislation will be implemented?

Secondly, I share the view of the noble Lord, Lord Warner, that the potential effects will vary according to demography. In certain boroughs, the overall balance of the population and its longevity will mean that this has a greater impact than elsewhere. For example, in Greater London, the impact will be completely different in the London Borough of Newham and the London Borough of Richmond. Have the differing effects in different geographical areas been modelled? What lessons have the Government taken from that modelling?

I think that the noble Lord, Lord Lipsey, is right. This scheme is a very important part of the overall architecture of Dilnot, and if it does not work, given the sensitivities which there are around property and so on, it could be extremely damaging. The noble Lord may be right that it should be deferred, perhaps as the noble Lord, Lord Warner, suggested, for a year. It may be better to do it at leisure and in more detail than to do it in haste and get it wrong.

4.30 pm

Lord Hunt of Kings Heath: My Lords, the Opposition strongly support the intention behind deferred payments. I hope therefore that the Minister will be able to give a serious response to my noble friend Lord Lipsey, because the issues before us are how the scheme is going to operate, the complexity that is necessarily involved and the ability of local authorities to do the right thing. Around all those matters, there remain some question marks.

While I would not necessarily support my noble friend on the specification of the interest rate, there are questions to be answered about how the Minister thinks the scheme will operate among the many local authorities which will be charged with discharging the scheme. For instance, on the question asked by the noble Baroness, Lady Barker, we could see large differences emerge between different local authorities. That would be unfortunate, and I would be interested to hear from the Minister what work his department has done in trying to model how it thinks local authorities will operate the deferred payment scheme.

The argument for a model deferred payment scheme is pretty persuasive. Even if local authorities are to have discretion—I do not disagree with that—in operating their own scheme, surely the production by the Minister’s department of a model scheme would ensure greater consistency and save local authorities a great deal of work in having to work out the details of their own scheme. Given all their other responsibilities, as much support as possible should be given to local authorities. A model payment scheme would be very useful.

I have two points to make on my noble friend’s Amendment 92ZZY. First, it is very specific on the loans being made available for the purchase of point-of-need insurance policies secured against an adult’s

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legal or beneficial interest in their home. That raises the whole issue of the insurance market. I again ask the Minister to reassure the House that he is confident that the insurance industry is prepared to come to market with suitable products. I know that he commented on this last week, but there remains some doubt about whether insurance companies really wish to operate in this market. Given that the whole thesis of Dilnot is that capping cost would lead to the development of an insurance market, this is something that we need to debate fully and be reassured on.

On Amendment 92ZZZ and the commencement date, I agree with my noble friends Lord Lipsey and Lord Warner about the complexity of what local authorities are being asked to do. We of course need to consider delay, but I do not understand why a different date has been chosen for the deferred payment scheme in contrast to other parts of the Dilnot implementation. It does not seem to make sense and, I would have thought, would be very confusing for people involved.

That brings me back to the second part of Amendment 92ZZY, which is the issue of regulated independent financial advice being made available to a person considering taking out a deferred payment. Surely the Minister will have been convinced by now that the financial consequences of decisions made by people in relation to the provisions in this Bill will be momentous. I would have hoped that by now he would recognise that the assurance that can be given through independent financial advice would be an important safeguard. Unless we have that, I fear that many people will have to make very difficult decisions, involving potentially large sums of money, without the necessary advice. That would detract from the generally consensual way in which we need to go forward. I hope that the Minister will perhaps have some good news for us on that front.

Lord Campbell-Savours: My Lords, I intervene briefly to ask the Minister a rather pedantic question. Subsections in Clause 35 all use the word “may”. There is no actual requirement for the Government to introduce regulations and therefore for local authorities to be placed in a position whereby they can charge. Why has it been left open, rather than using the word “shall”? If we could take the wording as meaning “shall”, can we assume that each further instance of the word “may”—that is to say:

“The regulations may specify costs … The regulations may require or permit adequate security…The authority may not charge interest under regulations…The regulations may make other provisions”—

is part of a whole package? Or, if “may” does mean “may”, might only individual parts of this clause be introduced, as opposed to the whole clause? For example, subsection (2) states that:

“The regulations may specify costs which are, or which are not, to be regarded as administrative costs for the purposes of subsection (1)(b)”.

If that particular part of the clause were not implemented, it would leave local authorities open to decide for themselves what the administrative costs could be. Whatever internal reasons they may have—and my noble friend Lord Lipsey referred earlier to the reluctance

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of local authorities—should local authorities have that ability to be flexible? I am seeking to establish whether, if this is all going to happen and we should read “shall” for “may”, all the subsections of Clause 35 will be implemented and that isolated subsections will not be introduced in the regulations. That might create difficulties that we are not foreseeing during the passage of the Bill.

