House of Commons
(13 years, 4 months ago)
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Prayers
(13 years, 4 months ago)
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09:34 - The House having divided: - Ayes: 0 / Noes: 34 -
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Mr Greg Knight (East Yorkshire) (Con)
I beg to move, That the House sit in private.
Question put forthwith (Standing Order No. 163).
The House proceeded to a Division.
Mr Speaker
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
Joan Walley (Stoke-on-Trent North) (Lab)
On a point of order, Mr Speaker. It relates to Standing Orders Nos. 11, 12, 13 and 14. Standing Order No. 12 states:
“Unless the House otherwise orders, the House shall not sit on any Friday other than those on which private Members’ bills have precedence.”
Standing Order No. 14, on the arrangement and timing of public and private business, states that
“government business shall have precedence at every sitting”
and paragraph (4) states:
“Private Members’ bills shall have precedence over government business on thirteen Fridays in each session”.
May I suggest, Mr Speaker, on the evidence of the time-wasting that we have seen not just today but regularly on Fridays, that, given that Members of the House come here to bring forward legislation—such as my Public Bodies (Sustainable Food) Bill, which is not mischievous and has not yet had a Second Reading and is unlikely to have one—it is time that this House, through the proper channels and the Procedure Committee, reconsidered how we deal with private Members’ business so that we can make progress and so that those Members of Parliament who are elected to this House have a genuine opportunity to get legislation on to our statute book? That is what the public expect of us.
Mr Speaker
I am grateful to the hon. Lady for her point of order and for advance notice of it. I have considerable sympathy for her and for other Back-Bench Members who have worked hard to bring their Bills to the House for debate. How today’s proceedings unfold is a matter for the House and the use of time and procedure is in the hands of individual Members. The Chair of the Procedure Committee is in the House today and he might welcome a memorandum from the hon. Lady setting out her analysis of the problem and the solutions that she proposes. I hope that is helpful both to the hon. Lady and to the rest of the House.
Mr Speaker
I shall take a very brief point of order from the right hon. Gentleman and we shall then proceed.
Mr Knight
Further to that point of order, Mr Speaker. I rise only to say that your conclusion is correct. I would welcome further discussions with the hon. Member for Stoke-on-Trent North (Joan Walley) and, indeed, we have already spoken in the margins of the Chamber to agree to do just that.
Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill
(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Greg Knight (East Yorkshire) (Con)
I beg to move, That the Bill be now read a Second Time.
It is an unexpected privilege to be here. I have signed the book for the ballot for private Members’ Bills every year since 1983, apart from four years when, due to the electorate, I was elsewhere. It therefore came as rather a shock to find that this year my name was in the top 20.
Of course, as the House will know, the ballot is only the start of the process, and today is only a little further down the long road that one has to take to seek to change the law of the land. Indeed, the statistics are not encouraging. I understand that only 10% of private Members’ Bills succeed, so a private Member’s Bill is a very fragile vessel. As I look around and see my hon. Friend the Member for Bury North (Mr Nuttall) in his place, and as I am aware that my hon. Friend the Member for Christchurch (Mr Chope) is in the building, I even wonder whether the word “fragile” is appropriate. Perhaps “brittle” is a more appropriate word. I hope that when I have explained the purpose of the Bill, they will decide that it is something they can support.
Joan Walley (Stoke-on-Trent North) (Lab)
I am most grateful to the right hon. Gentleman for his positive remarks about considering the issue of private Members’ Bills. Does he agree that one of the problems of our archaic system and how we deal with private Members’ Bills is that a great deal of filibustering goes on in this place, rather than action that makes our Parliament fit for purpose?
Mr Knight
If I may respond to that en passant, as it were, I accept that argument. The Procedure Committee has not yet considered this, but an argument can be made that we could consider bringing in a process whereby when a private Member’s Bill has had three hours of debate the question is then put. The Procedure Committee would wish to consider that option, although I would not wish to prejudge how it might decide to form its view on that proposition. That certainly could be done and it would mean that we would have more debates, which, in my view, is a good thing.
The next duty of anyone who comes fairly high in the ballot is to decide on the subject. Hon. Members basically make a choice in one of two areas. Either they choose a subject of great controversy or perhaps startling change and to have their day in the sun on Second Reading, knowing that the Bill will be opposed by the Government and even by the official Opposition and will be talked out, or they look for something less controversial but worthy in the hope that they can get it on to the statute book. I have to be honest and say that my first choice was to introduce a daylight saving Bill, but I was usurped by my hon. Friend the Member for Castle Point (Rebecca Harris), who was higher up the ballot and who, to her great credit, has successfully piloted her Bill to Committee. I wish her well with it. Because of her decision, I decided to look around for another less controversial but worthy proposition, and I decided that I wanted to introduce a Bill that would make our law fairer in some way.
I had cause to look at some of the recent work of the Law Commission and of the Select Committee on Justice—I am delighted to see that the Chairman of that Committee, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), is in his place—and I observed some of their reflections on the forfeiture rule and the law of succession. I therefore decided on my present Bill. I accept that it is not likely to be the talking point of the week in the village pub, but it deals with three related areas where, in my view, a small change in our law is both warranted and desirable.
I must tell the House that due to the complexities of the subject, this will not be a speech full of soundbites. I shall give some background. The Bill seeks to amend the law of succession in England and Wales where a person disclaims—that is, rejects—an inheritance or is disqualified from receiving an inheritance by reason of the forfeiture rule. What is the forfeiture rule? It has long been a doctrine of the common law of this country and I think it is a good doctrine to which no reasonable person could take exception. It states that if a man or woman is criminally responsible for the death of another, neither he or she nor his or her elected representatives can be entitled to reap any financial benefit from that act. As Lord Justice Salmon said in the case of Gray v. Barr, which was reported in 1971, 2 All England Reports at page 974:
“it would in general, shock the public conscience if a man could use the courts to enforce a money claim either under a contract or a will by reason of his having committed such act”—
that is, the act of murder.
Experience has shown that there are some cases—they might be few, but they are hard cases—where the public conscience would not want the full forfeiture provisions to apply, such as those involving mercy killings, the survivor of a suicide pact initiated by the non-surviving party and perhaps a battered wife driven almost beyond the borderline of sanity by the cruelty of a violent spouse. In such cases, the criminal courts will normally have been merciful and might have not even awarded any custodial sentence in the criminal proceedings. It was to deal with these situations and cases like them that the Forfeiture Act 1982 was passed. That Act provides for discretion to be applied by the courts in cases of manslaughter—I emphasise the word manslaughter, because there is no discretion in cases of murder. In cases of manslaughter where mitigating circumstances exist, the courts can allow the forfeiture rule to be relaxed, where appropriate.
The current rule is defined in section 1 of the 1982 Act as meaning the rule of public policy, which in certain circumstances precludes a person who has unlawfully killed another or unlawfully aided, abetted, counselled or procured the death of that other from acquiring a benefit in consequence of the killing.
My Bill gives effect, with some modifications, to the recommendations set out in the Law Commission’s 2005 report, “The Forfeiture Rule and the Law of Succession”. The subject of forfeiture and succession was referred to the Law Commission following the very unsatisfactory case Re DWS (deceased) 2001. Briefly, the facts of that case were that a person, whom I will call P, killed both his parents, neither of whom left a will. The court had to decide who was entitled to inherit P’s father’s estate under the intestacy rules, which are specified in sections 46 and 47 of the Administration of Estates Act 1925. P was not allowed to inherit because of the forfeiture rule, which I have just outlined. However, P’s child, the grandchild of P’s victims, could not inherit in place of P, because under the intestacy rules P was still alive and therefore P’s child could not take an interest in the estate. In that particular case, the victim’s estate therefore passed to a sister, which was unsatisfactory because by the time the court reached its conclusion the sister herself had passed away.
The Law Commission considered that the outcome of that case was unfair, and I agree. Equally unfairly, however, a situation might arise in which a killer forfeited an inheritance under a will. I do not believe that allowing a killer’s children to inherit from the victim in those narrow circumstances would encourage anyone who would not otherwise do so to commit a murder or attempted murder. The alternative is to stay with our present law and disinherit innocent children, which is most unfair. In any event, the law offers protection to prevent a killer from benefiting from a forfeited inheritance that passes to a minor, because the court has power on application to appoint two trustees or more where a minority interest arises on intestacy. It also has the power to pass over any person with a prior interest in a grant of letters of administration and appoint someone else to run the estate.
Similar problems can also occur where a person disclaims an inheritance under a will or on intestacy. For example, where in an intestacy—to the non-lawyers among us, that means where there is no will to say what should happen to the estate—the person who disclaims is the only child of the deceased, the inheritance will bypass the child’s descendants, because grandchildren can only inherit from their grandparent if their parent dies before the grandparent, in which case the inheritance passes instead to the deceased’s other, but more distant, blood relatives.
Let me give the House an example of how that might arise. Let us say that A, the deceased, dies and leaves a fortune, money which he lawfully made from his ownership of a nightclub and casino. He does not leave a will, but dies leaving a son, B, and two grandchildren, C and D. B is a strict follower of Victorian values and is a devout Baptist Christian, unlike his father. His views are similar to those of the Southern Baptist Theological Seminary in the USA, which holds the views that God’s way is that we should earn what we get and that gambling is a sin. Because of those beliefs, B decides that he cannot in all conscience accept the legacy, so he disclaims—that is, he gives up his entitlement to money from his father’s estate. Under our law, in so doing he would prevent his own children, C and D, from inheriting, which applies even if they were to welcome the inheritance with open arms. Indeed, C and D might have embraced gambling as passionately as their own father had disowned it, but that would make no difference. Under our law, the inheritance would go elsewhere, which is neither right nor fair. That is why I am seeking to make a change with my Bill.
Jacob Rees-Mogg (North East Somerset) (Con)
If the strict Baptist did not want the money to go to his children, because he thought that
“the wages of sin is death”,
would he be able to take the inheritance and give it away, which would have the same effect as disclaiming, and therefore not lose his right to make that choice?
Mr Knight
B would be able to do that, although our law clearly states that one cannot refuse part of an inheritance—it is all or nothing. Once the decision is made, one cannot change one’s mind, unless others have not acted on one’s initial decision, in which case one can. The son would be at liberty to accept the inheritance and then give it away—indeed, he could give it to the church of which he was a member.
Stranger things happen where there is a will. If someone decides to give up something that they have been bequeathed in a will, what happens depends on the wording of the will. Such cases would need individual consideration.
Mr Christopher Chope (Christchurch) (Con)
I apologise to my right hon. Friend for not being here at the outset of his remarks, but I have indicated to him informally my concern that that particular aspect of his Bill may have the unintended consequence of creating a loophole, whereby people can avoid inheritance tax. In the example that he gave, the money would go directly to the grandchildren as a result of his Bill, which means that by disclaiming, B would be able to pass the money on to the next generation, whereas normally he would be able to do so only by incurring a potential inheritance tax liability, if he did not survive for seven years after so doing.
Mr Knight
Under our existing law, there are various reasons why people may disclaim an inheritance, and reducing one’s tax liability is already one of them. For example, someone might decide not to accept an inheritance, where it involved taking on a property that was subject to a long lease that included expensive repair covenants.
Many people in the world, as well as in this country, seek to reduce the amount that they pay in tax. Some seek to do it by concealing their wealth, lying to the authorities and completing inaccurate and misleading tax forms. They are tax evaders—they break the law, and when they are caught, they are properly punished. Others seek to lower their tax liability by making perfectly lawful decisions affecting their own position, which is called tax avoidance rather than tax evasion. There is nothing unlawful about tax avoidance, and I am surprised that my hon. Friend, who is a Conservative Member of Parliament, feels that it is somehow inappropriate.
If a person who is on their deathbed inherits a legacy, and they are worried that by accepting the money, which they will not have time to spend, they will incur a greater inheritance tax bill, I see nothing wrong with such a person disclaiming. If my Bill were law, disclaiming would mean that person’s disclaimed money going to their children, which would be all the better. That person would have reduced their tax liability in a perfectly lawful way, and what is wrong with that? I hope that on reflection my hon. Friend will decide that his point, which he might initially have thought was a good one, is not actually a good one.
Mr Knight
It could be a consequence, but it is not the prime reason behind the Bill.
When the Law Commission looked at the laws of succession, it highlighted the anomalous situation involving the children of a deceased minor. That is also covered by my Bill, which addresses the irregular situation in which the children of a minor who is entitled to inherit an interest in the estate of an intestate person, but who dies unmarried and without entering into a civil partnership before reaching 18, are unable to inherit their parent’s interest in that estate for no other reason than that the law says so. I think that is unfair and I will elaborate on this issue later.
First, let me comment on specific clauses in the Bill. Clause 1 would amend part 4 of the Administration of Estates Act 1925, which sets out how a deceased person’s estate is to be distributed in the absence of a will or to the extent that a will is not valid. Clause 1(2) would insert proposed new section 46A into the 1925 Act. Subsection (1) of new section 46A specifies that the new section would apply where a person, X, disclaims an inheritance or is disqualified from inheriting because of the forfeiture rule. Subsection (2) of new section 46A provides that for the purpose of deciding who should inherit X’s interest in the deceased’s estate in those circumstances, X should be deemed to have
“died immediately before the intestate.”
That overcomes the rule in current intestacy law, under section 47(1) of the 1925 Act, that children cannot inherit if their parents are still alive. That Act, which is still on our statute book after all this time, was drafted and introduced by the first Earl of Birkenhead, who I believe is the subject of one of your forthcoming lectures, Mr Speaker, which I hope to attend.
The effect of the reform is that if a person disclaims or is disqualified under the forfeiture rule, the inheritance to which he or she is no longer entitled will go to the next person listed in the order of priority in section 46 of the 1925 Act, even though the person who disclaimed or suffered the forfeiture is still alive. Subsection (3) of new section 46A provides that the new rule would not limit the court’s power under section 2 of the Forfeiture Act 1982, under which the court has powers to modify the effect of the forfeiture rule where the offender has not been convicted of murder, for example by allowing the killer to inherit all or part of the estate. The circumstances in which the court would exercise that power would be the examples I gave earlier, in the case, perhaps, of a mercy killing, in which the deceased was the instigator of the act and the loving relative was complying with their wishes. The rule introduced by new section 46A gives way to any order made by the court under section 2 of the Forfeiture Act, which would override it.
Clause 1(3) would make a consequential amendment to section 47(1) of the 1925 Act. Section 47(1) defines the statutory trusts for descendants or intestacy, providing that no grandchild or remoter descendant may inherit if his or her parent is still alive when the intestate dies. That is clearly inconsistent with proposed new section 46A, which would treat the offender as has having died before the deceased. Clause 1(3) would therefore insert “(subject to section 46A)” into section 47(1) to ensure consistency with the new rule.
Clause 1(4) makes another consequential amendment, inserting a new subsection, 4A, after section 47(4) of the 1925 Act. New subsection 4A states that subsections (2) and (4) of section 47 are subject to new section 46A.
Section 47(2) of the 1925 Act currently provides that where no descendant of the intestate attains a vested interest by reaching the age of 18, marrying or entering into a civil partnership under that age, the estate is to be distributed as if the intestate had died without issue. Section 47(4) applies a similar rule to the statutory trust for siblings or issue of siblings, defined by section 47(3). For the same reasons as apply in relation to the amendment made by clause 1(3), new subsection 4A will ensure that sections 47(2) and 47(4) are consistent with the new rule.
Clause 2 deals with disclaimer or forfeiture of a gift under a will, and makes analogous provision to that made by clause 1 in relation to intestate succession. It inserts a new section after section 33 of the Wills Act 1837 and makes one consequential amendment to that section. In both those situations, the will is to be interpreted as if the person disclaiming or the person forfeiting had died immediately before the testator, the effect of this being that the person next entitled to the property will be able to inherit. I would not want, in any proposition I put before the House, to tamper with the express provision of a will, and this Bill would not do that. The general rule I have mentioned gives way to a contrary intention shown in a will. That is consistent with section 33 of the Wills Act, which also gives way to a specific contrary intention in the testator’s will. The new rule in clause 2 would, as with clause 1, give way to any order of the court made under section 2 of the Forfeiture Act to give relief to the killer from the effect of the forfeiture rule where the court decided that was appropriate.
Clause 3 deals with the death of a single parent aged under 18, in relation to which there is an anomaly in the law of intestacy. Where a child, C, of a deceased who dies intestate is entitled to a benefit but dies under the age of 18 without having married, but leaves a child or children, the law is unfair to that grandchild or grandchildren. Currently, C’s benefit does not pass to his or her children because by dying an unmarried minor, C does not attain a vested interest in the intestate’s property under the intestacy rules and therefore has no interest to pass on to his or her children. In such cases, the inheritance passes instead to the intestate’s other, more distant, blood relatives. That clearly discriminates against the children of single parent minors. Since 1991, illegitimacy has not been not a bar to intestate inheritance, and such children qualify as grandchildren of the intestate. This problem would not arise if the child-mother was married, or if the grandchild or grandchildren were catered for in a will. The law of intestacy discriminates against illegitimate grandchildren: they are penalised because their mother is young and unmarried and because the deceased failed to make a will.
Some people—I hope none of them are in the Chamber—may feel that this bizarre rule is good news because it is a clear case of the law encouraging marriage and acting as a disincentive to young, unmarried girls becoming pregnant. I do not accept that argument, because although the present law prevents the children of unmarried teenage mothers—and fathers, come to that—from inheriting any interest that their parent may have had in the estate of the intestate person, they can inherit in other ways and can inherit other property.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
An even more telling point is that someone who has got into that situation without taking any precautions is, to put it mildly, extremely unlikely to be aware of this bizarre provision of the law.
Mr Knight
I accept that point absolutely and completely. The effect of the law does not produce the outcome that the intestate person in most cases would have wished anyway, and my Bill seeks to correct that anomaly.
There are a number of ways in which the state can and should seek to dissuade teenage pregnancies, but using the law of intestacy should not be one of them. I am not convinced that after a night out at a disco or bar, just before the moment of unprotected sex—perhaps in the back of a car—two young teenagers are going to feel in any way dissuaded from having sexual relations, and possibly thereby conceiving a child, by the expectation that they may die before reaching 18 or marrying, and thereby disinherit an unborn child that they might or might not be about to create. I absolutely agree with the comments made by the Chair of the Justice Committee.
We hope that most children are brought up in a loving relationship. Let us think of the poor child, who has an unmarried mother who is killed before she reaches the age of 18. What does the state say to the child? “Because of these circumstances, you will not be helped; you will not be able to inherit money that you would have inherited from your grandparents if your mother had reached the age of 18.” Clause 3, therefore, inserts new subsections (4B), (4C) and (4D) into section 47 of the 1925 Act. I remind the House that that Act lists what happens on intestacy. The subsections inserted by the clause deal with the situation of the young child of an intestate who dies under the age of 18 without having married or formed a civil partnership. As C is a minor at the date of Y’s death in the example, his or her interest in Y’s estate will be held in the statutory trusts imposed by the 1925 Act.
On commencement, clause 4(4) provides that only deaths occurring after the commencement of the Bill will be covered by it. Knowing, in this cost-conscious age in which we live, my hon. Friends’ concern about the financial implications, I draw their attention to the fact that the implementation of the Bill is not expected to impose any additional burden or to increase any other public expenditure.
Mr Chope
My understanding is that the Bill incorporates part of the recommendations of the Law Commission, which were going to be legislated for by the Government, but the Government decided not to legislate for those because they said it would be too expensive to do so. How is that action by the Government consistent with what my right hon. Friend says—that nothing in the Bill would add to the costs to the public purse?
Mr Knight
My Bill is not precisely the same as the Bill proposed by the Law Commission; I have made a number of changes to it. I stand by what I just told the House. I am sure the Minister will deal with this point in further detail if it is felt that I am incorrect, but I suspect that the reason my hon. Friend the Member for Christchurch (Mr Chope) is confused is as follows. The Law Commission suggested that special trust provision for minors in forfeiture cases be set up, and when the Ministry of Justice consulted on the special trust provision proposals, which may have played a part in the issue of cost, several criticisms were made of them. Some consultees doubted that they were necessary, and I understand that the Ministry of Justice—I stand to be corrected by the Minister—re-examined those proposals with the Law Commission, and they both then changed their mind and agreed that the proposals were unnecessary. I have not suggested otherwise because I take the view that the law already provides protection for minors’ inheritances. That may answer my hon. Friend’s point.
Mr Knight
I am doing that for the simple reason that I have confidence and trust in the coalition Government and I saw no reason to seek to override them on so footling a matter. If the Minister tells the House that he supports the Bill—which I hope he will in a moment—I expect him in good faith to see that the Bill is brought into effect as soon as is reasonably possible. Because I have confidence, particularly in this ministerial team, I decided to leave it to the Government to make that decision.
Sir Alan Beith
I return to the point that the Law Commission had made. Its recommendation about creating trust provisions—originally with the Public Trustee—arose from an anxiety that money should be administered without benefit, particularly indirect benefit, to a killer. Although that could have been done by private trustees rather than the Public Trustee and without public cost, its original thinking was that something along those lines was needed. Is the right hon. Gentleman confident that he was right not to include it in the Bill?
Mr Knight
I think so, because the court has power to determine who manages an estate, and I would have thought that that power was sufficient. If the court felt that the estate was being manipulated by an incarcerated prisoner—the father who had murdered the grandparent—I would have thought that the courts would have power to intervene and take over the management of the estate. That was why I did not include those provisions in the Bill, particularly when I noted that there had been further discussions between the Ministry of Justice and the Law Commission and that they had both reached the conclusion that the special trust provision was unnecessary. I assumed, and still do assume, that because that was where the debate ended up, we need not bother with that extra tier of bureaucracy in the Bill. However, should the Bill be given a Second Reading and should evidence to the contrary arise, I am happy to look at the matter by way of possible amendment to the Bill—although I hope and believe that will not be necessary or desirable.
On public manpower, I tell my hon. Friends that no change in the work load of any Government Department or agency is anticipated if the Bill is implemented. Usually, Ministers have to make a statement about compatibility with the European convention on human rights. I am delighted to say that this is not a Government Bill, so it does not require a statement under section 19(1) of the Human Rights Act 1998. However, if it did, my understanding of that Act is that the provisions of the Bill are compatible with the convention in any event.
The Bill extends to England and Wales, and as my hon. Friend the Member for Christchurch has said, it will come into force when the Minister so determines should it pass through all its stages in both Houses. I am sure, if he supports the Bill, that he will not stand in its way.
The Bill is merely intended to make our law fairer, by removing technicalities that run contrary to the general policy of the law of succession. It will allow direct descendants to inherit ahead of more distant relatives on intestacy. Where there is a will, the Bill will allow the people whom the deceased intended, or could be assumed to have intended, to take the inheritance if the deceased’s first intended recipient does not. More importantly, the Bill will produce an outcome that is fair, rather than one based on legal technicalities.
I am most grateful for the courteous and helpful assistance that I have received from the Minister, his departmental team, Officers and servants of the House and members of the Law Commission to whom I have spoken. I am also grateful to the Justice Committee, which has indicated its support for the measure, and for the comments made by its Chairman, my right hon. Friend the Member for Berwick-upon-Tweed, whom I am delighted to see with us today. Finally, I am most grateful to all hon. Members for giving me a fair hearing today. I hope that they will in due course give this modest but worthy Bill a Second Reading.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I congratulate my right hon. Friend the Member for East Yorkshire (Mr Knight) on introducing the Bill and on his lucid presentation of a complex matter. Of course, as he indicated, the background is that a draft Civil Law Reform Bill was published in the last Session of Parliament and the Justice Committee studied the Government’s request in some detail. His Bill takes up a significant part of the draft Bill. Meanwhile, the Government have decided not to proceed with it.
I received a letter, dated 16 December, from the Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly), who is dealing with the debate today, indicating how grateful the Government were for the Justice Committee’s report, but he said that
“as the draft Bill does not contribute to the delivery of our key priorities, we have decided not to take it forward.”
I am not unsympathetic to the Government’s decision not to proceed with the draft Bill in this Session. It is complex; it would require a lot of ministerial time and attention; and the Department has many urgent priorities to deal with. But I hope that the Government have not closed the door on sorting out some of the laws with which it deals.
Much of the draft Civil Law Reform Bill related to bereavement and dependency damages and damages in respect of gratuitous care under the Fatal Accidents Act 1976. It was complex; the Justice Committee did not agree with it all; and further work clearly needed to be done. I hope that that work is not brought to a complete halt by the decision not to proceed in this Session and that it can be taken forward in other Sessions. Of course, if that does not happen, it raises yet again a question that we have come up against several times: why have a Law Commission, which consumes considerable public resources in doing detailed and careful work on laws that need to be improved and brought up to date, if its recommendations are not implemented? Judicial time, as well as public expenditure, is involved. The record of successive Governments in implementing Law Commission recommendations is not very good.
