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Grand Committee

Thursday, 16 January 2014.

City of Bradford Metropolitan District

Question for Short Debate

1 pm

Asked by Baroness Eaton

To ask Her Majesty’s Government what assessment they have made of the opportunities and constraints for the wellbeing of the City of Bradford Metropolitan District.

Baroness Eaton (Con): My Lords, Bradford is a unique and fascinating place, and the fact that so many of your Lordships have chosen to speak today is an indication that I am not the only Member of this House with a passionate interest in this metropolitan district. I thank all noble Lords for their support in speaking today.

The view of Bradford from those who do not know it first hand is coloured by a range of clichés and negative media stereotypes, many of which are anachronistic and often caricatured. However, of course the true picture of Bradford is more complex, more nuanced and certainly more positive than these stereotypes would have you believe.

The district is the fourth largest metropolitan district in England after Birmingham, Leeds and Sheffield. It is home to half a million people, a place characterised by diversity, huge contrasts in geography, wealth and built environment, communities of many cultures and ethnicities, and a place which typifies the complex range of socioeconomic, environmental and political problems and opportunities, which is the stuff of contemporary public policy.

What surprises many visitors and is perhaps unique among metropolitan districts is that two-thirds of the district is rural. The city of Bradford’s urban and cosmopolitan qualities contrast with, and complement those of, a number of vibrant towns and a host of Pennine villages. Furthermore, this diverse human settlement is set within a spectacular Yorkshire landscape of upland moors, wooded valleys and productive farmland. This multifaceted environment provides the public bodies within the district with distinct and complex planning and delivery challenges when attempting to balance the conflicting needs and interests of the economy, the environment and communities.

It is 12 years since the inner-city riots with which we are often still associated. In that time, our local economy has waxed and waned in line with national economic cycles, although underlying and positive structural changes have begun to take root. It is also noteworthy that during this period community relations have been mostly good and have improved, despite a dynamic picture of inward migration. The presence of many other, smaller communities and the growth of mixed ethnicity is resulting in one of the most diverse and cosmopolitan communities outside London.

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Bradford is probably one of the few places where relations between different faith communities are such that the Council of Mosques has provided financial support to the Jewish community to enable it to complete major repairs to the synagogue. The development of good community relations is supported and enhanced by groups such as the charity Near Neighbours—I declare my interest as chairman—which works at grass-roots level, encouraging people from different ethnic groups to share in community activity.

Bradford’s population is now 524,600, and its growth is forecast to continue, reaching 640,000 by 2033. However, along with this dynamic population change, the district has significant economic inequalities. Eleven per cent of the population is in the most affluent decile and 40% is in the least affluent decile of the United Kingdom.

Bradford is a big economy, creating £8.3 billion of added value to the UK, forming the eighth largest economy in England and amounting to a fifth of West Yorkshire’s businesses and output. It has strengths across a range of sectors. The council and its business partners have agreed to promote it as “The Producer City”, providing a distinctive economic identity for Bradford based on real strengths in key industries and businesses across the district’s economy.

Bradford has a low-wage, low-skills economy, and over the next 10 years the working-age population of the district is projected to rise by 2,000 people per year. This population growth is driving a real need for jobs growth. To maintain current employment rates of 64.9%, an additional 10,000 people will have to find employment by 2021. Improving education and skills levels is essential to future prosperity.

The council is working with a range of business partners on the Get Bradford Working programme, investing in apprenticeships, skills development and the creation of industrial centres of excellence, all of which are paying dividends. We are seeing major companies now repaying this growing confidence by investing in major developments.

The Government are currently consulting on a West Yorkshire combined authority, which Bradford wishes to see progress. Work has now begun on the long-awaited £260 million Westfield shopping centre, and with the formation of the new private sector-led Producer City board there is increasing momentum for a significant upturn in the economy. Government support for Bradford’s economic ambition, and the work of the new Producer City board with the Leeds city region LEP, will be crucial. I therefore urge the Minister to extend Bradford’s city centre growth zone from December 2014 to March 2017. I also urge her to commit to a meeting with the Producer City board this year to explore what further support the Government might be able to offer Bradford’s economy, in particular the development of its engineering capacity.

Given the significant population growth in the Bradford district and the clear potential for significant economic growth, it is both surprising and disappointing that the key rail route through Bradford has not been included in the Government’s provisional plans for electrification between 2014 and 2019. Electrifying this route, which links Bradford with Leeds and

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Manchester and also provides a major commuter link with the towns along the Calder valley, would have a range of benefits for the wider region as well as for Bradford. These would include unlocking economic potential, reducing congestion on the M62 motorway and decongesting other major routes, and would also make a major contribution to carbon reduction. This line connects 2.5 million residents to Leeds, Bradford and Manchester, three of the UK’s largest cities.

Education standards in Bradford have historically been low, and this has held the district back economically. However, over the past decade and recently in particular, improvements in attainment have accelerated. The excellent partnership approach which includes community and faith schools, academies and free schools working together and challenging each other, has been praised and recognised by Sir Michael Wilshaw, head of Ofsted.

A considerable number of Roma families move to and settle in the Bradford district. Over 6,800 Slovakians and Czech Roma have established themselves in the district since 2000. Many of the migrants come to the district with low levels of educational attainment and little experience in the formal employment sector, along with huge health issues and large families. They therefore require extensive support to integrate. Levels of turbulence in these communities, due to instability of employment, have an impact on schools and other services. A national Roma integration strategy would enable the Government to influence the policy towards Roma in their countries of origin, as well as their integration in places such as Bradford. I urge the Minister to consider working with Bradford to develop an effective Roma integration strategy.

I hope the Minister will appreciate from the contributions she will hear today that there is a commitment from people and organisations in Bradford to use every opportunity to address the challenges facing them in a positive way. The requests I have made of Her Majesty’s Government would provide a very welcome helping hand.

1.10 pm

Lord Patel of Bradford (Lab): My Lords, I begin by congratulating the noble Baroness, Lady Eaton, on providing the opportunity for us to focus our attention on the city of Bradford. It is very fitting that she has tabled this debate given her tireless years of service to Bradford, as a local councillor and then as leader of that council for a number of years. I also look forward to the maiden speech of the noble Baroness, Lady Williams of Trafford.

Bradford is a great place. I came to live in the city at the age of one when my parents migrated to the UK from east Africa, so I have grown up in Bradford, I went to school there, and I have worked for most of my professional life there. Most importantly, I have life-long friends in Bradford and am proud to call it home. The city has had its ups and downs. To be brutally honest, the past few decades have not been kind to this once hugely prosperous city. It should be remembered that we were once the wool capital of the world: no more. The decline in that industry, however, is only part of the story.

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As the noble Baroness, Lady Eaton, said, we have also suffered from negative media stereotypes. The burning of Salman Rushdie’s book in the late 1980s still haunts us. Racial tensions, which resulted in two major disturbances, led Bradford to being described as a city of segregated ethnic communities living “parallel lives”. No, these and other such stories have not helped us. However, we have worked hard to rise above this negativity, not only as a major and growing centre for manufacturing, with over 25,000 employees in that sector, but as a tourist destination. Besides the fact that we are blessed with beautiful and rugged rural areas, we became the first UNESCO City of Film with attractions such as the National Media Museum, Bradford City Park, the Alhambra Theatre and Cartwright Hall. Without doubt, Bradford also deserves the title of curry capital of the UK. Most recently, all our diverse communities came together, in a show of solidarity and cohesion, to give the English Defence League its marching orders when it had planned another of its disruptive marches in our city. That shows how far we have come.

However, we can only do so much. The economic climate over the past few decades has hit us hard, especially these past three or four years, by bringing us some of the most severe cuts to local authority spending and severely impacting our growth and redevelopment. High unemployment continues to be a persistent issue, especially for the growing population of young people who have also suffered from what were low, but are now thankfully improving, levels of educational attainment. We continue to have some of the most deprived areas in the country, with high rates of child poverty and infant mortality, and not surprisingly the gap between rich and poor is even greater. All these issues, coupled with the rise in fuel poverty and the number of food banks and stubbornly high levels of poor physical and mental health, pose many challenges for the city’s already stretched public services.

This is where the social capital of local people has been, and continues to be, key in tackling many of these issues. Many local people are already active in addressing these challenges. In fact, more than 20% of Bradford’s residents are engaged in volunteering, community groups or civic roles. Much of this crucial work is channelled through committed and hard-working voluntary sector services. I am proud to be patron of a number of these: for example, the Bradford Court Chaplaincy Service, the first multi-faith volunteer court service in the country; the Bridge project, which works with those misusing substances; Sharing Voices, a multi-ethnic mental health and well-being service; the Equity Partnership, which works with LGBT communities across the Yorkshire region; and Bradford Cyrenians, which for 40 years has been delivering services to homeless people. But they and others like them are struggling to keep delivering these invaluable services.

We all know that it is the small local agency, often supported by volunteers, which gives back to the local economy by creating jobs and providing local solutions to help those who are the most vulnerable find support while maintaining their independence. The local authority in Bradford has, to its credit, been innovative and creative with its support for these independent sector providers, but innovation and creativity can only go so

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far when you have had your budget cut ruthlessly and disproportionately. In view of the Government’s desire to promote localism and the concept of the big society, what further support are the Minister and the Government able to give to the city of Bradford to keep our crucial voluntary sector services delivering, developing and going?

1.14 pm

Lord Shutt of Greetland (LD): My Lords, I, too, thank the noble Baroness, Lady Eaton, for her passion and her balanced contribution in initiating this debate on Bradford. I, too, welcome the noble Baroness, Lady Williams, and look forward to her first contribution in this House.

I was brought up in a place called Farsley in the borough of Pudsey, three miles from Bradford and five from Leeds. I have kept my eye on Leeds and Bradford over the years, even though I now live half way between Halifax and Huddersfield. I have watched the exit door of Bradford, and I give three examples.

There have been firms of solicitors in Bradford—of national repute—which have said “Oh, we are going to open up in Leeds”—not open a branch in Leeds but shut the door in Bradford and take the whole place to Leeds. That has not been helpful to Bradford. When I was a lad there were five building societies based in what is now the Metropolitan Borough of Bradford. One remained, the Bradford Permanent, which merged with the Huddersfield and is now called the Yorkshire Building Society, the second largest in Britain. It put up a new headquarters a couple of miles the Huddersfield side of Bradford. Only last year, it announced expansion plans which involved putting 800 people in the city of Leeds. Is this the first move out? It is not good for Bradford. My third point concerns the threat of the National Media Museum leaving Bradford; many noble Lords may recall a short debate about that in this place. I have highlighted three developments that have not been good for Bradford, and that is in addition to the issue of manufacturing, which others are going to speak about.

This debate is about opportunities and constraints. One opportunity which is coming is HS2. Would you believe that it terminates in Leeds? One leg goes to Manchester and the north-west, one leg to Leeds. Compare and contrast: the Manchester terminus is to be parallel to Manchester Piccadilly station, and there is a spur which will enable trains to get to Manchester Airport, Liverpool, Runcorn, Warrington, Preston, et cetera. On the Yorkshire side we are to have a hammerhead terminal in Leeds that will not connect with Leeds City station. It will mean legging it somewhere between a quarter-mile and a half-mile from the London train. I do not believe that this is good for Bradford, and neither is it good for the rest of West Yorkshire, whether it is Halifax, Huddersfield, Keighley, Skipton, Harrogate or Wakefield. There is a danger, if it goes ahead, that the railway system will be ossified, so that there can never be through routes. This is important: it would mean an incredible constraint on connectivity in West Yorkshire, and it is something that government can do something about.

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1.17 pm

The Archbishop of York (Non-Afl): My Lords, I, too, give thanks for the speech given by the noble Baroness, Lady Eaton.

At the last census, 84% of people in Bradford considered their level of well-being to be good or very good. That is 3% ahead of the national average, which is not surprising—Bradford is in “God’s own county” of Yorkshire. The statistics show the resilience of the people of Bradford. Bradford does not need pity, it needs positive commitment. Bradford is often spoken about from a distance, or as an illustration of certain national problems. The church, however, has a different perspective, an insider perspective. In 2005 the churches in Bradford set up an organisation called Bradford Churches for Dialogue and Diversity, to help bring together the different communities to learn from and share with each other. The government-funded Near Neighbours programme has provided small grants to many local projects. One of these brought together Muslims, Christians and Jews in a Muslim majority neighbourhood to share meals. This led to the Muslim community helping a local synagogue raise funds to repair a leaking roof. This is about restoring not just the fabric of a building but the fabric of a neighbourhood, of civil society.

Bradford is the most youthful city in the country: 37.4% are under 25, compared with a national average of 32.1%. But what are the prospects for these young people? At Bradford Church of England Academy, where I was a month ago, young people are doing my Young Leaders programme, unlocking their potential within their local communities. It is fantastic to see the energy going into a church club for older people. All kinds of projects are being done by young people. A lunch club has been created.

These young people have so much to offer, but in parts of the city, Church Urban Fund research indicates that child poverty rates are as high as 42%. What will happen to those children, for example, if the Government abolish, as they plan to do, the ring-fenced funding given to local councils for crisis payments and community care grants? The link between poor health, poor housing and poverty is of particular concern, with just over a quarter of the district’s children classed as living in poverty. There are 287 families across the district currently affected by the housing benefit cap. The average reduction to housing benefit for those families is £49.29, and needs to be made up from other benefits to avoid rent arrears. What sense does that make?

On the matter of benefits, why is it that in Bradford, 1,130 local disabled people have fallen foul of jobcentre sanctions and left without any income for periods of between four and 13 weeks. That is astonishing to me.

Bradford’s population is forecast to grow at 8.5% over the next 10 years, and around 2,200 additional new homes will need to be built each year to meet the projected growth in households—a major challenge. It is estimated that up to 25% of all new homes will need to be affordable homes. With the right investment, this will mean much-needed new jobs.

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Bradford is proudly resistant to those who would seek to sow community discord, but high levels of unemployment are clearly a danger. Long-term projections indicate the importance of immediate action and investment. Just to maintain Bradford’s current employment rate of 65.6%, an additional 10,000 people will need to find employment by 2021. This is possible—with work on the Westfield centre beginning, there are new opportunities—but the city will still need 31,000 new jobs to bring it up to the national average. Jobs in Bradford tend to be low paid. It will be important for those in work to be paid a living wage.

I am very much looking forward to hearing the noble Baroness, Lady Williams of Trafford, give her maiden speech. Her experience as director of the north-west rail development company qualifies her well to encourage investment in a northern city. We in the Church of England are creating a new Diocese of West Yorkshire and the Dales. This will create neighbourhoods that are wonderful.

Noble Lords, Government, business, civil society, churches and all religious communities: I put it to you that this is a key moment for Bradford. I hope that today’s debate will lead to more understanding and more investment in this vibrant city. Long live Bradford!