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): I am grateful to the noble Lord, Lord Lipsey, for his amendments. He has a unique perspective, having first put forward the idea of deferred payments—as he reminded us—when a member of the 1999 royal commission. The Government share his disappointment that deferred payments are patchy and inconsistent across the country. Many people going into care face difficult decisions as a result, and authorities lose money when they offer a deferred payment because they cannot charge interest.

We also share the noble Lord’s commitment to ensuring that deferred payments work better in the future. We agree with the Dilnot commission that deferred payments should become a full and universal offer across the country for people who have to sell their homes to pay for residential care. We intend the scheme to be cost neutral to local authorities, as the commission also recommended.

We are proud to introduce this universal scheme from April 2015. It will provide much needed peace of mind to the 40,000 people who sell their homes each year to pay for care. As well as offering time to make decisions and choices over what happens to their home —a point well made by the noble Lord, Lord Lipsey—it will open up new options, such as renting it out.

In his amendments, the noble Lord raises important questions about implementation. These concern the interest rate, the use of a deferred payment to purchase insurance, support for authorities to implement deferred payments and the timetable. Before turning directly to those amendments, it may be helpful if I briefly outline our plans.

Clauses 34 and 35 contain the necessary powers for us to introduce deferred payments. All authorities will offer deferred payments and it is our intention that people at risk of selling their home to pay for residential care will qualify. They will be able to defer reasonable residential care and accommodation fees, in the care home of their choice, for the whole of their lifetime. We are currently consulting on more detailed proposals on who will qualify and what fees they can defer, and are gathering more evidence on the costs and practical issues involved with offering deferred payments.

One practical issue that we are exploring in our consultation is the possibility of situations in which the authority cannot secure its debt through a legal charge on the property. This is why the Bill provides for other forms of security, including third-party guarantees. The noble Lord, Lord Lipsey, expressed doubts about this provision and wondered whether the proposals in the Bill may put people off taking out a deferred payment plan. Our guiding principle here is that we want as many people as possible to benefit from deferred payments, but it is equally important that local authorities are able to secure their debt.

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Traditionally, deferred payments have been secured by registering with the Land Registry a legal charge on the person’s land, but this might not always be possible or offer sufficient security to allow the authority to recover its costs. Examples of this might include when a charge cannot be secured by registration with the Land Registry or where there is reasonable doubt about the person’s ability to afford the care home of their choice over the longer term, but we are consulting on whether there are situations in which offering a deferred payment is particularly challenging and, if so, on what a constructive way forward might be. That might include use of a different form of guarantee such as a solicitor’s agreement or the involvement of a third party. It is important that the Bill contains this flexibility so that when we design deferred payments to accommodate all situations that might arise, individuals’ preferences about the type of security that they wish to offer can be built in. I hope that this will persuade the noble Lord to withdraw his amendment, at least for the time being.

These issues will, in turn, inform how we set the interest rate, which has to strike an important balance. The rate must be enough to help authorities cover their lending costs but be affordable to people going into residential care who are at risk of selling their home. I understand the intention of Amendment 92ZZW to fix the interest rate at a predictable level but, as the noble Lord, Lord Lipsey, might have sensed—the noble Lord, Lord Warner, may have alerted him to this—I am concerned that setting the rate in the Bill before we have finalised other aspects of the scheme is premature. We will announce the proposed interest rate following the consultation and decisions on the wider design of the scheme. This will be set out in the regulations that we will consult upon in 2014. It will be a nationally set, maximum interest rate and local authorities will not therefore be able to charge excessive rates.

I have tabled government Amendment 92ZZAA, which would introduce a new clause allowing authorities to make alternative arrangements for people who would not wish to have a deferred payment because of their religious objection to paying interest. I am grateful to the Islamic Bank of Britain for its help on this amendment. We will work with the bank over the summer to produce detailed proposals, and ensure deferred payments are available to such people.

4.45 pm

Government Amendment 105U would provide that regulations made under the new clause, relating to how authorities secure their debt, would be subject to the affirmative resolution procedure if they amend or repeal an Act of Parliament. This mirrors the existing requirement in respect of similar regulations made under Clause 35(9), dealing with deferred payments.

The noble Lord, Lord Lipsey, has tabled Amendment 92ZZY, under which authorities would offer loans to people to assist with purchasing care annuities, so that they may enjoy peace of mind from insurance while also protecting their home. Of course, I understand the motivation for this amendment but, having reflected on this, our view is that the insurance market already

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offers such a mechanism: the use of equity release to purchase a care annuity. We are not convinced that the noble Lord’s amendment is necessary.

The noble Lord, Lord Hunt, asked whether the insurance market is really prepared to develop products of this kind. We are as sure as we can be that it will do so. Many companies have expressly said that they support the changes we are making. As I may have mentioned in an earlier debate, the Association of British Insurers welcomed our announcement, commenting that:

“This is potentially another positive step forward in tackling the challenges of an ageing society”.