However, into the breach has stepped my right hon. Friend to deal with laws that are significant to a small number of people. By definition, those few people are in pretty serious and challenging circumstances, particularly where a killing has taken place in the family or where a death—indeed, a death of a minor—has occurred. Those are awful family circumstances in which we want the law to be helpful, not unhelpful.
When a person dies without a valid will in England or Wales, intestacy laws determine who will inherit his or her property. Succession law is generally aimed at benefiting descendants in preference to other, more remote family members, and the order for doing so is set out in the Administration of Estates Act 1925—spouse, children, parents, siblings, half-siblings, grandparents, aunts and uncles, and half-aunts and uncles—and when no relative survives, the deceased’s money goes to the Crown.
Currently, the common law forfeiture rule prevents a person convicted of an unlawful killing from benefiting from the victim’s death, irrespective of whether the victim had made a will. Murderers are always prevented from benefiting from their victims’ deaths, but the court has discretion over whether to apply the forfeiture rule in cases of manslaughter or other forms of unlawful killing.
A child who has murdered his or her father cannot therefore inherit the father’s estate, even if he made such provision in his will. His or her children—the victim’s grandchildren—also cannot inherit because section 47 of the Administration of Estates Act 1925 and section 33 of the Wills Act 1837 require the death of the parent before the child can inherit from the grandparents.
The impact on a grandchild when his parent forfeits a grandparent’s estate under the forfeiture rule was heavily criticised in the case Re DWS in 2001, where a father had murdered both his parents. Both grandparents died without a will, and the Court of Appeal held that it had no power to treat the father, who was disqualified from inheriting by reason of his crime, as deceased, which would have allowed the grandson to inherit. The estate therefore went to other relatives. That led to the issue being referred to the Law Commission.
In such unusual circumstances, children who are indirect victims of a grave crime are denied the support that the murdered person would have wished them to have. Either they have expressed that wish in a will, or, having failed to do so, everyone realises that that is what the deceased person would have wanted. Added to the loss of a loved family member comes the loss of the benefit that that family member would have wished them to have.
The Bill would deem the person who disclaimed an inheritance or who is precluded by the forfeiture rule from inheriting as having died immediately before the deceased, unless the relevant will contains a contrary provision. Property would therefore to go to grandchildren, rather than more distant relatives, unless the deceased has explicitly excluded them from inheriting the estate in the will—a “deemed predeceased rule” is the legal term.
My right hon. Friend was also dealing with, and referred to, another anomaly: the case of the unmarried minor who has a child but dies without having married or entering a civil partnership. The Bill will allow the child to inherit in those circumstances by deeming that the parent died before the person from whom he or she was inheriting.
All that closely follows the Law Commission’s recommendations in the 2005 report, “The Forfeiture Rule and the Law of Succession”. That leaves only the commission’s recommendation that, if as a result of its other recommendations, property devolves on or is held for a minor descendant of a killer, the court should have the power to order that the property be held by the public trustee, who should administer it in order to avoid benefit to the killer.
There was a reason for that recommendation. Professor Hugh Beale, the law commissioner who led on the report, told the Justice Committee:
“We were worried that somehow the killer might benefit indirectly or directly by, as it were, either being able to get hold of some of the trust money, perhaps by influencing the trustee or possibly by encouraging the trustee to take on responsibilities which otherwise the killer himself or herself would bear: maintenance responsibilities”,
for example. The Government’s original draft Bill would have enacted that recommendation with a minor alteration: the court would have been required not to appoint the public trustee, but to consult the public trustee, who could then advise on a more suitable private trustee. Professor Beale described that as an “eminently sensible change”.
Concerns were raised by witnesses about the loose drafting of the relevant clause, which referred to
“an infant who is a child or remoter descendant of the offender”.
We recommend that the Government re-examine the drafting of what were then clauses 15 to 17, in the light of comments from the Bar Council and the Law Society. We expected all minors to receive suitable protection under the draft Bill. We said that we shared the Law Society’s concern that nothing should be done to impair the validity of existing wills. We welcome the proposal to ensure that minors who inherit under that provision have their inheritance protected. Whether there is a problem that ought to be dealt with, and could be dealt with without creating secondary problems, is worthy of at least some further consideration in Committee.
The primary argument against changing the law as proposed in the draft Bill, referring to the provision about minors, was discussed in an earlier intervention: the idea that the forfeiture rule could have a deterrent effect. The concept of deterrence is stretched at the best of times. Many crimes are committed with total unconcern for the consequences that might follow if someone were detected and brought to justice. The remotest and weirdest notion of deterrence would arise in circumstances when a child was conceived unexpectedly by a minor who did not then get married or enter a civil partnership—deterrence coming into play at that point is plainly absurd. The Law Commission took the view that killers were unlikely to be influenced by such changes in the law. That consideration is completely outweighed by the injustice that would be done to the deceased, whose property would be inherited by more distant relatives, and to the innocent children.
It was the effect of the present rules on innocent children in particular that influenced me in supporting the Select Committee view that the Law Commission proposals should be implemented. However, more generally, as I said in my opening remarks, we are concerned at the poor record of implementing Law Commission proposals. Our report said, at paragraph 194:
“We believe the delay in legislating on Law Commission recommendations is not only demoralising for that organisation but leads to a waste of limited resources because case law can change the legal context while recommendations await implementation requiring further consideration of the proposed changes. The last 10 years has seen a vast amount of criminal justice legislation introduced by the Government. In contrast, civil law measures have sometimes being neglected, to the public detriment.”
We are all grateful to the right hon. Member for East Yorkshire for filling part of the gap. In wishing his Bill success, I hope to prompt the Government not to neglect the area of civil law.
Robert Flello (Stoke-on-Trent South) (Lab)
I congratulate the right hon. Member for East Yorkshire (Mr Knight) on bringing the Bill to the House. I know the pressures and pitfalls associated with promoting a private Member’s Bill all too well, following my own experience with the Sustainable Livestock Bill. I hope that his hon. Friends will be somewhat pithier in their contributions when debating his Bill than they were on 12 November. I particularly noted the right hon. Gentleman’s opening remarks. Parliamentary observers—those outside the Chamber—will have seen the usual suspects in the House today and will know that we are probably in for a long sitting.
Robert Flello
I always like to be generous and, indeed, I thank the right hon. Gentleman for supporting my Bill on 12 November. I wish, sadly, that some of his colleagues had felt the same way.
The right hon. Gentleman did an extremely good job; he gave a valuable explanation, with examples that clarified the existing law and its application. I also congratulate the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) on his usual measured and thoughtful contribution to the debate. I concur that further consideration in Committee would be valuable to look at some of the detail. Despite 40 minutes or so of the right hon. Member for East Yorkshire introducing his Bill, some issues still need to be teased out in Committee.
If enacted, the Bill would address the concerns raised by the Law Commission in its 2005 report, “The Forfeiture Rule and the Law of Succession”. The report proposed amendments to the law as it stands, whereby grandchildren of a deceased individual are disallowed from inheriting property and suffer from what might be described as the sins of their parents being visited upon them if the parents were responsible for the murder of the deceased. The current law disinherits grandchildren of the deceased when their parent forgoes their inheritance, and it also applies when the parent is an unmarried minor on inheritance and dies without attaining majority, or marrying or entering a civil partnership.
The report’s headline recommendation was that a deemed predeceased rule be used when a child or relative has either murdered the deceased or opted to disclaim the inheritance, thereby forfeiting their entitlement to it. The child would be considered to have died shortly before the parent, and the law would then allow for the grandchild to inherit.
As the debate over the rights and wrongs of assisted suicide continues, and cases of patricide and matricide sadly continue to occur, the Bill is timely, and the Opposition believe it addresses a clear injustice. Indeed, the previous Labour Government accepted the recommendations of the Law Commission report, and in December 2009 produced the draft Civil Law Reform Bill which, among other things, incorporated those recommendations. The Bill was welcomed by the Justice Committee and it is disappointing that the current Government chose not to proceed with the measures in it.
I welcome the Bill introduced by the right hon. Member for East Yorkshire and I am pleased that he has used his favourable draw in the private Members’ ballot to bring forward legislation that reflects the combined wisdom of the Law Commission, and indeed the previous Labour Government. The Bill would take forward, with some modifications, clauses in part 3 of the Civil Law Reform Bill and despite the Government’s decision not to take forward that draft Bill, I am pleased that the Front-Bench team have—I believe—indicated that they do not oppose the Bill before us today.
The forfeiture rule is, of course, part of the wider principle that an individual should not profit from a crime they have committed. The previous Government strengthened that principle through such legislation as the Proceeds of Crime Act 2002, and the Labour party in opposition continues to support it. The forfeiture rule prevents an individual from inheriting property from someone, through a will, when they have unlawfully killed the deceased or unlawfully aided, abetted, counselled or procured the death. The rules as they stand would disallow a grandchild of the deceased from inheriting anything in such a situation—a rule the Bill seeks to amend.
The Law Commission report stated that the law as it stands is unfair for three reasons: grandchildren should not be punished for the sins of their parents; it is more likely that the deceased would have wished to benefit the grandchildren than other relatives; and the general policy of intestacy law is to prefer direct descendants to siblings and other relatives—to make an exception under the forfeiture rules is inconsistent with that policy.
The Bill introduces the deemed predeceased rule suggested by the Law Commission, whereby the child is considered to have died before the parent, and I believe it would address the Law Commission’s three criticisms. It would mean that unless stated otherwise in a will, a deceased person’s property would be distributed as though certain individuals—one who disclaims a gift, forfeits a gift, or a single parent dying under the age of 18—had died immediately before the deceased.
It is worth further mentioning the last of those three individuals—the single parent dying under the age of 18—as it is commendable that the right hon. Gentleman has used his Bill to address that anomaly. The current law states that when a parent dies leaving minor children, the “vested interest” of that child cannot be passed to their own children if they die before the age of 18. That is deeply unfair, so the Opposition welcome the inclusion of those provisions in the Bill.
As the debate over assisted suicide develops, or considerations as yet unknown become more important, future parliamentarians may find themselves debating the matter again. Unfortunately, when legislation is introduced to close a loophole or address a fairly narrow issue, it can in turn create new loopholes or additional issues. Those concerns notwithstanding, the Opposition have no objection to the Bill and we hope to see it proceed to Committee for further and more detailed scrutiny.
I again congratulate the right hon. Member for East Yorkshire on introducing the Bill. If it is pushed to a Division, I hope that a sufficient number of Members will join me in voting in favour of it.
Mr David Nuttall (Bury North) (Con)
I remind the House that I am a solicitor and notary public, although I no longer hold a practising certificate for either profession.
I congratulate my right hon. Friend the Member for East Yorkshire (Mr Knight) on using this opportunity to introduce his Bill in such a selfless way. Few could have anticipated that debate on a Bill with as dry a title as Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill would have resulted in references to unprotected sex in the back of a motor vehicle; that will certainly enliven those who read Hansard, I am sure.
I thank my right hon. Friend for clarifying, in response to an intervention by my hon. Friend the Member for Christchurch (Mr Chope), the difference between tax avoidance and tax evasion. All too often in recent months, Members on both sides of the House, including those on the Treasury Bench, have got those two terms muddled up, and have muddled them in the minds of the electorate. Historically, there has been a clear division in law between tax avoidance and tax evasion. If the Bill comes into use, by way of a disclaimer somebody might say, “That’s tax evasion, or avoidance,” but there is a big difference between the two terms, and I am grateful to my right hon. Friend the Member for East Yorkshire for making that clear.
Many Members, if they had come fifth in the private Members’ Bill ballot, would understandably be tempted to go down the road of popularism, and to use the opportunity to jump on whichever bandwagon happened to be passing. It says a great deal about the public-spiritedness of my right hon. Friend that rather than go down that path, he used the opportunity that he gained in the ballot to bring before the House this Bill, which, with the best will in the world, can be described only as a legal and technical measure. As I shall mention later, it has gone through what can only be described as a very long and tortuous period of gestation to be with us this morning. The Bill may be a technical measure, but it could affect many people in years to come. Many a family may well be profoundly grateful for the changes to the law of succession that the Bill seeks to introduce.
So what problem does the Bill seek to solve? Essentially, it would prevent grandchildren from being punished for the sins of their parents. In common law, it has long been the rule—often referred to as the forfeiture rule—that when someone unlawfully kills a person, they cannot benefit from the person’s estate. In short, they cannot inherit property from the deceased person whom they have murdered or otherwise unlawfully killed. Of course, even non-lawyers may be familiar with that common-law rule, as it has featured in many a murder mystery story over the years. Fans of Agatha Christie-type whodunnits may well have come across the rule as part of an interesting subplot to many a gripping yarn.
The forfeiture rule is an example of the general legal principle that a person should not be allowed to profit from his or her crime. That general common-law rule was, of course, enshrined in the Forfeiture Act 1982, which has been mentioned. I should like to clarify that the Act makes it clear that when someone is convicted of murder, the court has no discretion over whether to enforce the rule; it is only when a person is convicted of manslaughter that the court is given discretion over whether to apply the forfeiture rule in full.
As the House will be aware, a person who dies without making a will is said to have died intestate. When someone dies intestate and leaves no spouse surviving, but only a child, the law would, in the ordinary course of events, provide for that child to inherit the mother’s or father’s estate, but of course, in accordance with the rule to which I just referred, a problem arises if the son or daughter has unlawfully killed their parent.
That is more or less what happened in what is usually referred to as the leading case on the subject, which set in train the whole sequence of events that led to the Bill being brought before us this morning, and that is the case Re DWS (deceased), which was eventually quoted in the Court of Appeal in 2001. To understand the background to the Bill, I submit it is essential that the facts of that case, and the details of the judgment given, be examined, because it gives the best explanation of why the Bill is so essential.
In 1993, the son, whom I shall refer to as RS, murdered not one parent but both—Mr and Mrs S. Neither Mr nor Mrs S had made a will, and they were survived not only by their son, the murderer, but by his son—their grandson, T. T was a minor, and claimed in the court action the estates of his grandparents through his mother, who was acting, in legal terms, as his next friend, as he was of course too young to bring the action himself.
To understand the case fully, it is essential that we know what other surviving relatives there were. Mr S did not have either parent surviving him, but he did have his sister, Winifred. Sadly, by the time the case was heard, Winifred had died; she died in April 1995. The House will recall that the murder took place in 1993. Her estate was therefore represented by the persons who became the first, second and third defendants in the action. Mrs S was in a similar position; she did not have a surviving parent, but she did have a brother, Jack, and a sister, Gladys. However, although they both predeceased Mrs S, the sister, Gladys, had two children, who became the fourth and fifth defendants in the case.
The proceedings on behalf of T, the young grandson, were launched in 1995. T, through his mother, sought grants of administration covering the estates of both his grandparents, and he sought a declaration that he was entitled to those estates once he reached the age of 18. The grants of representation were made, and the only issue with which the judge—His Honour Mr Justice Blackburn, in the first instance—had to concern himself was the entitlement of T to the estates. It was accepted at the trial that the son, R, was disqualified from benefiting from his parents’ estate under the principle of public policy enunciated in a number of cases, the leading case being the 1892 case of Cleaver v. Mutual Reserve Fund Life Association.
As Mr S died intestate, the devolution of his estate fell to be determined in accordance with the provisions of sections 46 and 47 of the Administration of Estates Act 1925. Section 46(1)(ii) states:
“If the estate leaves issue but no husband or wife the residuary estate of the intestate shall be held on the statutory trusts for the issue of the intestate”.
When Mr S died, he left issue in his son, RS, and his grandson, T. With RS ruled out because of the forfeiture rule, the question was whether the grandson could inherit. I cannot put it more succinctly than the trial judge, who said:
“The plaintiff’s entitlement arises, if at all, under the statutory trusts set out in section 47(1)(i).
Under the terms of that provision, however, the plaintiff, as the son a child of the intestate, can qualify only if he is within the definition of: ‘issue living at the death of the intestate who attain the age of eighteen years or marry under that age of the intestate who predeceases the intestate’.
On its face therefore, section 47(1)(i) requires:
(a) that as issue of a child of the intestate, the plaintiff should
(i) be living at the death of the intestate”—
which of course T was—
“(ii) attain the age of 18 or marry under that age”—
although that was not yet achieved, the grandson might have gone on to do so—
“(b) that his father, RS, being a child of the intestate, should have predeceased the intestate”—
which was not the case. The judge concluded:
“Literally applied, therefore, the plaintiff cannot satisfy the conditions laid down for him to take.”
The counsel instructed to represent T, Mr Barlow, submitted that the crucial section 47(1)(i) should be construed as though RS had predeceased his father. Not surprisingly, the judge rejected that submission:
“Persuasively though the argument was put, and sympathetic though I am to the plaintiff’s plight, I cannot accept Mr Barlow’s submissions. In my view the relevant authorities do not justify such an approach. If anything they assume that as happened of course, the offender must indeed be taken to have survived his victim.”
It was then necessary to determine whether Winifred’s executors—the House will recall that Winifred was the murdered man’s sister—should inherit. The difficulty was that, if her estate was to benefit, compliance with section 46(1)(v) was required. That provision requires the intestate to have died without husband or wife, or issue or parent. However, there was issue, because both the son, RS, and the grandson, T, had survived. There were two possibilities for the court to consider.
First, as the conditions set out in subsection(1)(v) had not been satisfied, Winifred’s estate could not take, in which case, the estate of Mr S would pass to the Crown as bona vacantia. In view of the current state of the public finances, some people in the Treasury may well think that there ought to be more cases in which the Treasury stands to benefit, but that was not a matter that the court took into account. Secondly, notwithstanding the non-satisfaction of the conditions required for the operation of that subsection, the next available class could nevertheless take, where a person from an earlier class, although in existence, is disabled from taking.
Although it appears from the situation that prompted those questions that Winifred’s estate was entitled, it was not one that, according to the research undertaken by counsel, had been the subject of a decision in any previous reported case. The question had arisen—and had been considered in the context of a disclaimer, rather than in the application of the forfeiture rule—in the case Re Scott (deceased) and Widdows v. friends of the Clergy Corporation in 1975. I do not propose to go into the facts this morning; suffice it to say that the decision in that case was that if one class of potential beneficiaries had disclaimed, and there were no members in subsequent classes, that did not prevent members of a class with a lower entitlement from inheriting.
Mr Knight
My hon. Friend is dealing with two important cases, but does he agree that they illustrate that our intestacy provisions are defective, and that the Bill seeks to put that right? The intestacy rules are a default mechanism, designed to help people who did not make a will, by channelling their property to their nearest blood relatives. Those cases show that there is a defect in that mechanism that is enabling further, distant relatives to benefit in those narrow cases, which is something that the Bill seeks to put right.
Mr Nuttall
My right hon. Friend is absolutely right. Reading in even more detail the transcripts of those judgments, it was clear to me that the judges, certainly at first instance and again in the Court of Appeal, struggled with that dilemma, because they knew that in cases of intestate succession the will of Parliament was that the closest issue to the deceased should inherit, whereas the operation of this rule meant that more distant relatives were taking. In the case Re DWS, they concluded reluctantly that, with the best will in the world, they could not override the wording of the 1925 Act.
The judge decided that the case provided a common-sense if not entirely logical answer to the problem arising from RS’s disqualification from benefit. The Treasury was not represented in that case and decided that it would not even appear, so I think that the judge was looking for a way to ensure that at least someone in the family benefited, which is why he seized on the case of Scott as a way out. He stated that, if necessary—and he did not think that it was—the same result could be achieved by implying that the words “capable of taking” were added after the words “no issue’” in section 46(1)(v). The inclusion of those words was another way around the problem.
When I read the details of all the cases, it seemed rather odd that the judge was prepared in effect to add the words “capable of taking” into an Act. However, when it came to the previous rule, there was no way round it. Had he not made that decision, and found a way to get round the forfeiture rule, perhaps we would not be here today and there would be no need for the Bill. As a result of that approach, the estate of Mr S did not pass to the Crown as bona vacantia, but to Winifred’s executors.
That, of course, all led on from a murder in 1993. The case began in 1995 and reached the Chancery Division at Newcastle-upon-Tyne in March 1999. The decision was appealed on behalf of the grandson and the case went to the Court of Appeal in November 2000. Three years later, in July 2003, the Department for Constitutional Affairs asked the Law Commission to review the relationship between the forfeiture rule and the law of succession. In particular, the terms of reference specified that the review should be carried out with reference to the difficulties highlighted in the case Re DWS (deceased).
Mr Knight
Will my hon. Friend confirm that there was no suggestion at all in the case Re DWS that the grandchild had in any way aided and abetted the murder? He was an innocent potential beneficiary who lost out. Indeed, I believe that at the time of the murders the grandchild was only two years of age.
Mr Nuttall
I was not aware of the precise age of the grandchild, only that he was a young minor. I apologise: the preamble to the law report does state that RS had a two-year-old son, so it is fair to say that at that age he was entirely innocent. His mother, as I mentioned earlier, was acting on his behalf to ensure that he would not suffer as a result of the acts of his murderous father.
The Law Commission embarked on an investigation of the matter. It was asked to explore ways in which the law might be reformed to prevent the apparently unfair outcomes of the sort that occurred in that particular case. In October 2003, the Law Commission published a consultation paper entitled “The Forfeiture Rule and the Law of Succession”. It was in July 2005—another two years having passed—that the commission published its report. We can see how the years passed—it was 10 years since the start of the case and 12 years since the original murder.
In the introduction to its report, the Law Commission stated:
“It is clearly right to exclude a murderer from inheriting, but it seems unfair to exclude the murderer’s children as well. This outcome appears arbitrary: it is not based on public policy, but it is a by-product of the way the intestacy legislation is drafted.”
The Law Commission’s recommendations in its report of July 2005 were, first, that there should be a statutory rule that when a person forfeits the right to inherit from an intestate through having killed that intestate, the rules of intestate succession as laid down in sections 46 and 47 of the Administration of Estates Act 1925, as amended, should be applied as though the killer had died immediately before the intestate.
The Law Commission recommended, secondly, that when a person forfeits a benefit under an intestacy through having killed the deceased, but as a result of the reforms, property devolves on or is held for a minor descendant of the killer, the court should have the power to order that the property be held by the Public Trustee, who should administer it so as to avoid benefit to the killer. Thirdly, when a person forfeits a benefit under a will through having killed the testator, the will should be applied as though the killer had died immediately before the testator unless the will contains a provision to the contrary.
The fourth recommendation was that where a person forfeits a benefit under a will through having killed the deceased, but as a result of the reforms property devolves on or is held for a minor descendant of the killer, the court should have power to order that the property be held by the Public Trustee, who should administer it so as to avoid benefit to the killer. Fifthly, when a person disclaims an inheritance either under a will or under the law of intestacy, the inheritance should devolve as if the person disclaiming had died immediately before the deceased. The sixth and final recommendation was that when a person loses a benefit under intestacy by dying unmarried and a minor but leaves children or remoter issue, the property should devolve as if that person had died immediately before the intestate.
The following year, in 2006, the then Labour Government accepted the Law Commission’s recommendations and included the provisions to implement them in part 3 of a draft civil law reform Bill which they put out for consultation in December 2009. Seven of the eight respondents to part 3 of the consultation on the Bill supported the reforms and agreed that the new law would be fairer and simpler to operate.
Lyn Brown (West Ham) (Lab)
I have been listening with rapt attention to this modern-day “Bleak House”, although I am sure the hon. Gentleman will agree that the prose is not quite as eloquent as that of Charles Dickens. Given that the Bill proposes a remedy to the particular difficulties that the hon. Gentleman has highlighted in the cases that he has placed before us, is he not prepared to accept the Bill and allow it fair passage through to its Report stage?
Mr Nuttall
I certainly wish the Bill well. I am about to express my concern at how long it has been held up in the legislative process. The report from the Justice Committee referred to that.
Jacob Rees-Mogg
I am loth to disagree with the hon. Member for West Ham (Lyn Brown), who always makes fine points, but on this occasion may I encourage my hon. Friend to give us a full explanation so that we can thoroughly understand why the Bill is necessary? Legislation is a big and weighty matter and should be brought in only for major issues where there is real concern. We need to understand that, and I am grateful for the fullness of my hon. Friend’s explanation, which I hope will be even fuller.
Mr Nuttall
I am extremely grateful to my hon. Friend for that intervention. The Bill would not be before the House had it not been for the original case. It raises the question how many other cases in solicitors’ offices throughout the land have been determined on the back of that Court of Appeal case without ever going to court because the solicitors would say, “We know what the law is because of the Court of Appeal ruling in that case.” Many cases may have been dealt with in that way.
It has now been 18 years since the murder, and 10 years since the judgment, which raises the question of how fast we have progressed with the matter.
Mr Nuttall
I am grateful to my right hon. Friend for that helpful information. If we extrapolate from that, disregarding the fact that the legal proceedings took six years from their launch to their conclusion, we can calculate that in the past 10 years around 2,000 cases have been affected by the delay in bringing the matter to fruition.