1.22 pm

Baroness Williams of Trafford (Con): My Lords, it is a pleasure to follow the noble Lords, Lord Patel and Lord Shutt, and the most reverend Primate the Archbishop of York in contributing to this debate initiated by my noble friend Lady Eaton. She and I were leaders of metropolitan authorities—as some have mentioned, I was the leader in Trafford, in Greater Manchester, for many years. I never thought for a moment that I would be following my noble friend into your Lordships’ House, but it is a pleasure to do so. I also mention in their absence my sponsors, my noble friends Lord Howard of Lympne and Lady Morris of Bolton, whose support and assistance over the years have been so much appreciated. I was so pleased that they agreed to be my sponsors when I was introduced to your Lordships’ House.

My journey has taken me, as an Irish immigrant, first to the north-east of England and then to the north-west, where I have lived my whole life—apart from a short diversion to Huddersfield, which, given that we are discussing Bradford, is not too far away. The north-west is the second largest economy outside the south-east, but in productivity terms it lags behind by some £30 billion. My point today is not to decry the success of London and the south-east, but to explore how northern metropolitan authorities and areas can contribute to the prosperity of this country now that economic growth is well under way.

We have led the way in the north-west in innovation, enterprise and industry. I mention at this point the great Alan Turing, whom we must thank, first for our freedom, through the work that he did with the German-encrypted Enigma machine, which helped to give us our successes in the Second World War; and secondly, for developing the Manchester Mark 1 computer, which of course has led the way in the advances in

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technology that we enjoy today. I would also like to mention graphene, which is a recent discovery by two Nobel Prize-winning scientists in Manchester. It was very pleasing that the Chancellor saw fit to fund, in part, the National Graphene Institute in Manchester. Given the noble Lord who is following me, I might also add our achievements in sport. We believe very strongly that the success of the Commonwealth Games in Manchester in 2001 in no small part paved the way for our successes in our bid to host the Olympic Games here in London.

Historically, we have a vibrant manufacturing sector. If any of your Lordships are partial to the humble baked bean, they will have been canned in Wigan—the beans rather than your Lordships. If any of your Lordships are partial to Guinness, it will have been canned in Runcorn. If any of your Lordships ever travel on the London Underground, the escalator chains will have been manufactured in Wythenshawe and the drive shafts in Rochdale. There is a great deal of industry and manufacturing coming out of the north-west.

The Government have addressed some of the structural issues already mentioned, in terms of people accessing jobs and growth, and particularly in terms of connectivity and infrastructure. We have also seen the start of some great supply-side reforms—the reductions in corporation tax, the lending for business, the reductions in fuel duty and also taking a number of people out of income tax altogether—I think a quarter of a million in the north-west. These have greatly helped in starting that journey back to growth. There are also challenges. My noble friend Lord Freud mentioned yesterday that the north is actually outpacing other areas in terms of employment growth, but we are still very reliant on the public sector in the north-west and in other parts of northern metropolitan areas for economic growth.

I notice that my time has already run out. It just remains for me to say that the north-west is a very competitive area in which to locate business, and it is a great place to live. Finally, I thank Members from all sides of your Lordships’ House who have been so friendly and welcoming to me, and of course all the staff who have been very patient with me, as I frequently get lost in your Lordships’ House. Thank you.

1.28 pm

Lord Faulkner of Worcester (Lab): My Lords, it is always a privilege and a pleasure to follow a maiden speech, particularly one of such quality and eloquence as that which we have just heard from the noble Baroness, Lady Williams of Trafford. She comes to the House with a distinguished record in local government as a former leader of Trafford Council, having represented Altrincham on that authority from 2002 to 2011.

The noble Baroness is, as we have just heard, a powerful advocate for the north-west, and supports major infrastructure projects in the region, including the Atlantic Gateway—a long-term plan for development between Manchester and Liverpool along the Manchester ship canal—the north-west rail hub and, I am delighted to say, High Speed 2. Her previous career includes two years as vice-chairman of the Association of Greater

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Manchester Authorities, membership of the Greater Manchester Police Authority, and chair of the Heritage Lottery Fund in the north-west.

Before getting involved in local government, the noble Baroness worked as a nutritionist for a charity that provided specialist support and therapy to sufferers of multiple sclerosis. In the 2010 election, Susan Williams came within just 92 votes of winning the Bolton West parliamentary constituency. I am sure that I speak for all your Lordships when I say that the House of Commons’ loss was undoubtedly our gain, and we look forward to many more speeches from her in future.

Crossing the Pennines, I warmly congratulate the noble Baroness, Lady Eaton, on securing this debate on Bradford and for attracting such an impressive array of speakers. Few of us will be able to do justice to this great city in four minutes. Had I more time, I too would have spoken about the need for trans-Pennine railway electrification, and I probably would have said a word about the splendid Keighley & Worth Valley Railway, the original home in “The Railway Children”.

My contribution today is as a trustee of the Science Museum, which is the parent of Bradford’s National Media Museum, as mentioned by the noble Lord, Lord Shutt. The museum attracts almost 500,000 visitors a year and is the second most-visited attraction in Yorkshire. It contains some of the finest and most compelling visual material to be found anywhere in the world, such as the oldest known surviving negative, John Logie Baird’s original television apparatus and the camera that made the earliest moving pictures in Britain. The museum is the reason why Bradford received City of Film status from UNESCO. According to Bradford Council, it has an economic impact of £24 million a year, and it does particularly well in attracting 42,000 visits in education groups, including 20% from black and minority ethnic backgrounds and 44% from the lower socioeconomic groups.

Despite all this, in the summer of 2013 there was real doubt about the future of the museum. This started in April when, following cuts in grant in aid to all the national museums, the Science Museum Group was asked by the DCMS to model further cuts of 5%, 10% and 15% for the 2015-16 spending review. The director of the Science Museum made it clear that if the cuts were at either of the two higher levels, one of the museums in the north of England—Bradford, the National Railway Museum in York or the Manchester Museum of Science and Industry—would have to close. Most media comment centred on Bradford as the most likely candidate.

The reaction was immense. There was a public rally at the museum on 8 June and a public meeting at Bradford’s city hall on 11 June, chaired by the leader of the council. At the media museum’s 30th birthday celebrations over the following weekend, 1,000 visitors expressed their support, many with birthday cards. There was an Adjournment debate in the Commons and a Select Committee inquiry. On 26 June came the welcome news that the cut would not be 10% or 15% but 5%. It was therefore possible for the director to say that the museum would stay open.

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While it is still going to be very tough, the Science Museum Group has renewed its commitment to Bradford. Provided that more support is forthcoming from bodies such as the city council, the University of Bradford, Bradford College, local schools and the BBC, whose historic collection was gifted to the museum in 2013, the museum should have a brighter future. It is also looking for a commercial film operator to help sustain the cultural programme, such as film festivals.

There is no doubt that the threat of closure was a real wake-up call, not just for the Government, who realised—perhaps a bit late in the day—how vital our national museums are to the life and well-being of the nation, but also to all the local interests in and around Bradford. I hope that they now realise that the future of the National Media Museum depends to a very considerable extent on them and on what they can do to support it.

1.35 pm

Baroness Scott of Needham Market (LD): My Lords, the Committee may be wondering why a woman from deepest Suffolk is speaking in a debate on Bradford. The answer lies in the genes: my father was a Bradford man and, thanks to the wonderful work of the West Yorkshire Archive Service, I know that generations of my ancestors, going back over 300 years, came from the area around Bradford, Leeds, Halifax and Huddersfield. These towns were part of the backbone of the industrial revolution, and in the case of my ancestors it was the textile industry that occupied them. In my ancestry are wool combers, sorters, cloth dressers, weavers, dyers, spinners, carders, warp dressers and weft men, and this continued right up to the death of my uncle in the early 1970s. During the 1940s and 1950s, these jobs were done increasingly by immigrants from the Indian subcontinent who were prepared to tolerate the low wages and poor conditions in the industry. By the 1970s and 1980, instead of the people coming to the jobs, the jobs went to the people—most of the textile and garment industry moved to the Far East, where labour was cheap.

I mention that because there is growing evidence that we should be rethinking all this. The textile industry can now be almost totally automated; fewer people are required, and those who are required are highly skilled. Every process, from design to manufacture and packaging, can be computerised and automated. Digital connections mean that small start-up businesses can almost instantly be connected to markets, research and suppliers from right across the globe.

The competitive advantage of cheap labour does not necessarily exist anymore. If noble Lords are not convinced, I can point to Apple and General Electric, both of which are bringing their manufacturing capability back to the United States. Reshoring, the opposite of offshoring, is a growing reality, and I can point noble Lords to the recent work by our colleague, the noble Lord, Lord Giddens. In the textile industry, Jaeger has restarted UK production, having ceased in 2000. The fact is that wages in Asia have risen while they have stagnated in Europe and the US. The head of a company manufacturing household textiles in both

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the UK and China recently commented that it is his UK plant that is more productive, due to the highly skilled workforce and the fluctuations in currencies.

Transport costs are going up all the time, which makes reshoring increasingly viable. Producing closer to the markets also has the advantage of shortening order times, giving a flexibility that many big retailers particularly welcome. Customers and businesses are becoming more aware of sustainability arguments and the ethical considerations, which were so graphically highlighted by the terrible loss of life in the garment factory in Bangladesh. The UK is currently still uncompetitive in cheap mass-produced markets but has a big advantage in quality.

In Seoul, John Lewis is now one of the most popular stores in the city. Its quilts and bedding are being made in Lancashire, and the managing director points to the design, quality and overall value that are leading to their success. The “Made in Britain” label is definitely seen as a plus, and retailers such as Marks & Spencer are committed to promoting it. The textile trade body is promoting UK manufacture under its Let’s Make it Here initiative, which links companies at all stages of the supply chain.

Vince Cable has talked about the growth of reshoring. The textile industry is ripe for this, and I would appreciate assurances from the Minister that its importance is being taken seriously. The Government have a role in promotional activities, helping start-ups and ensuring that capital, and the right skills, are available. Bradford still has a small but thriving textile sector, but it could do so much more. How magnificent it would be if Bradford, with all its industrial heritage, could once again become a thriving centre for textile manufacturing.

1.38 pm

Baroness Warwick of Undercliffe (Lab): My Lords, I am delighted to be able to contribute to this afternoon’s debate. I share with the noble Baroness, Lady Eaton, a Bradford upbringing, and I am grateful for her informative and balanced outline of the challenges facing the district today. I congratulate the noble Baroness, Lady Williams of Trafford, on a fascinating and uplifting maiden speech.

As others have said, in recent decades Bradford has been badly hit by economic deprivation and social unrest. However, I feel strongly that there is cause for optimism today when we talk about Bradford. That optimism is there when I talk to people in the town and, perhaps surprisingly, it is often there in the local press. Among the car crashes and court cases covered by the Bradford Telegraph & Argus, space is also given to regeneration and community projects, to construction starting this month on the long-delayed Westfield shopping centre and to the encouraging early outcomes from the Get Bradford Working initiative. Even the national media sometimes take note. I was struck by a story that I read before Christmas, which has also been mentioned by the noble Baroness and the most reverend Primate the Archbishop of York, about the town’s last remaining synagogue, a grade II listed

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building that a year ago was leaking badly and in danger of being sold off, which would have forced the small congregation to travel the 10 miles to Leeds to worship. Yet, one year on, the Bradford reform synagogue’s future is looking more secure because of the intervention of Bradford’s Muslim community. Some of its most influential members helped the synagogue’s chairman to mount a successful lottery bid, and that money will now help renovate the building. Thanks to the relationships formed through their fundraising effort, the communities now do other things together. Once renovated, the synagogue plans to open for school visits throughout the week.

I, too, believe passionately that education has a key role to play in helping to address the challenges of integration faced by the district’s different communities. I want to focus my remaining time on the tremendous educational opportunities in Bradford, not least the role the university is playing in raising aspirations locally. The university’s three-year partnership with University Academy Keighley has seen a significant increase in the percentage of students gaining five A* to C grade qualifications, including in English and maths.

Last year, Bradford University opened a £1.6 million centre to raise attainment in the key science, technology, engineering and maths subjects for schoolchildren, not only in the district but beyond—one of the few STEM-specific facilities in the country. In December it launched a Centre of Excellence for Environmental Technologies in collaboration with Bradford Council and Buttershaw Business & Enterprise College, as part of the Get Bradford Working programme. It is supported by many local businesses, including Yorkshire Water. They all want to build a highly skilled young workforce which will attract more companies and investment into the area.

The university is one of the largest employers in the area. It plays a lead role in the Yorkshire Innovation Fund, in which local universities help small to medium-sized enterprises to develop new and improved products and services through R&D and innovation. One example is the university’s groundbreaking Centre for Pharmaceutical Engineering Science, which is helping to improve the competitiveness of South Yorkshire SMEs through the use of green processing technologies.

I also want to mention Bradford College, the fourth-largest college in the country and the largest provider of HE outside the university sector in England, which plays its part in transforming lives, communities and the economy. The college’s new multimillion pound campus, being built in the heart of Bradford, is due to be completed this autumn and will add to the regeneration of the city.

I take heart from the assiduous work of the university in raising aspirations and attainment and aiding the prosperity of Bradford, and from the story of the synagogue and the mosque communities supporting each other. In 2014, Bradford is showing that it is a place where people of different faiths and backgrounds can come together, to learn, to work and to do business, for the benefit of all the people of the district.

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1.42 pm

Lord McKenzie of Luton (Lab): My Lords, I congratulate the noble Baroness, Lady Eaton, on securing this rather novel debate about the well-being of the City of Bradford Metropolitan District. We also congratulate the noble Baroness, Lady Williams, on a fine maiden speech.

From the briefings we have received and the contributions made today, we can be optimistic about the city’s well-being in the future. Under the strong leadership of Labour’s Councillor David Green, Bradford has a council that is working towards the vision of a place that is prosperous, creative, diverse and inclusive, and it is delivering this by working with partners and citizens. As we have heard today, there have been and remain major challenges to the city. The challenges are made more difficult by the draconian and disproportionate cut in funding it has endured.

Surely one of the tasks of government, whatever the overall level of the local government finance settlement, is that its distribution should be fair. Why, in the two years ending in March 2013, should funding have fallen by over twice as much in Bradford as the average fall for the 10 least-deprived authorities? The council has responded to this by operating in new ways, commissioning services locally from a range of providers, including local businesses and community and voluntary organisations. The Joseph Rowntree Foundation report on the Bradford Social Future Awards scheme is a helpful reminder that relatively small amounts of funding can make a real difference to engaging local people with entrepreneurial solutions to local social problems.

This debate highlights Bradford’s ambition for regeneration and the new Producer City strategy, building on its manufacturing strength. But the facts—Bradford having the fifth-highest concentration of manufacturing employment in the UK; its emphasis on advanced engineering and manufacturing; it being the location of major global companies—amply justify the noble Baroness, Lady Eaton, seeking exploration with the Government of how this capacity might be enhanced. She also made the case for the city centre growth zone to be extended.