We have a sector-led review working constructively with the Government to understand how the market will develop, or should develop, and in general create the right environment for products to succeed. That work will proceed over the summer.

Lord Lipsey: My Lords, I wonder if the noble Earl could clarify what he said about equity release as an alternative to deferred payments. There seem to me to be two absolutely insuperable objects to that working. One is that you could not have both a deferred mortgage and an equity release on the same property. You cannot have two things secured. More importantly, you cannot get equity release on a house that is empty. The rules of the Equity Release Council—I am on its advisory board—do not permit that. That is not a possible solution to the problem which I put forward.

Earl Howe: I have received advice that, technically, that is not so, but I am more than happy to engage the noble Lord in discussion after this debate. It would largely depend on the availability of a deferred scheme, agreed to by a local authority. It would also largely depend on the quantum of the debt that was already in existence. Of course, setting aside this particular issue, there could be a property on which there was pre-existing debt of a considerable size. It would largely be for the local authority to judge in individual cases whether it was in a position to offer a deferred payment scheme, looking at the facts of the case. I do not think one can make generalised remarks about this. We think that technically it is possible for an equity release scheme to exist alongside a deferred payment loan. As I say, I am sure that the noble Lord, with his insight into the market, will be able to put us right if we have misread the situation.

Lord Warner: While we are on this topic, it seems to me that there is an issue for the Government to think about. What is the market rate for equity release, compared to the market rate for deferred payments? If you are not very careful, you could end up with a situation where one is incentivised over the other. I wonder what consideration the Government will give to that issue.

Earl Howe: We will, of course, give that consideration. I am just reflecting, in the light of the noble Lord’s comment, on whether deciding what arrangements suit the individual is a matter for the Government, or

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rather a matter of individual choice. If there were a difference in the interest rate, it would surely be up to the individual to decide whether they wished to avail of whatever facility was being offered to them. I do not see that it is necessary to go down the path that the noble Lord, Lord Lipsey, is suggesting, whereby a local authority should be the one and only provider of funding in that kind of situation, merely because the interest rate was perhaps more favourable than an insurance provider’s.

Deferred payments mean that people will not have to sell their home in their lifetime to pay for residential care; I do not think that any commercial product offers that. Equity release is not available to people currently in residential care. However, there is potential for equity release to help people with domiciliary care and other costs. We would welcome developments in that market but this is an evolving discussion with the industry.

In respect of Amendment 92ZZX, we will continue to work with the care sector to ensure that authorities are in the right position to offer deferred payments from April 2015. There will be a dedicated implementation effort led jointly by government and local authorities, learning from local areas with well established deferred payments schemes. This will help to achieve a consistent national approach that fits with existing local systems and structures. We have also announced £335 million of additional funding in 2015-16 to support local authorities to deliver funding reform, including the introduction of universal deferred payments.

Amendment 92ZZZ would delay implementation by one year, until 2016. Given the work already under way with the sector and the shared desire across both Houses to address the issue of care and support funding reform, it is surely only right that we implement this at a reasonable pace. My view—and I hope, on balance, that the Committee will agree—is that it would be unfair to persist with the current system for longer than is needed. The timetable we have set out has other advantages. The 2015 introduction means that deferred payments will be part of the new offer to self-funders coming into place that year, and the stronger engagement by authorities with self-funders will be excellent preparation for introducing the capped costs system in 2016.

The noble Lord, Lord Warner, expressed the fear that we would have 152 deferred payment schemes around the country. As we have discussed, some authorities already have established deferred payments schemes. We think it makes perfect sense to build on the good work that exists. It will also ensure that deferred payments integrate with wider care services. The point here is that authorities will be following criteria set out in national regulations. There will be a consistent approach to who qualifies and what fees they can defer, and a consistent policy around interest and charges.

There is, of course, work to be done by local authorities, but I suggest that what we are tasking them to do is not exactly alien territory to them. We are confident that local authorities have the skills to offer deferred payments. The requirements primarily involve financially assessing people and keeping a

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record of fees that people have deferred and the interest owed, which is all consistent with activities that authorities undertake as part of providing means-tested care and support. Many authorities already operate deferred payments very effectively. We will work with the sector to identify good practice, as I have mentioned.

In answer to my noble friend Lady Barker, in local authorities with established schemes 20% to 30% of self-funding care home residents take out deferred payment. The level of uptake in 2015 may be similar or it may be somewhat higher. Again, it is incumbent on us—and we recognise this—to work with the sector to identify good practice that others can learn from.

Baroness Barker: Is the 20% to 30% an average across all authorities?

Earl Howe: Yes, it is intended to be an average estimate across local authorities.

The noble Lord, Lord Lipsey, was concerned that there might be an incentive to encourage people to go into care homes rather than receive care at home, which would be contrary to the direction of the policy. That is an understandable concern, but Clause 1 creates a new statutory principle that applies to all the functions under Part 1, including care and support and safeguarding and means that, whenever a local authority makes a decision about an adult, it must promote the adult’s well-being. That ensures that individual well-being is the driving force behind care and support so that local authorities focus on achieving the outcomes that matter to people.