My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) referred to the evidence that Professor Beale gave to the Justice Committee when it prepared its sixth report, which was part of the pre-legislative scrutiny procedure for the draft Civil Law Reform Bill. Professor Beale had indicated the difficulties in implementing the Law Commission’s recommendations. With regard to limitation periods, one problem was that the delay had been so long that new cases had come along in the meantime and changed the legal position.
The Secretary of State for Justice at the time, the right hon. Member for Blackburn (Mr Straw), had accepted that there had been delays in implementing the Law Commission’s recommendations. He said that the draft Civil Law Reform Bill had “been in process” since he had been at the Ministry of Justice. He said:
“One of the difficulties… is that this is an important measure but there have always been other… demands on the legislative programme in the past which have meant that it has been squeezed out, because it is worthy—I actually think very important in terms of what it is doing—but it has not been seen as such a high priority.”
I am sure that those affected by that in the 2,000 cases would think that it is an extremely high priority. He continued:
“That is the honest trust about it… There has also been an extensive period of consultation.”
Well, he is certainly right there. He continued:
“The original proposals, for example, in respect of damages following fatal accidents, which were in the Law Commission proposals, have themselves been refined since then. But if you are saying: ‘Does that take 11 years?’, the answer to that is no.”
There are clearly problems with the procedures. If the case highlights anything—it is perhaps something that the House should look at—it is how the recommendations of the Law Commission are put into legislation. The Minister might have something to say on that later.
The Justice Committee did much pre-legislative scrutiny on that draft Bill and produced an excellent report on it, so it is interesting that the coalition Government have now announced that they do not intend to proceed with it. Were it not for the good fortune of the decision by my right hon. Friend the Member for East Yorkshire to adopt the Bill after his name was drawn in the ballot, I wonder how long the work of the Law Commission and the subsequent legislative scrutiny of the Justice Committee would have languished in the parliamentary waiting room.
If the Bill passes into law, the position would be clarified by virtue of the inclusion of proposed new section 46A, which provides that where a person is entitled to inherit on an intestacy but has either disclaimed their right or is precluded from inheriting by the forfeiture rule, that person is to be treated as having died immediately before the intestate. Clause 2 makes a similar provision to cover cases in which a person dies having left a will and a beneficiary under that will either disclaims or is precluded from inheriting by virtue of the forfeiture rule. Clause 3 provides that in the tragic case of a single parent under the age of 18 dying intestate and leaving a child or children surviving, the estate of the intestate—
Jacob Rees-Mogg
Would my hon. Friend explain a little more about the circumstances under which a testator could leave provision that would not be affected by the Bill? I have been unable to work out how a person who is murdered could have expected and anticipated that in their will. Would he elaborate on that point?
Mr Nuttall
My hon. Friend makes an excellent point. One of the problems is that the affairs of a person who is murdered are left hanging in mid air. If they have not made a will, their affairs might be left to the vagaries of the intestacy laws. If they have made a will and have been murdered by their son, law might provide for the estate to pass to that son anyway.
Mr Knight
My hon. Friend, like me, is a lawyer, so I hesitate to suggest this to him, but is not the answer to that question that any good will has a default position? If a testator gives to a son a share of the estate, which might be a 100% share, and that son then murders the testator, thus becoming prohibited from inheriting under the forfeiture rule, a good will would state that in the event that a son does not inherit, the estate should go to person A, B, C or whoever. Does my hon. Friend agree that a well-drafted will should cover that eventually? In my view, a will that does not do that and merely gives money to one person, without stating what will happen if that person cannot inherit, is an appallingly drafted will.
Mr Nuttall
My right hon. Friend is absolutely right, and I am sure that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) has taken that comment on board. It was exactly the point I was about to make. I would add that I am sure that professionally drawn wills would, in the vast majority of cases, make further provision for substitution. As I know from experience, many wills are made at home—home-made wills—in which case people might not be so careful or think that it is even necessary to think beyond their nearest and dearest. They simply write their will at home, with two witnesses, and leave it at that. In such circumstances, if that person had an only child and that child murdered the testator, there would of course be nothing that the testator could do about it. However, if the person dies within a year of the act, it can still be classed as murder. The person might linger and still have appropriate testamentary mental capacity to make another will and change it. I could imagine those circumstances arising, although I accept that they would do so rarely.
Clause 3 provides that in the tragic case whereby a single parent under 18 years old dies leaving a child or children surviving, the estate of the intestate is distributed as if the single parent had died immediately before the intestate. That point was covered adequately in the comments of my right hon. Friend the Member for East Yorkshire.
My right hon. Friend thinks that the issue will affect 200 estates a year, but in future many thousands of estates will benefit from the proposals in the Bill. One thing is certain: many families will be for ever grateful that this measure was brought before Parliament. I certainly wish it well, I am pleased to see that Members on both sides of the House support it, and I trust that it will have the support of the whole House.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I, too, congratulate my right hon. Friend the Member for East Yorkshire (Mr Knight) on his success in last year’s ballot on private Members’ Bills and, indeed, on his good judgment in deciding to introduce the Bill before us. I am happy that he went for, as he put it, the worthy and uncontroversial option. Let us hope that that remains the case. It is uncontroversial but certainly not uncomplicated.
In presenting the Bill, my right hon. Friend was supported by the Chairman of the Justice Committee, my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), who it is good to see here today, the hon. Members for Cardiff West (Kevin Brennan), and for Birmingham, Yardley (John Hemming), my hon. Friends the Members for Stone (Mr Cash), for South West Devon (Mr Streeter) and for Bridgwater and West Somerset (Mr Liddell-Grainger), the hon. Member for Rhondda (Chris Bryant), my hon. Friend the Member for Christchurch (Mr Chope), the hon. Member for Mansfield (Mr Meale), and my hon. Friends the Members for Croydon South (Richard Ottaway) and for Shipley (Philip Davies)—a good cross-section of the House.
Today, we have thoroughly debated an unusual but important aspect of succession law, and we had strong contributions—from my right hon. Friend the Member for Berwick-upon-Tweed, my hon. Friends the Members for Christchurch and for North East Somerset (Jacob Rees-Mogg), and the lawyer’s eye of my hon. Friend the Member for Bury North (Mr Nuttall)—that brought out many of the complexities of the succession law, even though the principle seems relatively straightforward.
My right hon. Friend’s Bill, as has been mentioned, will implement the main recommendations of the Law Commission in its 2005 report, “The Forfeiture Rule and the Law of Succession”, making the law of succession simpler and fairer. The purpose of the law of succession in this context is to decide who should get what from the estate of a deceased person. The Law Commission reached its conclusions after a public consultation in 2003, and its recommendations were accepted by the then Government in November 2006, subject to minor modifications. Those proposals were then included in the draft Civil Law Reform Bill, which was published for public consultation and pre-legislative scrutiny in December 2009. The pre-legislative scrutiny was conducted by the Justice Committee, which published its conclusions in its sixth report of the 2009-2010 Session of the previous Parliament, under the title “Draft Civil Law Reform Bill: Pre-legislative Scrutiny”.
Before the previous Government could reply to the Justice Committee, the general election was called. We all know the events that followed, but for the purposes of our debate today what matters is that my right hon. Friend was returned as the Member for his newly formed constituency of East Yorkshire. When the ballot for private Members’ Bills was subsequently held, he was fortunate enough to draw 20th place.
Mr Nuttall
I think that, in fact, my right hon. Friend was a little more successful: he was drawn fifth.
Mr Djanogly
I am very grateful for being put right on that point, so fifth place it was. My right hon. Friend could no doubt have chosen any one of numerous topics from his own extensive experience without consulting anyone, and I am sure that it would have been a topic well worth debating and, perhaps, legislating on. Instead, however, he decided to consult the Law Commission and ask whether any of its recommendations, as he said earlier, were suitable for a private Member’s Bill and unimplemented. Those discussions led him to the commission’s draft law reform (succession) Bill, which was published in the Commission’s 2005 report, “The Forfeiture Rule and the Law of Succession”.
The provisions of that draft Bill had, by the time my right hon. Friend was considering what to do with his place in the ballot, been published with minor modifications as part 3 of the draft Civil Law Reform Bill. Those provisions, which my right hon. Friend adjusted in the light of the response to the distribution of estates provision in the draft Civil Law Reform Bill, form the basis of the Bill that we are debating today.
As the Minister responsible for the general law of succession in England and Wales, and as a Minister in the Department that sponsors the Law Commission, I am doubly pleased to be able to announce the Government’s support for this Bill on the law of succession; and I was pleased to hear from the hon. Member for Stoke-on-Trent South (Robert Flello) that the Opposition support the Government’s position in that context.
My hon. Friend the Member for Christchurch asked why the commencement date is not three months after Royal Assent, and the simple answer is that that is to allow the professionals and others to prepare for commencement: there will be wills to be re-looked at and so forth. Before considering the substance of the Bill, I should like to record the Government’s thanks to the Law Commission for its work on the forfeiture rule and the law of succession.
Law Commission Bills are by their nature likely, legally speaking, to be very technical, and this Bill is no exception. There is more to a law reform Bill than technical accomplishment, however; we have to be sure that it delivers the desired policy outcome effectively and efficiently. In that respect, the Bill has the additional advantage of having already in effect been carefully scrutinised by the Justice Committee. I know that my right hon. Friend the Member for East Yorkshire has paid careful attention to the Committee’s conclusions, and I thank my right hon. Friend the Member for Berwick-upon-Tweed, who as Chairman of the Justice Committee considered the draft Civil Law Reform Bill and, I am delighted to say, has returned to that role in the current Session. I am also grateful to the other hon. Members who served on that Committee with him when they scrutinised the draft Civil Law Reform Bill.
My right hon. Friend the Member for Berwick-upon-Tweed, the hon. Member for Stoke-on-Trent South and my hon. Friend the Member for Bury North asked in different ways about the Law Commission’s wider Bill and the Government’s attitude to the commission. The Government are committed to ensuring that the law is modern, simple and accessible, and we hold the commission’s work in high regard. I am confident that the measures flowing from the Law Commission Act 2009, both the protocol and the duty to report annually to Parliament, along with the new House of Lords procedure for Law Commission Bills, will help to improve the implementation rate of commission proposals. A higher rate of implementation will help to ensure more effective and accessible law, delivering better value for money as valuable Law Commission work is put to good use.
Five reports have been implemented or received Royal Assent over the past year: those on the rules against perpetuities and excessive accumulations, third parties’ rights against insurers, trustee exemption clauses, on reforming bribery and parts of its murder, manslaughter and infanticide reports.
My hon. Friend the Member for Bury North also asked what we are doing about the wider Civil Law Reform Bill issues. Decisions not to take forward the Law Commission’s excellent work are always difficult, and they are not taken lightly. It is a difficult time at the moment, and the Government have to be realistic about what they can achieve when there are other pressing priorities and a reduction in resources.
A great deal of the Law Commission’s work requires primary legislation to implement it, and it is very difficult at present to secure parliamentary time for legislation that is not a high priority or that does not deliver significant financial savings. Deciding not to take forward the proposal in the Law Commission’s reports on damages, personal injury, medical, nursing and other expenses, claims for wrongful death and pre-judgment interest on debts and damages, was not easy. However, in the current financial climate we need to focus our resources on delivering key priorities.
Having said that, I think that the new protocol on best practice between the Government and the Law Commission, agreed in March last year, should help. The protocol aims to ensure that the Law Commission takes forward only projects to which Departments are fully committed; that there is a close working relationship during the project; that the Law Commission produces impact assessments looking at the costs and benefits of proposals; and that Departments respond quickly once the Law Commission reports.
The Law Commission will soon be putting forward proposals for its 11th programme of work. That will be the first programme agreed in the light of the new protocol, and I am confident that it will assist in reducing delays both in responding to the Law Commission when proposals are accepted and in implementing them.
However, neither the Law Commission nor the Justice Committee could function as effectively as they do without the support of those who respond to consultations and calls for evidence. The experts who give freely of their time and experience are perhaps the unsung heroes of law reform work. It is invidious to single out organisations or individuals, but I note that the Law Society and the Bar Council replied not only to the Law Commission’s 2003 consultation and the Ministry of Justice’s 2009 consultation, but gave evidence to the Justice Committee in 2010.
I would like to thank all those who have replied to the Law Commission, the Committee and my own Department over the years. Unsurprisingly, the Bill does not reflect all their views, but I can assure them that their comments were all carefully considered and taken into account. I am confident that this Bill would command the support of the overwhelming majority of them.
I will now explain why the Government are supporting this Bill. Obviously, we are pleased that the Bill represents a return on the investment of public money in the Law Commission. The Government are committed to ensuring that the law is modern, simple and accessible. Usually, and properly, it is the Government who introduce Law Commission Bills; there is, however, no reason at all why the introduction of Law Commission Bills should be the preserve of the Government alone. Indeed, I would encourage hon. Members who in future years find themselves well placed in the ballot for private Members’ Bills to consider whether they might imitate the example of my right hon. Friend and discuss with the Law Commission whether any of its Bills might be suitable for debate. My right hon. Friend has set a very good example, and I thank him for that.
However, more fundamentally, the Government support this Bill because it will make the law fairer. To understand what is wrong with the law, it is necessary to go back to 1994 when a certain individual was convicted of the murder of both his parents; various hon. Members have referred to the incident. He was described in the press as an “evil conman” and
“a grasping son who repaid his parents’ lifelong devotion by bludgeoning them to death”.
He duly received two life sentences, but it is not the monstrosity of his crimes that underlie the Bill before us today—rather, it is what happened to his parents’ property, which was apparently worth more than £1 million and highlighted the problem with the law.
Apparently, the killer’s parents had made it clear to their son that they would not provide for him on their deaths; they would provide only for his young son, their grandchild. To go back to the point made by my hon. Friend the Member for North East Somerset, if only they had made clear wills in favour of the grandchild, their apparent wish to support him would have been accomplished. However, no wills were found and their property was distributed according to the statutory intestacy rules.
Mr Denis MacShane (Rotherham) (Lab)
On a point of order, Mr Deputy Speaker. We are being informed by television that Mr Andy Coulson, one of the most important figures in Her Majesty’s Government and one of the Prime Minister’s closest aides, is now resigning. As the House is sitting, I believe that it would be appropriate for the Prime Minister to come to the Commons, explain why that is happening and give the public the full details here in the House of Commons, rather than burying the news on a day when, frankly, an awful lot of other news is taking place. This is the Commons, where the Prime Minister should—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. That is not a point of order, as the right hon. Gentleman, who has long been a Member of the House, knows. The fact that a member of the Prime Minister’s staff has resigned has nothing to do with the House.
Mr Deputy Speaker
Order. Before we get carried away, I should say that that has absolutely nothing to do with the House. Neither of the points made is a point of order.
Mr Djanogly
I am delighted to pull the House back to the important issue of succession.
I was just saying that the property of the killer’s parents was distributed according to the statutory intestacy rules. The intestacy rules are a default regime; they apply where a person has not exercised his or her right to make a will or to the extent that his or her will is not valid. Their aim is to safeguard the deceased person’s family by providing for them from the deceased person’s estate in a manner that is thought to mirror the wishes of the average person had he or she made a will.
Generally speaking, an intestate estate will pass to the surviving spouse or civil partner and the deceased’s children first, but if the deceased is not survived by either of them, then other blood relatives of the deceased will inherit the estate in a strict order of priority set out in section 46 of the Administration of Estates Act 1925, as amended. I am not going to read out the rules, but if any hon. Members wishes to know more about them, I shall provide the information.
When there are no known eligible blood relatives to inherit, the estate is dealt with by the Treasury solicitor. On receiving the estate, the Treasury solicitor will make full inquiries into the estate and will advertise for eligible kin in the hope of distributing the estate. If there appear to be no eligible kin, or none can be traced, the estate becomes “bona vacantia” which means “ownerless goods” and it will pass to the Crown, the Duchy of Cornwall or the Duchy of Lancaster, depending on where in England or Wales the deceased lived.
When a minor inherits on intestacy, the property to which they will be entitled is held on trust. The terms of that trust are specified in the intestacy rules. Basically, the trustees will hold the property for the benefit of the child until he or she reaches the age of 18 or marries or enters a civil partnership under that age.
All that may seem relatively straightforward, and hon. Members could be forgiven for thinking that the grandchild in the DWS case would have inherited their property on reaching the age of 18, or marrying or forming a civil partnership before then, but there is a devil in the detail and, sadly, there was a family dispute that led to litigation. That culminated in the decision of the Court of Appeal in 2000 in the case Re DWS (Deceased). By that time, it was agreed that the son himself could not inherit because, as he had murdered his parents, the forfeiture rule prevented it. The forfeiture rule is a common law rule, applying the general rule of public policy that a person is not able to benefit from their wrongdoing. It is illustrated by the 1892 case of Cleaver v. Mutual Reserve Fund Life Association, when it was held that a person is not entitled to benefit from the estate of a person he or she has unlawfully killed.
A person who is convicted of the unlawful killing of another, or of aiding, abetting or counselling another to do so, is automatically disqualified from inheriting from his or her victim under the forfeiture rule. However, persons convicted of manslaughter or other offences less serious than murder may still be permitted relief to inherit the victim’s property by the court under the Forfeiture Act 1982.
The question for the court in Re DWS (deceased) was who would receive the grandfather’s property. Had the son died before his father, the property would have gone to the son’s only child, who was aged only two at the time of the murder and was also the grandfather’s only grandchild. However, the son—that is, the killer—was not dead, but merely disqualified from inheriting because of the operation of the forfeiture rule.
The relevant provision of the intestacy rules setting out the statutory trusts contained in the Administration of Estates Act 1925 provides that the grandchild will inherit only if his or her parent has already died. The court accordingly decided that the law did not allow the grandson to take the property. Instead, it was decided that the property would have to go to the estate of the dead grandfather’s sister, who had also died by the time of the court case. Thus, in this situation, not only is the killer disqualified from inheriting, but so also are all the killer’s direct descendants. The Court of Appeal expressed concern that this may have been an unforeseen and unintended consequence of the present intestacy rules.
In July 2003, the then Department for Constitutional Affairs, whose responsibilities in this regard have been assumed by the Ministry of Justice, asked the Law Commission to review the relationship between the forfeiture rule and the law of succession. The terms of reference were as follows: first, that in conjunction with its work on illegal transactions, the Law Commission should review the relationship between the forfeiture and intestacy rules; secondly, that the review should be carried out with reference to the difficulties highlighted in the case of Re DWS (deceased) and should explore ways the law might be reformed to prevent apparently unfair outcomes of this sort; and, thirdly, that the review should also consider any ancillary areas of succession law that might produce analogous outcomes—for example, disclaimer and attesting beneficiaries.
In October 2003, the Law Commission published a consultation paper, “The Forfeiture Rule and the Law of Succession”, which considered the problem raised in Re DWS, and discussed whether a similar problem arose in other contexts. The consultation paper provisionally proposed that in cases such as Re DWS there should be a “deemed predecease” solution—that is, where a person forfeits a benefit on intestacy through having killed the deceased, the estate should be distributed as if the killer had died immediately before the deceased. The Law Commission also proposed that the deemed predecease rule should apply where a gift under a will fails because of the forfeiture rule.
Sir Alan Beith
It is perhaps worth placing on the record—the Committee specifically sought to inquire into this—that the deemed predeceased rule has no other legal effect. In other words, determining that someone is deceased for the purposes of inheritance does not affect any other legal provision or right relating to them.
Mr Djanogly
I thank my right hon. Friend for setting out that important point. If that were not the case, it could have serious knock-on effects for other cases.
The Law Commission received responses to the consultation paper from 31 individuals and organisations. Those included leading academics in the field of succession law; the Society of Legal Scholars, Property and Trusts Section; a number of individual judges, including Lord Justice Sedley, one of the members of the Court of Appeal who had heard the Re DWS case, whose response wholeheartedly endorsed the Law Commission’s proposed solution; the Association of District Judges; specialist solicitors from leading firms; the Inland Revenue; the Bar Council; the Law Society; and the Chancery Bar Association. Most of the respondents agreed that the current law was unsatisfactory, that in Re DWS (deceased) the grandchild ought to have inherited, and that a “deemed predecease” rule would be the best way of achieving this.
The Chancery Bar Association must, however, be singled out for particular mention. It spotted that there was an analogous, albeit rare, circumstance, elsewhere in the law of intestacy, that should be addressed. This arises from the fact that where a child inherits from a parent or other relative on intestacy, that child’s interest is held “contingently” on the statutory trusts under the intestacy rules.
In July 2005, the Law Commission’s final report, “The Forfeiture Rule and the Law of Succession” was presented to Parliament. The report recommended that a “deemed predecease” solution should apply in three situations. First, where a person disclaims or forfeits the right to inherit from a person who has died intestate, the intestacy rules should then be applied as if the killer had died immediately before the intestate. Secondly, where a person disclaims or forfeits a benefit under a will, the will should be applied as if the killer had died immediately before the testator, unless the will contains a provision to the contrary. Thirdly, where a person loses a benefit under an intestacy by dying unmarried and a minor, but leaves children, the property should devolve as if that person had died immediately before the intestate. The Civil Law Reform Bill incorporated provisions to this effect, subject to minor modifications relating to the role of the public trustee, which for reasons I shall explain, need not concern us now.
I hope this explanation of the genesis of this Bill makes clear the problems that it is trying to address. The overall point is that in the three circumstances identified— forfeiture, disclaimer and the rights of the children of a minor heir on intestacy—the detail of the law does not produce the desired result. The general policy on intestacy is that once the interest of any spouse or civil partner has been satisfied, the property of the deceased should pass to closer blood relatives before more distant ones: the children of the deceased, for example, should be preferred to siblings of the deceased.
Where there is a valid will, the general policy of the law is that the wishes of the testator—the person who made the will—should determine who is to inherit what from the estate of the deceased. That gives effect to the principle of freedom of testamentary disposition, which lies at the heart of our succession law in England and Wales, and which was referred to by my right hon. Friend the Member for East Yorkshire and others.
The effect of the Bill will therefore be to change the law in the three areas mentioned, so that it is consistent with the general policy of the law. First, as was highlighted in the 2001 Court of Appeal decision in Re DWS (deceased), where a person forfeits an inheritance on intestacy because he or she has killed the person from whom he or she would have inherited, his or her children will also be disinherited. The forfeiture rule thereby disinherits not only the criminal but also the innocent grandchildren of the victim.
This problem is not confined to intestacy. For example, where there is a will that contains a gift specifying who is to inherit, if the first named recipient dies before the testator and that recipient forfeits his or her inheritance, the default gift cannot take effect because the recipient is still alive. Similarly, if there is a will giving a gift to a child of the testator without any further provision, the law implies a term that the gift will pass to his or her children if he or she predeceases the testator. If the testator’s child forfeits his inheritance, his or her children—the testator’s grandchildren—will not be able to inherit.
The same problem arises in both testate and intestate successions where the person who would be first entitled disclaims the inheritance. Anyone claiming through him or her will not be able to inherit. Let me explain the term “disclaimer” as that was raised by my right hon. Friend the Member for East Yorkshire, and discussed further by my hon. Friends the Members for Christchurch and for North East Somerset in the context of disclaiming gifts under a will. There was a further question as to why this needed to be done.
A beneficiary is free to accept or disclaim—that is, refuse—a gift that has been left to him or her in a will. The unwanted gift will form part of the testator’s residuary estate—the part of the estate remaining when all the specific gifts have been satisfied— unless, as is less usual, he or she has made a default gift in the event of a disclaimer. If the will does not make provision for the disposal of the estate, it will be distributed according to the intestacy rules.
My hon. Friend the Member for Christchurch went on to ask why that should be the case. Figures are not kept on the number of people who disclaim gifts in wills. However, in its consultation paper, “The Forfeiture Rule and the Law of Succession”—CP No. 172—the Law Commission commented that the usual reasons for disclaimer in will cases will either be to secure beneficial tax consequences or to enable the beneficiary to avoid inheriting onerous property such as a lease with repairing covenants. My hon. Friend then asked whether the disclaimer provision opens the way to evade inheritance tax. The answer is no, because in the example we have before us, the son could achieve the same results as a disclaimer under the Bill by varying the will or the intestacy rules. Deeds of variation can be used to vary the distribution of the estate for inheritance tax or capital gains tax purposes. That is only possible where all the original beneficiaries agree and the tax legislation permits it. These variations will often include disclaimers by some or all of the original beneficiaries, and the Bill simply enables the intended recipient to disclaim without thereby disinheriting anyone entitled to claim through him or her.
My hon. Friend the Member for North East Somerset then asked whether a disclaimer of inheritance can instead take the money and give it away. The answer is yes; the money would then be his or hers to do with as he or she wished, but he or she could not disclaim part of an inheritance, or having disclaimed, specify where the inheritance should go. That is for the deceased to say in a will or the intestacy rules, which act as a deemed will, if I can put it in those terms. So a beneficiary of an intestate estate is free to accept or disclaim the inheritance. When the disclaimer is a child of the deceased, the disclaimed interests passes to the child’s siblings. Clauses 1 and 2 of the Bill address those issues.