We have heard that economic growth would be improved, congestion reduced and carbon reduction facilitated if the Calder valley line were to be included in the provisional electrification plans being considered for the period 2019-24. It is asserted that the line currently connects 2.5 million residents, 75,000 businesses, 120 multinationals and three of the largest cities in the UK—Leeds, Manchester and Bradford. Given the age of some of the rolling stock on this line and the scale of the catchment area, why is it not being considered for electrification as part of this programme?

We know that the council and the community have had to face difficult issues, especially around safeguarding children, but it seems to be doing this by confronting the problems and seeking to learn from past failures. Transforming educational outcomes is a key imperative for the council to support the local economy and to ensure a future for the young population of the city. We have heard that not all engage with the educational

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opportunities available and the particular problems arising from the growing Slovakian Roma community to which the noble Baroness referred.

We should be proud as a country to be a safe haven for those who suffer persecution in their homeland. Living in Luton, I know the joys of diversity and the challenges of integration which it can bring: challenges for local services, school places and housing; challenges of poverty; and exploitation in employment. The call for help from government to work with Bradford to develop an integrated strategy deserves a positive response. We should also acknowledge the role of interfaith work in helping to tackle such challenges.

We should wish Bradford well and all those engaged in seeking to improve the well-being of its communities.

1.47 pm

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con): My Lords, I should declare from the start that I am from Beeston, Notts, and not from Beeston just outside Leeds, just in case anybody is listening to me and wondering why I do not know more about what is clearly a fantastic part of our country.

I join others in congratulating my noble friend Lady Eaton on securing this debate and on the clear and eloquent way in which she introduced it. She gave us a very full picture of Bradford. I was talking to somebody the other day about Bradford and asked them how they would describe it to me. They said that it was a beautiful place with beautiful people. I think that that came through from what my noble friend said, as did her pride in the city.

I welcome my noble friend Lady Williams of Trafford and congratulate her on her excellent maiden speech. I look forward to hearing more from her—very soon, I hope—in the main Chamber, where more noble Lords will receive the benefit of her wide knowledge and great expertise on a range of matters.

We have heard today from several noble Lords who have expert views on the opportunities and challenges in Bradford, expert views grounded in their local knowledge and experience. For me, this exemplifies an important principle of this Government’s policy, which is that local areas should be able to decide for themselves what goes on in their communities and how they want their area to grow and develop. That is a far more effective way to help local areas thrive than for central government to dictate how they should go about things. We have given local areas the powers and the freedoms to take control of their future, from having greater control over planning decisions to retaining some business rates.

We in central government must create the right economic conditions for places to thrive. While we still have a way to go, we are on the right track, as the recent growth forecasts and this week’s inflation figures show. Beyond the national economy, we must also provide a range of opportunities that will work for different parts of the UK to address their specific needs and help them realise their full potential; for example, by rebalancing the economy away from

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dependence on the public sector and instead attracting private sector investment to start up businesses and create jobs. That is particularly important in the north, and it is relevant to today’s debate about Bradford.

I was pleased to hear my noble friend Lady Eaton talk about the strong signs of growth in Bradford. It is worth noting that growth in Bradford has outstripped regional and national averages since 2008. As has already been acknowledged, the first way in which we are helping in this area is through the regional growth fund. Projects in Bradford have secured almost £22 million, including about £17 million for the council-led city centre growth initiative.

The noble Baroness, Lady Warwick of Undercliffe, referred to the Westfield shopping centre. I know that it has been delayed and this has led to much frustration being felt in the city until now, but once it is off the ground it will be a very iconic new development in Bradford. My noble friend raised some concerns about potential delays. This is a very complex project, and I understand that officials in my department are working with Bradford council to address some of the issues in order to ensure a speedy resolution.

My noble friend also asked if I would meet with the Bradford Producer City board to discuss this and other matters. I would certainly encourage the board to work closely with the lead city region LEP on their strategic economic plan, and I gather from the comments I hear from my noble friend that that is happening. I would certainly be happy to meet them in addition, and we will take that forward and make sure that it progresses.

Beyond the regional growth fund, Bradford was also one of the first places to benefit from the city deals as part of the Leeds agreement. These 10-year deals mean that areas have much greater certainty and confidence to meet the longer-term challenges they face. In this region, the city deal will tackle some of the systemic issues which have held Bradford back in the past. This again demonstrates the importance of giving local people who understand those challenges the ability to deal with them. It was the local leaders who emphasised transport and skills and education as the main priorities for investment.

My noble friend Lord Shutt raised HS2, which clearly we believe will bring tremendous opportunities to the area. It is a massive investment in transport. The new combined authority to which other noble Lords have referred will be the best way to make the most of these opportunities, ensuring that all local communities are connected to the line. He raised the specific issue of the hammerhead terminal. I will raise this on his behalf with my noble friend Lady Kramer and come back to him with a specific answer, because I am not equipped to do so today.

My noble friend Lord Shutt also raised the issue of electrification on the Calder valley line, as did other noble Lords. It is worth pointing out that this Government have done more on electrification than previous Governments. We have funded Network Rail to the tune of about £130 million to improve speed and capacity on that particular line and on the Hope valley line, and the further details of the schemes are currently being worked out. My noble friend is right that the

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Calder valley line was not named among the eight specific lines for electrification, but the task force is free to consider the case for any route in the north. More details will be announced shortly, and I urge local leaders in Bradford to ensure that they are talking to the right people at Network Rail and the Department for Transport about this.

Beyond those transport matters, the city deal provided a £1 billion fund to improve public transport, outside of heavy rail and the highways network. Beyond that there is a further £1 billion for capital funds via the local enterprise partnership and the local growth deal. All of these are to ensure that Bradford gains from the advantages of HS2, and that in that part of that country—as, indeed, in other parts—there is the connectivity which is so important for people to access work and other opportunities.

I go back to the city deal and the decisions of local leaders as to their priorities. The other area was education and skills, which are of course vital not just to give every child the best chance in life to succeed but because without a skilled and trained workforce, Bradford will lag behind other cities. My noble friend Lady Scott of Needham Market stressed that point when she talked about reshoring and the return of industry to the Bradford area, which is very welcome.

The cornerstone of the city deal is a commitment that every young person in the Leeds city region has access to a job, training, apprenticeship, volunteering or work experience. It is important for me to emphasise that in response to the comments of the most reverend Primate the Archbishop of York. The aim is to create 20,000 new opportunities, which will tackle the problem of young people not in education, employment or training. The Department for Education is also working closely with Bradford local authority, schools and the dioceses to improve school performance. There are now 25 academies open, with another nine in development, helping to drive improvement in some schools with the lowest performance. I was also pleased to hear what the noble Baroness, Lady Warwick, said, about the work happening with the University of Bradford. Much is going on in that area. We must ensure that Bradford has a highly skilled workforce and that the young people in Bradford receive the right level of education, which is so important to their future.

I also want to pay tribute to the strength of local communities in Bradford. The noble Lord, Lord Patel, among other noble Lords, spoke powerfully about that. Cities are far more than just their economies, and Bradford is not just culturally and socially rich but has a proud tradition of diverse communities working together across a range of issues. We have had some powerful examples highlighted by my noble friend Lady Eaton, the most reverend Primate and others. That is incredibly heartening.

In the context of communities, my noble friend Lady Eaton raised the issue of integration of Roma immigrants in Bradford and suggested the need for a national Roma integration strategy. The Government believe that the issue is better served through our broader strategies to promote social inclusion and improve education, but I would certainly be happy to discuss the matter further with my noble friend.

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The noble Lord, Lord McKenzie, referred to the local government finance settlement. Our approach to local government finance means change in the way that central government works with local authorities, freeing them from dependence on central grants and requiring them to meet centrally imposed targets, but of course the Government still protect those councils which are more dependent on government grant. It is worth noting that Bradford still has a spending power of £2,350 per head, which is greater than the national average, reflecting some of the greater demands on services in that area.

I pay tribute to the local authority in Bradford for the effort that it is making to improve the delivery of its services and to save money, although I certainly urge it to go further, as I do with all local authorities. I point to one specific different approach to local government financing, which I think answers one of the points made by the most reverend Primate about the desperate need of some families. That is the troubled families programme. That is one way in which we are changing the way in which we finance and approach difficult and entrenched issues, and we are making a huge amount of progress in that field.

The noble Baroness, Lady Warwick, said that there is lots to take heart from today, and I agree. There is also lots to be optimistic about. My noble friend Lady Scott of Needham Market gave us one example when she talked about reshoring. This is a city that is proud of its identity. I was really pleased to hear the noble Lord, Lord Faulkner, talk about the National Media Museum. As someone who has worked a lot in the media industry, I am ashamed to admit that I have never visited the museum, but I will, now that I know just how amazing it is. I only hope that the people who run the National Media Museum will help the people of Bradford to tell a greater and more powerful story about that wonderful city.

Animal Welfare: Methods of Slaughter

Question for Short Debate

Baroness Northover (LD): My Lords, there are many speakers in the next debate. When the clock says “2”, the speaker has had two minutes.

2.02 pm

Asked by Lord Trees

To ask Her Majesty’s Government what assessment they have made of the ethical, legal and religious factors that influence the way in which some animals are slaughtered in the United Kingdom.

Lord Trees (CB): My Lords, in my 45 years as a veterinary surgeon I have witnessed the abattoir slaughter of many animals with and without stunning, but when I first witnessed slaughter without stunning it was profoundly disturbing. The animal staggered from its killing crate, blood gushing from the neck wound, and it did not collapse into unconsciousness for some considerable time. It is that experience and others since that have caused me to bring this debate.

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It might be useful initially to cover the legal framework surrounding the slaughter of animals—and I am going to concentrate on cattle and sheep. The legal framework is straightforward. In abattoirs, the death of animals is due to exsanguination following severance of the major blood vessels in the neck. It is illegal in the UK and throughout the EU to do that without first rendering animals insensible by stunning—except that that requirement for pre-stunning is exempted for those of Muslim and Jewish faiths to produce either respectively halal meat or kosher meat by shechita. I intend to talk about stunning and non-stunning in the rest of my speech.

Noble Lords have heard my reactions. Let me quote the reactions of a female, Jewish vet, who recently sent me an e-mail. She said:

“Without a doubt, during my almost twenty years as a vet, I have never witnessed anything as horrific as Shechita slaughter. That horror lives fresh in my mind today and having been raised and now living in a Kosher home I do not and never have eaten a piece of Kosher meat since the day I witnessed this barbaric practice. Indeed I have seen much suffering and many severe injuries in the animals I have treated over the years, but nothing comes close to the unnecessary and brutal suffering that these animals experience at the very end of their lives”.

Note that that is from a qualified, official veterinary surgeon who has done a lot of meat hygiene work and has witnessed the slaughter of many animals involving both stunning and non-stunning.

Let me emphasise that I recognise that both the great faiths in question have serious concerns for animal welfare. I also make it quite clear that I defend and respect the freedom of expression of all groups, religious or non-religious, within reasonable limits acceptable to our society. Nevertheless, it is my contention that unnecessary suffering is being caused to a very substantial number of animals by slaughter without stunning. I want to address this under three headings: inconsistency, injury and insult.

In terms of inconsistency, we rightly pride ourselves here in Britain on our animal welfare regulations and our humaneness. Recently, it has been made an offence to dock a puppy dog’s tail. That is something that involved a snip with a pair of scissors which, on a week-old pup, evoked at most a slight yelp. We have made that illegal—and I am happy with that law—yet we allow adult animals to have their throats cut without rendering them unconscious first. Is that a consistent approach to humaneness?

I turn to biological tissue injury. The Farm Animal Welfare Council, in its report of 2003, considered the whole issue of slaughter without stunning in great detail. Considering the injury to the neck involved in throat-cutting, the council noted that this involved the incision of skin, muscle, trachea, oesophagus, both jugular veins, both carotid arteries, major nerve trunks and several other nerves. It concluded that,

“such a massive injury would result in very significant pain and distress in the period before insensibility supervenes”.

The FAWC report went on to refer to evidence of the time taken to lose brain responsiveness in different species following the neck cut. It noted that in sheep it was five to 10 seconds; in adult cattle, with excellent technique, it was a minimum of 22 to 40 seconds; and

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in calves it was 10 to 120 seconds. Twenty seconds is a long time if you are suffering pain. The FAWC report—and remember that this is the Government’s independent advisory committee—recommended in its 2003 report that,

“the Government should repeal the current exemption”

from pre-stunning.

I turn to insult. By this I mean tissue damage and particularly the induction of pain—I mean a biological insult. Determining the perception of pain can be very difficult, I acknowledge, but some recent research has been done on calves in New Zealand which I would argue provides strong evidence that pain is perceived by a neck cut and that stunning abrogates that. In this work, electrophysiological measurements were taken of brain signals, for which there was supportive evidence of their being associated with pain. A neck cut without pre-stunning caused pain signals lasting for up to two minutes. Such signals did not occur when stunning was used before the neck cut. Finally, if the neck cut was made and then animals were stunned, the pain signals occurring after the cut were immediately abolished. Every attempt was made in this work to mimic slaughter without stunning but true shechita could not be performed because, ironically, the animals had to be gently anaesthetised to conform to experimental animal laws and thus could not pass for human consumption, as shechita demands. So I would argue that it is likely that severe pain is caused by slaughter without stunning, albeit for a relatively short period, but perhaps for as much as two minutes in cattle.

How many animals are involved in slaughter without stunning? The latest available survey by the Food Standards Agency, in 2011, indicates that approximately 70,000 cattle are slaughtered in the UK each year without stunning, mainly by shechita, and that about 1.5 million sheep are despatched without stunning, mainly for halal consumption. I should point out that the majority of sheep that are killed for halal purposes in the UK are pre-stunned, but that still leaves the significant minority of 1.5 million that I have referred to. Thus I contend that, given the nature of the biological insult and the numbers involved, slaughter without stunning is a major, if not the major animal welfare issue in the United Kingdom today. A further important fact is that much of the meat from non-stunned slaughter goes into the food chain for mainstream consumers. I suggest that consumers can justifiably expect to be informed if the normal legally required form of humane slaughter has not been used.

All the independent welfare bodies advocate stunning before slaughter—FAWC, the British Veterinary Association, the Federation of Veterinarians of Europe, the RSPCA and the Humane Slaughter Association—and furthermore, the food-quality assurance schemes such as red tractor and the Soil Association do not permit non-stun slaughter. In Europe, Sweden, Norway, Switzerland and Iceland have disallowed non-stun slaughter, and New Zealand does not permit the non-stun abattoir slaughter of mammals. Significantly, New Zealand exports large amounts of sheep meat that has been reversibly stunned and certified as halal to Muslim communities in Asia and the Middle East.