Moreover, although local authorities will be able to charge interest they will not be able to make a profit on deferred payments, so there should not be perverse incentives. Even so, it is important that people who go into residential care should understand their financial options so they can decide what is best for them. Authorities will have a duty to establish and maintain a service to help people access independent financial advice. We are currently consulting on how this duty should operate in practice, including how it works for deferred payment.

The noble Lord raised an important point in relation to the details of the scheme. These are all things we want to look at as part of our consultation and in the work we are doing with the care sector on implementation of funding reform.

Lord Warner: I am sorry to interrupt the Minister, but he skipped past the whole issue of 152 schemes rather rapidly in his answers and brushed aside most questions. Have the Government actually considered a national scheme, which was one of my questions? Does the Minister realise that only a small number of local authorities are actually running deferred payment schemes? It is a very small proportion of the total. The overwhelming majority of them have no experience whatever of running a deferred payment scheme; very few of them are used to valuing assets. These are all new complexities, but the Government are not going to be producing their draft regulations until 2014, by the Minister’s own admission. This is a recipe for a total shambles.

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Lord Hunt of Kings Heath: My Lords, the noble Earl has said, and I am sure it is welcome, that the Government intend to set a maximum interest rate to be charged by local authorities. Does he agree that, since it is a crucial part of a deferred payment scheme, setting a rate nationally is consistent with a much more uniform approach? That is why I would have thought my noble friend’s amendment would be a sensible way forward. It is not being mandatory and does not go as far as my noble friend Lord Warner, but simply asks for a model scheme to be introduced.

Earl Howe: We are absolutely on side with the suggestion that there needs to be a uniform approach to the essentials of this scheme. That includes a national maximum interest rate. I suggest to the noble Lord, Lord Warner, that we do not need a national body running an all-singing, all-dancing, nationally mandated deferred payment scheme. We want to build on the good work already going on out there. The noble Lord made a fair point that only a minority of local authorities currently operate deferred payment schemes. Of those that do, many provide us with a very good basis on which to build and share knowledge with other local authorities. That can start now before the regulations are drawn up. We can and will start work with local authorities to ensure that they are gearing themselves up in the right way to approach this task.

5 pm

The noble Lord, Lord Warner, asked me about statutory safeguards around independent financial advice and where the Government are in our discussions with stakeholders. As he will recall, this is a point that we discussed at length when dealing with the provisions on information and advice—or, rather, he will not recall it, as I think he was unavoidably away at that time. I have, though, noted the strength of feeling on the issue that emerged from our debates, and I take further note of the noble Lord’s own views on this, which I shall reflect on between now and Report and will be happy to talk to him about.

The noble Lord, Lord Campbell-Savours, asked me about Clause 35 and the reason for the word “may”. We are consulting on the details of how this policy will work, as I have mentioned, and our intention is to make a set of regulations that will reflect the policy decided in response to the consultation. I do not anticipate that we will adopt a selective approach to the various provisions set out in Clause 35. Those provisions have been put there for a purpose because we think that they are important. I hope that, while I cannot anticipate the result of the consultation, I may reassure the noble Lord as far as I can that we do not anticipate omitting any of those provisions from the eventual regulations.

Lord Campbell-Savours: But suppose that the local authorities come back and say, “We don’t want regulations to cover the issue of administrative costs”. What happens then? Is it possible that the regulations might be introduced excluding the requirement of administrative costs, if the consultation threw that up as a response? If it were possible, would it not change the nature of the debate that we are having today on this part of the clause?

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Earl Howe: We fully expect a range of views about how to implement the proposals that we have set out in the consultation document. However, what we do not anticipate is wholesale objections to the very idea of the proposals, because by and large they are widely accepted as being the right ones. We need to ensure that they are capable of being implemented in a practical way.

Lord Campbell-Savours: I am sorry to press the Minister, but the point is that some local authorities—let us say Westminster, Maidenhead and Windsor or Wandsworth—may want to raise the charges for administrative costs while other authorities might be more sensible and reasonable about what those costs are. There has to be national uniformity in that area, and we should be given assurances today that there will not be flexibility, which would invite differential administrative costs between local authorities and trouble for many people.

Earl Howe: I can reassure the noble Lord that we are aiming to have uniformity. Merely because one local authority may present us with some rather maverick objections, I do not think that I could possibly envisage us capitulating to that kind of pressure. We want to see a system where people, wherever they live in the country, can rely on some clearly set-out rules and can thereby have peace of mind if they take out a deferred payment scheme. I hope and sincerely believe that the noble Lord’s fears will prove groundless, but I am happy to clarify as much of that as I can, given that we have only just gone out to consultation, in the letter.