There is the rather unusual situation, which was spotted by the Chancery Bar Association—I take my hat off to the assiduous lawyer who noticed this one—in which if a person under the age of 18 who is prospectively entitled to inherit property under the intestacy rules, perhaps from his or her parent, dies before reaching the age of majority, leaving children but without having married or entered a civil partnership, those children cannot inherit in place of their parent. Right hon. and hon. Members used several interesting possibilities to explain how that could be put into practice, but that happens because the parent did not reach the age of majority or marry or form a civil partnership under that age. In more legal language, the parent did not attain a vested interest. That anomalous outcome, rare as it might be, discriminates against those children.
Clause 3 addresses that issue. In all three cases, the Bill would solve the problems by deeming the person who loses the inheritance to have died before the person whose estate is being distributed. That means that on intestacy, the children of the person losing out will be able to inherit under the statutory intestacy rules and, if there is a will, that the actual or deemed wishes of the testator will prevail. In short, the aim of the Bill is to try to ensure that the “right” people inherit. The Government support that aim.
I shall comment on the differences between the Law Commission’s draft Bill, published in 2005, and the equivalent provisions in the draft Civil Law Reform Bill, published in 2009. These issues were raised by my right hon. Friend the Member for Berwick-upon-Tweed, and my hon. Friend the Member for Christchurch touched on them, too. They largely derive from the comments of the Justice Committee and the people who gave evidence to it. Some of the changes are drafting changes, but others were more significant. The question arises of why they should have been left out of the Bill.
Although the Justice Committee welcomed the proposal to ensure that minors who inherit under the provision have their inheritance protected, several criticisms were made of the special trust advice chosen by the Law Commission to achieve that aim. On consideration of the responses to the consultation and the evidence to the Justice Committee, it has become clear that the special trust was unnecessary and would be problematic and expensive to operate. The existing law, which already imposes a trust and gives the court power to appoint alternative trustees and supervise those trusts, gives the property of minors adequate protection. We therefore believe that the Bill meets the concerns of the Justice Committee in that regard.
The Justice Committee welcomed the reforms and reached two conclusions. First, it stated:
“We welcome this clause as ending the current rule which penalises the children or other heirs of a killer who are themselves not only entirely innocent but are the people whom the deceased would probably have wanted to benefit from the estate in any event. We also welcome the proposal to ensure that minors who inherit under this provision have their inheritance protected.”
Secondly, it pointed out:
“We recommend the Government to re-examine the drafting of clauses 15 to 17 in the light of the comments made by the Bar Council and the Law Society. We expect all minors to receive suitable protection under the bill. Equally, we share the Law Society’s concern that nothing be done to impair the validity of existing wills.”
The main difference, however, as my right hon. Friend the Member for Berwick-upon-Tweed pointed out, is that the earlier draft Bills contained specific provisions intended to ensure that in forfeiture cases the criminal was prevented from gaining any benefit from the inheritance that would, under the terms of the draft Bill, pass to his or her children. Those special trust provisions attracted a good deal of criticism from witnesses to the Justice Committee and people who replied to the Ministry of Justice’s consultation on the draft Civil Law Reform Bill.
Two respondents—the Law Society and the Bar—considered that the safeguard provisions were not necessary because legislation already exists that would protect an infant beneficiary’s inheritance in forfeiture cases if such protection were to be needed. Both referred to section 116 of the Senior Courts Act 1981, which provides the court with discretion to pass over any prior claims to a grant and appoint someone else if by reason of any special circumstances it appears necessary or expedient to do so.
The Bar also mentioned section 114(2) of the 1981 Act, which provides that wherever a minority interest arises under a will or on intestacy, a grant should be made to a trust corporation or to two individuals, unless it appears to the court to be expedient that there should be a sole personal representative.
The same two respondents also expressed concern about the limited application of the safeguard provisions, which is restricted to the infant children or more remote issue of the offender, and only then if, as the Bar noted, the infant inherits by virtue of the reform rather than under, for example, a default gift in a will. It considered that there may be cases where court intervention is needed to prevent potential abuse of the inheritance, where those inheriting are infants but are not directly related to the offender.
The Bar also objected to the width of the power of the court to allocate any property in which the infant had an interest to the trust, and it raised a fundamental concern about the workability of the provisions, where both the infant and the disqualified person would inevitably benefit from the trust property—for example, where the former matrimonial home was held under the trust, and the infant and the disqualified person were both living there.
The Bar concluded:
“On balance, we consider the provision”
to safeguard an infant after forfeiture
“to be unhelpful, and likely to lead to increased expense in the administration of estates in circumstances which are bound to be tragic but are otherwise unpredictable.”
The Government have given particularly careful consideration to those comments, which we have discussed with the Law Commission and with Master Winegarten of the chancery division of the High Court, who was very critical of the special trust provisions. We agree with the Justice Committee that minors who inherit should have their inheritance protected and that all minors should have suitable protection under the Bill. However, it is clear from our more detailed consideration of how the special trust provisions would work that they are unnecessary, problematic and expensive to operate.
As my right hon. Friend the Member for Berwick-upon-Tweed pointed out, the Civil Law Reform Bill contained special trust provisions for children. He asked whether this Bill provides protection now that the special trust provisions have been taken out, an issue which I have dealt with. In our view, the existing law, which already imposes a trust to the benefit of minor children and gives the court power to supervise the administration of estates, gives effective and adequate protection.
Sir Alan Beith
My hon. Friend is giving a detailed analysis and providing fairly compelling reasons why the specific provisions involve many problems. However, it is not only the protection of the minor’s inheritance that is at stake, but the maintenance of the principle that the person who has carried out the murder should not benefit from that murder, which might happen indirectly.
Mr Djanogly
I take my right hon. Friend’s point. As we have discussed, I agree that there is the technical possibility of the murderer taking advantage, but it is far fetched. Indeed, my right hon. Friend has mentioned that that assumes that the murderer had a solid knowledge of the laws of succession, which would include the certain knowledge that they would spend many years in prison. As my right hon. Friend the Member for East Yorkshire pointed out, the Bill does not affect the forfeiture rule. In the light of the responses to the consultations by the Law Commission and the Ministry of Justice and the pre-legislative scrutiny by the Justice Committee of all those proposals, we do not believe that allowing a killer’s children to inherit from the victim will encourage people to kill.
Sir Alan Beith
My hon. Friend has misunderstood my point, which does not concern the absurd issue of deterrence. Someone who has committed a murder—they may even be in prison—may be able to evade financial responsibilities as a result of the provisions. It is not far fetched that those who have committed murder would seek to gain some benefit from the money that would rightly pass to their children under such provisions.
Mr Djanogly
I thank my right hon. Friend for making that clear.
The Law Society also made an important point about the wording of the provisions in new section 33A(2) of the Wills Act 1837, which would be inserted by clause 2(1) of the Bill. Earlier draft Bills provided that where a person disclaims, or is disqualified by the operation of the forfeiture rule from inheriting under the deceased person’s will, the will is to be construed as if that person had died immediately before the deceased, save in so far as there is any provision in the will about how the devise or bequest is to take effect. The Law Society thought that this “any provision” test was more demanding than the “unless a contrary intention appears by the will” test in other related statutory provisions, and the Bill now follows those other provisions. We hope that will provide consistency and simplicity.
We welcome my right hon. Friend the Member for East Yorkshire’s decision to make the Bill consistent with the Wills Act and I should add, for completeness, that the Law Commission is content with the Bill in its present form. We are very grateful to the Justice Committee and its witnesses, particularly the Bar and the Law Society, for drawing attention to these matters. The approach in the Bill is the right one. This is a small but worthwhile piece of technical law reform produced by the Law Commission. I applaud my right hon. Friend for taking up this serious topic and I wish the Bill a fair passage through this House and the other place.
Mr Knight
I shall be brief because I sense that the House now wants to hear from the hon. Member for Washington and Sunderland West (Mrs Hodgson).
I thank my ally, the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith), and I am grateful for his support and the work that his Committee has undertaken. I am also grateful to him for agreeing to be a co-sponsor of the Bill. On the point that is still exercising him a little, I understand that the court does have power to appoint two trustees to take over an estate where they are concerned about a killer benefiting and where a minority interest arises. I hope that provision is sufficient.
I thank the hon. Member for Stoke-on-Trent South (Robert Flello) for reciprocating today the support that I recently gave to him for his private Member’s Bill. My hon. Friend the Member for Bury North (Mr Nuttall) made a comprehensive and wide-ranging speech and I am grateful for his support, coming as it does from a former practising solicitor. The lesson that every member of the public should draw from the remarks of the Minister and my hon. Friend the Member for Bury North, and from all the cases associated with this area of law, is that it pays to make a well-drafted will. However, the Bill seeks to prevent injustice occurring where a well-drafted will is not in place. I thank the Minister, I am delighted to have the Government’s support and I endorse all his remarks.
I shall not detain the House any longer except to say that what I seek to do is introduce a deemed, predeceased rule which means that a person who has killed the deceased person, a person who disclaims the inheritance and a person who dies a single parent under the age of 18 are all deemed to have died immediately before the deceased. The Bill will make the law fairer by removing technicalities that run contrary to the general policy of the law of succession. This is a complex area of law; I do not expect any publicity from the media about this Second Reading debate, but that does not matter to me. What matters is that the proposal is just, modest and, above all, fair. I commend it to the House.
Question put and agreed to.
Bill accordingly read a Second time; to stand committed to a Public Bill Committee (Standing Order No. 63).
Sale of Tickets (Sporting and Cultural Events) Bill
(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
I beg to move, that the Bill be now read a Second time.
The reason for my bringing forward the Bill should be obvious to hon. Members who have turned up today, even those who have done so perhaps only to oppose it. To demonstrate the problem, I will paraphrase from an article in The Times of 25 September 2010. At 8.50 am, Rachel Still switched on her computer and waited. At 9 am precisely, tickets for a gig by Brandon Flowers in London were to go on sale. A few minutes before 9, Rachel logged on to the ticket website and began the repetitive formula for buying tickets. At 9.1 am she was told that the gig had sold out. Her friends told her that they had received the same message at 8.57 am, before the tickets were even officially released. Within minutes those same tickets were appearing on secondary websites at prices way above the £25 face value, the cheapest one being £74. A survey showed that of the 2,300 tickets sold, 616 were instantly re-advertised—more than a quarter. No doubt there would be more to follow closer to the date too, as it is common practice to drip-feed more tickets on to the market at a sufficiently slow pace to keep the prices high.
That situation plays out time and again in homes up and down the country—ordinary fans trying in vain to get tickets, only to find that they have sold out within minutes. The disappointment is then compounded when they see that the touts do not have the same problems as they do in finding large numbers of tickets. I know all this because it has happened to me and to my teenage children, and I know we are not alone.
When I first tabled the Bill, after the private Member’s Bill ballot, the media attention prompted lots of people to write to me, expressing their support for action to tackle ticket touting. They ranged from academics to ordinary fans, and all had a story to tell. The story that stood out most prominently, though, was that—
Mrs Hodgson
Not at the moment. There will be plenty of chances for Government Members to speak. We have plenty of time, and I will give way when I have got further into the substance of my speech.
The story that stood out most prominently was that of a gentleman who used to work at a media event venue, which I will not name. He told me that it was common practice for the box office managers to cream off all the best seats to sell to touts at a mark-up of 50% before they even went on sale. Then, when the tills opened, they would simply put in the face value and issue a receipt for them all. I suspect security has improved since those days, but there is no doubt that the levels of reward on offer and the lack of regulation mean that many tickets never even reach the legitimate market at face value.
Even the big players in the secondary market recognise that, from the consumer’s perspective at least, there is a massive problem with this market. I quote Graham Burns, chairman of the Association of Secondary Ticket Agents, who said in a Sunday Times article in November:
“The ordinary fan is screwed. The decks are stacked against them. Try and buy a front-row seat at a bestselling concert at face value. It can’t be done.”
The aim of the Bill is to redress that balance—to give consumers back the power and to help event organisers choose how they want their tickets to be available and for how much.
While I initially approached the Bill from a fan’s perspective, I quickly got a better picture of the industry’s perspective as I met people who had got in touch about it, but I think the most strikingly unjustifiable part of the secondary market is the resale of charity tickets. Later in my speech I will go into some detail about the experience of the Teenage Cancer Trust, but I came across another, briefer example in The Sunday Times. Like the Minister’s boss, I too am a fan of some of Rupert Murdoch’s news output.
That example was the sale of Help for Heroes tickets. The gig was at Twickenham in September, and featured Robbie Williams, Gary Barlow and Tom Jones, who had freely given their time and names to support an incredibly worthy cause. Tickets for the event were being touted on secondary websites at an average of £106, despite the fact that the face value of an ordinary ticket was £46.75 and that the tickets clearly said on the back that they were not to be resold. The touts are earning more than the charity here, and if any hon. Member can convince me that that is right, I will happily withdraw my Bill and sit down.
Philip Davies (Shipley) (Con)
I wonder who the hon. Lady sees as the victim. If a charity wants to sell tickets at £46 each and someone pays £46 each, the charity gets all the money that it expected to get. The fact that someone is prepared to pay more to someone else for that ticket does not take any money away from the charity. It still gets exactly the same amount as it bargained for when it sold the tickets. It makes no difference to its income whether the person who paid £46 for the ticket uses it or sells it on to someone else.
Mrs Hodgson
The charity does not get the whole £46. On average, with overheads and so on, charities reckon that they get about half the ticket money. The tout or whoever sells on the ticket, which clearly states on the back that it must not be resold, makes six or eight times more than the charity. The artists, who have given their time freely, intend that any money that comes on the back of their time and from the ticket should go to the charity. I find it quite shameful that the hon. Gentleman can say that such a practice is fair when the charity intends to help teenage victims of cancer. [Interruption.]
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Hon. Members should work through the Chair, rather than talk across to each other.
Jacob Rees-Mogg (North East Somerset) (Con)
I thank the hon. Lady for being both gracious and generous in giving way a second time so quickly. If the charity fails to sell its tickets for the market price, which is £106, that is its fault. It ought to investigate other ways to sell its tickets, such as eBay, to maximise its return, rather than our introducing a harsh legislative measure.
Mrs Hodgson
The charity decides on the price based on the genuine, ordinary fans whom it wishes to attract. It is often aware that the price is sometimes below the market value, but the reason is that it does not want to attract only people who can afford to pay £106. It wants to attract a broad cross-section of people. It does not just want elite people in the audiences at such events. I will give further examples in due course.
Ian Austin (Dudley North) (Lab)
Does my hon. Friend share my surprise that Government Members support a system that excludes their constituents from having access to a free and open market, in which they can compete with other people to have proper access to tickets? Why does she think that they are in favour of their constituents not being able to buy tickets when they first go on sale?
Mrs Hodgson
That is an interesting point. Government Members have a lot of good arguments on the free market, but with regard to charity tickets, none of those arguments hold up. They should want such access for all their constituents, not just the ones who can afford to pay premium prices.
Mrs Hodgson
I would like to move on. I have a long speech, and I would like to get through the details.
I am, of course, aware that the issue has been considered on a number of occasions over the past five years. To be honest, the fact that it has been revisited so many times is testament to the fact that those who look at it keep coming to the wrong conclusions. Although I have read some of the contributions to the Culture, Media and Sport Committee’s inquiry, I still cannot understand how it arrived at its conclusion. The Select Committee and the then Government both concluded that fans wanted a forum in which they could buy tickets closer to the date of an event or sell them if they could not make it. I absolutely agree with that statement, but I disagree that that conclusion should allow the secondary market to carry on unregulated.
The key thing that both the Government and the Select Committee missed is that consumers also want a fair chance to get tickets at face value, and they do not want to be ripped off. I have a quote from a letter that my right hon. Friend the Member for St Helens South and Whiston (Mr Woodward) sent in his capacity as the then Minister with responsibility for the creative industries in response to my hon. Friend the Member for Glasgow North West (John Robertson), who is not in his place today, when he was campaigning on the issue way back in 2007. My right hon. Friend said:
“While consumers want a secondary market, they do not want to be exploited by individuals or businesses at their personal expense.”
But he then suggested that it was not in the public interest to legislate. I know my right hon. Friend the Member for St Helens South and Whiston; he is an intelligent man, so I can only think that once one becomes a Minister, there is sometimes a tendency to trust what the civil servants are saying a little too much.
Mrs Hodgson
No, I will not, if the hon. Gentleman does not mind.
Will the Minister tell us what his civil servants advised him ahead of this debate? I know my office provided them with advance sight of the Bill, so I hope they had enough time to come to a considered view. I look forward to hearing the Minister’s response—if his colleagues allow him to get in.
Coming back to the point, the Bill does not aim to do away with the secondary market. It aims to make the secondary market work in the interests of genuine fans, by forcing out the people who are there simply to profit from the hard work, investment and creative talent of the live entertainment industry, a sector that I am sure the Minister will agree has become extremely valuable to the UK’s economic vitality.
The role of the Government and of the House is to legislate in the public interest. The public interest does not lie in a few touts and the channels they sell through continuing to make obscene profits at the expense of the general event-going public and of the live entertainment industry. The public interest lies in the Government providing a statutory framework for the industry to use in the interests of fans where needed. That is exactly what the Bill provides for.
Before I come to the substance of the Bill and go through its various clauses, I take this opportunity to thank my fantastic and hard-working team who have helped me on my route to introducing the Bill to the House. In particular, I thank two people: Mike Forster, my researcher, who only started in August, so the Bill has been a huge part of his job; and David Hopper, previously my intern but now studying to be a solicitor, who did a lot of the groundwork behind the scenes on legislation around the world.
The Bill addresses the problem I laid out. It creates two new offences, but that is not the starting point. The starting point is the creation of a voluntary designation scheme under which those involved in putting on live entertainment events can apply for protection from the unauthorised resale of their tickets. If they apply for protection, it would be an offence for an unauthorised individual to be concerned in the sale of a ticket for that event at a price greater than 10% above face value. For such purposes, face value is the printed value plus any service charges levied by the appointed ticket agent.
Such an approach broadly follows that set out in the Queensland solution, of which hon. Members on the Select Committee on Culture, Media and Sport will be aware. In Queensland, tickets for any event held at certain major venues are subject to price caps on unauthorised resale. I want to broaden that provision out, because it would not touch a large part of the market, such as theatre or mid-sized and small gigs, which are just as lucrative for touts as stadium events—if not more so, because they occur on almost every night of the year in towns and cities throughout the country.
Clause 1 sets out how that system of designation could work. I am open to its refinement or to alternative suggestions from the Government or other hon. Members in Committee should the Bill be successfully voted through today.
Clause 2 sets out the offences, the first of which I have already mentioned. The second offence is the advertisement for sale and taking of payment for tickets that have not yet been released by the primary retailer. The issue is separate from that of the secondary market, coming as it does before even the primary market. Websites spring up offering concert tickets—a recent example is the Take That tour—that the person running the site obviously does not even have. It is a risk-free business, because the person gets a lump sum of cash to buy as many tickets as possible to satisfy the orders, and simply refunds any orders that cannot be satisfied. In some cases, such sites have simply not delivered the tickets and done a bunk with the money. Other laws cover such activities, but why is it still legal for those sites to offer tickets that they do not have, at the risk of many consumers being left short-changed and without tickets?
Clause 2 sets out the sanctions for the offences, which include a fine up to the level 5 limit on the standard scale. There was a case for going higher than that, as for many major operators, £5,000 represents a drop in the ocean of their business.
Lyn Brown (West Ham) (Lab)
As my hon. Friend knows, I am particularly concerned about the issue of ticket touts and the Olympic games. I do not feel that £5,000 is enough of a fine to deter unscrupulous touts. Does she agree?
Mrs Hodgson
I certainly do, and I shall come on to the Olympic games shortly. One of my suggestions is that we work with the Metropolitan police unit set up to tackle the issue. I am sure that my hon. Friend will meet it in the course of her work as a local MP. That unit also feels that £5,000 is nowhere near a big enough deterrent. There are measures in place, which I will come to in due course, but perhaps my hon. Friend will intervene on me again if I do not cover her point in detail.
I want to state explicitly that for the worst cases, the confiscation, under section 70 of the Proceeds of Crime Act 2002, of assets and cash thought to have been garnered through this activity should be considered. Clause 3 assumes an exemption from the limitations where the proceeds of an auctioned ticket are to be used for, or donated to, charitable purposes. Any exploitation of that assumption would obviously be investigable under the Charities Act 1993.
Philip Davies
The hon. Lady talks about her constituents and mine being exploited by ticket touts, but does she not accept that one of the worst exploitations in the whole ticketing market is carried out by promoters who sell tickets and then refuse to exchange them or give refunds? Somebody who buys a ticket and then finds that they cannot go to the event may not get a refund. In the secondary market, viagogo has a viagogo guarantee; if anything goes wrong, it guarantees people their money back. Surely that is giving people a better service than the primary ticket market does.
Mrs Hodgson
I shall come to that point, too; I shall mention that I encourage primary sellers to offer a refund service within a certain period—a cooling-off period, as it were. A lot of other online purchases are covered by these periods—a certain amount of time in which purchases can be returned. I met Rugby Football Union representatives, and that body accepts returns of all its tickets; the same is true of most tickets from the All England Lawn Tennis Club for Wimbledon finals. Most of these places will happily accept the tickets back and give a full refund, because they know that the tickets are highly sought after. [Interruption.] Not all are, but some key tickets are accepted back; the Minister is nodding.
Mrs Hodgson
Some are, and later in my speech I shall say that as part of the legislation, there could be discussions with primary ticket sellers and event organisers about ensuring that they offer a refund facility.
Let me come back to the clauses of the Bill. Clause 4 relates to the sale of tickets on the internet by touts. It is not my intention to require the active monitoring of adverts placed on websites by sites’ administrators; after all, the practicalities involved would be prohibitive. However, where that monitoring is done, either by the event organisers or the police, the Bill places a duty on the administrators of those websites to take down in a timely manner any adverts thought to be in contravention of clause 1—that is what will happen with regard to Olympic tickets—and to co-operate with any investigations of touts who have been using their services. Again, failure to comply would incur a fine up to the level 5 maximum.
Clause 5 places a duty on the Secretary of State to consult the industry on two things. The first is the establishment of a voluntary code, under which primary ticket agents would offer refunds on tickets within a certain time frame, just as other internet retailers are subject to distance-selling regulations; that exactly covers the point mentioned by the hon. Member for Shipley (Philip Davies), who is now not listening to the debate. Secondly, the Secretary of State should consult the industry on whether the creation of an official ticket exchange facility would be beneficial for consumers—both those who have spare tickets to sell, and those who want them. Primary agents and sites through which the secondary market operates would be happy to engage in that process and work towards creating a fairer marketplace for fans. The remaining clauses relate to interpretation provisions and the commencement and jurisdiction of the Bill, and require no explanation.
The House will be interested to learn that, in drafting the Bill, I consulted officers from Operation Podium extensively, and I thank them for their input. Members with an interest in preparations for the Olympic games—my hon. Friend the Member for West Ham (Lyn Brown) has such an interest as a constituency MP—may be aware that Operation Podium is being carried out by a team in the Metropolitan police dedicated to tackling crime associated with the games. Half of that taskforce is concerned primarily with working with Olympic organisers and the industry to tackle touting of Olympics tickets under the powers set out in section 31 of the London Olympic Games and Paralympic Games Act 2006, which builds on provisions relating to football tickets in section 166 of the Criminal Justice and Public Order Act 1994. The 2006 Act decrees that no reselling may take place by unauthorised retailers, and sets up a ticket exchange facility whereby genuine fans can sell tickets on to other fans at face value. That is the ideal model, and could easily be replicated if the political will was there.
Officers from Operation Podium told me that the secondary market is estimated to be worth up to £1 billion a year—money that is not being used to support grass-roots sports, artists or investors in live entertainment. Much of it will not go to the Treasury, save for a bit of VAT on charges levied by the websites that the touts use. They also told me that as the previous Government and the then Select Committee on Culture, Media and Sport had effectively given the measure the green light, it has been increasingly exploited by organised criminal networks, both UK-based and international, as a result of the vast sums of money on offer. The implication is that a large portion of that estimated £1 billion is being used to bankroll other crimes, such as drugs, trafficking, money laundering and so on. Tackling touting would therefore choke off a stream of income for those networks, which is just one reason for the measure that has been suggested to me since I began work on it.
The Minister for Sport and the Olympics (Hugh Robertson)
I looked at this issue carefully when we were in opposition. It was alleged that ticket touting was used as a means to launder the proceeds of crime. I specifically asked the Metropolitan police about that about 18 months ago, when the then Select Committee and the previous Government were looking at it, and they said that there was no firm evidence to support that allegation. If the hon. Lady has that evidence, I urge her to bring it forward.