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The EU is currently conducting a study on providing consumers with the relevant information on the stunning of animals by labelling of meat products. In the UK, the beef and lamb trade organisation EBLEX is working on the issue of clear labelling with halal producers. Will the Government support measures to label meat appropriately to enable consumers to make informed choices?

I make it clear that I am not asking in this debate for non-stun slaughter to be banned. I am not a believer in bans; I would rather that society collectively arrived at decisions about what is acceptable and what is not. However, I sincerely ask the Muslim and Jewish communities and their leaders to reflect and consider whether ancient practices, for which there were good reasons many hundreds of years ago, are necessary today. There are non-lethal, non-invasive methods of stunning, and even if there is disagreement on the extent or duration of pain perception, is it not time to adopt stunning to preclude the possibility of unnecessary suffering—as some Muslim food authorities have allowed?

2.12 pm

Baroness Fookes (Con): My Lords, I declare my animal welfare interest as set out in the register, and I thank the noble Lord for introducing this very important subject, which worried me considerably when I was a young MP in the other place. Certainly, given the opportunity at that time, I would have said, “Ban the slaughter of all animals that are not pre-stunned—no exceptions”. One gets a little more tolerant as years go by, but I still think that a great many measures could be taken that could help in the situation as so vividly described by the noble Lord.

I will put several propositions to the Minister. First, I hope that he—if his department does not do so already—will enter into constructive, friendly dialogues with the Muslim and Jewish communities to see if there is not some consensus or way of going forward as outlined by the noble Lord, Lord Trees. I realise that this may be a particular problem for the Jewish authorities. I must say at this point how much I commend the Muslim community for having so many of its animals slaughtered with pre-stunning. That is a great development and I am happy to pay public tribute to that community.

However, given that we may not get complete consensus, will my noble friend look at the possibility of stunning immediately after the cut is made, which would obviate some of the suffering? Finally, I take particular exception that a lot of meat that is not used for the religious communities comes on to the market without being labelled. If we are to have some rights, that is a right I should like for myself. I do not wish to eat meat that has not been pre-stunned, and I have the right to have the meat very clearly labelled.

2.14 pm

Lord Rooker (Lab): My Lords, I declare an interest. I am a meat-eater, and I am personally offended if expected to eat meat from non-stunned food production animals. As such, I have no problem whatever with religious slaughter, but I do not wish to eat non-stunned meat, and therefore it should be labelled. It should be

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labelled where born, raised, slaughtered and the method of slaughter. That is perfectly acceptable information to be put on a label for consumers.

One of the problems with this issue is that there is no central authority for halal meat. The rules vary around the world, so it cannot be policed. All New Zealand lamb entering the UK is classified as halal. It is all pre-stunned before slaughter. There is not a problem. Over my years as a Minister in MAFF and Defra, and as the FSA chair, I visited dozens of abattoirs. The FSA is only responsible for the enforcement of animal welfare regulations as a contractor to Defra, as the Minister will make clear. It is not a food safety issue.

I want to elaborate a bit on the figures given by the noble Lord, Lord Trees, with a one-week survey from September 2011 which was in an open board paper of May 2012. Some 43,000 cattle were slaughtered, 1,700 halal, 84% of which were pre-stunned; 307,000 sheep and goats were slaughtered, 154,000 halal, 81% pre-stunned; and 16 million chickens were slaughtered, 4.7 million halal, 88% pre-stunned. I have not got time to give the Jewish figures. So the non-stunned totals for halal and Jewish that one week were 3% of the cattle, 10% of the sheep and 4% of the poultry. They are very small numbers of non-stunned animals. The trouble is that too much of the extra goes into the general food chain and customers are not aware. The simple answer to this is labelling. Consumers have the right to know the method of slaughter, and that should be a given, in my view.

2.16 pm

Baroness Parminter (LD): My Lords, I wholeheartedly support the case made by the noble Lord, Lord Trees, and the evidence that he outlined that slaughter by throat-cutting without pre-stunning is absolutely unacceptable in animal welfare terms. However, like other speakers, time is short, and therefore the important issue for me today is to put on record that, yes, we must respect the rights of religious communities, but equally we must respect the rights of consumers for them to be able to make informed choices about the food they eat.

At present, a concerned consumer can go and buy red tractor meat or freedom food meat, or go into Waitrose, where all meat is pre-stunned, or if they are in Southall they can go into the McDonald’s and buy a halal burger which is pre-stunned. However, there are millions of animals slaughtered in the UK without pre-stunning, as the noble Lord, Lord Rooker, has outlined. With the Muslim and the Jewish community only comprising about 4% to 5% of the population, that means a vast percentage of people in this country are unwittingly buying food which has been slaughtered without pre-stunning.

It is an incredibly timely debate today. It is surprising that we have not debated it more frequently in this House, but it is timely because at this very moment the regulations are being discussed in the European Parliament. Those certainly should help consumers make informed choices about the food they buy, and they could do even more, if they included mandatory

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labelling of the slaughter methods, by exception—that is, only the meat that is slaughtered without pre-stunning requires labelling.

I therefore add my voice to that of the noble Lord, Lord Trees, in asking the Minister what discussions the Government have had with the European Commission on the study it is commissioning at the present time, due out in April, into the effectiveness and applicability of labelling meat products on the methods of slaughter. If those draft proposals were to emerge as a result of that study, would my Government support, as I do, the EU-wide mandatory labelling of non-pre-stunned meat?

2.19 pm

Baroness Masham of Ilton (CB): My Lords, I declare an interest as I breed sheep. I have to admit that I try to shut out the fact that some of them have to go to market for slaughter. I feel this is something that the general public do not think much about, as long as they have their burgers, steaks and chicken tikka masala. I take part in this short debate on behalf of the animals. I ask that religious leaders—who have traditions—look at the welfare of the animals that give them food. I ask them whether the practice of killing the animals is the best that can be done to relieve the suffering. Animals must sense a horror of going to a slaughterhouse, as has been shown when some animals make violent attempts to escape.

I have been involved with the legislation concerning female mutilation—circumcision. This is a barbaric practice of mutilation of young girls without anaesthetic, all because of some people’s traditions and customs. Animals which are hung upside down and have their throats cut without stunning or anaesthetic must also be terrified. Do the proprietors of these customs realise the cruelty they are inflicting?

The Jewish method of slaughter, shechita, requires animals not to be stunned before slaughter. Recent data collected by the EU Dialrel project show that 100% of the animals and birds slaughtered by the UK abattoirs service for the production of kosher meat were slaughtered without prior stunning. At four establishments, 1,314, or 3%, of cattle and calves were slaughtered by the Jewish shechita method, with 10% of these stunned immediately after bleeding. Does that mean they are still alive after bleeding? These figures were published by the Food Standards Agency in 2012. The National Animal Welfare Advisory Committee of New Zealand recommended a dispensation for kosher slaughter in 2001, but the new code does not allow any exemptions. Among the countries which have banned shechita are Iceland, Norway and Sweden. I hope the Jewish community will see the light—that the animals which give us so much need respect when they have to die.

2.21 pm

Lord Sheikh (Con): My Lords, I speak as a Muslim who consumes halal meat regularly.

Islam forbids the mistreatment of animals; the welfare of animals is enshrined in Muslim beliefs. The Prophet Mohammed—peace be upon him—has said:

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“A good deed done to an animal is like a good deed done to a human being, while an act of cruelty to an animal is as bad as cruelty to a human being”.

Islam permits the slaughter of animals for food, but dictates that such slaughter must be exercised humanely. There has never been any conclusive scientific evidence to suggest that religious slaughter is less humane than conventional mechanical methods. The controversy revolves primarily around the issue of stunning. Exemption from stunning is allowed for halal and kosher slaughter. In halal slaughter the animal ceases to feel pain due to the immediate brain starvation of blood and oxygen. For the first few seconds after the incision is made, the animal does not feel any pain. This is followed by a few seconds of deep unconsciousness as large quantities of blood are drained from the body. Thereafter, readings indicate no pain at all.

It is important to consider that prohibiting halal meat would have profound social and economic implications. There are now 2.7 million Muslims in the United Kingdom, 4.8% of the population. Halal meat accounts for between 10% and 15% of UK meat sales; some of this meat is, however, pre-stunned. People from all religions and backgrounds now choose halal as an alternatively produced meat.

I want to see a rigorous code of conduct and an efficient system of self-regulation. This would reassure non-Muslims that such animals are being respected and standards are being adhered to. I would also like a full and transparent system of labelling for all meats, so that the consumer can make an informed decision about the meat they buy. Labelling should not be confined to religiously slaughtered meat. Finally, Islamic leaders have asked the Jewish community for guidance on this, and I hope they can work together.

2.24 pm

Lord Winston (Lab): My Lords, what other religion argues that its animals should not work on the Sabbath? And we do not “seethe the kid in his mother’s milk” because that seems cruel somehow. I would argue that the notion of animal protection is stronger in Judaism than in any other world religion.

I want to speak purely as a scientist. We have heard a number of assertions here which are not scientific. With all due respect to the noble Lord, Lord Trees, death is not caused by exsanguination; it is due to interruption of the blood supply to the brain, which is immediate and has been measured. The problem with EEG measurements—electrode recording—is that they have been shown to be unsound. Indeed, the only way that you could detect pain would be by positron emission scanning of the brain, which clearly does not show any activity at all within two seconds once the blood supply has been cut. I would also argue that shechita is a much more humane method than stunning. Contrary to what some have said, it is a better method of killing animals because there is less suffering. Animals have to be calm and they are not manhandled roughly.

The noble Lord, Lord Trees, is not the only one who has been to an abattoir. They are not pleasant places. It is never pleasant to see any kind of animal killed under any circumstances, but the truth is that

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under the Home Office Act we would not be allowed to slaughter laboratory animals with stunning because it would not be regarded as a proper way of culling an animal in a laboratory. It would have to be done by a method which is much closer to cutting the blood supply to the brain.

I emphasise that what has been said about pain is another assumption. Of course animals may move after the brain is severed but the brain itself does not perceive pain if it is damaged and, in fact, none of the organs below the skin has pain fibres. You have some pain fibres in your trachea but they are very small. The evidence that animals suffer severe pain after one cut with an extremely sharp knife is extremely arguable. The truth is that, once you are unconscious, nobody knows what the perception of death or pain is.

2.26 pm

Lord Palmer of Childs Hill (LD): My Lords, I do not disagree with the labelling of meat. Jews do it already for the kosher food trade. There are a number of legal but unpleasant methods of mechanical stunning and, if meat is to be labelled, it should all be labelled alongside that produced from humane religious slaughter. These methods include shooting, mostly of hunting and game birds; a captive bolt gun to the skull for cows and sheep; chickens shackled by their ankles and dipped in a water bath that has an electric current running through it; herding pigs into a room and gassing them; and trapping and clubbing, which are mostly used in hunting.

It is important to be honest about the incidents of mis-stunning that are recorded. The European Food Safety Authority’s report, Welfare Aspects of Animal Stunning and Killing Methods, found that the failure rate for penetrating captive bolt stunning in the non-kosher slaughter of cattle may be as high as 6.6%—the noble Lord, Lord Winston, says it is 8%—and that, for non-penetrating captive bolt stunning and electric stunning, it can rise to as high as 31%. The percentages of mis-stuns far exceed the total quantity of animals slaughtered for the Jewish community. Every year, millions of animals across Europe are mis-stunned and left in great distress. I say: label all this meat, and that would deal with the problem raised by the noble Lord, Lord Rooker.

Two million cattle, 8 million pigs and 9 million sheep and lambs are slaughtered every year. Of those, the Jewish community slaughters only 90,000 red-meat animals. If you round that to the nearest percentage point, it is 0%. Similarly, every year 750 million birds are slaughtered, of which the Jewish community slaughters maybe half a million—a fraction of a fraction of 1%.

A new European Commission report published on 19 December 2013 on the various stunning methods for poultry concludes that, although there are serious animal welfare concerns about the water-bath stunning of poultry, more humane methods are not “economically viable”.

2.29 pm

Baroness Flather (CB): My Lords, first I must confess that I am no expert, but I wanted to come to this debate partly to say what I feel but also to hear what

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all the experts were going to say. This has been a very distressing and confusing debate. On the one hand the noble Lord, Lord Trees, has told us that stunning is essential, and on the other we have had the noble Lord, Lord Winston, tell us that it really is not. I do not know what to believe.

I have been here in my adopted country off and on for most of my life, since 1947, and all the time we have been gradually moving towards looking after everyone, whether they are animals, women or people needing equality. All those issues have been moving forward, and it has been a fight to get to various points that are important. That underpins the values of this society.

I do not think that the British people are much worried by other people’s faith. They do not seem to be much worried by their own; why would they take much notice of other people’s? I am not in the least concerned about other people’s faiths, but practice is another issue. I hope that any practice that is not in keeping with the ethical values of British society is carefully considered.

We have heard some differing views today. I hope that this will all be put together and looked at carefully. The labelling issue is extremely important because at least we will know what we are buying. I have been buying halal meat because I have found it to be very good; I say that openly. Now I will be worried because I do not know whether it has been done with pain to the animal or with no pain.

I am concerned about many things, and I think that all of us in this country need to watch for changes that take us in directions that we never wanted to go in, especially—the minutes do not seem to be passing.

A noble Lord: The Clock is not working.

Baroness Flather: So how long have I been speaking? Too long! How wonderful. I want to say one last thing, which is not on the animal issue: when I read about the Islamic Society at Leicester University being allowed to separate girls and boys at a meeting, it breaks my heart. We have worked terribly hard for equality and for animal welfare. Please let us keep those things in mind and not allow this country to go in that direction.

2.32 pm

Baroness Hodgson of Abinger (Con): I declare an interest in that I was a member of the Farm Animal Welfare Council, although not at the time of the report that the noble Lord, Lord Trees, referred to. I thank the noble Lord for raising this important subject, which we all recognise arouses the strongest feelings. Mahatma Gandhi is reported to have said, “The measure of a civilisation is how it treats its weakest members”. Without wishing to be accused of sounding too anthropomorphic, it is in that context that I view this discussion.

The demise of local slaughterhouses in the UK means that animals now often have to travel a long way for slaughter. By the time that an animal in the UK reaches its final destination, it is often tired, stressed, confused by the unfamiliarity and frightened

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by the smell, so the loss of consciousness should be instantaneous. Bill Riley, a past president of the British Veterinary Association, has expressed the view that slaughter without stunning causes suffering, a view echoed by the Farm Animal Welfare Council. I am told that Islamic rules for halal meat can be satisfied with pre-stunned animals, with 80% of UK halal meat now produced this way, so perhaps we could persuade them to make this mandatory, as has been done in Denmark and New Zealand. I understand that kosher meat does not permit pre-stunning, so the question is how to stop the animal suffering. If an animal is not cut correctly, it can take several minutes to die.