Lord Deben: I wonder why the particular councils which were chosen by the noble Lord are all among the best councils in Britain, which would certainly behave in the most generous way.

Earl Howe: My noble friend is, of course, completely right. They are model councils of their kind. It is rather fanciful to present them as possible examples of councils that might wish to do badly by their residents.

This is a major reform that we have committed to introduce in this Parliament. While I am the first to agree that that in itself should not drive the timetable, we think that the timetable is achievable. We are consulting to get the details right and working with the care sector to ensure that implementation goes as planned. The noble Lord raised some important points. I am sure that he knows me well enough to accept that this is not the last occasion when I shall look at the points that he has raised. I shall do so further. For the time being, I hope that I have responded to his satisfaction, at least on some of the amendments, and that he will feel able to withdraw the amendment.

Lord Lipsey: My Lords, I genuinely thank the Minister for that response. I do not want to be the least bit churlish about these amendments which, after all, finally put into practice an idea that came to me in the bath 14 years ago. It does not happen very often, but this time we are on the verge.

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I warmly welcome the Minister’s assurance that there will be a national interest rate for deferred loans. That completely deals with the point raised by my amendment on interest rates and my point about Wonga rates of interest and is a tremendous breakthrough for this scheme, so I thank the Minister most warmly for that.

Moving to slightly more churlish mode, on whether we have 152 schemes or one, on balance, I buy the Minister’s arguments against having a separate national organisation imposing this or a compulsory national scheme, but that is not the proposal made in my amendment. My proposal was that the Government produce a model scheme that those who wished to could adopt. It might have some bits that could be added on or taken away as local options within the national scheme, but it would at least stop work being done 152 times over. As my noble friend Lord Warner pointed out, some people are working with this stuff for the first time because they have never brought in a deferred payment scheme. I ask the Minister, among the other things that he has kindly offered to consider, to have another look at that specially to see whether we can find some mileage in it.

I got no change on the time of introduction of the scheme, not perhaps greatly to my surprise, but I still believe in my guts that, as this process moves forward, it will become more and more apparent that it is not sensible to aim for 2015. I do not ask the Minister to comment on that now, but I give him an assurance that I—and I hope my Front Bench will do the same—will not accuse him of a U-turn if later on he finds that it is not sensible. A syndrome in government that comes up time and time again is that a Government announce a timetable and, when it is quite clear it cannot be met, go on fighting like made to preserve their original timetable. I shall not say the words “unified benefit”, but I easily could. This does not make any sense. We are all after the same thing here, and if the Minister decides—and I am sure that he will make a very good judgment on this—that it cannot sensibly be met, let him say so openly and we shall be welcoming, not critical.

My final point emerges partly from what we were just talking about: things on which the Government will possibly think again. The noble Earl very generously said that there are lots of things on which he will want to engage in discussions; at one stage he said, “at least not for the time being”, and has made many remarks of that kind. I will make a purely practical point. It is 22 July and the House will return to the Bill relatively early in October, although I do not know when, and many noble Lords are planning to be away for parts of that period. All of us want to resolve as many of these issues as we possibly can without the need for confrontation or debate in this House or, heaven forefend, Divisions, if they can be avoided. Therefore it is rather important that we all reflect on how we can set up a mechanism so that we can continue over this period to discuss the outstanding issues. I know that the Minister will reflect, but he and his officials may want to have discussions with some of us who are involved, so that by the time that we get to Report we will have made use of this Committee stage and found a way to

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move the House and the Bill forward without unnecessary rancour. With that, I beg leave to withdraw the amendment.

Amendment 92ZZV withdrawn.

Clause 34 agreed.

Clause 35 : Deferred payment agreements and loans: further provision

Amendments 92ZZW to 92ZZZ not moved.

Clause 35 agreed.

Amendment 92ZZAA

Moved by Earl Howe

92ZZAA: After Clause 35, insert the following new Clause—

“Alternative financial arrangements

(1) Regulations may, in such cases or circumstances and subject to such conditions as may be specified, require or permit a local authority to enter into alternative financial arrangements of a specified description with an adult.

(2) “Alternative financial arrangements” means arrangements which in the Secretary of State’s opinion—

(a) equate in substance to a deferred payment agreement or an agreement of the kind mentioned in section 34(8), but

(b) achieve a similar effect to an agreement of the kind in question without including provision for the payment of interest.

(3) The regulations may make provision in connection with alternative financial arrangements to which they apply, including, in particular, provision of the kind that may (or must) be made in regulations under section 34 or 35 (apart from provision for the payment of interest).”

Amendment 92ZZAA agreed.

Clause 36 : Notification, assessment, etc.

Amendment 92ZZAB

Moved by Baroness Campbell of Surbiton

92ZZAB: Clause 36, page 30, line 43, after “4)” insert “and keep the adult and the carer informed of progress”

Baroness Campbell of Surbiton: My Lords, I shall speak also to Amendment 92ZZAC and Amendment 92ZZAF.