Mrs Hodgson
I certainly will do so, and I will pass on all the correspondence that I have received from the senior Operation Podium officer. I do not think he would want me to name him on the Floor of the House, but he has met officials from the Home Office—I know that that is not the Minister’s Department—to discuss the issue. I am sure he would be delighted to meet the Minister and explain how things have moved on quite considerably since the then Government and Select Committee looked at them. I have used the term “green light”. The decision that my Government, and the cross-party Select Committee made was seen as a green light to the criminal fraternity to begin to exploit the whole market. I am sure that the officer would meet the Minister in a flash, because the police need to get the situation right before the Olympic tickets go on sale in March. He would be thrilled to know that the Minister wanted to meet him.
Given the large amounts of money that could be made on premium tickets for major finals, the police do not believe that the sanction for individuals caught touting tickets for the Olympics—a level 5 fine, as I mentioned—is a sufficient deterrent. As I said, many people would regard it as just an occupational hazard, pay the fine and carry on straight away selling more tickets. That issue is addressed by clause 2(6), which emphasises prosecutors’ ability to consider whether the case should be looked at by a Crown court under section 70 of the Proceeds of Crime Act 2002, so that touts know that £5,000 is not the absolute maximum that they can be fined.
Mr Nuttall
Is the hon. Lady saying that she has decided to restrict the offence to level 5 because of an order under the Proceeds of Crime Act? Why not a higher level?
Mrs Hodgson
It could be higher, but a level 5 offence is laid down in the Olympics legislation, which I have used as the basis for the legislative framework of the Bill. It was deemed an appropriate level. However, as I said, officers at Operation Podium have said they do not consider that strong enough. They would like to talk to Ministers about the current legislation and the possibility of extending it to other entertainment industries, such as those I am speaking about.
Officers have also pointed out that the mainstream secondary marketplace—the websites that consumers tend to trust, such as viagogo, Get Me In! and eBay, as we have just heard—do not prevent professional touts from selling on their websites. A member of the public contacted me on Twitter when they heard about the Bill to say that they had once received an e-mail which was obviously intended for regular sellers on one of those sites, recommending that they buy tickets for certain events from the primary retailer purely in order to sell them on through such a site.
Whether that is true I cannot be certain, but there seems no reason for that person to lie to me. If it is true, it shows that at least one of those websites actively encourages touting and sees itself more as a broker than as a fan-to-fan exchange. Many of these organisations now call themselves ticket brokers. viagogo is the only one of those sites to get in touch with me about the Bill. Unfortunately I was not able to meet its representatives, but a member of my office, Mike Forster, did. They told him that a majority of their sellers sell fewer than six tickets a year so could not be considered big operators.
That is fair enough, but I still question whether a person selling tickets to six events a year is doing so as a genuine fan who cannot go to those events. Perhaps some of them might have been unlucky, and things seem to crop up whenever they buy tickets for a gig, but I would hazard that many of them are simply amateur touts without the time and infrastructure enjoyed by some of the bigger operators. That leaves the rest of the traders who are selling tickets to more than six events a year—there can be little doubt that those people are doing it as a deliberate money-making exercise, rather than just disposing of surplus tickets.
The police officers I met also raised the issue of how some of the big operators acquire so many tickets. What they said echoed some of the reading that I have done on the subject. The more IT-literate Members among us will know what I mean by a botnet. For those who do not, it is a network of computers—maybe the ones that we all have at home—which have been infected by a virus that allows the originator of that virus to control the terminal. It is a valuable commodity for hackers. Sometimes they are hired to carry out denial of service attacks on websites, and direct so much traffic to a particular website that it buckles under the strain. Members may remember that an anonymous group used this tactic to bring down sites such as PayPal and MasterCard after these withdrew their services to the WikiLeaks website just before Christmas.
The same method can be used in conjunction with numerous credit cards and bank accounts to evade the systems that primary retailers have put in place to stop one person buying up lots of tickets. I read an article on the technology news website The Register in November, which chronicled the case of a gang of touts in the US using Bulgarian hackers to buy scores of tickets automatically to gigs such as Bruce Springsteen, as well as Broadway musicals and major league baseball games. They were eventually indicted on charges of hacking, but by that time they had been operating for seven years, selling an estimated 1.5 million tickets, earning them $25 million. That is not small change.
This practice is of course illegal, but the vast profits to be made mean that it is an attractive and simple way for professional touts to do business, and it is very difficult to detect amid the usual high levels of traffic that a primary ticketing website gets when it first releases tickets for a major event. That illustrates that fans and touts are not competing on a level playing field when buying tickets, which is why such large numbers of tickets reappear almost instantly on the secondary market. That also illustrates why it is difficult for primary ticketers to take the lead in preventing touting. They already do a lot that they should not have to do, such as limiting the number of tickets that can be bought in one go and using word-recognition software, but the problem keeps getting worse. If computer whizz kids can hack into the Pentagon and GCHQ, finding a way around security on a ticket website is child’s play.
Those involved in Operation Podium have welcomed the Bill and see it as a necessary measure to tackle the criminal and organised elements that dominate the secondary market. They know that it can be policed—a point that I am sure Government Members are ready to bring up—because they are policing it now in preparation for Olympics tickets going on sale. They know that they can police it across borders because they are doing so now. The Olympics legislation does not limit jurisdiction to processes that happen solely on British soil, because the internet allows people to get around that easily. The Bill will follow that precedent. Those working in Operation Podium know that this is the right way to go, and I hope that their professional judgement will be taken into account by the Members.
Philip Davies
Does the hon. Lady not see that there is a potential problem with restricting the resale value to just 10% of the original ticket price? It is much easier to manage that on the internet than to do so for touts standing outside stadiums. There is no way to tell how much people in a local pub might have sold a ticket on for, so that the safeguards of the secondary market on the internet would be lost as the tickets were resold. We are not going to get rid of the secondary market—like prostitution, it will always be there—but it will just shift from the internet to the street, where there will be fewer safeguards for the purchaser.
Mrs Hodgson
As the hon. Gentleman says, we cannot get rid of the secondary market, just as we cannot stop people selling stolen goods, but because legislation says that receiving stolen goods is illegal, the vast majority of the general public do not participate in such activity. Once legislation makes it clear what is allowed and what is an underground activity, public opinion and hearts and minds will change. That will happen with the Olympics tickets and the Bill.
The hon. Gentleman suggested that 10% is not fair, but the tickets for the Olympics will have no mark-up at all. They can be refunded through the Olympics authorities, in which case they will go to a fan on a waiting list and no mark-up will be allowed at all. The Bill recognises that there are sometimes other associated costs, such as postage or credit card fees, which is why it would allow the 10% level, which is what Queensland permits, too. If we were right to do that for the Olympics tickets, I cannot see why it is not the right thing to do for other ticketed events.
Sajid Javid (Bromsgrove) (Con)
I am intrigued to know why the hon. Lady selected 10%, rather than 20%, 30% or 40%.
Mrs Hodgson
We had a long debate about that, and 10% was deemed to be sufficiently small that there would be no profit. The people we are talking about buy huge numbers of tickets, and I am sure that the hon. Gentleman can work out that the bigger the percentage, the more lucrative it is for the number of tickets they buy up. Keeping the percentage small restricts the amount of extra money they can make on top and so removes the incentive for touts to participate in that activity.
I must return to the substance of my speech, if hon. Members will allow me. The Bill also has wide-ranging support from the live entertainment industry. The hon. Member for Hove (Mike Weatherley) and I met several people involved in the business last night. In particular, I spoke to Ron Smallwood—the manger of Iron Maiden, no less—who has been trying to push the matter up the agenda for many years. He said:
“When Iron Maiden tickets went on sale late last year for an extensive arena tour of the UK this coming summer, thousands upon thousands of tickets at much higher average price than face value appeared across these secondary sites within days… Do they really expect us to believe that even a small number of these were bought by people who suddenly—the day after they bought the ticket—found they couldn’t go to a concert some 9 months away?... This is one story of many…it is sheer piracy and must be stopped to protect the real fans and the performers.”
Last night I also met the manager of the Arctic Monkeys, Ian McAndrew—
Mrs Hodgson
I know. It was very enjoyable, and Mr McAndrew, who welcomed the Bill, summed up the situation succinctly, saying:
“Ticket touting is a substantial and thriving parasitical economy, which exploits both music fans and those stakeholders who are investing in putting on live entertainment.”
I could not have come up with a better soundbite myself, and I like to think that I am a fully fledged politician.
I have also been working extensively with the Sport and Recreation Alliance, formerly known as the Central Council for Physical Recreation, because the issue affects sport as much as, if not more than, musicians and other artistes, and I thank Dom Goggins and James MacDougall for their help in putting the Bill together. For those Members who do not know, the Sport and Recreation Alliance is the umbrella organisation representing the national governing and representative bodies of sports in the UK, including the Football Association, the Rugby Football Union, UK Athletics, the Ramblers and the Royal Academy of Dance.
Touting mainly affects the big sporting showpieces, such as international games and tournament finals, which national governing bodies run, investing any surplus they make in promoting grass-roots and associated programmes that are aimed, in particular, at increasing participation and instilling healthy lifestyles among school-age children. Such bodies want those children to be able to experience top-class sport, like most live events, with their families, and that is why—to respond again to the hon. Member for North East Somerset (Jacob Rees-Mogg) and his point about the market price—they set the majority of their ticket prices artificially low.
Philip Davies
I am very interested to hear the hon. Lady say that sporting bodies set their tickets at ordinary prices that fans can afford. Does she not accept, as it emerged a couple of years ago, that the Rugby Football Union did not put any tickets at all on sale to the general public for the Six Nations matches? For someone who was not part of a local rugby club or one of the sponsors, there were no tickets available. There were no tickets for ordinary rugby fans to buy on the open market. That is hardly delivering much of a service to genuine fans.
Mrs Hodgson
I contest that point, because the reverse is true. That body would have released tickets to clubs throughout the country, and they are full of genuine fans—and full of genuine fans who participate in the sport. So that does give people the chance to access tickets and gives kids who play the sport the chance to watch their heroes, without the tickets going on to the open market, where the touts buy them up and sell them on to the highest bidder.
Ian Austin
Is my hon. Friend as perplexed as I am why Government Members would rather see touts buy up tickets in bulk, excluding ordinary fans from the market, than see those tickets available to ordinary fans through clubs? Is that not bizarre?
Mrs Hodgson
It is bizarre—but not surprising. I know that not all Government Members will agree, and if any who do not would like to intervene I shall be more than happy to give way.
Mike Weatherley (Hove) (Con)
Does the hon. Lady agree that what my hon. Friend the Member for Shipley (Philip Davies) just said reinforces the point that those who have the creative talent should be the ones who utilise the tickets in such situations? That is an exact example of our point regarding ticket touts: the person who provides the creative talent should have some control over who goes to watch such events. I am grateful to my hon. Friend for making that point on our behalf.
Mrs Hodgson
Definitely. I do not think that the hon. Member for Shipley (Philip Davies) quite realised he was helping our cause when he made that intervention, but I thank him for doing so.
The situation to which I referred opens up the market to touts. They buy tickets at the low price that the governing body has decided to sell them at, and by selling them on at a profit they deprive fans of lesser means of the opportunity to enjoy top-class sport.
Sarah Newton (Truro and Falmouth) (Con)
Does the hon. Lady agree that in this House we sometimes struggle to find issues of relevance to young people and their families? Here we have an issue that is incredibly important to teenagers who are passionately involved in sport, which we hear many Members applauding and wanting to promote. Those interested in the creative industries are also relevant. Is it not vital that we listen to and encourage those young people and reflect their concerns in the legislation that we make in the House?
Mrs Hodgson
Definitely; I certainly agree. I am so grateful for that intervention. If the hon. Lady wants to make any further interventions, so that it is not just my voice that everybody hears today, I would be grateful.
Faced with this situation, it would be no surprise if sports simply put up their prices to squeeze the touts out, but they do not want to do that—and as we have heard, we do not want them to do that and teenagers do not want them to do that. Sports need to create a sustainable level of interest, and pricing the vast majority of families out of top events would certainly negate that ambition.
What sports want is to be protected by a regulatory scheme such as the one set out in the Bill. Only the sports that experience problems with touts would opt in to be covered. That would mean that it would not be the overarching, top-down imposition on the industry that some Government Members may try to argue it is. It would mean the Government doing what the Government should do: stepping into the market when they are needed to ensure that it operates in the best interests of the majority, especially of young people.
Tim Lamb, chief executive of the Sport and Recreation Alliance, summed up the position from the perspective of the sports that he represents. He said:
“Ticket touts are simply exploiting sport and their gain is everyone else’s loss.”
He could not be more right. I have also had positive feedback from Festival Republic, best known for putting on the Reading and Leeds festivals every August, which has been campaigning prominently on this issue for years, and from See Tickets, a major primary ticket agent. See has worked with the organisers of the Glastonbury festival to ensure that passes for the festival are impossible to sell on, by requiring pre-registration and photographs of the ticket holder to be printed on the ticket. That is effective, but completely impractical for the vast majority of live events and not something that organisers should have to invest in.
The interesting thing about See is that it has nothing to gain from the Bill. It gets paid for selling tickets, whether to touts or genuine fans, yet it still sees the huge unfairness in how the secondary market has developed. Rob Wilmshurst, See’s chief executive, said:
“The live entertainment industry provides cultural and economic benefit to the UK and needs support. Ignoring this issue again will further diminish customer trust in the market and therefore the contribution the industry makes in general to the country.”
Again, that is an insightful comment from someone who knows the industry better than any of us in the Chamber, as has been the case with all the feedback that I have relayed to hon. Members today. If those figures and their peers support the Bill or any action to make the situation fairer, it is incumbent on the Government to listen to those calls and at least re-examine the impact that the secondary market is having on live entertainment.
Simon Davies, chief executive of the Teenage Cancer Trust, was also at the meeting that I had last night. I also met him and his team late last year to discuss the Bill. I put on the record my sincere thanks to them for their support and input into the process. For those Members who are unaware of the work done by the Teenage Cancer Trust or who think that it is fair for touts to take money away from such work, I shall explain. The trust funds and builds specialist units in the NHS that cater for the specific needs of young people and teenagers who suffer from cancer, bringing them together so that they can socialise with and support each other through the most difficult time that one could ever imagine. On top of that, the trust funds a network of teenage cancer specialists and nurse consultants, to pool knowledge and expertise and provide tailored support to the young people. I am sure that all hon. Members would agree that it is an exceptionally worthy cause.
Mrs Hodgson
I shall be interested to see how the hon. Gentleman is going to explain his opposition to that.
Philip Davies
The hon. Lady talks about the Teenage Cancer Trust, but as she is probably aware from her research, where tickets are sold for a charity event and the charity contacts a company such as eBay to point out how much money is going to the charity, it can request that eBay insists that the seller passes at least 20% of the profit back to the charity. The Teenage Cancer Trust is one charity that has done that with eBay, gaining a kick-back and an increase in its income from the secondary market—more than it would have done if the tickets had simply been sold on the primary market.
Mrs Hodgson
They should not necessarily have to raise that issue with eBay to get the money back. What is more, the charity told me last night that it does not want venues to be full of people who can afford to pay the prices that the touts charge for tickets. That is not the purpose. It wants genuine fans to come along—not venues full of elites, paying hundreds and hundreds of pounds.
Mrs Hodgson
No, I am going to carry on.
A large part of the fundraising activities to support the trust’s wonderful work is the running of a series of live entertainment events at the Royal Albert hall, featuring major artists and comedians who give their time for free to support the trust. Last summer, in its 10th year at the Royal Albert hall, it put on nine spectacular gigs featuring Suede, the Who, Noel Gallagher, the Arctic Monkeys, Jimmy Carr and Noel Fielding. As a big fan of talent TV shows, I would particularly have enjoyed seeing JLS, Diana Vickers and Lemar perform on the same night. I see that some Conservative Members are looking confused about some of these names. If they see me afterwards, I will certainly explain any pop culture references that they do not get. I might even be able to put together a compilation CD for them.
All these artists freely give their time—as well as that of their support crew—their energy and their talent to support what they view as a worthy cause, but it is not simply a case of artists giving up a night off. Doing a gig in London lessens demand for any other gigs in London that they might have planned close to that date. It could be that they cannot perform in London again for a few weeks or even months, so their participation is a genuine expression of their desire to help the cause. These big names could easily have done other things to earn money on the night they performed. The very fact that they are involved means that demand for tickets is huge.
Even though the Teenage Cancer Trust knows that demand for its events could allow it to sell the tickets at a higher price, it wants the events to be affordable to the average fan. As at almost all live entertainment events, tickets are sold at a price below what the market will bear, because organisers recognise the fact that the sustainable approach to putting on live events is to allow as many genuine fans as possible—and especially as many young people as possible—to attend. Quite apart from any moral or ethical consideration, that makes good business sense, building a long-lasting relationship with fans, which could not be achieved if they felt that they were being ripped off or could not even begin to get on the first rung of the ladder.
Regular-priced tickets to extraordinary events run by the Teenage Cancer Trust are put on sale with all the standard technological measures in place to combat touts. Like all other big events, they sell out in the space of a morning—sometimes in an hour or two. On the same day, without fail, hundreds of those tickets reappear on secondary websites at massive mark-up prices—well over double their face value.
Mrs Hodgson
No, I am going to carry on.
Assuming that about half the face value of the ticket represents the profit that the Teenage Cancer Trust makes on these events—by profit, I mean, of course, the money that goes to help young cancer sufferers—we can conclude that a tout selling for double the face value is making double the amount that the charity is making. Double face value, of course, is a conservative estimate. That price might be got by buying from a tout outside, part way through the gig, but anyone buying through internet channels either just after the tickets go on sale or just before the gig would be extremely lucky to get one for just double the price. Simon Davies said last night that some of the premium tickets went for four times their face value, meaning that the tout got six times the amount raised by the charity.
Do hon. Members really think that a situation in which private touts can earn more than the charity is satisfactory? Do they really think it right for individuals to be able to exploit the demand created by freely given hard work, the good will of a charity and the selfless giving of artists? I do not, and I would be interested to learn whether any hon. Members can intervene to explain why that is right, other than by just repeating what they have already said, which is, “It’s the free market.”
On that basis alone, I ask any hon. Members who have turned up to talk out the Bill with frivolous and self-indulgent speeches to think again.
Mrs Hodgson
I do not think that I am making a frivolous or a self-indulgent speech.
I ask such Members whether any of them have talked to their constituents about their intention to block this Bill. If they have, I would be interested to know what they heard. If they spent their Fridays out and about meeting their constituents, rather than habitually causing parliamentary mischief, they might have a better idea of what their constituents sent them to Parliament to do.
Philip Davies
I commend the hon. Lady for leading with her chin on that particular point, because all the surveys carried out on this issue fly in the face of what she thinks. I do not know whether her constituents are a rare breed compared with the rest of the country, but in an ICM poll of 1,000 people, 86% agreed that if they have a ticket to a sporting event, concert or other event, then they should be allowed to resell it. It is therefore the hon. Lady who is flying in the face of public opinion, not me.
Mrs Hodgson
My Bill would not stop them from being able to resell a ticket. My Bill would allow them to resell that ticket if they have genuinely bought it and genuinely cannot go to that gig or other event, and it would even allow them to resell it with a 10% mark-up for their trouble.
To bring my speech to a conclusion, my Bill sets out a blueprint for addressing the pernicious issue of ticket resale.
Graham Jones
I have wanted to make the following point for quite a while. There is a tax revenue issue in respect of secondary selling that needs to be addressed. A lot of the people concerned are operating in the black economy, making substantial amounts of money. The secondary market needs to be dealt with; we need to do something about it. Some of these people can be very friendly, but they are making an awful lot of money, and I make the assumption that certainly those who sell tickets outside venues do not pay any tax; rather, they are simply operating for themselves, cash in hand.
Mrs Hodgson
I thank my hon. Friend for raising that point. I did not address it at length, although I did touch on the fact that the Exchequer was not receiving any revenue from this billion-pound industry, apart from a small amount of VAT that some of the exchange sites levy. Every working person in the country has to pay tax through Pay-as-you-earn, but these touts, some of whom are making huge sums of money, are certainly not paying any of it.
Mrs Hodgson
I will not. I suspect that the hon. Gentleman might want to say, “Therefore, we should regulate touting and get these people to offer to pay pay-as-you-earn on their income.”
Mrs Hodgson
I will give way to the hon. Gentleman, in order to hear what he has to say.
Sajid Javid
I thank the hon. Lady for being so generous with her time and giving way for a second time. First, I want to say that this is the first Friday on which I have turned up. I am not going to make a habit of it, but I am very glad that I am present today, because the hon. Lady has made this a very exciting afternoon, whereas I was a bit worried that I might have been bored.
I want to say what my constituents might think of this proposal. I think they would believe that if they have genuinely and honestly come by a ticket and they wish to sell it, Government should impose no restrictions on what price they can sell it for, and on how they can sell it.
Mrs Hodgson
Well, such restrictions are law of this land now; that is what will happen for Olympics tickets. Someone who buys an Olympics ticket will not be able to sell it on for however much they choose, even though it is theirs. The Government have decided that those are premium tickets which are so desirable that they cannot just go to the highest bidder, and that instead they must be redistributed. A precedent has already been set, therefore.
Hugh Robertson
On a matter of fact, for a small number of major international tournaments it is a requirement of the bid that ticket touting is outlawed. For the Olympics, it is an International Olympic Committee regulation that has to be agreed to as part of the bidding. I am pretty sure, although we have not bid formally for a cricket world cup, that the same regulations would apply to an International Cricket Council 50-over cricket world cup. The same applies to football competitions, but that is for reasons of security, not ticket touting.
Mrs Hodgson
I thank the Minister for that clarification. If the IOC made that stipulation, it will have been for very good reasons. I sincerely hope that Members and the Government will consider those reasons, because they are as valid for the IOC as they are for this great country of ours.
We should remove the financial incentive that drives the activities of the major operators and give the police a way to go after those whom they suspect are involved in other criminality. The Bill is sufficiently light touch, I believe, not to harm any promoter, artist or other investor who does not wish their event to be covered. If they do not opt in to the scheme, or if they come to a commercial arrangement with a secondary retailer, the fans will know that that is an active decision. Nobody will be forced to opt in and have such regulation covering an event. If a commercial arrangement with a secondary retailer were made, at least some of the mark-up would go back to the artists or the sport.
Graham Jones
When it says on a ticket that it is not transferrable, can that be enforced in law? If that is the case, are the Conservative Members who have spoken encouraging people to break the law? The tickets that I buy pretty much always say, “This is not transferable.” Can my hon. Friend clarify?
Mrs Hodgson
As far as I am aware, tickets for the major charity events all have on them “not to be resold” or “not for resale”. Some will say that they are non-transferable. Yes, such people probably are breaking the law—certainly in the case of charity tickets—but there is no mechanism for bringing them to book.
Philip Davies
The hon. Member for Hyndburn (Graham Jones) has made a fair point. Some tickets do say that they are non-transferable and it is for those promoters, if they wish, to take to court anybody who they find in breach of that to enforce the non-transferable status. The hon. Lady and the hon. Gentleman might want to reflect on the reluctance of promoters to do so. They might discover that that reluctance is born out of the fact that a court would probably find such an approach to be a restriction in trade and that the term “non-transferable” was not enforceable.
Mrs Hodgson
That would be because there is no legislation on the statute book to say that that is a criminal offence. That is why people feel that they are powerless, and they are looking to us to do something about it.
Of course, I would prefer a blanket ban, like the one for Olympics tickets, but having consulted as widely as possible, I accept that it should be for individual stakeholders in the sector to decide how they want their tickets to be sold. I accept that there is a role for a secondary market, but that secondary market must operate in the interests of fans, not touts. Should the Bill go into Committee, I would be more than happy to talk to the Government about whether a different approach might work better. After all, the Minister has vast resources and scores of able minds, including his own, at his disposal. I am certainly open to working with him and his officials on a way forward, provided that the outcome is fairer to fans, artists and everyone else who invests in the live entertainment industry. I hope that he will not reject their concerns out of hand today.
If the Minister does reject those concerns, and if this Bill is not successful, the bad feeling about the secondary market, which is damaging the reputation of the entire sector, will not go away. The situation will not get better without Government intervention—and that of the Minister, I hope. I know that because I have seen how far the situation has developed since the Labour Government and the Select Committee last considered it and effectively, as I have said before, gave the touts a green light to continue by doing nothing to stop them. The Government and Parliament were wrong to come to that view, and I hope that a fresh set of Ministers will come to a different conclusion.