While some people choose to eat kosher or halal meat, as Masood Khawaja, the president of the Halal Food Authority, has recognised, others have a right to choose not to eat it, and I therefore echo the comments of others about having it labelled.

I have the greatest respect for those of different faiths and beliefs but I feel that I must speak up for the voiceless. Please let us prioritise kindness towards animals, consider how this affects them and do everything possible to minimise their fear and suffering.

2.34 pm

Baroness Deech (CB): I wish to dwell on the selectivity in the Question as regards “some” animals. Ethical, religious and legal factors should be universally applied and not selective. This is a country in which fishing is a national pastime. Fish die from being left to suffocate and being gutted, which takes quite a while. We shoot foxes and trap them. We cull badgers by shooting and perhaps gassing them. We shoot stags and pheasants. We decapitate rabbits. Millions of lobsters have their claws bound and are thrown into boiling water where they thrash for a long time. Chickens and turkeys are swept through an electrically charged water bath and then are immersed in scalding water but it frequently goes wrong. It has been found that 26% of turkeys and one-third of chickens probably enter the scalding water while still alive and sensible.

Stunning cattle is vaunted as superior to Jewish slaughter, but it frequently goes wrong. The Jewish method ensures immediate cerebral perfusion and is irreversible. No electric prods are used and one animal is not killed in the presence of another. I am not religious in my attitude to food but I greatly respect the attitude of those who are orthodox and their religious slaughtermen, who regard the killing of animals as an act that should be not only humane but infused with respect and reverence, remembering at all times the gravity of what they do and never becoming slapdash or hardened. This attitude should be more widespread, so that we do not see newspaper reports of deliberate mistreatment of animals in abattoirs for fun.

The European Food Safety Authority found that about 12 million cows suffer from failed stunning. That greatly exceeds the entire annual quantity of cattle slaughtered for the Jewish religious community, which is a few thousand. There should be more focus on what goes wrong in stunning and the cruelty inflicted on other animals, and less pointing the finger at the Jewish few thousand if we are to be fair and ethical in our worries.

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2.36 pm

Lord Gold (Con): Let me first declare an interest. I am an observant Jew who eats only kosher meat, meat that has been killed by religious slaughter. I am not as observant as the next speaker, but I have an interest in allowing me and my co-religionists to practise our religion. I am sure that Rabbi Sacks—the noble Lord, Lord Sacks—will say a little about kosher meat in that respect. As other speakers have said, and as the noble Baroness, Lady Deech, has just made clear, the number of animals slaughtered for kosher meat without stunning is very small indeed.

The focus of this debate has not been on the effects of stunning and how it goes wrong. In researching for today’s debate, I have been horrified at some of the things that go wrong. The Vegetarians International Voice for Animals, which is opposed to religious slaughter, states:

“Tens of millions of animals are being ineffectively stunned and are regaining consciousness while they bleed to death”.

That is a horrific number.

On looking at the legal position, European Council regulations recognise that the stunning methods listed in their own literature are not the only methods. Those intimately involved in this work believe and argue that Jewish religious slaughter, properly undertaken and as described by the noble Lord, Lord Winston, also constitutes acceptable stunning because it instantly cuts off the blood supply to the brain. That comes within the definition of stunning provided in the regulations. The definition is,

“any intentionally induced process which causes loss of consciousness and sensibility without pain, including any process resulting in instantaneous death”.

I understand that, properly undertaken, that is exactly what Jewish religious slaughter seeks to achieve.

The welfare of the animal pre-slaughter is paramount in the Jewish religion. Any animal or bird which is even slightly harmed before slaughter is not considered suitable for kosher consumption. Special care is taken to ensure that the animal is calm before slaughter. The use of electric prods and the like is absolutely prohibited. It is also the case that the European regulations expressly respect the freedom of religion and the right to manifest religion or belief in worship, teaching, practice and observance, as enshrined in Article 10 of the Charter of Fundamental Rights of the European Union which states:

“Everyone has the right to freedom of thought, conscience and religion. This right includes freedom to change religion or belief and freedom”—

Baroness Northover: I remind the noble Lord that we are in a timed debate and he is already 50% over, if my maths is right.

Lord Gold:I am so sorry, I will stop there. I have made my position clear.

2.39 pm

Lord Sacks (CB): My Lords, I welcome this short debate and thank the noble Lord, Lord Trees, for initiating it, because it provides an opportunity to clarify certain matters about the killing of animals which I believe are still not understood.

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I declare an interest, having been for 22 years until recently the chair of the Rabbinical Commission for the Licensing of Shochetim, the body responsible for the supervision of every act of animal killing done in this country under Jewish law. This body exists because for us animal welfare is a matter of high religious principle, which we take with the utmost seriousness. This is why we insist on long years of training, spiritual as well as practical, before anyone can be qualified to kill animals. In Britain, every shochet is licensed, every licence needs annual renewal, and their work is regularly supervised and reviewed.

Shechita itself, the act of animal killing, is designed to minimise animal pain. The animal must be killed by a single cut with an instrument of surgical sharpness, and in the absence of anything that might impede its smooth and swift motion. The cut achieves three things: it stuns, kills and exsanguinates in a single act. We believe that this is the most humane, or a most humane method of animal slaughter. Quite apart from the fact that other methods are not permitted by Jewish law, we have doubts about their effectiveness. Pre-stunning by captive bolt, as your Lordships have heard, often fails at the first attempt. According to the European Food Safety Authority’s report in 2004, the failure of penetrating and non-penetrating captive bolts affects around 10 million animals, causing the animal grave distress.

In Britain, some 3 million cows annually are affected by these failures, compared to the 20,000 cows killed annually by shechita. The pain caused to animals by the use of pre-stunning methods vastly outweighs that caused by shechita, even were it the case that shechita did cause extra moments of pain. However, we are not convinced that such is the case. The failure rates of pre-stunning, and the inconclusive and highly challenged nature of some of the experimental studies done in this field, should give us pause. Therefore, if a case is made for labelling meat to indicate how the animal was killed, this must apply to all methods of slaughter, not just to some. I hope therefore that the Jewish community will continue to work with the Government to ensure that shechita continues to the highest standards of concern for the welfare of animals, which should rightly be the concern of us all.

2.42 pm

Lord Grantchester (Lab): I thank the noble Lord, Lord Trees, for introducing this debate today and declare my interest as a dairy farmer. Science does not find it easy to adjudicate on welfare claims, especially as the need for individual handling on a flock or herd animal seems to contravene a general legal and cultural requirement to reduce avoidable stress and pain at slaughter.

The EU regulation came into force in January 2013, allowing slaughter without stunning in accordance with religious practices to continue. However, individual member states may impose stricter rules. A consultation on new domestic regulations to implement this regulation ended in October 2012. Can the Minister tell us what point his Department’s dialogue with stakeholders has reached? What discussions are currently ongoing with the Commission? Are the Government waiting for a

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resolution to be achieved in Europe first, before coming forward with proposals here in the UK? The industry is pushing forward with proposals while Defra appears reticent. Could the Minister undertake at least to publish the results of the department’s consultation, now closed over 12 months ago?

Compromises have been reached in other jurisdictions which are being echoed here by industry, such as additional veterinary presence at non-stun slaughter and post-cut stunning. Has the department had discussions on these matters with interested parties and religious and cultural leaders, and what stage have any discussions reached? New Zealand has managed to achieve agreement among the communities through their leaders. Is this the favoured way forward for the Government?

EBLEX and the Food Standards Agency have come forward with some very interesting statistics indicating that non-stun slaughter of sheep and goats has increased by some 70% over the past 10 years, even though the number of animals not stunned prior to slaughter is low: 3% of cattle, 10% of sheep and goats, and 4% of poultry. Yet the communities consuming the excepted meat are much smaller than these figures would suggest.

Much of the meat from animals slaughtered by religious methods is not sold as such because it comes from the wrong cut of meat. This raises serious questions for labelling, and labelling must inform the consumer in a non-pejorative way. I recognise the complexities surrounding labelling but what is the Government’s approach to this? Other countries seem to have been able to settle this issue. Can the Minister say when his Government will come forward with their proposals?

2.45 pm

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con): My Lords, I thank the noble Lord, Lord Trees, for securing a debate on this very important issue, and I thank all noble Lords for concisely making some really important and informative points on all sides of the argument.

This is a subject in which I am intensely interested. Indeed, I should start by saying that we are completely committed to improving standards of animal welfare, including welfare at slaughter. I should highlight that my response on behalf of the Government applies only to England. The devolved authorities are responsible for their own animal welfare policy.

In 2012, in England, 764 million poultry, 8.4 million sheep, 8.1 million pigs and 1.4 million cattle were slaughtered. Given the sheer numbers involved, it is right that we take the welfare of animals at slaughter very seriously. The public rightly expect the Government to ensure that appropriate welfare measures are in place. In late 2012, we consulted on the best way to implement the new EU Regulation 1099/2009 on the protection of animals at the time of killing.

After careful consideration of responses, we decided to retain all existing national rules protecting the welfare of animals at killing, including those on religious slaughter, where they provided greater protection than the EU regulation. We will bring forward new secondary

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legislation soon to consolidate these national rules with the new requirements under the EU regulation. In coming to that decision, the Government assessed the key factors—legal, ethical and religious—raised in this debate. In answer to the question from the noble Lord, Lord Grantchester, I anticipate laying the regulations in April.

As regards the legal factors, Council Regulation 1099/2009 provides for the protection of animals at the time of slaughter and came into effect on 1 January last year. It aims to ensure that animals are spared any avoidable pain, distress or suffering at the time of slaughter and it therefore requires that animals are stunned before they are killed. The only exception, as this debate has widely covered, is where animals are slaughtered according to religious rites.

The EU regulation also requires religious slaughter to take place only in an approved slaughterhouse and it allows member states to introduce additional national rules for religious slaughter. It is on this basis that we will retain our existing national rules on religious slaughter in the new domestic regulations and provide more extensive welfare protection to animals slaughtered in accordance with religious rites than that provided by the EU regulation.

Our existing national rules provide greater protection than those contained in the EU regulation in relation to, for example, cattle restraints, the method of killing and the handling of animals. We will keep our rule on “standstill time”, which means that animals must not be moved after the neck is cut until they are unconscious, and in any event not before a minimum period depending on the species.

It is worth saying that our stricter national rules take into account human rights legislation, including Article 9 of the European Convention on Human Rights, the right to freedom of religion and the freedom to manifest one’s religion or beliefs, and Article 14, prohibiting discrimination on grounds of race or religion.

The consumption of meat is a matter of personal choice. Those who choose to eat meat expect animals to be treated humanely when they are slaughtered. This is reflected in both EU and domestic legislation, which require that animals are spared any avoidable pain, distress or suffering both when they are handled and at the time of slaughter. As the noble Lord, Lord Trees, said, the Farm Animal Welfare Council’s 2003 report on the welfare of farmed animals at slaughter proposed that non-stun slaughter should be banned on the basis that it caused unnecessary suffering. That view needs to be balanced against the rights of the Jewish and Muslim communities to eat meat prepared in accordance with their religious beliefs. To insist on pre-stun slaughter would also effectively deny Jews and Muslims access to meat slaughtered in this country.

While the Government would prefer to see all animals stunned before slaughter, we respect the rights of Jewish and Muslim communities to eat meat prepared in accordance with their religious beliefs. It is worth noting that the term “religious slaughter” does not automatically mean that the animals are slaughtered without being stunned. As noble Lords have mentioned, some halal meat comes from animals that are stunned before slaughter. My noble friend Lady Fookes asked:

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why not require post-cut stunning? As we have seen, this is a very complex subject, but I understand that animals subject to post-cut stunning would no longer be acceptable to some religious communities.

The noble Baroness, Lady Deech, the noble Lord, Lord Palmer, and my noble friend Lord Gold referred to mis-stuns of cattle in conventional slaughtering. All animals that are mis-stunned must be immediately re-stunned, and operators are required by law to check that stuns are effective. That process is checked by independent vets.

The noble Lords, Lord Trees, Lord Rooker and Lord Grantchester, and my noble friends Lady Fookes, Lady Parminter, Lord Sheikh and Lord Palmer all spoke about labelling. The Government are aware of concern about non-stunned meat being sold on to the general meat market. We agree with noble Lords who have made the point that consumers should have the information to make an informed choice. It has to be said that there are some practical difficulties in identifying the method of slaughter for all meat from the point of source to the point of consumption, so the European Commission, which is well aware of our view, has commissioned a study on the labelling of meat from non-stunned animals. We await the results of that study, which are due shortly. We will look carefully at what options are available for providing information to consumers in the light of the study, and I am sure that noble Lords will want to revert to this subject when we have those results.

We remain committed to improving the welfare of animals at slaughter and, as my noble friend Lady Fookes proposed, to a continuing dialogue with all those concerned, particularly on the issues raised in this debate.

2.53 pm

Sitting suspended.

Business: International Competitiveness

Question for Short Debate

3 pm

Asked by Baroness Neville-Rolfe

To ask Her Majesty’s Government what direct measures they are taking to promote enterprise and the international competitiveness of British business.

Baroness Neville-Rolfe (Con): My Lords, I ask this Question today to call attention to and encourage the measures that the Government are taking to promote our international competitiveness. This is a huge subject, and I will not talk much about the excellent work done by our ambassadors, UKTI, and by our Prime Minister to improve exports to China, Russia and so on, as I know that other noble Lords will do that. I will focus on three key drivers of enterprise and competitiveness: tax and regulation—we need fewer, better and clearer

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regulations and a mindset that encourages enterprise; infrastructure; and education. These are critical to a skilled workforce.

Economic advances stem from ideas developed by individuals and by private companies. When government has sought to take a direct hand in business, the results have often been disappointing. But government can and must provide a sound macroeconomic framework, sensible policies on tax and regulation, sound legal, competitive and educational structures and a good transport system. If policies in these areas are unwise, business finds it much harder to succeed. Enterprise and industry is also the source of the wealth on which ultimately everything else depends. That basic fact is sometimes overlooked. Schools, health, defence and welfare are important, but the resources available are dependent on the wealth that the business sector creates.

I come to this subject as someone who has spent many years working for a British company, Tesco, which has been one of the major commercial successes of the past 20 years. As a civil servant I led the deregulation initiative under my noble friend Lord Heseltine. I hope that my continuing business interests, which are recorded in the register, will keep me up to date in this House.

I begin with tax and regulation. As regards macroeconomics, the Chancellor has adopted the right strategy in rebalancing Britain away from reliance on debt and deficit. The deficit is declining rapidly as a proportion of GDP and we now have 30 million people in work. More important, from my perspective, is that for every one job lost in the public sector, four new jobs have been created in the private sector since 2010.

To match other countries in competitiveness, we must keep business headquarters in Britain. In my experience, philanthropy, R&D and a focus on a country’s interests all go with the headquarters, so it is excellent news that WPP, the advertising giant, has returned from Dublin to London. I welcome the new regime for taxing companies’ overseas operations and the Patent Box. They will help us to keep here companies such as GSK and ARM, which exports the chips for the iPhone to China. Best of all is the policy to reduce corporation tax; to help us to compete I would like to see it even lower.