I declare an interest as a long-term user of social care services. I have lived all my adult life in the same local authority. Like other disabled and older people who use social care services, I would find it impossible to move out of my local area because I could not be sure that my needs would be adequately met. Noble Lords will be aware that I have been very keen to change this deeply discriminatory state of affairs since I moved my first ever amendment in this House in May 2008 during the passage of the Health and Social Care Bill. I have returned to the issue several times in the past five years, culminating in my Private Member’s Bill on social care portability, which I recently introduced for a second time. Therefore, I am delighted that the

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Government have decided to put right this fundamental flaw in our social care system. I have been privileged to be closely involved in the Government’s deliberations on this issue for nearly three years. The Minister in another place told me very recently that my Private Member’s Bill was used as a template for the provisions in this Bill. That was very flattering, but flattery will not get you everywhere, and, on this, we are not quite there yet. There are a few points to be ironed out if social care portability is to work in practice.

5.15 pm

My Amendment 92ZZAB ensures that service users and carers are informed about how their case is progressing. My Amendments 92ZZAC to 99ZZAE require the second authority to pay appropriate attention to the existing care plan so that the individual can continue to do the things that they currently do. Finally, Amendment 92ZZAF ensures the provision of a safety net if the process is not as seamless as it should be. I will now explain why such provisions are of critical importance.

We surely all agree that the adult who moves, and their carer, should be kept informed of what is happening throughout the process. Knowledge is power, and lack of knowledge is disempowering. Up-to-date information is vital for reassurance and confidence. Clause 36(4)(a) requires the second authority merely to provide the information that it thinks is appropriate to the adult and their carer. It says nothing about keeping them updated. My Amendment 92ZZAB corrects this omission. It ensures that communication about the transition is clear and regular.

Moving home is always exceptionally stressful, especially for disabled and older people. Stress exacerbates impairments and ill health, particularly mental health conditions. For those with a significant care package, an interruption in care may mean not being washed, dressed and fed—the fundamentals of life. That runs entirely counter to the Bill’s emphasis on well-being and prevention. I will give an example.

Dave Morris was a severely disabled man who required 24-hour care. He was appointed as a senior policy adviser to the Mayor of London. He had to relocate and found suitable accommodation for his needs. He took his personal care assistants with him for a few weeks, aware that the new authority might not have finalised his care package. He was right. Although it had had three months’ prior notice, nothing had been organised. For five months, while they argued over payment rates and systems, he relied on friends such as me to pay towards the cost of his PAs and to help him survive. The new authority failed to keep him informed. It failed to consider his existing support and what he wanted to secure so he could take up the post, and there was clearly no safety net. He nearly lost his job and he could easily have ended up in hospital. He was a clever and articulate man—so what hope is there for those who are not?

As my noble friend Lady Grey-Thompson said last year:

“The success of the Paralympics opening and closing ceremonies was because of Dave Morris’s inspired vision”.

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Sadly, he did not live to see them. He died just before the Games. This is just one example of the barriers faced by disabled and older people who move from one local authority to another. Most cannot take the monumental risk Dave Morris was willing to take, which took its toll on him.

Even with the provisions in the Bill, service users cannot be certain that the care and support they receive in a new locality will enable them to lead their lives in the same way they do now. To have the same opportunities in education and work, and the same enjoyment of private and family life, the care and support must result in the same outcomes. Under Clause 36(7), the second authority must “have regard” to the existing care and support plan, or the existing support plan for a carer, when it carries out its assessment. My Amendment 92ZZAC would require the second authority to “have due regard” to the existing plan. This involves appropriate and conscious consideration—a stronger duty than having regard.

Critically, my Amendment 92ZZAD proposes that, when the second authority considers the existing plan, it does so with the aim of securing the same outcomes as far as reasonably practicable. It recognises that there may be occasions when the same outcomes are not possible. This goes to the heart of the continuity of care—to get as seamless a transition as possible—and it reflects the underlying intention of my Bill.

During Second Reading of the Care Bill, the Minister said in his winding-up speech:

“The noble Baroness asked why there was no requirement for equivalent services when somebody moves”.—[Official Report,21/5/13; col. 829.]

Let me put the record straight. Neither I nor my Private Member’s Bill expect the second authority to offer the same service. That is a total misunderstanding. My clear intention, as reflected in my Bill, is that the second authority should enable the individual to have the same end result—what the Bill describes in Clauses 9 and 10 as,

“the outcomes that the adult wishes to achieve in day-to-day life”.

Amendment 92ZZAE makes this clear by referring back to those provisions. For example, it might mean taking your children to school but not by taxi if an accessible bus service is available, or having opportunities to keep fit or enjoy leisure activities but not by the same means.