As touts got that green light, the primary market has naturally adapted to step in to the secondary marketplace —and why should it not do so? I do not condone the practices of Get Me In and Ticketmaster, if they are true, and I do not like the fact that artists such as Madonna auction premium seats or that some sports give their premium seats directly to secondary retailers, but one cannot blame them given the situation. If a tout can make that money, why should it not go to the people who put on the event? Indeed, it would be preferable to have it that way, particularly in the sporting world, where extra money means extra grass-roots investment. That is not an abstract hypothesis about how the primary market will go. That is what is happening right now, with many events at the O2 arena selling premium tickets at much higher prices than regular tickets.
My Bill seeks to limit the involvement of touts in the ticket market, which will provide less of a reason for anyone in the industry to feel that they must resort to such practices, thereby increasing the likelihood of a genuine fan being able to buy a ticket at face value with their saved-up pocket money. The only people who benefit from the current situation are a few professional touts. Whether they are linked to other crimes, and whether they use hacked computers or other underhand methods to buy their tickets, is beside the point. However they do it, they are manipulating the supply of tickets to exploit demand created by the talent, hard work, good will and investment of everyone involved in putting on live entertainment. Despite contributing nothing, they reap vast sums. As the manager of the Arctic Monkeys has said, it is “a parasitical economy”. It is the most distasteful expression of free market capitalism, because it creates a few big winners and countless big losers. If enacted, the provisions would be popular, because they are a proportionate attempt to redress that imbalance. I commend the Bill to the House.
Mike Weatherley (Hove) (Con)
I refer hon. Members to my entry in the Register of Members’ Financial Interests.
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on introducing the Bill and on allowing the House to have a lively debate.
Before I get on to the reasons why I—perhaps surprisingly—support the Bill, a little background is in order. At university, I was fortunate enough to attend a speech by the late Sir Keith Joseph, who changed my life. The speech was about free markets and, although I was studying business studies, I had the preconception that it would be boring—how wrong I was, because I was blown away by the arguments. I am a Conservative, because I believe that the free market is far and away the best method by which efficiently to allocate resources. Risk needs to be rewarded, and consumers should have the ultimate say on how products are delivered and at what price. In 90% of cases, the market should decide.
My second interest in the Bill stems from my love of live music and sport. Music and other forms of creative expression are vital to the British economy. I have delivered a number of speeches in the House about the importance of the music industry to the country for overseas earnings and suchlike. The performing arts and sport sustain employment and tax revenues, which benefit all our citizens. There is, however, a blight that creams off revenues by exploiting an imperfect market and contributes nothing to the creative copyright holders. That blight consists of those who profiteer by exploiting excess demand.
Ticket touts who take advantage of availability do nothing to promote our creative industries, and this is one of those rare examples where the Government need to step in to protect creative persons. There are five conditions for the formation of a perfect market, such as perfect knowledge of alternatives and so on. One of those conditions concerns the availability of supply. That is fine for physical products, which can be increased or decreased according to demand—for example, when manufacturing output is turned up, supply increases and the equilibrium price is found again. However, where supply is based on an individual, it is impossible for the number of hours in the day or the number of days in the year to be increased. A performer cannot be in two places at the same time. An imperfect market is then created, and prices rise due to a shortage of supply.
The question is whether intermediaries should be able to take advantage of that imperfection against the wishes of those providing the service. I certainly hope that everyone present in the House today recognises the value of copyright protection to the creative industries. If anyone does not, I suggest that they review the conclusions of the Gowers report, which agrees that intellectual property, and thereby the wishes of the creative person as to how their product is produced, marketed and used, should be protected. The copyright owner should retain control of their product.
Philip Davies
The problem with this line of argument—the comparison with general intellectual property—is that with other forms of intellectual property infringement, the person producing the goods or services loses out. With ticket touting, the promoter does not lose out because if they are selling 50,000 tickets at £20 each, they are hoping to get £1 million, and whether or not a ticket tout buys those tickets and sells them later they still get their £1 million, so they do not lose out financially.
Mike Weatherley
I am grateful to my hon. Friend for making that point, to which I shall give a specific answer later.
The issue is who owns the product that people are going to see. My view is that the copyright owner who produces the good, whether it is a concert or a sports event, is the owner and should have control of it for various reasons. There are many reasons why a business might want to price at below full market value—in specific sectors, market penetration is one such reason; reward for loyalty is another. Football is a good example. There is differential pricing in stadiums, but clubs depend on their regular, grass-roots fan base, and this is recognised in the lower prices in certain sections. Many clubs have a young persons’ section at half-price. They could easily charge full-price for that section, but they do not. If the argument of free market enterprise were applied to those tickets, young people would buy them and sell them on at a much higher value, but the club does not want them to resell those tickets at a higher price, as it knows they could, because it wants to encourage a loyal fan base and benefit the community.
Philip Davies
It is interesting that my hon. Friend uses football as an example because as the Minister said, the restrictions on ticket touting in football are to do not with ticket touting but security. Even so, an increasing number of clubs not only allow but actively encourage season ticket holders to resell their tickets through the secondary market when they are unable to go to a particular match.
Mike Weatherley
I have spoken to various football authorities about this, and the reason they allow the selling on of season tickets is that they recognise that people must have a mechanism for reselling if they cannot go to a match. However, the football authorities would not want someone to sell their season ticket for a particular match at 10 times its value. I happen to be going to a Chelsea-Manchester United match later in the season, but I have not paid 10 times the value of that ticket: I have been given it by a season ticket holder who cannot make the match. That is entirely proper.
Graham Jones
The hon. Member for Shipley (Philip Davies) raised the security issue, and I am somewhat confused by the way he contradicts himself. Surely, with football, there is a problem with ticket touting allowing people with football banning orders to access a match moments before it starts or while it is going on. However, that point is contrary to the one he made about the restraint of trade, which he says should not be allowed. Does the hon. Member for Hove (Mike Weatherley) agree that it is important to have some control over touting? When considering access to football grounds and the potential for violence, it is important that touting is legislated against.
Mike Weatherley
I am grateful to the hon. Gentleman for making that point. It is entirely accurate to say that the selling on of football tickets is problematic because of the segregation of supporters. That is well recognised by all concerned and is just one reason why the promoters of any event might want to restrict to whom tickets are being sold. There are other reasons, and I shall give a good example of one that relates to Conservative Members in a moment.
An hon. Member explained to me that that restriction would not apply to house building—that a developer who builds houses should be free to sell to people, and those people should be free to sell on again. Of course that is true, but if, for charitable reasons, the developer wants five of those houses to go to Cancer Research nurses, they are quite within their rights to say, “We will only sell those on in future to Cancer Research nurses” and restrict the free market into the future as to where those houses go. I see that as no different from the owner—the creative industry person who creates the product—deciding what they want to do with their product into the future. It is essential, therefore, that the owner of the skill or creative talent, or supplier, has a say in who the end user is—but not in all situations. The Bill does not cover every event, and the promoter or band who wish to cover their event have to so designate it.
It is impossible to restrict onward selling without having a mechanism for refund, and the Bill not only allows for a refund but allows on-sale at a premium, be that 10% or double face value or whatever has been decided in the final stages. I am going to a concert tonight—The Cult at Hammersmith Apollo—and my colleague has a spare ticket. He is going to on-sell that ticket at face value, and he should be able to do so. I see no reason why, in that situation, he should not. There are no crowd control or exploitation issues.
However, our discussion relates to those ticket agents that advertise sporting or music events later in the year—sometimes before tickets are even on sale—at 10 times face value. They buy in their hundreds and sell on at huge profits. It is possible to buy Chelsea tickets for later in the season right now, although they are not on sale—and incidentally, as everyone knows, the premier league has a rule on selling at face value only. That is a clear example where the free market for ticket sales is not advantageous. We have mentioned the Olympic games; a non-profit clause is enshrined in its arrangements as well.
There are other cases where the issuer reserves the right for tickets to be non-transferable—train and plane tickets, for example. I expect that when hon. Members sell tickets for a fundraising dinner, they reserve the right to object to a replacement being issued. Can they imagine tickets for the forthcoming Conservative ball, which are £400 each to raise funds for the party, being bought up by touts and sold on at £1,000 to lobbyists, or others, whom they may not necessarily want in their midst? Of course not. The point is that the person giving the function restricts the number of tickets, and insists on the person buying attending or getting permission to transfer. It is right and proper that the person providing the event has some say in that.
On the face of it, ticket touts provide a free-market service, but scratch a little deeper, and for some events that is a misguided and counter-productive service. The touts are exploiting a market abnormality to the detriment of the wishes of those who put on the event.
The proposals in the Bill are fair, in that selling at a small premium is allowed and not all events are covered. Only those wishing to be bound by the rules need apply. If the artist is happy for their tickets to be sold at a premium, that is fine. I slightly disagree with the hon. Member for Washington and Sunderland West, who said that Madonna would sell at a premium on an auction. I think it right and proper that she be allowed to do so; that is a free-market thing, and she has control of her product to do what she wants with it, but if she has decided that she wants to sell it at a certain price, that should be respected by the copyright owner.
Sarah Newton
Does my hon. Friend agree that we have rightly, as a coalition Government, focused on wanting to support free enterprise, to create a lot more jobs in the private—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Lady should be speaking through the Chair. I find it difficult to hear otherwise.
Sarah Newton
I am sorry; of course, Mr Deputy Speaker.
Quite rightly, the coalition Government have focused on supporting small business, private enterprise and growing jobs in the private sector. Does my hon. Friend agree that the Government should be listening to such an important and growing sector of our economy as the creative industries? They have identified this practice as being problematic and standing in the way of them growing this successful business and creating new jobs in our economy.
Mike Weatherley
My hon. Friend makes a very good point. If a business wants to develop its products, it might underprice in the market for a number of reasons, as I have said, one of which could be market penetration. If someone wants to develop a fan base and encourage people who might not necessarily come to watch their events or try their commercial products, they will often use prices far below market value to get people to try them for the first time. A lot of ticket promotions do that specifically for concerts, sporting events and so on. Small businesses and small events that are trying to grow their business can have very good reasons why they might want to carry on a market penetration for a long time into the future. I thank my colleague for her intervention.
The price that the creative copyright holder wants to charge should not be a judgment for the House or any external body. If a biscuit manufacturer wants to give away biscuits for sampling purposes, we should respect that. We should not say that touts can buy them up and sell them on. As my hon. Friend said, we should help that business to develop its market. We should not be judgmental about what it does for commercial reasons. Let us not kill the goose that lays the golden egg. Let us listen to the music managers, football clubs and those who provide creative services—I have met no one who is against this measure—and get behind the Bill to the benefit of the country in the long term.
Ian Austin (Dudley North) (Lab)
I congratulate my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson). She is a brilliant MP and a formidable campaigner. I remember her relentless and successful campaign to pilot and promote free school meals to all children. Now she has ticket touts in her sight. If I were them, I would be very afraid. I completely understand why she has introduced the Bill. She is in touch with the people whom she represents. She understands ordinary people’s worries. She has listened to the concerns of ordinary sports and music fans who want to get a fair crack of the whip when buying tickets to watch the bands whom they love or the teams whom they support. As she said, every parent knows just how keen their kids are to see their favourite groups or watch their sporting heroes, but they are being priced out of the market by people who make mass purchases and exclude ordinary fans. For that reason, we should look very closely at what she proposes.
It is fair to say that many organisations in sport and the arts—as well as charities such as Teenage Cancer Trust, to which my hon. Friend has referred—are concerned about this issue. Many governing bodies have told me that they want proposals that will ensure ordinary grass-roots fans have access to tickets. I, too, want to ensure that ordinary fans have access to the primary market and that tickets are not bought up in huge numbers the minute they go on sale by organised gangs in the way that she described. I believe in open, free and fair competition. I want free access to fair markets. Free markets are underpinned by open access and fair competition. It is particularly important to ensure that any suggestion of organised criminals being involved and any question of links to the funding of criminal activity or laundering money for criminal operations are investigated and prevented immediately.
Philip Davies
On fair access, may I give the hon. Gentleman a scenario to find out what he makes of it? I might really want to see an event, but am unsure whether I can do so because of my work or family commitments. By the time I have sorted them out and rung up, the event might be booked up because it has sold out in a flash. Does he not recognise that, as a true fan, my only possible opportunity to go to that event would be provided by some form of ticket tout? If no ticket touts were available, I would be excluded from that event. They might charge a price that I do not want to pay—that is my choice, and I can make that decision—but they are helping genuine fans who have other commitments when tickets go on sale to buy them.
Ian Austin
I understand that, like me, the hon. Gentleman was educated in Dudley, but given the nonsense that he is speaking today, he wasted his time there. The Bill would not eradicate the secondary market. It would not prevent tickets from being sold on; it would simply limit the price. That might or might not be the right thing to do, but is he saying that the secondary market is perfect and that he can guarantee that there is absolutely no abuse, fraud, illegality or criminal behaviour? Is he saying, for example, that no one prints fake tickets, which cause all sorts of problems?
Such issues should be considered, but the hon. Gentleman and his colleagues, with their juvenile antics—the usual nonsense and behaviour that bring the House into disrepute every Friday—are preventing them from being examined. My hon. Friend’s proposals might not be the right ones, but we should consider them in Committee. We should examine the Bill, listen to all the experts and take appropriate measures, but the hon. Gentleman is preventing that from happening.
Philip Davies
I am rather surprised at the hon. Gentleman’s fake outrage, because I posed a perfectly legitimate question. Most people watching would conclude that his reaction was juvenile. He talked about fake tickets being printed, but surely someone in his position would accept that such fraud is already illegal. If he is not aware of that, I worry for him in his new position.
Ian Austin
Of course such things are illegal, but they are happening. We should examine—[Interruption.] New technology and all sorts of things change markets all the time. We should not say that we are not prepared to look at the issues to see whether changes ought to be introduced—whether regulation might work—to make the markets operate more effectively and give ordinary fans greater access to them. The hon. Gentleman is trying to prevent that by talking the Bill out. That is a disgrace and he should be ashamed of himself.
Sajid Javid
I am confused about the hon. Gentleman’s position. He started by supporting the Bill, or implying that he supports it.
Sajid Javid
Perhaps not, but the hon. Gentleman can correct me. He talks about free and fair markets, but he cannot support a Bill providing for a maximum 10% premium on resale and at the same time support free and fair markets. For the record, can he tell us the view of the official Opposition? Do they support the Bill or not?
Ian Austin
The hon. Gentleman has obviously not been listening. I said that I completely understand why my hon. Friend the Member for Washington and Sunderland West introduced the Bill. I believe in open, free and fair competition. I want ordinary fans to have proper access to the markets. There is clear evidence of abuse, with suggestions of organised criminal activity, people printing fake tickets and the rest. I am interested in looking at measures that could best deal with such things, opening up markets and ensuring free and fair access for ordinary fans. As I said, my hon. Friend’s proposals might do that, but there are strong views out there, so we should listen to all the experts and take a view. However, the hon. Gentleman and his colleagues are trying to prevent that debate by talking the Bill out.
Sajid Javid
With respect, I am not talking anything out, I am debating.
The hon. Gentleman is not making any sense. It is not clear what he thinks. Presumably, he had time to consider the Bill before coming to the House today. Does he support it or not? The question is straightforward. Hopefully, he can give a straightforward answer.
Ian Austin
I support the Bill going into Committee so that it can be examined in detail and we can find solutions to the problems identified by my hon. Friend. That is pretty clear from the three times that I said it.
I am interested in whether registration or membership schemes—selling tickets through clubs—can promote access for ordinary fans. I am interested in how new technology can facilitate the sale or resale of tickets free from fraud and illegitimate or illegal ticket touts. I want to explore how safety and security can be enhanced to tackle people who rip fans off through ticket fraud or online scams—selling tickets they do not have, printing fake tickets or claiming that a ticket is for a seat at the front when it is actually right at the back.
I urge the Government to allow the Bill into Committee, so that we can discuss it, examine the detail, listen to all the experts in sport and the arts, talk to people in the ticket trade and look at how new technology can promote safety and security. As I said, there might be other ways of tackling the problems and safeguarding access to live entertainment and sport.
Times are tough now for ordinary, hard-pressed working families. We have a good case for seeing how we can open up the market and ensure that exciting and enjoyable events are not taken out of the reach of ordinary people. I pay tribute to the extraordinary campaigning energy of my hon. Friend and wish the Bill fair passage to Report. The system is clearly not perfect. The market should be opened up and any illegal or criminal involvement should be tackled.
Sajid Javid (Bromsgrove) (Con)
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on bringing the Bill forward. She has raised important issues that are worthy of discussion in the House. My understanding, although I may be corrected, is that the issue has come up before through private Members’ Bills in previous Parliaments. However, in the interests of a full debate, it would be good to make a robust argument against what she proposes.
The Bill is flawed, in that it really does not understand the most basic laws of supply and demand. I do not think that one can buck the free market, or that it is the role of Government to get involved in free transactions. Let me make it clear that the issue is not about fraudulent transactions or criminal activity; as my hon. Friend the Member for Shipley (Philip Davies) said earlier, such activity is already illegal. This is about people legitimately getting hold of tickets in an honest way, and not prohibiting them from trying to sell those tickets at a profit, whatever that profit might be. In fact, such activity is probably an excellent example of the enterprise culture and of what a classic entrepreneur does, as long as—I emphasise this point—they get the tickets legitimately.
Ian Austin
Does the hon. Gentleman think that there are any problems associated with the secondary market at the moment? Can he guarantee that there is no involvement in criminal activity or fraud, and no online scams? If he cannot guarantee that, does he think that any consideration should be given to dealing with those problems?
Sajid Javid
I thank the hon. Gentleman for that intervention. Of course I cannot guarantee that; no one can guarantee that any market is free from criminal activity. The Bill will do nothing to stop criminal or fraudulent activity, because even if one put restrictions on sale prices and made certain practices illegal, it would not mean that any criminal or fraudulent activity going on at the moment would stop.
Sajid Javid
I will in a moment, but I shall just finish answering the hon. Gentleman’s point.
Philip Davies
The hon. Member for Dudley North (Ian Austin) is trying to talk the Bill out.
Sajid Javid
Yes, and we should not do that. The hon. Member for Dudley North (Ian Austin) has had ample time in which to speak. The point that he is missing—this is why I was confused by the speech that he gave from the Opposition Front Bench—is that if the concern is about criminal and fraudulent activity, and activity that is clearly wrong, there are already laws in place for that. If those laws are not strong enough, or Members think that changes should be made to them, that is a completely different argument from what is being proposed today. One of the key proposals in the Bill is to limit the resale price in the secondary market at a premium of only 10% of face value.
Mrs Hodgson
Does the hon. Gentleman not recognise that limiting the price at which a ticket can be resold will remove the incentive for people to buy huge numbers of tickets, and will remove the large amount of profit in, and the size of, the secondary market? There is nothing wrong with reselling tickets, but we are trying to limit the amount of profit that can be made. Also, does he not recognise that no income tax is paid on any of those earnings by the entrepreneurs he talks of?
Sajid Javid
The hon. Lady seems to suggest that anyone who earns a profit over a certain margin must be engaged in some kind of criminal or fraudulent activity, and that is clearly not the case. I hope that she accepts that, as has been mentioned, many ticket touts—perhaps the vast majority—are legitimate, have got the tickets in an honest way, and are not engaged in any kind of criminal or illegitimate activity at all.
Jacob Rees-Mogg
I wonder whether my hon. Friend might cast his mind over the issue of people buying up large numbers of tickets. Is that not actually enormously to the advantage of promoters of events, who are guaranteed a certain number of sales—the tickets may not be sold on subsequently—and get their cash flow early on? It is not simply a case of the practice disadvantaging the personal shopper.
Sajid Javid
My hon. Friend makes a fair point. In some cases, that can be advantageous, but I accept that where there is clearly very high demand, there are sometimes good reasons to restrict the number of tickets that an individual can buy.
Mike Weatherley
Does my hon. Friend agree that the people who should be making that judgment are the music promoters and managers, who almost unanimously say that the point made earlier by my hon. Friend the Member for Shipley (Philip Davies) is totally inappropriate, and that they do not like that way of selling? They prefer to sell directly to the fans, rather than to those intermediaries who distort the market for the type of person they want to come to the concert.
Sajid Javid
It is a varied market, and different promoters and creative acts will wish to sell their tickets in different ways. It could well be the case that they do not like selling tickets in bulk—that is their choice; no one is forcing them to do so—and if they wish to sell individual buyers a maximum of two or three a time, that is their choice. Equally, the price at which tickets are sold is their choice, and if a company or creative act is genuinely concerned about that, they always have the option to increase or reduce the price. That is how the free market operates.
Mike Weatherley
Is that not exactly the point? The copyright holder themselves can make that judgment. Many promoters restrict ticket sales to four or six at a time, only to find that 100 are on display through the software programmes that the hon. Member for Washington and Sunderland West (Mrs Hodgson) mentioned and that offer multiple ticket buying in different formats. If the promoter wants to offer a maximum of six to an individual, he should be allowed to do so.
Sajid Javid
I take the point that my hon. Friend is making, but I have already answered that question.
Ticket resellers act like classic entrepreneurs, because they fill a gap in the market that they have identified. They provide a service that can help people who did not obtain a supply of tickets in the original sale to purchase them for sporting and cultural events. As long as those tickets have been acquired genuinely and lawfully, it is an honest transaction, and there should be no Government restriction on someone’s ability to sell them.
Ian Austin
I am grateful to the hon. Gentleman for giving way again. Given that he was unable to guarantee that nothing could be done to improve the primary or secondary markets, will he guarantee that he will not talk out the Bill, so that it can go into Committee and these issues can be discussed properly by Members on both sides of the House?
Sajid Javid
I did not say that there could not be any improvements in the system. I have no intention of talking out the Bill, but I cannot guarantee the intentions of other hon. Members.
The hon. Member for Washington and Sunderland West referred several times to real or genuine fans, and to the fact that they cannot buy tickets because they are priced out of the market. She referred, too, to speculators. I do not understand what she meant by that, as I shall explain, and perhaps she will be able to clarify what she was implying. Her argument sounded far more anti-capitalist than anti-tout.
Let me explain by way of the example of a Wimbledon final. Only 10,000 tickets are available, but demand is three times as high—30,000 people want a ticket, which is not atypical by any means. If the tickets are priced at £20 a head and are sold in a secondary market at five times face value at £100 a head, who is being exploited and how? I assume that the hon. Lady would say that the ticket tout is exploiting people in that example by making a profit of £80.
Perhaps that could be avoided if the club priced the tickets at the outset so that there was not a mismatch between supply and demand by selling them, for example, at £100. If that is what the hon. Lady is suggesting, the corporation or company behind the club or event would make the extra profit. I would have thought that, as a socialist—I assume that she is a socialist—she would welcome the small man or the honest ticket tout who has bought their tickets legitimately and offers them for sale, making a profit for themselves, as opposed to the corporation making those profits.
Let me use a personal example. I was brought up in a part of Bristol called Bedminster. It is a working-class neighbourhood and, as a child, I lived near the Bristol City football ground. Many times at weekends I would pass the ground and see ticket touts trying to sell tickets. I would hear them offering their tickets, sometimes at prices that were multiples of the face value. Many of the touts were ordinary hard-working people. One may not have liked the look of some of them, and they may have seemed unsavoury to some people, but they were ordinary people providing a service in a legitimate way. I would rather be on their side than on the side of the large corporations.
Mrs Hodgson
The hon. Gentleman is talking about those salt of the earth-type individuals selling on tickets and doing a hard day’s graft for their little reward, but are they paying any income tax like the rest of us? Is he condoning black market activity? Does he think it is right for those salt of the earth types to stand outside selling tickets at Bristol or wherever, at mark-ups that my hon. Friend the Member for Dudley North (Ian Austin) considers rather high, and without paying any tax on that, unlike the rest of us?
Sajid Javid
I think the hon. Lady will find that most secondary market sales, such as those on eBay, are exempt from income tax and other such charges. If that is her concern, there is no reason to single out tickets, as opposed to other items that might go on sale in the secondary market. Although she described ticket touts as the salt of the earth, that is not a phrase that I used. I am not suggesting that some of those characters might not look unsavoury or that they might not have a tattoo on their head, for example, but that does not matter. As long as they have tickets that they acquired legitimately and they wish to sell them at a price that is higher than the face value, the Government have no responsibility to intervene.
The interests that the hon. Lady is representing are probably those of the chattering middle classes and champagne socialists, who have no interest in helping the common working man earn a decent living by acting as a middleman in the sale of a proper service.
Ian Austin
Setting to one side the ludicrous fantasy that tickets at Bristol City have ever gone at many times their face value, which is a total invention, the hon. Gentleman’s point is interesting. If he is saying that ticket touting ought to be allowed at football games, how could he prevent the admission of people who are subject to banning orders for causing trouble at football, how could he ensure the proper segregation of fans, and how could he guarantee public order in the grounds? He ought to be aware that ticket touting at football is illegal for precisely those public order reasons, as I am sure the Minister will confirm. Has he discussed with the police his desire for ticket touting to be allowed at football, and sought their advice?