We also need a regime that helps the 4.9 million small businesses in the UK. What the Government are already doing is not very well known: £2,000 off national insurance; an allowance to boost jobs from this April; no national insurance charge at all from next April for under-21s who earn less than £813 a week; a £25,000 increase in the investment allowance for plant and machinery until 2015; £150 million in start-up loans—a long list. For the high street, which is close to my own heart, 360,000 small businesses pay no rates at all because of the doubling of business rate relief.

I am the president of EuroCommerce, the EU-wide association of 6 million retailers and wholesalers. For us, the most important driver of enterprise is the EU single market. We also work hard to open up world trade, and I was delighted at the progress made at Bali, which included changes to border processes worth

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billions of pounds in saved time. I offer many thanks to my noble friend Lord Green, who did so much to make this happen.

I turn to the vexed subject of red tape. I know from my time in government, in Brussels and, indeed, my weeks in this House that everyone believes passionately in their own proposed regulations. However, the cumulative effect, especially on small business, can be disastrous and enforcement a further burden. Often, our regulators are judge, jury, scribe and enforcer, and so frightened of the media that they take a heavy-handed approach.

We have a programme of deregulation, but to make a real impact on small business, we have to change the mindset in the public sector from bureaucracy to customer focus and the elimination of wasteful error. We have to do less and champion simplicity—fewer, clearer laws, forms and penalties and better process using simple IT, including apps. Tesco taught me a lot about cost control. A process that saved one second at the checkout saved the company £2 million. We learnt lessons from complaints as well.

My second theme is infrastructure and the investment we need in our proverbial roofs. Some great things are being done. Crossrail is fantastic—although you never hear about it, possibly because it has admirable cross-party support. It is a £15 billion project and is estimated to bring benefits of £42 billion. The building of 55,000 new homes will come forward. Thousands of jobs have been created, some with small contractors as far away as County Down. It is a model project, to my mind, with the cost shared equally between government, Transport for London and business.

We need to mend the roof north of Birmingham as well. We need imaginative plans for our northern cities with transport links that do not just come to London, such as the Northern Hub and the Ordsall Chord, Manchester’s own Crossrail, which links Victoria to Piccadilly.

It is a digital age, and as the UK leads Europe in digital business and consumer internet access, we need proper broadband and mobile coverage everywhere. I commend the 2012 report of our Communications Select Committee on this very subject. In Shanghai, my phone works well. At home in Wiltshire, I had to go to the local cafe to do business last summer because of broadband problems. The Government are investing £500 million with matching funding from local authorities and BT. These are huge sums, so why cannot we require a basic level of connectivity everywhere by 2015? What about an official map, perhaps held by the Land Registry, to show street by street what progress is being made?

Finally, I turn to education. International competitiveness depends on education, and it is a scandal that in the latest OECD tables, our best place was at number 21. The Secretary of State is doing many good things, with free schools a fine innovation—we just need more of them. So are the new academies, such as the London Academy of Excellence at Newham, which sends more children to Oxbridge than some famous private schools. I hope that the Minister will update us on examples of business involvement in education that can really inspire others, such as our studio schools and university technical colleges.

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However, as a businesswoman, I am very concerned about the way that Britain is being left behind. We need to improve education across the board and stop it being a postcode lottery. That is the best route to social mobility and reversing those worrying PISA scores. I would allow more grammar schools to expand.

In any event, I think that streaming should be the norm in our schools, as it also helps innovative teaching to be used in the slower streams. By recognising that children have different skills and strengths, more streaming could also give a boost to vocational training. Let us learn from Germany, where trades are learnt from sitting alongside experienced master craftsmen and engineers, and where employers have a big role in course design. The scale of apprenticeships under this Government and across the economy is a story that we should celebrate but work to improve yet further. Rolls-Royce had 318 apprentices in 2012, and this year, Tesco had 4,127.

I have one final point, and it is a warning. Looking back at the run of general elections, one sees parties vying to promise short-term measures that crack down on business and do disproportionate damage. There have been recent unfortunate examples. We must avoid this temptation: the effect will be to hurt our international competitiveness, our reputation and our country. We must promote enterprise and the competitiveness of British business. I look forward to further suggestions from noble Lords and to the Minister’s response.

3.10 pm

Lord Bhattacharyya (Lab): I thank the noble Baroness, Lady Neville-Rolfe, for securing this important debate, and I declare my interest as chairman of Warwick Manufacturing Group at the University of Warwick.

Much of the Government’s role in making business competitive is essentially passive: keep corporation taxes down, do not over-regulate and do not impose unreasonable bureaucracy. I have no quarrel with this: competitive taxation and sensible regulation are essential in a modern economy. In Britain we have outstanding finance and services companies that rely on these principles. However, this is a minimum, not a maximum, strategy for being competitive. To go further, we must actively support the creation of a strong product base in a wide range of sectors. We cannot rely just on banking or on our aerospace industry, because the global market is changing. The Prime Minister found this to be so in China. Economies such as China and India know their consumers are very attractive to global businesses. Understandably, they want to keep more of the value of their growing markets in their economies.

What does that mean for Britain? In population terms, we are a relatively small country. For our businesses to grow they must succeed in export markets as well as at home. The first step to achieving this is a competitive exchange rate. For many years, British exports were strangled by high sterling, and we must not let that happen again. The Bank of England has a major role to play by not rapidly increasing interest rates. Stable

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exchange rates clear the way for government to help create an innovation framework that helps businesses develop their product base. This is the key to sustainable growth. For proof, look at the export data by region. In most of Britain, exports were flat in 2013, but in the West Midlands exports were up a staggering 14%. Why? It cannot be the exchange rate, or tax rates, or regulation. No, the reason is that one company, Jaguar Land Rover, is enjoying huge success, now accounting for almost a quarter of all British exports to China. This is no accident. When the global market was in crisis, JLR spent billions of pounds on researching innovative new products. It spends £100 million a year in my place on R&D. Now it is reaping the rewards. Naturally, the companies which export so successfully will need to build factories in their biggest markets. Crucially, however, the benefits of this expansion will also be felt at home.

How can we spread this success more widely? First, we must help more businesses invest in Britain for the long term. We are beginning to do this with the UK Business Bank. However, compared to our competitors our help is insignificant: less than 1% of the assets of the German KfW. It is no wonder that German investment in both R&D and fixed capital is far higher than ours. The Business Bank must be greatly expanded. Secondly, we must encourage industry sectors to work together to identify the scientific challenges that will shape global markets, and fund the R&D that will solve them. The UK Automotive Council shows how this can work, developing research road maps and co-ordinating investment in areas such as battery technology. This is especially vital in building our supply chain, so that the success of a single company also supports broader growth.

Next, we must increase investment in workforce training and skills. The best people to identify the skills needed in the economy are businesses and workers themselves, not government. I welcome the approach of Vince Cable in encouraging apprenticeships and employer-led skills training. We have a university technical college because the noble Lord, Lord Baker, asked me to set it up. Within a year, we had 200 students joining us, long before it had even started. However, this must not be a free lunch for businesses. The quid pro quo must be greater business funding for skills training. A return to the training levy system would be supported in many sectors, as it would remove free riders.

Finally, if you want to attract investment, do not get in the way of businesses hiring talented people. The current visa policy is, if not causing a problem, creating a sentiment that Britain does not welcome talent. If we want to be competitive, we must encourage the best and brightest to come to Britain. British business has invested in the automotive sector to create innovative products, skilled people and efficient processes. That sector was in the dumps five years ago but, as a result of that investment, it is succeeding in the global market. Our challenge is to increase the number of industries where this is happening and to spread growth down the supply chain. This will take time and it is a task for many Governments, not just the current one, but the prize is surely worth the effort.

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3.15 pm

Lord Green of Hurstpierpoint (Con): My Lords, I join in thanking my noble friend Lady Neville-Rolfe for tabling this important debate. International competitiveness is a function of many things, as we would all recognise: there is tax, regulation, infrastructure, education and the skill base. The two previous speakers have covered those. I want to focus on why it is so important for UK business to enhance its international competitiveness and on some of the implications of success in the international arena for policy and action by both government and business.

First, on why it is so important, I draw attention to the balance of payments. The current account deficit in 2012 was nearly 4% of GDP. That is a substantial deterioration on 2011, although that is partly—but only partly—the result of a fall in profitability on outward investment, which may be an aberration. The broader truth is that we have had a weak balance of payments position for the working careers of us all in this Room, and that trade has recovered only rather modestly since the 25% or so devaluation of sterling which happened five or six years ago. That is perhaps the slowest recovery ever, or at any rate since the war. The first decade of this millennium was the worst in terms of balance of payments and recent numbers show that we are, to say the very least, not yet out of the woods.

Why does this matter? Time was when a market fundamentalism had it that it did not really matter what the balance of payments did because the market was self-regulating and self-stabilising, and whatever current trade position we had, the market would take care of it and make the appropriate adjustments seamlessly. We now know that that is not true. Indeed, there is some reason to fear that future devaluations of sterling will be less effective than they have historically been because there is a rising share of imports in exports. About 70% of the value of some of our major exported manufacturing products is now in fact in imported components, which of course blunts the effect of any sterling devaluation.

Even more fundamentally, a weak and weakening trade position is a drag on growth. We all know that we need to rebalance the economy to shift it away from the old growth model, which depended too much on the domestic consumer taking on debt to drive growth. We know that we need to find other sources of growth and that means stronger investment performance—another story—but also, importantly, a stronger trade performance, because that way lies sustainable growth.

That is the macroeconomic perspective. The microeconomic perspective is that international involvement is clearly good for companies. There is compelling evidence from both government surveys and academic and private sector surveys that companies which get into the export markets become materially more productive and efficient than those which do not, and that those effects are very quick. Unfortunately, the evidence is that fewer British companies are engaged internationally than is the case with our natural competitors. For the sake of discussion, I will treat those as being Germany, France, Italy and such countries.

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A challenge for both the Government and the business community is to encourage and support more companies to get into the international arena: first, because we need it from the balance of payments perspective; and, secondly, because it is good for their productivity and we thereby strengthen the backbone of the whole economy.

What do we need to do to encourage and support this? There is the role of the Government themselves of course, and we have already talked about the importance of the tax and regulatory framework. I want to dwell briefly on the role of trade promotion. I might be regarded as parti pris in so saying, but I think that the role of UKTI and UKEF is important. The key themes of work in progress in both cases are obvious to us all—more private sector experience in their leadership, more ability to operate flexibly and to market their services to British companies up and down the land, and adequate budgetary resourcing. Can the Minister assure us that the work that has been put in hand over the last two to three years will be continued? This is, I might add, a marathon and not a sprint. We need to continue it, not merely through the next spending review, but probably for the next 10 to 20 years, if we are to put this right.

My final point is that this is a national challenge. Even if the Government get everything right, and we score the Government 10 out of 10 on all criteria, there is a job for business in this, and in particular, an important role for overseas business groups and chambers. In recent months, we have begun to work with the chambers overseas to upgrade their activities. My impression, from my previous role, is that there is a growing recognition among them of the importance of this, and a growing readiness to step up to the plate. Again, I invite the Minister to confirm that the work that has been put in hand will continue, because as I say, this is a marathon and we have to keep this up, probably for a generation.

3.21 pm

Lord Stoneham of Droxford (LD): My Lords, we know that the prime purpose and focus of the coalition has been to rebalance the nation’s finances, but frankly there is no point to austerity if we cannot now achieve growth.

In April 1990, I took on a new responsibility running a newspaper business—a very cyclical business. The English economy was just tipping into the property recession at that time. Within six months, the profits of that company halved. In the subsequent six months, 50% of the rest disappeared. It is an experience seared in my mind. It took more than five years before we rebuilt that business. Once your market goes, you concentrate on cost-cutting to remain viable. You push back on marketing and investment. It takes time for consumers and suppliers to regain their confidence. Then it takes time for the business to have the confidence to invest and retrain and recruit staff to take advantage of the pick-up, and build on its competitive advantages.

One of the problems at the moment is that although we have rising confidence, with increasing orders for business, the preconditions for sustained upturn are not yet in place. We know that consumption is fragile,

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and what we do not want is another boom-bust based on credit. We need the sustainable growth which builds on our competitive advantages in business, to compete better as a trading nation. The noble Lord, Lord Green, mentioned the vulnerability of our current trading account in international trade. This is where the Government have to concentrate on improving the underlying business environment, through their industrial strategy. They have to adopt a strategic approach to championing key sectors in the UK, where their competitive advantage gives them possibilities of advances and future opportunities for growth in international markets. It represents a once-in-a-generation opportunity to use the pressures of the recession, and business desperate to recover, to achieve the changes we need.

I am very optimistic. We have seen in the past year the success of the Olympics—the construction firms and the supply chain companies who are benefiting from the reputations gained in that very successful enterprise. It is a remarkable case study that our motor industry has been transformed in the last 20 years, building—announced only this week—1.5 million cars last year, and set for 2 million by 2017. In the next two months, our creative industries, through our film makers—the British producer of “12 Years a Slave” and the technical specialists on “Gravity”—are almost certainly going to be honoured as world beaters. There are 1.7 million jobs in that sector, which is 5.2% of our economy—also announced this week. It is beyond belief, and I cannot quite understand it, that this is not one of the key sectors in the Government’s industrial strategy. I question sometimes those slightly misplaced criticisms of media studies courses in our universities—but I pass on.

I mention also the company in which my son works, easyJet. Founded in 1995 by a Cypriot businessman, it is now the biggest airline in the UK. It has more than doubled its revenues during the recession. We certainly have the experience and the managerial talent to take us forward.

I commend the CBI’s publication, Raising the Bar, which illustrates in its business environment scorecard what we need to do to raise our game and to be more successful. It measures how we are doing against our principal competitors of Germany, France, the US and Japan. We are ahead now on corporate tax competitiveness. We have a strong competitive advantage in our science renewal facilities, but we have major catching up to do in education and skills, R&D expenditure as a percentage of GDP, overall infrastructure quality and especially ease of access to loans. On regulation, we do not score well, but nor do France, Germany, the USA and Japan.

What do we need to do? We need to build on what we are best at. Clearly, partnerships need developing between government, business and university research establishments—the new £1 billion advance propulsion centre to develop new propulsion technologies in the motor industry is one example of this. Of course, we need to reform regulation, particularly in Europe, but we do not need to undermine business confidence by sacrificing all the benefits of the open markets of Europe.

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We need to focus on technical training and might well have to accept some sacrifice in our university education. We are leaders in some of the elite sectors of education, but we are underachievers in the less successful parts of education, where we need to increase the resources and the commitment given to technical education. Finally, we need to examine our supply chains. Only 36% of UK vehicles are sourced from domestic business, and there are opportunities for our suppliers to fill those gaps.