When I talk about outcomes, I am talking about ordinary day-to-day activities. However, without genuine continuity of care, they stop altogether. For example, I received a letter from a young woman who moved to her neighbouring authority. The new authority honoured the existing plan, providing homecare assistance three times a day, but it refused to offer this at times which would fit in with her office breaks and childcare pick-ups, so she could not use the toilet or collect her children—same assessment needs; totally different outcomes.

I turn to my final amendment, Amendment 92ZZAF. It is clearly intended that the process of putting in place care and support should be completed by the day of the person’s move. Clause 37(1) states that, if this has not happened, the second authority must

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meet the same needs that the first authority has been meeting. Clause 37(6) says that from the day of the move the first authority has no more responsibility. However, as my earlier example showed, that does not provide any safety net if the second authority does not comply with its duty or it delays in doing so. The Local Government Ombudsman told the Joint Committee on the draft Care and Support Bill that failures may occur, which could have a major impact on the provision of care and the person’s experience. As noble Lords will know, the process of assessment and care planning can be arduous and lengthy. It would be far better for the first authority, which has the relevant experience, to continue to meet the person’s needs if the second authority is not ready to do so by the day of the move. That should continue until the second authority has put its own arrangements in place. It is too risky to assume that nothing will go wrong. Dave Morris’s story gives the lie to that.

If the first authority has to step in, it should of course be refunded by the second authority. That would provide an incentive for the second authority to act without delay. My Amendment 92ZZAF provides for this. This is the position under my Bill and the Joint Committee recommended a similar provision.

I genuinely congratulate the Government on this first attempt to secure social care portability, but as yet it is not deliverable. I have done my homework and have consulted local authorities and service users on this issue for nearly five years. Please let us honour Dave Morris’s memory by getting continuity of care just right. I beg to move.

Lord Low of Dalston: My Lords, I am glad to add my voice in support of the amendments in the name of the noble Baroness, Lady Campbell. Unfortunately I was too late to get my name on the Marshalled List but that should in no way be taken to indicate any lack of enthusiasm for them. I do not think that I can usefully add anything to the advocacy of the noble Baroness. She is the expert in this area, and as she has told us, she has been living and breathing this for several years. She has spoken to the amendments comprehensively and with great eloquence.

Instead, I shall speak to Amendment 92ZZAFA in this group, which is a more narrowly targeted amendment. It is not unrelated to the amendments tabled by the noble Baroness, Lady Campbell, but it is more targeted. It would amend Clause 38, which deals with where a person’s ordinary residence is. Ordinary residence rules under the National Assistance Act 1948 established which local authority has a duty to fund a person’s care and support, particularly when they are living in a residential care setting outside their original local authority area and in another local authority. These rules are often disputed by local authorities, and every year hundreds of disabled people are caught in the middle of these disputes, which are mainly about financial responsibility, of course.

This is a probing amendment designed to seek clarification from the Minister about the policy which will inform the regulations accompanying Clause 38, which have yet to be published. Ordinary residence disputes are not merely academic; they affect the liability

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of local authorities, as I have said, but more particularly, they profoundly affect people’s lives. People who rely on significant care and support in their daily lives can change where they live only when all the arrangements are in place. As the noble Baroness, Lady Campbell, has powerfully demonstrated, they cannot afford to take the risk of a local authority refusing or delaying payment for their care, so people’s independence is put at risk and sometimes severely compromised. For example, there are people like Peter who, after three happy and productive years at a specialist college, wants to stay in the area to look for a job. He plans to live with two fellow students in supported accommodation, but he is under pressure from his home local authority to go back home. There is Lucy who has profound and multiple physical and learning difficulties. She requires 24-hour care and has been living out of area in residential care in London. She is ready to live more independently and a voluntary sector care provider is supporting her to move nearer her family on the south coast. However, her plans are in limbo because of disputes about funding her care package.

The Voluntary Organisations Disability Group—an umbrella body of more than 70 voluntary sector providers—estimates that 500 people, such as Lucy and Peter, are affected by ordinary residence disputes at any one time. A small number of disputes are referred to the Secretary of State for determination—64 in the past three years, of which 40 were dealt with. But these are just the tip of the iceberg. Not only disabled people are affected: providers too are caught up in these disputes. The Voluntary Organisations Disability Group estimates that in the past three years, voluntary organisations had to cover a gap in fees of more than £1.5 million while disputes have been resolved. That is not counting the amount of staff time involved.

5.30 pm

To their credit, the Government have recognised the problems surrounding ordinary residence disputes and are making some welcome changes through Clause 38. Clause 38 provides that when an adult requiring a particular type of accommodation to meet their care and support needs moves into a different care setting, responsibility remains with their original or first authority. Regulations will describe different care settings by defining what constitutes accommodation of a particular type. These improvements will help to address some of the problems, but I fear not all. Unless the regulations are clear and comprehensive in terms of what types of accommodation are included, ordinary residence disputes and the uncertainty associated with them will continue.