Sajid Javid
I am sure the hon. Gentleman is aware of the current rules and regulations surrounding the issue. We are debating a Bill that seeks to change those rules and regulations. Perhaps it would be easier if I explained the role of a middleman using an example that is not as sensitive as that of tickets.
The hon. Gentleman may have sold one of his used cars in the past. If he wanted to sell a car, he could try and sell it himself, but most people would try to find a middleman to help with the process. They might go to a car dealer. Their car might be sold for £1,000 to a car dealer. If they learned that the car dealer who purchased their car and helped them went on to sell it a few days later for £1,500, they would not say that the car dealer had ripped them off by £500, because he had provided a service. A middleman in a ticket transaction provides a service no different from that, as long as—I stress this—he had acquired the tickets honestly. That is why we have a secondary market in the sale of tickets and will continue to do so. So long as the individual involved in secondary market transactions has acquired the tickets legitimately, they are providing a service that deserves to be rewarded.
The hon. Lady should understand, as has not been made clear today, that not everyone has the time to queue for a ticket, or leads a well-regulated life or knows months in advance, when tickets might go on sale, whether they can attend an event, and not everyone knows privileged insiders who can get hold of tickets that would otherwise be difficult to obtain. However, everyone, to a greater or lesser extent, has money. If a person wishes to devote a large part of their disposable income to see something that is disproportionately attractive to them, why should anyone else care and why should it be their business?
The hon. Lady seems to believe that touts are ruthless exploiters whom no one in civilised society should countenance. Nothing could be further from the truth. If the tout has come by his tickets in an honest way and offers a genuine service with a real risk of loss in the pursuit of profit, that is not a problem. As someone who believes passionately in the virtues of the free market and who is on the side of the ordinary, common working man, I respectfully oppose the Bill.
Philip Davies (Shipley) (Con)
I congratulate the hon. Member for Washington and Sunderland West (Mrs Hodgson) on bringing forward the Bill. I think we ought to be aware that ticket touts can lose money—on many occasions they do—as well as earn it. I will give an illustration: if a ticket tout had decided to buy up tickets for the Labour Benches today, hoping to sell them on at a profit to the supporters of the Bill, they would be badly out of pocket. What surprised me from the outset is that the hon. Lady, despite making such a passionate speech on how annoyed her constituents are about ticket touting and how passing the Bill was the most important thing anyone could do, has spectacularly failed to persuade any of her colleagues to attend. Had they considered it at all important, there would be at least 100 of them here to support a closure motion and guarantee that the Bill went into Committee, which the hon. Member for Dudley North (Ian Austin) is so anxious to see happen. I am afraid to say that I will not take any lectures on how important the Bill is to people across the country when the hon. Lady cannot even persuade her colleagues of its benefits.
I agree with my hon. Friend the Member for Bromsgrove (Sajid Javid): it struck me that the hon. Lady’s speech was more against capitalism per se than against any kind of ticket touting. She seemed to indicate—she will no doubt correct me if I am wrong—that to sell a ticket at a profit of more than 10% was verging on criminality and that it was completely unacceptable and outrageous. If it is the view of the Labour party that anyone who happens to sell a product at a profit of more than 10% is verging on criminality and is totally undesirable, it seems to me that many people will be interested to know that.
If the hon. Lady goes to any clothes shop and asks for the profit margin on the clothes being sold, she will find it is considerably more than 10%. In fact, she will find that the profit margin on anything in any shop will be considerably more than 10%. She seems to be saying she does not believe in the business world or capitalism at all, and the hon. Member for Dudley North, who is pushing for the Bill to go into Committee, seems to be endorsing that approach. I knew that new Labour was dead, but I had not realised it was dead to that extent. This really is old Labour with bells on.
Mrs Hodgson
I know that the hon. Gentleman is having sport with me, because he knows I am not saying that people should not be able to charge a mark-up of whatever percentage they choose in shops. That is not what I am saying at all. The principle would apply specifically to tickets for events whose organisers would choose to opt into the Bill. It would not cover every event, as the promoter would have to choose to opt in to be covered under the Bill’s proposals and so control the amount of money that those tickets are sold on for. That would mean that there would be more chance of genuine fans buying them at source. It would not stop genuine fans buying tickets at the last minute either, because genuine fans would still be able to get them through a resale, but there would not be the huge market that encourages tickets to be bought up at source within minutes of their going on sale.
Philip Davies
I heard the hon. Lady’s argument the first time around; I was not persuaded by it then and I am not persuaded by it now.
Before anybody suggests that I am going to talk out this Bill, I should say that it is absolutely my intention—in fact, it is a guarantee—to speak for less time than the hon. Lady did when proposing it. So I hope there will be no arguments about that.
Jacob Rees-Mogg
My hon. Friend will have to do that, because this particular business ends at 2.30 pm so the time available is obviously less.
Philip Davies
My hon. Friend spotted that, too, but the situation is beyond my control. If you, Madam Deputy Speaker, tell me—not for the first time—that I have to conclude my remarks, I shall accept your ruling with the good grace that I always show.
Ian Austin
I can assure the hon. Gentleman that new Labour is not dead. I said I believed in free markets, open competition and fair access for ordinary people. I want to ensure that the organised bulk-buying of tickets which excludes ordinary fans is prevented, so that ordinary people get a fair crack of the whip when it comes to buying tickets. When he thinks about it, he will find that that is a more free-market approach than his. It is the Opposition who are standing up for open access, competitive markets and free competition. If he believes that there are no problems at all with secondary markets, fair enough; but surely he can see that there must be some ways of improving them. My hon. Friend’s proposal might not be the best way of doing so, but I simply say that we should get the Bill into Committee so we can debate it.
Philip Davies
That is a perfectly fair point, but the hon. Gentleman did not manage to persuade his Government to adopt that approach when they were in office, as they killed the Bill when it last came up, so I am not entirely sure why anybody who is against it now should be considered a tyrant, because his Government killed exactly the same Bill in the previous Parliament.
New Labour clearly is not dead, because the hon. Gentleman seems to think that just by asserting something, it is therefore true: so if he says that he believes in the free market, it is therefore sufficient proof that the Labour party believes in the free market. I take a rather different view: I think our policies have to reflect our assertions. We cannot just say, “I believe in the free market” and then pass laws that completely fly in the face of the free market. I ask him for some consistency, so that his lofty words about believing in the free market might be followed up by action and policies that support them. I am afraid, however, that I cannot see any of that happening.
Mr Deputy Speaker, you are in a privileged position in this debate, because you were also on the Culture, Media and Sport Committee with me when we considered this matter two or three years ago. We conducted an interesting inquiry. The hon. Lady was absolutely right: not only did we find the secondary market to be perfectly legitimate, but her Government found exactly the same. She did not mention this point, but she will also be aware that the Office of Fair Trading has always made it clear that the secondary market for tickets is not only not a bad thing but actively works in the consumer’s favour.
That brings me to my hon. Friend the Member for Hove (Mike Weatherley), who says that the people who own the rights to an event—the promoters or, in his words, the holders of the intellectual property—should be free to determine such matters. That is a perfectly legitimate and respectable view to hold, but I do not agree. I was encouraged, nevertheless, as he said he was not really taking the consumer’s interests into consideration. They did not matter; what mattered was the intellectual property holder. That is a perfectly respectable view, but I do not agree. I think that the public—the consumers—are an important part of the process.
Mike Weatherley
My hon. Friend makes a good point, and I thank him for his comments, but does he agree that the point is not about the free market, which we all fully endorse and support, but about the ownership of the product, control over the creative product and the ability to determine whom one should sell to and deal with?
Philip Davies
I agree with my hon. Friend on many things, but not on this. I believe that if I sell a product to somebody else who hands over the money that I have asked for to purchase it, I have ceded that product to that person. That is the whole point of the free market. If somebody goes into a supermarket, buys a product and sells it on, I do not believe that the supermarket should have a go at that customer for doing that; once it had sold it, it was that person’s to do what they wanted with it.
The issue comes up in all sorts of things outside sporting and cultural events. We did not have time to go into other matters during the speech made by the hon. Member for Washington and Sunderland West, but I would be interested to know how she feels about them.
To save any misunderstanding, I make it clear that I am not arguing from a personal interest perspective, but there is often a big hoo-ha in the press when a limited edition of designer handbags goes on sale in Selfridge’s or some other big department store, and there is a huge queue outside to buy the 25 available. Alternatively, Buzz Lightyears go on sale at Christmas—everybody wants one, but there are hardly any left. Massive queues form outside overnight. The lucky 20 dash in and buy the few available and within five minutes flat the product is on eBay being sold at 20 times the price because the person who bought it knows that there is a much bigger demand than the shop was able to accommodate.
I am not entirely sure whether the hon. Lady or the hon. Member for Dudley North are suggesting that, from their party’s perspective, it is the Government’s job to start regulating all these matters, so that if somebody buys somebody else’s intellectual property and then uses the free market to sell it at 25 times the price, the Government should stop that. If the hon. Lady or the hon. Gentleman are suggesting that, I should like them to stand up and say so; if they are not, perhaps they will explain what the difference is between somebody who buys a ticket to an event and somebody who buys a limited edition of a Buzz Lightyear, a handbag or anything else. Perhaps my hon. Friend the Member for Hove could do the same. I see no difference at all. It seems to me that once the Government go down the road of controlling the market in tickets, they are opening up the floodgates, or a slippery slope, of intervening in every single nook and cranny of the commercial world.
Mr Nuttall
That raises the interesting question of what would happen in the stamp market. People often buy stamps, especially commemorative issues, for the purpose of holding on to them for a number of years in the hope of selling them on for a profit.
Philip Davies
My hon. Friend’s question helps to illustrate the point: where would it end if the Government went down such a road? Where would it all end indeed?
It does not surprise me at all that the Labour party wants to interfere in every nook and cranny of everybody’s lives—what they buy, how much they can sell it on for and all that kind of business; that is its raison d’être as a political party. However, I hope that the one thing that the coalition Government will not do is adopt that kind of socialist agenda. That would be very worrying indeed.
The hon. Lady talked about how popular the issue was among the general public, if not among her own colleagues. However, I take issue with the notion that the reselling of tickets is unpopular; I am not entirely sure that there is a great deal of evidence to suggest that. ICM conducted some opinion polls on this matter. As I mentioned earlier, 86% agreed with the statement:
“If I had a ticket to a sporting event, concert or other event that I could no longer use then I should be allowed to resell it”.
Some 83% agreed with the premise:
“Once I’ve bought a ticket it is my property and I should be able to sell it just as I can any other private property”.
That point was made by my hon. Friend the Member for Bury North (Mr Nuttall). Some 86% agreed:
“It shouldn’t be against the law for people to resell tickets that they no longer want or can’t use.”
The hon. Lady, or her cheerleader on the Front Bench, made the point that the Bill would not ban the resale of tickets, but simply restrict the price at which they could be resold, and that therefore the opinion polls were irrelevant. However, the same opinion poll also found that 56% agreed that the price of a ticket should be determined only by what they were willing to pay, which seems to fly in the face of the hon. Lady’s argument that everybody in the country is appalled by the current situation and that something needs to be done about it. Perhaps she has taken only a small or a biased sample of opinion; if she has a better mechanism for opinion polls than ICM, she should share it with the organisation. Furthermore, 61% agreed that the second-hand or secondary ticket market enables real fans to get hold of tickets that they would otherwise have missed out on. Contrary to the hon. Lady’s contention that most people think that the secondary market stops real fans getting their tickets, 61% of people think the exact opposite.
Mr Nuttall
My hon. Friend has just mentioned the term “real fan”, while earlier we heard a number of references to “ordinary fan”, “average fan” and “biggest fan”. Is he aware of a definition for any of these terms?
Philip Davies
My hon. Friend makes a good point about what constitutes a “real fan” in these matters. If somebody is prepared to pay £2,000 or £5,000 for a ticket to a concert, I would argue that it provides the best example of a real fan. Nobody is going to pay that kind of money for a ticket to an event in which they are not really interested. It seems to me, then, that the free market and ticket touting help the real fans to find their way to the front of the queue rather than get clogged up by people who might be buying on a whim because the tickets are rather cheap.
The hon. Lady says that she is trying to help the organisers and others to sell the tickets for the benefit of real fans, but perhaps she should reflect a bit further. Some of the concert and sporting promoters should also reflect on the part of the ICM opinion poll showing that 71% of people agreed that too many tickets for major sporting and cultural events were allocated to corporate sponsors, hospitality packages and VIPs. On this particular matter, I tend to agree with my hon. Friend the Member for Hove, who would presumably say that these are their tickets and they are entitled to give them to whomever they want. I would not gainsay that in this particular case. It is a bit galling, however, for people to be lecturing everybody on how they want the real genuine fans to have the tickets at a price they can easily afford when they are some of the worst when it comes to real fans not getting their tickets, because of the “prawn sandwich brigade”.
Mike Weatherley
Would my hon. Friend care to meet some of the music managers with me and be lectured by them? Perhaps we could also invite some real and true fans to come along to express their opinion so that we get a breadth of viewpoint. I wonder whether the Minister would also like to accompany us on this particular venture.
Philip Davies
My hon. Friend makes a tempting offer and it would be churlish of me to turn it down, so I look forward to receiving that invitation. I am encouraged: the longer I speak, the better the invitations I get. That encourages me to keep going a little while longer. I do not mind the free market—if anyone has a better offer, I would be prepared to hear it. I can assure my hon. Friend that I have already heard these arguments, as the Select Committee heard the views of promoters. I suspect that even the mere mention of my name to a certain Harvey Goldsmith is likely to give him a near-heart attack. Some of the spats that he and I had—not just in the Select Committee, but on radio interviews afterwards on the issue—seem to have done his health more harm than good. I am certainly aware of the arguments, but I was not persuaded by them.
My hon. Friend the Member for Bury North made a good point about who the real fans are in this case. Who are we trying to protect? Who are the people who are losing out as result of ticket touting? I have never worked out who the losers are, but they are certainly not the promoters. They do not lose out in any shape or form from ticket touting and nor do the artists.
Mr Christopher Chope (Christchurch) (Con)
Is my hon. Friend sure that the promoters are not losing out? They could be selling their tickets at a higher price, and if they are worth more on the open market than the promoters are selling them for, then they are losing out.
Philip Davies
If my hon. Friend does not mind my saying so, he states the obvious. Obviously, if the market would guarantee a higher price for the tickets and the promoters were to sell them at a higher price, they would make more money. My point, however, is that that is their choice. If a promoter has 50,000 tickets to an event and chooses for one reason or another to sell them at £20 per ticket, their ambition is to bring in £1 million from the sale of those tickets. Rather than ticket touts causing a problem for the promoters, I assert that they are helping, because the more tickets they buy, the more likely the promoters are to sell the amount of tickets required for them to raise the sum of money for which they have budgeted. The ticket tout is therefore helping the promoters reach their targets. If there is no ticket touting, the promoter is not going to bring in more than £1 million; the tickets will still all be sold for £20 each. That is the only income the promoters are going to get, so they are certainly not losing out.
Ian Austin
I would like the hon. Gentleman to address the central question; it has not yet been dealt with. Is it fair that individuals are excluded from the market because cartels buy up the tickets in bulk and then rig the price? That is not a free market. Is the hon. Gentleman saying that that is fair? If he agrees that it may not be fair, and that it may need to be looked at, why is he not going to help get this Bill into Committee?
Philip Davies
I do not accept the hon. Gentleman’s assertion that ticket touts prevent people from accessing tickets. I would make the opposite point. Tickets for an event might sell out in five seconds flat, before a genuine fan has the chance to realise they were on sale or before they could check whether they could get time off work or child care. If they later realise that they can go to the event and there were no ticket touting, they would have no chance of going to the event. The only mechanism that enables them to have a chance to go to the event is the secondary market. It may well be that the price the secondary market charges is more than the person is prepared to pay, but that is their choice. If the ticket touts were not there to offer their services, that person would not even have that choice in the first place. It is therefore my assertion that ticket touting gives the genuine fan more access, rather than restricts it.
Ian Austin
I am not arguing with the points the hon. Gentleman makes about the secondary market. I am simply asking him this: is it right that people should be able to use technology to buy up all the tickets right at the outset, prevent anybody else from having a fair crack of the whip, and then fix the price? That is not a free-market solution.
Philip Davies
I am not aware that the hon. Gentleman in his speech or the hon. Member for Washington and Sunderland West (Mrs Hodgson) in her Bill advocate that these provisions should be limited to people who buy huge quantities of tickets over a website. This is a principled point about people selling tickets at more than a 10% mark-up, however they come by them.
I always thought that the Labour party believed in the redistribution of wealth from rich people to poor people. I thought that was the way they wanted to go. I am therefore a bit flummoxed by what has been said. A constituent of mine who has not got a great deal of money but is a great fan of cricket might buy a ticket to the cricket world cup final for, let us say, £25. They then go to the pub where a fellow says, “Do you know what? My lifetime ambition is to go to the cricket world cup final but I cannot get a ticket as they have sold out. I am so keen, I would give £3,000 to get a ticket.” My constituent might then think, “£3,000 for this ticket! All my Christmases have come at once. This fellow has obviously got far more money than he knows what to do with if he is prepared to pay £3,000 for my ticket.” That would be an example of great redistribution of wealth from rich people to poor people. The richer people are giving the money to the poorer people for a commodity that they want to sell. I would have thought that Labour Members would be all for that kind of redistribution of wealth. What on earth has happened to them? They have given up being new Labour, and now they have given up being old Labour.
Mrs Hodgson
The hon. Gentleman is making a flamboyant and interesting speech in his usual manner, and he may have made some valid points. I suggest that he allows this Bill to go into Committee and perhaps allows the Minister to speak in the last 10 minutes available. I am sure that the Minister has prepared something and has some pearls of wisdom to offer that I really want to hear and that should be on the record. Will the hon. Gentleman allow the Minister to speak so that the Bill can pass to Committee?
Philip Davies
It was the hon. Lady who spoke for an hour, not me. If she had shown some discipline during her speech, we might well have got on to the Minister. We might yet. However, the more interventions she makes the less chance I have of getting beyond my opening remarks.
Joan Walley (Stoke-on-Trent North) (Lab)
On a point of order, Mr Deputy Speaker. Further to my point of order earlier this morning, is this not just one more example of the filibustering and archaic procedures that are preventing genuine private Members’ Bills from receiving scrutiny in Committee?
Mr Deputy Speaker (Mr Nigel Evans)
I know how frustrating Fridays are for those who have Bills that are down the line, but my job in the Chair is, if a filibuster takes place, to stop it immediately. That is not the case and the hon. Member for Shipley (Philip Davies) is in order.
Philip Davies
I am grateful, Mr Deputy Speaker, and I am glad that you think that the points that I have made are relevant to the Bill. I am genuinely disappointed that Opposition Members do not wish to engage in a debate. I thought that that was the whole point of Bills going through Parliament—that we debated them. When I have finished making the points I have to make I will, in customary fashion, sit down. I always thought that that was the way that debates worked in this place—that people spoke until they had finished and then they stopped.
Philip Davies
My hon. Friend is ingenious as ever. That might be something that the Procedure Committee will want to consider. I suggest that my hon. Friend mentions it to our right hon. Friend the Member for East Yorkshire (Mr Knight). I shall look forward to that system being introduced.
I do not think that things work against the interests of the promoter. The promoter gets all the income that they were ever going to get in the first place, so the promoter is looked after. The issue is then whether things work in favour of the consumer. As I hope I have argued, the fact that the consumer can buy tickets right up to the end means that it works in their best interests, too. I must say in passing that if ticket touting is such a big issue for concert promoters and sporting promoters—if it is the be all and end all and the biggest single threat to their business—it is a wonder that they do not do more imaginative things to try to stop the antics of ticket touts. My hon. Friend the Member for Hove said that it should be up to them what they do, and it is. Perhaps, rather than selling all the tickets in one go right at the start so that they are sold out in five minutes flat, which provides a perfect market for the ticket tout because no tickets are on open sale, why not sell tickets gradually week by week, so that there are still some tickets on open sale right up to the day before the concert? There would therefore be no market for the ticket touts.
I do not think that the solutions to the problems lie with more legislation, but of course that is what the Labour party always reaches for. If Labour Members perceive a problem—for the avoidance of doubt, I am not saying that there is a problem—they think the only solution is more Government legislation, more Government interference and more of a nanny state. The solutions to these things are often in the hands of the promoters and I want to see an explanation of why more promoters do not sell tickets bit by bit, week by week and day by day, so that tickets are still available on the open market the day before. There would then be no market. Perhaps the hon. Member for Dudley North could explain what is wrong with that solution. I see that he does not want me to give way, so perhaps I have talked him round. Perhaps this is a triumph that I did not anticipate. He appears not to disagree with me, so I shall leave it at that.
I want to refer to the Office of Fair Trading. People seem to think that not allowing the person who owns the property to set the price will make the price more expensive for the consumer. I take issue with that, because when I had the pleasure of working for Asda, it challenged the net book agreement. I do not know whether hon. Members remember the net book agreement, which allowed publishers to set the price of books and which prevented anyone else from selling the book at a different price.
I presume that my hon. Friend the Member for Hove supports the net book agreement, because the book belongs to the publishers, who should therefore be able to force everybody to sell it at a particular price. At Asda, we thought that that was against the interest of the consumer, that it was a protection racket and that it flew in the face of the free market. We took our case to court to argue that we should be able to sell books at the price that we wanted to sell them at and that there should be a free market. After a lot of to-ing and fro-ing and a lot of expense, I am delighted to say that Asda won its case and the net book agreement was broken.
What has been the upshot of the end of the net book agreement? If the argument advanced by the hon. Member for Washington and Sunderland West holds, prices would have risen: people would have abused the system by charging all sorts of prices. The nice, kind publisher would have wanted as many people as possible to read the book, and would have sold at the cheapest possible price, while the nasty retailers would have hiked up the price to increase their profits. The exact opposite actually ensued. Since the net book agreement ended, book prices have decreased, so breaking that restriction worked in the best interest of consumers. I do not see the difference between books and tickets, because the principle is the same. The free market won out in the courts, and I hope that it will continue to do so.
Mike Weatherley
My hon. Friend has set out a good economic analysis. Does he accept that in commercial terms there is such a thing as price differentiation in different markets for various reasons by the producer for long-term commercial purposes?
Philip Davies
Indeed. My hon. Friend has made some perfectly reasonable points, but I happen to disagree with them. Most of the problems that he has identified can be solved by the industry itself, and I have made some imaginative suggestions. If ticket touting is such a big issue, tickets should be sold on the open market by auction, as my hon. Friend the Member for Christchurch has suggested, which would maximise income and get rid of ticket touts, who would have no business.
Mrs Hodgson
In the two minutes remaining, I wonder whether the hon. Gentleman will allow the Minister to say a few words.
Philip Davies
As I made clear at the start of my speech—I hope that I am considered to be someone who sticks to their word—I will speak for less time than the hon. Lady, and I intend to keep that promise.
Mr Nuttall
My hon. Friend may like to know that those who have spoken in favour of the Bill spoke for 85 minutes; even if he continues until 2.30 pm, those who oppose the Bill will have spoken for only 51 minutes.
Philip Davies
My hon. Friend is, with good reason, considered to be the expert on Friday rules, if I can put it like that. I am sure that the hon. Member for Washington and Sunderland West is grateful that he has not charged for his advice on getting her Bill through in future weeks. I commend his advice to her.
When the chief executive of the Office of Fair Trading gave evidence to the Select Committee, he did not just say that the secondary market was working in the best interests of the consumer, although he did say that. I add that the right hon. Member for Barking (Margaret Hodge) also said that when she gave evidence as a member of the Labour Government; she was a passionate supporter of the secondary market. The chief executive also made it clear that he considered that the secondary market also worked in the interests of promoters. Let me quote what he said—
Business without Debate
(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text
Hon. Members
Object.
Bill to be read a Second time on Friday 1 April.
Public Bodies (Sustainable Food) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 17 June.
Freedom of Information (amendment) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 4 February.
Fire Safety (Protection of Tenants) Bill
Resumption of adjourned debate on Question (19 November), That the Bill be now read a Second time.
Hon. Members
Object.
Debate to be resumed on Friday 1 April.
Waste REcycling (End Use Register) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 17 June.
Safety of Medicines Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 4 February.
Council Housing (Local Financing Pathfinders) Bill
Motion made, That the Bill be now read a Second time.
Hon. Members
Object.
Bill to be read a Second time on Friday 11 February.
parliamentary Standards (amendment) Bill
Motion made, That the Bill be now read a Second time.
Cycling in England
(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dr Julian Huppert (Cambridge) (LD)
I am very grateful to have secured the debate and I thank the Minister of State for attending, particularly at the end of a week in which the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), made an important and encouraging statement on local sustainable transport. Many hon. Members will be aware of my passion for cycling. I believe I was the only Member of Parliament to cycle away from their count. Occasionally this passion has gone too far. At the turn of the year, I successfully tested the surface of a road while descending rather too fast around a bend, and fractured my humerus in the process, which is a rather less amusing injury than the name—or your expression, Mr Deputy Speaker—suggests. The section on cycle safety later in my speech might come with some sense of a wry smile.