The momentum of the industrial strategy needs to be maintained. A political consensus is required to support it through the next Parliament and to ensure long-term investment. I hope that the industrial strategy council will hold government and business to account to ensure that real economic growth shows the benefits for the wider nation.

3.27 pm

Lord Lyell (Con): My Lords, I thank my noble friend for giving us a chance today to hear some outstanding speeches. I am afraid that I am well down the list, so, as far as industry is concerned, I am very much the tail-end Charlie. However, I take enormous pride in the fact that, 52 years ago, I started my commercial career as a apprentice chartered accountant in Rolls-Royce in Glasgow. Then, in 1962, there was—and indeed there still is—a strong shipbuilding industry on the Clyde in Glasgow. One of the first jobs that I did as an apprentice accountant was to go to a colossal steel company in Motherwell and to a seal fabrication company. Alas, that was 52 years ago. Things have, sadly, moved on from that particular aspect.

However, in the great city of Glasgow, what have we got? We still have the brains and the industry, including Rolls-Royce. Another firm very much involved in high technology, which the noble Lord spoke about, is Barr & Stroud. It is in defence and makes superb aiming and technical equipment. There is also the Weir Group. Wherever there may be problems with energy pipelines, you will find the Weir Group. Where is it based? It is in Glasgow. It is involved not just in the defensive aspect; it is aggressive in developing ideas throughout the world. These are all enormous, worldwide successes in different sectors, but I take some pride as a humble accountant in the fact that, defensively, they are all carefully watched by the accountants. I believe that we have good accountants in Scotland, but they keep their feet firmly on the ground of what you can afford. That is definitely crucial. I look at accounts and finance as a being a first-class defence in that particular area.

In the early 1970s, I found myself spending more and more time in your Lordships’ House. In January 1977, I found that I was No. 2 apprentice on the Opposition Benches.

In January 1977, we discussed something called patents. I said, “Oh yes, that is very interesting”, but I then discovered that you had to be a lawyer or a scientist to have any clue about it. I am neither. However, thanks to wonderful advice from your Lordships’ House and from the pharmaceutical industry, I gained undying admiration for that industry in the United

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Kingdom, which I believe is a world leader. It is a subject of enormous pride and a colossal success in the UK. Looking at the competition all over the world, one or two of these enormous pharmaceutical enterprises in the United Kingdom have perhaps contracted but they have appeared in other areas. That is very much the lesson that my noble friend gave: where there has been a reduction in employment in some areas—for example, the public sector—there has been an improvement in other jobs, whatever the ratio may be, and we see that in the pharmaceutical industry.

The Minister who will be replying knows that I, too, am from north of the border. I am enormously proud of what we have in Dundee, with world-famous oncology ideas coming forward at the university. Indeed, the noble Lord, Lord Patel, is a world leader in that subject.

I understand that two aspects are relevant to the industry. One is something called the Patent Box, which I think my noble friend referred to. That involves finance and is most important, and I am sure that my noble friend Lord Younger will be able to reply on that. On the second aspect, I have a question. The Minister does not need to reply to me today but can he please ensure that the pharmaceutical industry is kept up to speed with patents and that it seizes the ideas and inventions that come forward within this country?

I thank my noble friend for the opportunity to take part in a star-studded debate. I am the junior batsman but I hope that I have made it.

3.32 pm

Lord Paul (Non-Afl): My Lords, I, too, thank the noble Baroness, Lady Neville-Rolfe, for initiating this very timely debate. I declare an interest as the chairman of the Caparo group, an industrial manufacturing company.

We are seeing a recovery in the economy—in particular, in UK manufacturing. This is very heartening, and confidence is important in achieving any recovery. However, I am concerned that growth will continue to struggle without the necessary environment of efficient regulation and support that only government can provide.

As someone who is involved with manufacturing industry, I am keenly aware of the fragility of this current upturn. In the automotive sector, for example, we have seen recent international success for the UK plants of Jaguar Land Rover and Nissan, yet for most other car plants, market conditions remain challenging. The fourth, fifth and sixth biggest car manufacturers are producing 30% fewer cars than before the financial crisis, and although we are now buying as many cars as we did before the recession, only one in every seven cars sold in Britain is made here. Even for those that can sell their products in this sector, skilled engineers are hard to find, and working capital to fund growth remains difficult to secure.

Behind the big car-producing household names lies a supply chain of component manufacturers and service providers upon which the car makers rely and which provide the majority of jobs and income on which our manufacturing regions depend. Most of these businesses have been unable or unwilling to risk investing in new

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productive capacity in the past few years. They are now feeling more confident to invest, but how are they going to find the capital and skilled labour to allow them to do this?

Despite the Government’s efforts, the commercial banking sector in the UK has continued to shrink its loan books, and what is available remains difficult to access. I welcome the initiative of the Government in setting up the British Business Bank, and wish the recently appointed chairman every success in investing the £1.25 billion that the Government have set aside, but this may be too little, too late. Germany’s KfW, on which I believe the British Business Bank is based, invested more than €17 billion in Germany’s Mittelstand companies in the first nine months of 2013 alone. If we are to compete in international markets, the Government and financial sector need to work together now to provide easily accessible funding solutions to support investment in our economy. Tax incentives for lease finance providers, coupled with enhanced investment allowances for manufacturers, could and should be considered.

We must also support our manufacturers in the training, development and availability of skilled labour at all levels, from shop-floor technicians through qualified engineers to senior managers. This must be a true partnership between government, academia and manufacturers. We need to ensure that a significant part of our higher education system is providing relevant skill training that serves the needs of commerce, and that involves local communities.

The Government must make key decisions for the country’s longer term future, such as proper plans for future power generation, airport capacity, transport infrastructure development and cutting procedural red tape, which stops us getting things done.

As yet, we do not know the outcome of the EU vote, nor are we likely to until at least 2017. Of course, at home we have the Scottish devolution vote. Any investor in UK commerce, whether domestic or from overseas, wants certainty on what it is committing to, and those unresolved issues hinder and frustrate even those who have the money and the labour. I urge the Government to start making decisions now, before it is too late.

The time may have come when the Government might think about the experience of our colleague, the noble Lord, Lord Green, and put him in charge of British industry’s development.

3.37 pm

Lord Borwick (Con): My Lords, I am grateful for the opportunity provided by my noble friend Lady Neville-Rolfe to make a few points about the international competitiveness of British business. The noble Baroness has had a tremendously successful career running an enormous British business employing thousands of people to satisfy millions of customers.

My experience is rather more mixed and modest, but I have started several engineering businesses, and at one time I could say that I was the first person to start an automotive production line in Coventry since the war, to make a new electric delivery vehicle to sell to companies such as Tesco. The noble Lord, Lord

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Paul, once drove it with me. Unfortunately, we were pioneering too early and in a dreadful recession, and I had to shut that business down. The business was indeed helped by BIS, but that was not what broke it. The reason why we started such a pioneering business in the Midlands was the depth of skills there and the enthusiasm of local businesses to help a small manufacturing start-up.

I am not sure that my experience is general, but I believe that making things is fun. I have had the privilege of running the company making the London taxi and I got a kick out of seeing taxi drivers doing business in my product, making themselves money. The noble Lord, Lord Bhattacharyya, may remember helping us, as he has helped so many Midlands-based manufacturing businesses. Indeed, he trained most of the engineers in most of the businesses in the Midlands.

When I saw the new electric van in Tesco livery, it was a thrill. It was not government encouragement or help that made us want to start the business. I believe that the most important thing that the Government can do to help British business is to reduce tax. The way in which entrepreneurs want help is by cutting the costs of doing business, the regulations on health and safety and the regulations on human resources that sap the little energy left in the mind of an entrepreneur after he has concentrated on satisfying his customers. Reducing tax is exactly what this Government are doing, and it is exactly the right thing to do. They may be doing so of necessity, because in this age of international trade it really is impossible to identify exactly where a profit is made and therefore where tax should be levied. Is it made by exploiting the patent or capitalising on the brand? It is quite reasonable to have a dozen different opinions on the implications of the same facts.

The best solution is to lower the tax rate to the point where it is not economic for the taxpayer to argue. I am not sure that 21% is low enough, but it is certainly a start and every little helps. We often underestimate just how beneficial tax cuts can be. There were encouraging signs of progress on this at the Autumn Statement 2013, with some preliminary work done on the dynamic modelling of corporation tax cuts. They were much more beneficial than static calculations had suggested. The Treasury and HMRC should be commended for finally undertaking this task. The model should now be published in full so that improvements can be made.

When I was a struggling entrepreneur, my wish was for smaller government, not better or more frequent free advice. My wish was for simpler tax laws, and now that I have the enormous fun of joining your Lordships’ House I am sure that tax legislation would be improved immensely if it were subject to the wisdom that is endemic here. The advantage to British business of your Lordships’ scrutiny of tax laws would be immense. If someone could actually read them before they were legislated, that would be an enormous advantage. The noble Baroness has called for debate on the direct measures that the Government are taking to promote entrepreneurship. The best single measures are to reduce Government expenditure and to reduce and simplify taxes.

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3.41 pm

Lord Young of Norwood Green (Lab): My Lords, I, too, congratulate the noble Baroness on introducing this debate on a vitally important topic. It has been fascinating to see and hear the different perspectives. I did not take issue with many of the points raised by the noble Baroness. She mentioned the Patent Box, and we ought to claim a bit of the credit for that for the previous Government, whose idea it was.

However, I stumbled a bit when she confessed her desire to increase the number of grammar schools. As an ex-grammar school student myself, I must admit that the quality of my education was good, but I do not think that in the 21st century that is really the answer to our problems. We are far more likely to succeed with the model of university technical colleges which the noble Lord, Lord Baker, has been proselytising, if we are serious about inspiring the next generation of young people to get involved in craft and engineering. That seems to me to be a much more important way forward than trying to reintroduce grammar schools.

The noble Baroness also made the point about job creation, and one public sector job lost and four new jobs in the private sector. Of course we welcome the expansion of jobs in the private sector, but with some of them there is a price to be paid. A significant number are not full-time jobs but part-time jobs, and they do not actually fulfil the requirements of many people who need a full-time job. I do not quarrel with the expansion of jobs in the private sector, but we ought to get it into perspective.

Similarly, there is the question of the importance of education and apprenticeships. Of course, I applaud the work of the Government in building on our rejuvenation of what was in fact a dying apprenticeship scheme. My only problem with the current approach is that there is sometimes a desire to quote numbers. However, many of them, as we found out from examination, are adult apprenticeships which are really reskilling rather than being real apprenticeships. For me, with 1 million young people unemployed, the real focus ought to be on the age ranges of 16 to 24 and 16 to 18.

As has been said, a number of companies are doing well in recruiting apprentices—names such as Jaguar, Range Rover and Rolls-Royce. Yes, they are success stories, but far more worrying is the fact that still at best 8% of British companies have apprentices—that is the real nub of the problem, if we are serious about improving our skills—and still only one-third of FTSE 100 companies have apprentices. We have a long way to go in promoting that. There are still too many companies that believe that training is some other company’s problem, not theirs.

A couple of things have not been mentioned in this debate that interest me. One is the quality of management. We still have some way to go. I forget the exact figures from the Chartered Institute of Personnel and Development, but it was something like one in five managers having any training. So if we are serious about addressing the quality of the products and on productivity itself, then surely that is one of the things that the Government need to focus on: improving the quality of managing.

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I cannot help reflecting on another issue that no doubt impacts on Britain’s ability to export, and that is the cost of energy. We are all struggling with how we are going to deal with fracking and shale gas but I do not believe that we can ignore it. Look at what has happened in the States: the impact of low energy costs is not insignificant. I do not want to spoil the debate by focusing on the negative but a number of contributors today have indicated that we are not doing as well as we should be. The noble Lord, Lord Green, said, in relation to the nature of the recovery, that it was fragile. There is still a worry that the level of debts and the housing bubble are not really what we seek to do. If we are talking about sustainable growth then surely it does not matter which party you are a member of, but the latest figures are still worrying.

I look forward to hearing from the Minister whether he thinks that—I conclude on this—the biggest constraint that businesses have with regard to expanding and exporting is the thorny question of credit finance. A number of noble Lords have pointed out that the current efforts by the Government have not remedied this problem, but the latest proposal for a small-owned business bank itself may not be sufficient. I think it was the noble Lord, Lord Paul, who drew our attention to the German model. Whichever model we create, we must ensure that it delivers on what British businesses, especially small businesses, require, and that is reasonable rates of credit and finance.

3.47 pm

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Viscount Younger of Leckie) (Con): My Lords, I thank all those who have contributed today, and particularly congratulate my noble friend Lady Neville-Rolfe on initiating this important debate. Indeed, I understand that it was her first debate in this House.

In my remarks I will outline the measures that we are taking to meet our aspiration that the UK is seen as the best country in the world in which to do business. There is of course much to say on both enterprise and competitiveness, so I will focus only on some key areas; that is, improving access to finance, equipping people with the right skills, increasing our exports and simplifying both taxation and regulation—all subjects that have been alluded to today.

First, the Government’s growth and business plan for UK plc is set out in our industrial strategy. As part of this, we are implementing 11 sector strategies in partnership with business. My noble friend Lord Stoneham highlighted the importance of focusing on specific sectors. I am co-chairman of one of the sector councils—the Professional and Business Services Council. This is the UK’s largest economic sector, accounting for 12% of UK employment and 11% of gross value added.

We have been working on some exciting projects. The Government have invested, in partnership with industry, approximately £2 billion in the Aerospace Technology Institute and, as my noble friend Lord Stoneham mentioned, £1 billion in the automotive Advanced Propulsion Centre. The first projects for both will be launched later this year. We have also

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earmarked £600 million for eight technologies where the UK has the potential to be a world leader; we have announced a new £100 million employer ownership fund to co-finance investment in skills in key sectors and new technologies; and we are going to reform public sector procurement to make it more accessible to SMEs.

The Government are also taking steps to strengthen manufacturing by encouraging innovation, business investment, technology commercialisation, skills and exports. For example, the Advanced Manufacturing Supply Chain Initiative has made £245 million available to support manufacturing supply chains in England.

The Government are also committed to ensuring that businesses can access the finance that they need for investment and growth. The new British Business Bank brings together the management of existing government loan guarantee and investment schemes into a single, commercially minded institution. I am pleased to have broad support for this from the noble Lord, Lord Paul.

Business bank schemes are supporting £600 million-worth of lending and investment on an annualised basis. This includes the successful Start Up Loans programme, which has already provided £60 million of funding, helping more than 11,500 entrepreneurs to set up their own businesses. The business bank will use its funding to unlock up to £10 billion-worth of additional business lending and investment. It will achieve this by developing innovative programmes for smaller businesses and investing alongside the private sector.