As the Government's current guidance on ordinary residence makes clear:

“The well being of people is paramount in all cases of dispute”.

Since this guidance was published, the meaning of well-being has been helpfully clarified in Clause 1 of the Bill. Clause 1(2(c) refers to,

“control by the individual over day-to-day life (including over care and support, or support, provided to the individual and the way in which it is provided)”.

Clause 1(2)(g) refers to the “suitability of living accommodation”, and Clause 1(3)(a) to,

“the importance of beginning with the assumption that the individual is best-placed to judge the individual’s well-being”.

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However, with ordinary residence disputes, the individual themselves becomes invisible in the midst of financial wrangling between authorities. If an individual is prevented or delayed from moving because of a dispute between local authorities over who pays, they have been denied the choice and control that are said to lie at the heart of this legislation. Funding rather than individual well-being has become the prime consideration.

Regulations must capture the full range of relevant accommodation options and be drafted in such a way as to anticipate future models of care. The Government have said that their intention is for regulations to include any type of accommodation where accommodation is required as part of meeting care and support needs. Specifically, I understand that regulations will include extra-care housing, supported living, and shared lives schemes, but the starting point should be the need for care rather than the specific type of accommodation. The type of care and the range of settings in which it is provided are developing quite rapidly. It would therefore be more appropriate for regulations concerning people placed out of area to be framed more generally in terms of the care that people need provided that they are eligible rather than a list of accommodation types which may soon become out of date.

I would welcome clarification from the Minister about the Government's intentions and that not only settings regulated by the CQC will be included. The regulations need to be clear. It is essential that councils are left in no doubt about which types of accommodation have a care element and which do not, otherwise this will become a new area for dispute. Some types of accommodation, such as a residential home, clearly have a care element but with others the picture is far less clear. For example, there is considerable diversity of definition about what constitutes domiciliary care as compared with supported living and what the differences are. This just indicates the sort of issues that need to be addressed if continuing disputes are to be avoided. These regulations provide an opportunity to end the needless consignment of vulnerable people and their families to limbo, avoiding the waste of time and resources caused by disputes and thereby give those who rely on social care and support more choice, control and independence in their lives.

Lord Wigley: I would like to put on record my support for the points made by the noble Baroness, Lady Campbell, and those just made by the noble Lord, Lord Low. I wish to speak to the two amendments in my name in this group; Amendments 92ZZAG and 107. These are probing amendments to try to get something on the record with regard to the way in which care issues covered by the Bill and which have cross-border implications between Wales and England will be handled in the future.

Although Clause 112 says that the Bill extends to England and Wales, the Bill is ostensibly to do with care provision in England only, which is why I have exercised a self-denying ordinance and not imposed my opinions on the House or the Committee in recent weeks—other than at Second Reading when I flagged up these matters, which I wish to pursue today.

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There are two distinct issues although they can in some circumstances be linked. The first relates to the people who move between Wales and England and England and Wales and how differing care regimes in the respective countries will affect their entitlements. I am talking about people who move voluntarily and not those who may be placed by local authorities or a health authority. The second relates to the funds associated with this Bill and how they impact on the two respective countries, and to that extent the Bill certainly has implications for Wales, Scotland and Northern Ireland.

I first remind the Committee that the social care dimension is a wholly devolved subject, and the policy in Wales may be totally different from that in England. The National Assembly is now considering draft legislation which no doubt will lead in coming months to the evolution of a new statute in Wales. The Welsh Government have a commitment to a new system that is fair, affordable and sustainable within a Welsh context. The legislation being considered in Wales is likely to increase the number of services where people can claim a direct payment from local councils; introduce national eligibility criteria that may be different from those in England; create portable assessments within Wales that do not extend to England as I understand it, and establish a national adoption service and allow council officers greater powers in helping those suspected of being at risk.

In Wales there is a substantially greater proportion of older people—greater than any other country or region in the UK. I also maintain in that context that the GVA levels in Wales are in some areas 40% below the average levels of the UK. The financial profile against which any new policy is set will inevitably be different between Wales and England. They will also have to allow for the fact that disability levels are significantly higher in Wales. Wales has already set a cap of £50 a week on charges for home care. The Welsh Government have, wisely to my mind, waited to see the sums involved in England before deciding on the best policy for paying for care in Wales.

There has been pressure on the Welsh Government from Age Cymru and others pressing for a lower cap in Wales than in England and there has been talk of caps of £23,000 and £35,000, which is the figure recommended by Dilnot. There are serious questions about how the Care Bill in England may affect Wales and vice versa, both in terms of whether there is any full Barnett consequential accruing to Wales from the £1 billion cost of the package in England, and with regard to the entitlement of people who have moved informally—not by placement but informally—between the two countries. For example, what is the portability of assessments of need made in Wales for people who move to England and vice versa—not cross-border placements but those who move voluntarily?