Your Lordships will be aware that apprenticeship numbers continue to rise as we make it easier for employers to take on an apprentice. The noble Lord, Lord Bhattacharyya, and my noble friend Lady Neville-Rolfe, highlighted the importance of skills and education, as did the noble Lord, Lord Young of Norwood Green. We are equipping people with the skills that employers want—for example, 2.5 million adult learners achieved a government-funded further education qualification, representing an increase of 9% in 2012-13.

I now turn to exports. First, I pay tribute to my noble friend Lord Green, a tireless advocate for UK businesses. He recently vice-chaired the World Trade Organisation summit in Bali. The outcome of the summit is the first global trade deal in 20 years. It will add £100 billion to the global economy and will provide £1 billion of benefit to UK businesses annually.

As Trade Minister, my noble friend also encouraged UKTI to focus support on those sectors most important to the UK—for example, helping AugustaWestland to win a £1 billion helicopter contract with the Norwegian air force and safeguarding 3,000 jobs in Yeovil. It is also working with British chambers to deliver a one-stop shop of support services to UK companies in overseas markets.

As Minister for Intellectual Property, I should like to plug, rather unashamedly, the business support provided by our network of international IP attachés. They have directly helped almost 300 businesses since November 2012 and advised 2,600 in their outreach and business education work. My noble friend Lord Green raised the very important point about the continuation of the work that he started at UKTI. I

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reassure him that that very good work will continue and will be built on to achieve the challenging targets that he himself set and which are still the bedrock of what UKTI must achieve. For example, I understand that UKTI is on target to assist 50,000 businesses by the end of 2014-15, and it is making a major contribution towards achieving the target of £1 trillion of exports by 2020 and getting 100,000 more businesses exporting by the same date.

We have set out to reduce tax and provide a stable tax environment to encourage investment. We will be reducing corporation tax to 20% by 2015, which will be the joint lowest in the G20. We have introduced the Patent Box to encourage innovative businesses to invest in R&D in the UK, and to boost the research base we have made R&D tax relief more generous.

The Patent Box, which my noble friend Lord Lyell mentioned, provides a 10% rate of corporation tax with the full benefits being phased in over five years, starting last April. It has already been widely welcomed by businesses and by representative bodies, including the CBI, and is expected to benefit up to 5,000 companies including SMEs. R&D tax relief helped to support over £11.9 billion of R&D expenditure in around 12,000 companies in 2011-12, and we have built on the success of this scheme.

We have reformed our controlled foreign company rules to give British businesses more certainty in their international operations. We are now starting to see the results of our tax changes, with businesses coming to the UK, including WPP and AON, and companies which plan to invest more in research and manufacturing facilities in this country, such as GSK and AstraZeneca. I do agree with my noble friend Lord Lyell that pharmaceuticals are indeed a key sector in the UK, and, by the way, it was good to have a plug from him for the city of Dundee. He also raised the point about the importance of patents and education, and I can reassure my noble friend that as Minister for Intellectual Property, the communication of the importance of protecting IP is very high on my agenda. Last year, for example, the Intellectual Property Office contacted 25,000 businesses. The Patent Box helped secure an investment of £500 million by GSK, which will create 1,000 new jobs in Cumbria.

My noble friend Lord Borwick raised the issue of tax, and I agree with him that the wish for simpler tax laws is very high on our list. I am sure that tax legislation would be improved if it were subject to the wisdom which is endemic here in this Chamber. The Government’s aim is for a tax system that is simple to understand and easy to comply with, and we have taken action to modernise and simplify the tax system. The Government established the Office of Tax Simplification in July 2010 to provide independent advice on simplifying the tax system, and have acted on a range of its recommendations—for example, a new cash basis for calculating tax in April 2013 for up to 3 million of the smaller self-employed businesses, and investing £200 million to expand HMRC’s digital services over the next three years, making it easier and cheaper for all 4.8 million small and medium-sized businesses to deal with HMRC.

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However, we must make life simpler for businesses. We continue to work hard to reduce bureaucracy. I am happy to report that our efforts on deregulation have already saved businesses over £1 billion per year. We are exempting micro-businesses and start-ups from new regulations. This has recently been extended to businesses with up to 50 employees through the new small and micro-business assessment. We have committed to scrap or improve at least 3,000 regulations through the Red Tape Challenge. This includes stopping unnecessary health and safety inspections for low-risk businesses and introducing fees for employment tribunals to help deter spurious and vexatious claims. I know, as she has said, that my noble friend Lady Neville-Rolfe takes a keen interest in deregulation and I particularly wanted to thank her for her valuable contribution to the better regulation strategy group chaired by the noble Lord, Lord Currie.

We all know how vital small and medium-sized enterprises are to the economy. That is why we published a document, on 7 December, Small Business: GREAT Ambition, which sets out our commitment to help them. It focuses on a number of areas where government can help, including financing business growth, hiring people, developing new ideas and products, expanding into new markets, and getting the right support at the right time. What this means, more generally, is letting businesses get on with doing business.

My noble friend Lady Neville-Rolfe emphasised the importance of where business headquarters are located. I am happy to report that Ernst & Young reported in December that 60 multinationals were looking to move to the UK in the following 18 months. KPMG’s recent tax competiveness survey confirmed for the second year running that companies believe Britain has a more attractive business tax system than key competitor countries.

My noble friend Lord Stoneham raised the issue of the creative industries and asked why they were not one of the key sectors, which is a fair point to raise. The Government take the interests of the creative industries extremely seriously. We have the Creative Industries Council, which is chaired by my right honourable friends in the other place, Vince Cable and Maria Miller. I attended one of its meetings last year and can testify to the great work that the Government and industry are achieving by working together in this particular sector.

We are listening to businesses and we are doing everything we can to make sure that they develop, prosper and flourish. The initiatives I have spoken about today are of course only a selection of what we are doing to help, and I believe it is working. Evidence shows that businesses are more confident. Since April 2013, the proportion of businesses that believe their output performance is higher than 12 months ago has been increasing each month. We know there is still much to do, and the noble Lord, Lord Young, mentioned a fragile recovery. I believe it is better than that, but there is much more to do. We will continue to work hard, first, to make sure that the UK is seen as the best place in the world to do business; secondly, to make sure that the quality of British goods are acknowledged as exceptional around the globe and that enterprising

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companies have the necessary opportunities for growth; and finally, to continue to push our way to the very top of the World Economic Forum and the World Bank’s ranking for ease of doing business.

Education: Foreign Language Teaching

Question for Short Debate

Baroness Northover (LD): My Lords, I remind noble Lords that we are about to begin a time-limited debate. As far as I can see, there is no slippage time. Therefore, for those making Back-Bench speeches, when the clock reaches “5” they have had their five minutes.

4.02 pm

Asked by Baroness Coussins

To ask Her Majesty’s Government what steps they are taking to ensure the success of mandatory foreign language teaching at Key Stage 2 from September 2014.

Baroness Coussins (CB): My Lords, I declare my interest as chair of the All-Party Group on Modern Languages, which has been pressing for some years now for foreign languages to be part of the required curriculum in primary schools. I am therefore delighted that this will finally be the case from September this year, and I congratulate the Government most warmly on this reform. It has been a long time coming, having been on the cards for September 2011 but abandoned as part of a cross-party agreement before the most recent general election. I have never gone along with the idea, promoted from 2004 onwards, that compulsory languages at key stage 2 was a sensible strategic alternative to keeping languages in the national curriculum for all until the end of key stage 4. I believe that we should have both.

The focus today is on key stage 2, and the timing is very good. With some concentrated focus and leadership from the Government, starting now, we can ensure that we will not be back here in four or five years’ time being told by the language naysayers that pupils still do not like languages, there are not enough teachers and in any case English is enough. This is not the occasion to rehearse the arguments about why languages are important; we really must take that for granted in today’s debate. Suffice it to say that in the 21st century, knowing English is vital but knowing only English is a serious drawback. Primary school is the place to start making sure that pupils in the UK are on the front foot.

I apologise in advance to the Minister for the many detailed questions I shall be asking. If he does not have time to answer them all today, I hope that he will write to me and place a copy in the Library.

We will not be starting in September with a blank sheet of paper. Some 97% of primary schools already offer some language teaching and there is some excellent practice in several parts of the country. However, the latest data from the Language Trends survey indicate a wide variation in practice. Many schools treat their provision as a very lightweight introduction to a new

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language and concentrate solely on oral skills. Around one-third of schools say that their neither monitor nor assess pupils’ progress. Schools are not confident about the more rigorous aspects of language teaching.

There are five issues that need urgent attention from the Government if the new policy is to be a success overall, not just in small patches. I will address each of them in turn. They are guidance, support and training; teacher supply; measuring progress and continuity; capitalising on home languages; and the role of Ofsted.

First, the survey reveals a high level of dependence on outside support. However, there are real problems with schools’ access to that support and training. Official guidance barely exists. The new documentation for schools has only three pages outlining the purpose of study, attainment targets and subject content in modern languages. That compares with 88 pages for English. Surely that sends a message to schools about the level of importance attached to studying a foreign language.

The DfE says that schools should seek advice and support in preparation for key stage 2 languages, but does not actually provide any support or indeed guidance on how to find it. What is being done, and what more can be done, to ensure that schools have access to the support and training that they need? In particular, will the Government facilitate training for the new programme of study? Without further guidance on the intended outcomes of key stage 2 languages, it is also very difficult to know how much time to give to the subject in the timetable. England provides one of the lowest amounts of teaching time to modern languages in both primary and secondary schools of all the OECD countries. The current typical offer is one 30-minute lesson a week, and while that might be valuable in itself it is unlikely to lead to any measurable level of competence by the end of key stage 2.

The second big issue is teacher supply. How will the Government ensure that enough primary school teachers are trained to teach a language, bearing in mind that this becomes compulsory in only a few months’ time? What opportunities will there be for teachers to spend time in a country where the language they are teaching is spoken? Given the shortage of suitably trained teachers, what advice will the Government be giving to schools on the use of unqualified speakers of a given language who, perhaps with the appropriate training, might assist schools with their language provision?

The Minister might be interested in the case study of the Al-Noor primary school, an independent Muslim school in east London hoping to become voluntary aided. The pupils, none of whom are native Arabic speakers, start to learn Arabic in reception class and by year 6 have reached a level judged to be equivalent to GCSE. The teacher is not a native Arabic speaker either, although he is an experienced teacher and teacher trainer. However, he does not have QTS because the assessment-only route to QTS is not available, as I understand it, in languages. Is there any modification of the QTS process that the Government could make to improve the supply of qualified language teachers?

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The third issue is measuring progress and achieving continuity. There is currently no guidance on the level to be achieved at the end of key stage 2 or how it is to be measured. Other countries use the Common European Framework of Reference, or a version thereof, which is adapted to measure the progress of young children. Without a national system of measurement, there is a danger that schools will adopt a minimalist approach that will not provide a secure or consistent enough basis for secondary schools to build on in the same way as they do for maths, English and science. Without this, year 7 pupils will all too often find themselves starting from scratch again in languages, which leads to boredom, demoralisation and a reluctance to continue languages after key stage 3. Will the Government therefore introduce a formal assessment measure? Will they set a defined level of achievement for pupils to reach at the end of key stage 2?

The Language Trends survey revealed that 60% of primary schools have no contacts on languages with their local secondary schools. The issue of continuity is often just dismissed as too complex to deal with, yet the national curriculum requires that key stage 3 should build on key stage 2. The need for a proper system to record pupil progress and pass this information on to secondary schools is key to the success of language teaching at key stage 2 and, indeed, throughout statutory schooling.

Crucially, will the Government ensure that a national recording mechanism is introduced to facilitate information transfer and also to provide data that would enable local, national and international comparisons to be made? The London Borough of Hackney and other school partnerships offer one example of an approach to achieving continuity, by having all schools, both primary and secondary, agree on which language is taught at key stage 2. Will the Government provide a strong steer to encourage schools to work together in this way?

The fourth issue that I flagged up is the value of home languages. One in six primary school pupils does not have English as their first language. We should recognise this linguistic capital as a significant asset. The Government’s decision to remove the list of seven languages allows primary schools the freedom to develop home languages as well as to introduce a new one. The challenge is how to recognise and accredit home languages now that the Asset system has been withdrawn. What will the department can do to make the Government more aware of the potential importance of the rich range of languages spoken in the UK for economic growth, national security and international diplomacy? Without the Asset scheme, how do the Government intend to support and develop higher levels of literacy in home and community languages?

Lastly, I want to say a few words about the importance of Ofsted inspections, which will play a critical role in measuring the successful implementation of this policy, as well as encouraging primary schools to take the reform seriously. To what extent will the inspection of language provision be part of Ofsted inspections from September 2014, and will the Minister assure noble Lords that full account of the new policy on key stage 2 languages will be taken in inspection visits and that it will form a part of all inspection reports?

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I am excited about this new policy, but I ask the Government to pay urgent attention to the various gaps in the system that I have described, in order to prevent the policy from backfiring in practice.

4.11 pm

Lord Lyell (Con): My Lords, no subject in your Lordships’ House could have a better champion than the noble Baroness, Lady Coussins. I am one of her—if I can call it so—pupils. I am delighted that the noble Lord, Lord Aberdare, is here, because 60 years ago, at the school we both attended, I was decreed to be incapable of taking on board anything to do with science or mathematics and was placed in the languages stream. I have never forgotten what I learnt there. I listened to the marvellous and very encouraging comments made by the noble Baroness, Lady Coussins, about rigour in language tuition. The noble Lord, Lord Aberdare, and I will remember the rigour with which we had to learn languages in those far-off days.

I am particularly grateful to the noble Baroness, Lady Coussins, for all the expert advice that she has produced today, together with her commitment, drive and enthusiasm in beating the drum for something which appears not to be of enormous importance for school curricula, especially at an early stage: primary school, or when moving on to secondary school. I am afraid I am a bit lost with what the noble Baroness referred to as stages—is it stage 4? In any case, the first stage is the most important one.

The noble Baroness referred to mandatory tuition, and I had a question mark there. I believe that it can be, and ought to be, all the more important, since in another part of your Lordships’ House we have just had an enthralling debate on the world wide web with the noble Baroness, Lady Lane-Fox. That demonstrates the worldwide means of communication, and I suspect that a good bit of the world wide web is not in English, although English is probably the majority language of communication. If the Minister has time, I hope that he can say—or write to me or let me know somehow—whether there is a chance of using the world wide web and expanding its fantastic capacity for teaching and furthering worldwide communication.

On a personal basis—if the noble Baroness will forgive me this—when I was at the University of Oxford, I often had an essay crisis in the middle of the night. BBC Radio 2 went off air at midnight, but one did not worry—there were stations that could be listened to for 24 hours out of 24. On long wave, one had French radio. I was able to take all four French channels, and I am delighted that they have improved my communication. I then came to learn about the BBC World Service and all the languages and services that it provided.