Hon. Members may know that my constituency has long been at the forefront of cycling. Some 26% of its adult population cycle to their work or education—a figure comparable with the highest performing cities elsewhere in Europe. When I go to visit schools, it is always heartening to see how many pupils cycle or walk to school, although more could be done. I represent people who, for reasons topographical, historical and cultural, do not merely talk the talk, but walk the walk—or, rather, ride the bike. However, this is a wider debate about cycling in England generally, and I shall make several points about the Government’s general strategy and recent announcements. I will also ask some questions that I hope the Minister will answer later.
Why should we encourage cycling? There are a number of reasons: it is safe, healthy, cheap, convenient, fast, reliable, clean and green. Another reason, which I have noticed increasingly as a Member of Parliament, is that cycling around my constituency allows me to see the world around me and for people to see me. In a car, one is very much separated, whereas on a bike, one is very much part of the environment. There is much to welcome in the Government’s approach to cycling and to sustainable transport generally. I have already mentioned my hon. Friend the Under-Secretary’s statement on Wednesday, which contained a great deal of good news. Perhaps the most important announcement in it, apart from the local sustainable transport fund, which I shall come to later, is the £11 million of funding to Bikeability next year and the commitment to support it for the duration of this Parliament. Many people in Cambridge and elsewhere shared my concern about the Government’s decision to scrap Cycling England—a decision which I continue to find deeply regrettable, and which led to the title of this debate. We were particularly concerned that Bikeability, a vital training scheme and one that has worked wonders for cycling all around the country, was under serious threat. I am very pleased and relieved that the Government have committed themselves so fully to that scheme.
There are a number of other encouragements. I was especially pleased to hear about the possibility of greater powers for local authorities over traffic signs. Can the Minister confirm that that will allow, among other things, “no entry—except cycles” signs to be used? Contraflow cycling in appropriate one-way streets affords cyclists greater access to quieter streets, avoiding busier roads and making quicker journey times possible. We in Cambridge have asked for years for permission to use those signs, but it has been a struggle with Department for Transport officials until a recent trial was allowed. The current “low-flying motorbike” sign simply is not understood by many people.
There are also some specific issues that need resolving. Could the section of the Traffic Management Act 2004 that allows for enforcement of mandatory cycle lanes be brought into force? I believe it is the only bit that has not yet been implemented. Could the law be adjusted so that the presence of a vehicle in a cycle path or on a footway be taken as evidence that it was driven there, rather than appearing magically, as seems to be assumed at the moment?
One great thing about the headline story of the statement was the setting up of the £560 million local sustainable transport fund. The previous Government—Labour Members are noticeable by their absence—talked a very good game on green issues but destroyed their credibility with disastrous initiatives such as the third runway at Heathrow, which has now thankfully been jettisoned by the coalition. It is essential that a green thread runs through all Government policy if we are seriously to tackle climate change. We cannot rely on an occasional eye-catching idea here, an emotive piece of environmental rhetoric there, while business proceeds as usual. Local sustainable transport has a key role to play. If used correctly to support strong and well-designed bids, the fund will have a vital role to play in shaping our communities and reducing our reliance on expensive and unsustainable transport—but the Minister will realise that that is a big if. I have several questions to raise about how the Government intend to take the scheme forward.
The Department for Transport has produced a very useful guidance document, which I have in my hand, for those local authorities considering bids, and I would encourage local authorities to study it carefully. The assessment criteria for prospective bids are carefully set out in it. I am pleased that front and centre are the two policy objectives driving the Government’s approach: creating growth and cutting carbon. But as we all know, those two objectives can and do get in each other’s way at times. I hope the Minister will be able to clarify to what extent bids will be judged ultimately on cutting carbon, and to what extent on creating growth.
Perhaps the Minister might also find time to consider and address the other priorities flagged up in last year’s Cabinet Office report on urban transport, which found, interestingly, that the economic damage in cities, as a result of detriment to public health through vehicle crashes, poor air quality and physical inactivity from reduced walking and cycling, was three times greater than the effect of congestion alone, although those factors are far too often overlooked in transport decisions.
I hope the Minister and the Government will be sympathetic to the need for radical bids to reduce carbon emissions significantly, but I also believe the Department can and should do more to encourage such bids in the first place. The Department for Transport, along with the late Cycling England, produced a so-called hierarchy of solutions, which does an excellent job in establishing a cycle and pedestrian-friendly infrastructure —at least, it would do an excellent job if it was not virtually unknown among local authorities and widely flouted in practice. The Department should promote awareness of that policy among local authorities, as it is when they ignore it that we tend to see the type of cycle facilities that are often worse than useless. To take an obvious example, many local authorities still persist in creating poor quality shared-use cycle facilities on pavements, creating unnecessary conflict between cyclists and pedestrians. That is contrary to the guidance from the Department, which rightly focuses on reducing traffic volumes and speeds, redesigning junctions and reallocating road space. There clearly is a role for off-road cycle paths, but it must be good quality and not just a cheap alternative to road provision.
I welcome the Government’s guidance, although I wonder whether the Minister can give assurances that it will be put more strongly to local authorities bidding for this important fund. In particular, I take this opportunity to bang the drum for 20 mph speed limits in residential and shopping streets. They make a large difference to safety for children, cyclists and pedestrians but only a small difference to car travel times.
This is part of a wider point: a commitment to reducing road danger is needed. Nearly three quarters of people agree that the idea of cycling on busy roads is frightening, partly because road safety policies have for too long focused on making cycling look dangerous—for example, by excessive advocacy of cycle helmets—when we should be addressing the source of the danger. Slowing traffic is one way to do that; reducing traffic volume is another; and more cyclists lead to safer cycling.
Perhaps the Minister will also consider prosecution, sentencing, liability and awareness issues. In far too many accidents, the ready-made excuse, “I just didn’t see him, guv,” is invoked and too readily accepted. We must encourage the police and the Crown Prosecution Service to be more ambitious in the choice of charges and the decision to prosecute, so that judges and juries can decide whether an excuse is good enough. Driving with a reckless disregard for the safety of fellow road users should be treated very seriously. Will the Minister consider the use of proportionate liability? Putting the default onus on the more dangerous vehicle in a collision would protect cars from trucks, bikes from cars and pedestrians from bikes.
The frequent use of the “Sorry mate, I didn’t see you,” or SMIDSY, excuse also points to a lack of awareness among drivers. Many cyclists must simply feel invisible at times. Even in Cambridge, the lack of consideration shown by some motorists is shocking. Will the Minister consider including a cycling and pedestrian awareness element in the driving test, for example, that goes beyond the occasional video clip during the theory test?
Taking away the stigma attached to cycling by making our roads safer would be a positive step in encouraging those who would like to try it but feel intimidated or frightened. That would accompany the successful attempts by organisations, such as the Cyclists Touring Club, to encourage more cycling, particularly to work. Its workplace cycle challenge in Cambridge succeeded in encouraging 132 new cyclists on to the road in just two weeks. The cycle-to-work scheme, which was introduced by the last Government, deserves genuine praise. I should be interested to know whether the Government have any plans to build on the scheme’s success and to help to resolve the many concerns about what happens to the bike at the end of the scheme.
It is very important to encourage councils and businesses to provide the small essentials that make the difference to journeys, including convenient, safe and sheltered cycle parks at workplaces and town centres and things such as showers and lockers at work, so that people can travel and more easily be fresh for a day’s work.
I have previously asked questions, which are particularly relevant to the Minister, about the difficulties involved in bus and train transfers. The situation for cyclists who commute using other public transport as well remains grim. Problems continue with cycle parking at railway stations, and the Minister is welcome to come to Cambridge to see the problem for herself. Can she offer any further encouragement on the subject at this time, or at least an assurance that it will be given due importance in deliberations over rail and bus stock, routes and timetables? Will these issues feature prominently in franchise negotiations?
May I briefly draw the Minister’s attention to problems faced by the cycle-racing community, which has been championed by the hon. Member for Dudley North (Ian Austin)? Will she support the ongoing work between the Department for Culture, Media and Sport and her Department to redraft the outdated Cycle Racing on Highways Regulations 1960? Will she try to facilitate appropriate traffic signs for road cycling? Will she review the anomaly that motor rallies are allowed to take place on bridleways, but cycle racing is not?
As I said, I am grateful for securing this debate, which has achieved extra topicality as a result of Wednesday’s statement. The last time that I spoke on transport, the Under-Secretary of State described my speech as something of a wish list. I hope that I have succeeded in reining myself in a little more this time, although my natural enthusiasm for the subject sometimes overtakes me.
I shall finish on a suitably austere note: other cycling enthusiasts have noticed that the Government say in their sustainable transport White Paper that they plan to spend more money on developing their own cycle journey planner. Perhaps in the spirit of the big society, I point the Minister and her Department to the CycleStreets website, which already provides such a service, reliably and efficiently, and without requiring millions of pounds of Government subsidy. The website was developed by two of my constituents, both avid cyclists who are very much involved with the excellent Cambridge cycling campaign, and cost a total of about £40,000 to cover the whole country. I hope the Minister will consider the value for money of supporting and utilising their work, rather than inventing a new wheel. I look forward to her comments.
The Minister of State, Department for Transport (Mrs Theresa Villiers)
As is customary, I congratulate my hon. Friend the Member for Cambridge (Dr Huppert) on securing the debate and on his eloquent contribution and his passionate support for cycling.
I strongly agree that cycling generates important social, environmental and health benefits. The role it can play in relieving congestion, improving air quality and reducing carbon emissions is clear and well accepted. Regular cycling has other important benefits, in particular for health, reducing by half many chronic illnesses, including heart disease. Cycling can also help us to address the obesity problems that cost the NHS and wider society around £20 billion annually.
As well as the wider benefits, we should not lose sight of the simple truth that cycling can be a great way to get around—a convenient and low-cost way to make short journeys. The key question is how we can lift the barriers that deter people from regular cycling. The coalition agreement makes a commitment to supporting sustainable travel, including walking and cycling. The Department for Transport will be investing £58 million in cycling over the current financial year. Cycling receives further Government support through local transport plan funding to local authorities and the DFT grant to Transport for London.
On Wednesday, as we have already heard, the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), published a White Paper on local transport alongside bidding guidance for the new local sustainable transport funds. I thank my hon. Friend the Member for Cambridge for the support he has expressed for that important initiative. I believe the measures announced by my hon. Friend the Under-Secretary will prove to be a significant step towards realising two of the coalition’s most important objectives—creating growth and cutting carbon. The White Paper sets out how we can encourage the uptake of more sustainable modes locally, supported by the £560 million allocated to the new sustainable transport fund.
In answer to the questions put by my hon. Friend the Member for Cambridge about the relative importance to be placed on creating growth and cutting carbon, the answer is that weight will be given to both, taking into account each scheme’s overall merits. He will realise that in many cases similar actions can both generate economic benefits and cut carbon.
It will be up to local authorities to decide what goes into their bids, but the case for cycling is so compelling that I am certain many councils will want to include cycling projects in their bids to the fund. We therefore expect cycling programmes to attract substantial support from the new fund. We are strongly encouraging local authorities to work with voluntary and private sector partners when putting forward their bids. That will open up opportunities for the involvement of groups such as CTC, Sustrans and the Campaign for Better Transport.
As my hon. Friend pointed out, our first commitment in relation to the local sustainable transport fund is on cycle training. The coalition has confirmed Bikeability funding for the remainder of the Parliament, confounding some of the anxieties created by the abolition of Cycling England. Learning to cycle safely and confidently on today’s roads is a valuable life skill and a key part of our strategy to promote cycling. The national cycle training scheme currently receives funding of £11 million, providing up to 275,000 Bikeability training places. Earlier this week, we announced a further £11 million for Bikeability training in 2011-12.
To get first hand experience of Bikeability, I decided to have a go myself. I very much enjoyed being taught the level 1 and 2 courses by David Dansky of Cycle Training UK. At the end of the lesson, I certainly felt my hand signals had improved and were much more positive.
Recently published research demonstrates how highly Bikeability is regarded by parents and the children who take part in the scheme. Children reported to the survey that, after the training, they generally felt safer and more confident when riding on the road. It is clear that parents feel more confident allowing their children to ride on the road, because the child’s ability to judge risks will have been strengthened by the training they have received.
To complement our education programmes, we will set aside £13 million from the fund in 2011-12 for links to school, bike club and walking to school initiatives, delivering additional cycle parking and infrastructure changes for safer links to schools—something my hon. Friend mentioned.
In preparing their bids for money from the new fund, local authorities might well wish to emulate the approach taken in the cycling demonstration town programme, which has delivered impressive results. Darlington managed to double cycling in four years. In the first six towns that took part, there was an average increase of 27% in the number of people cycling regularly. Assessment of the programme indicates that the congestion, health and other benefits—benefits of the sort that my hon. Friend mentioned, to do with air pollution and the public realm—generated by the programme were three times greater than the amount of money spent on the programme.
My hon. Friend expressed concerns about problems integrating cycling journeys with public transport. Again, that could prove another fruitful source of ideas for local authority bids to the local sustainable transport fund. The bike ’n’ ride demonstration projects running over recent years are a model worth considering for the future. They have improved facilities for cyclists at rail stations run by South West Trains, Merseyrail, Northern and Virgin Trains. Hundreds of additional cycle parking facilities have been provided at stations run by those train operators, together with hire facilities at Waterloo, Richmond and Southport. That project complements wider Department for Transport work to support the establishment of cycle hubs at key rail stations, the hub in Leeds being the first to open, last September.
The announcement that I made earlier this week on a move to longer rail franchises will give train operators stronger incentives to invest in improving stations. That, of course, could include the provision of cycle parking. Chiltern Railways is an example of a longer franchise; it was able to deliver a considerable uplift in cycle parking places, but as we judge the bids coming in for rail franchises, we will certainly look at the ideas that bidders and train operators have for improving linkages with cycling, and for making it easier to integrate cycling into the rail system.
The Department continues to monitor the voluntary station travel plan pilot schemes, which can provide clear benefits to cyclists as part of efforts to integrate rail successfully with other sustainable modes of transport. My hon. Friend highlighted the cycle to work scheme; it continues to provide tax incentives that enable employers to help those who wish to switch to commuting to work by bicycle. A concern here is the judgment in the AstraZeneca case; the Government are currently looking at how that case might impact on the scheme to see whether we can resolve any resulting difficulties.
My hon. Friend rightly highlighted safety issues as being one of the barriers that can sometimes deter people from cycling. It is not really for me to start dictating to the Crown Prosecution Service about their decisions on prosecutions—I am sure that he anticipated that answer—but there are a range of other ways in which the Government can help to tackle concerns about road safety and cycling. First, of course, The Highway Code emphasises the importance of watching out for cyclists. I agree with my hon. Friend that strengthening driver awareness of cyclists should be an important priority in our continuing work to improve the driving test and driver training. It is already very much a focus of driver training and the driving test, but we acknowledge the continuing importance of that work.
Secondly, we encourage local authorities to make their roads safer for all users. We stand ready to offer advice on the options available, including the 20 mph zones that my hon. Friend supports. However, I am sure that he will agree that such decisions need to be taken locally, in the light of local circumstances. Thirdly, we are providing local government with the funding to improve cycle routes and networks through local transport plans and, in future, via the local sustainable transport fund.
My hon. Friend is right: we should be careful not to overestimate the risks associated with cycling, in case we find ourselves being part of the problem and deter people from doing more cycling. It is worth noting that the health benefits offered by cycling clearly outweigh the road safety risk. We still need to make our streets more welcoming to cyclists. The DFT’s “Manual for Streets” emphasises the importance of providing for cyclists and pedestrians. My hon. Friend is right to say that a user hierarchy recommended in that document places pedestrians and cyclists at the top. “Manual for Streets 2” was recently published after a lot of input from different stakeholders. My understanding is that those documents are heavily used by local authorities in their work on our roads and streets. The uptake of those documents is more extensive than my hon. Friend has been led to believe.
In response to my hon. Friend’s point about signage, I, too, very much welcome the trial of the “No entry—except cycles” sign. He is right: it has been a very long time coming. The results of the trial will be part of the signs review included in the White Paper which was announced this week by my hon. Friend the Under-Secretary. Like my hon. Friend the Member for Cambridge, I hope that that sign will be seen more widely on England’s streets in future.
As for road racing, officials from the Department for Transport, the Department for Culture, Media and Sport and the Home Office have been working with British Cycling and the Association of Chief Police Officers to explore ways of improving procedures for holding cycle races on public roads and addressing the issues that my hon. Friend rightly raised. My hon. Friend the Under-Secretary met British Cycling representatives earlier this week, and we have identified an existing legal power that enables the police to give directions for places at which traffic must stop for the race, and for cycle race marshals to hold a sign for that purpose. It is not sorted yet, but we hope that that might provide a solution to the major concerns expressed by the cycle racing community. Working with British Cycling, we have identified amendments to regulations to improve procedures for authorising cycle races, and the Under-Secretary is keen that they should be introduced.
My hon. Friend the Member for Cambridge concluded by expressing concern about the Department for Transport developing its own cycle journey planner when good websites such as CycleStreets are already available. Given the importance of the issue, there is room for Government action to complement the websites provided by the private sector, particularly given our focus on providing novice cyclists with the information that they need to encourage them to go out cycling, so that they are confident they can identify easier and safer routes.
We have begun to see real progress on cycling. My hon. Friend discussed the long history and success of cycling in Cambridge. London, too, is a great success story, as the number of cyclists in the capital has more than doubled over the past decade. Some 27,000 people now enter central London by bike every day. That shows that with the right measures it is possible to make a difference and create the right conditions for cycling to grow, generating the health, congestion, carbon and quality-of-life benefits that he rightly highlighted.
In conclusion, the 19th-century reformer and suffragette, Frances E. Willard, wrote in a preface to one of her books:
“She who succeeds in gaining the mastery of the bicycle will gain the mastery of life.”
I am not sure whether that overstates things, but there is no doubt about the benefits that cycling can bring for quality of life. I strongly recommend it to all hon. Members, and I look forward to working with my hon. Friend in encouraging greater uptake of cycling by members of the public.
Question put and agreed to.
Written Ministerial Statements
(13 years, 4 months ago)
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Off-Grid Energy
(13 years, 4 months ago)
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The Minister of State, Department of Energy and Climate Change (Charles Hendry)
The recent severe weather has caused significant concern about the domestic oil market and the liquefied petroleum gas market. I fully recognise the difficulties people have experienced with rising prices and supply problems.
Underlying many of the complaints are concerns about the challenges of supplying oil and gas to rural communities and whether the current market structure provides the reassurance that consumers can get fuels for heating when needed at a price they can afford.
The Office of Fair Trading is currently consulting on its annual plan to help determine its work programme for 2011-12. This includes proposals to prioritise markets impacted by high, rising and volatile commodity prices. The off-gas grid energy market is clearly one such affected market.
In response to the Office of Fair Trading consultation and mindful of the various issues highlighted by the recent severe weather, I have written to the Office of Fair Trading asking it to bring forward its competition and consumer study into off-grid energy. In addition, I have asked the Office of Fair Trading if the study could explore the longer term consumer issues such as lifetime payback, consumer standards and labelling for alternative energy sources or supplies. Such a study would provide an independent assessment of the off-grid market and establish what further action may be necessary to ensure it works properly.
I welcome the Office of Fair Trading’s support for this area, and look forward to seeing its conclusions in advance of next winter so the lessons from this winter can be learned and any necessary changes made.
EU Justice and Home Affairs Policy
(13 years, 4 months ago)
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The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Home Office and the Ministry of Justice have prepared the first annual report to Parliament on the UK approach to Justice and Home Affairs policy following the coming into force of the Lisbon treaty on 1 December 2009. The report, which has been laid before the House today, is submitted on behalf of both my own Department and that of the Secretary of State for Justice.
On 9 June 2008 the right hon. Baroness Ashton, the then Leader of the House of Lords, made a statement setting out commitments by the Government to Parliament in respect of the scrutiny of decisions to be taken by the Government in accordance with protocol (No 21) to the treaties on the position of the UK and Ireland in respect of the area of freedom, security and justice (“the Justice and Home Affairs opt-in protocol”). These commitments were designed to ensure that the views of the Scrutiny Committees should inform the Government’s decision-making process.
This included a pledge that the Government would
“table a report in Parliament each year and make it available for debate, both looking ahead to the Government’s approach to EU Justice and Home Affairs policy and forthcoming dossiers, including in relation to the opt-in, and providing a retrospective annual report on the UK’s application of the opt-in protocol”.
The coalition Government have agreed to maintain this commitment, and this is the first such report. It covers the 12 months since the coming into effect of the Lisbon treaty on 1 December 2009. For completeness the report also covers the application of protocol 19 to the treaties on the Schengen acquis integrated into the framework of the EU (“the Schengen opt-out protocol”). The Government decision-making process for this protocol is the same as for the Justice and Home Affairs opt-in protocol.
House of Lords
Arrangement of Business
Baroness Anelay of St Johns
My Lords, I must inform the House that, owing to a considerable increase in the number of speakers who signed up for the Second Reading of the Rehabilitation of Offenders (Amendment) Bill over the course of just yesterday, and owing to the tabling yesterday of additional amendments to the Dog Control Bill introduced by my noble friend Lord Redesdale, it has been agreed with my noble friend that we will look to reschedule the Committee stage of his Bill to a later date rather than proceed with it today. That is in order to ensure that today the House can rise no later than the conventional time of three o’clock. Of course, I regret the inconvenience to any noble Lords who were hoping to participate in proceedings on my noble friend’s Bill today and I am grateful to him for his co-operation in this matter.
Marine Navigation Aids Bill [HL]
(13 years, 4 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Anelay of St Johns
My Lords, before the noble Lord, Lord Berkeley, is able to make his speech, it falls to me to make the following statement. I see one or two puzzled faces opposite, but this is very much a normal matter.
I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Marine Navigation Aids Bill, have consented to place their prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Lord Berkeley
My Lords, I am grateful to the Chief Whip for that introduction. The predecessor to this Bill had its Second Reading nearly a year ago, on 5 February 2010, and I refer noble Lords who are interested to col. 432 of Hansard for that date. In its present form, this Bill is in exactly the same format as the Bill that I introduced then and noble Lords will be pleased to hear that I do not intend to make the same Second Reading speech.
Lord Berkeley
I am grateful for that show of support. However, in many ways things have moved on on the navigation aids front. There has been progress, with developments, and I believe that it is a good idea to bring the Bill forward again.
I remind noble Lords that I introduced the Bill last year because, in the previous year, the Government of the time had increased light dues—the dues that ships pay to enter any British port—by 67 per cent, which in the middle of a recession I thought was a bit steep, to say the least. I can go through all the reasons for that, but I think that it is enough to say that they can be found in the Hansard of a year ago. I maintained then, and still do, that such an increase is frankly unaffordable. We are talking about a unique structure, where the Government set the charges for ships based on what the three general lighthouse authorities say that they need, and the ship owners have to pay up.
The main problem arises when you compare that with all the cost-cutting that the Government are making at the moment. There have been some enormous cost-cutting measures, which we have been debating here and will continue to debate, particularly in the Public Bodies Bill. Basically, the Government are saying, “You have to cut the costs. Do it how you like but this is the way that it is going to end up”. Uniquely, I think, in this case, the Government still set the charges but the taxpayer does not pay; the ship owner pays. I shall repeat just one quotation that I read out a year ago from Stephen Bracewell, the chief executive of the Harwich Haven Port Authority. He said that, as a result of the increase in the light dues,
“no less than four major container services have ceased calling at the Haven Ports”.
That is a pretty serious change to ship movements, involving a loss of revenue and a loss to the economy.
In the ensuing year, I have consulted a number of people and organisations about this light dues issue. The problem is still as bad, but I believe that there are simpler solutions. I have come across a number of examples elsewhere of how costs have been slashed for maintaining the lights, which of course has resulted in lower charges. The best example that I found was in Australia. A couple of weeks after my Second Reading speech last year, I received an e-mail from someone in Australia whom I did not know saying that he had been reading Hansard the previous night. I felt chuffed about it but I wondered why someone in Australia would be reading my speech in Hansard. However, the person concerned had been the director of the Australian lights authorities and, over the past 10 years, had achieved a saving of 50 per cent in the maintenance of the lights all the way round Australia. I went to Australia in April and arranged to meet him. I was extremely impressed with him because he also knows the UK waters very well. He was adamant that similar savings could be made here and a number of his articles were published in Lloyd’s List. One of the elder brethren at Trinity House, Michael Grey, wrote in saying that Australia was nothing like the UK. He said that it was a square country and needed only a lighthouse at all four corners. I am exaggerating slightly, but it was that kind of thing. Mr Davidson responded by saying that he knew all about the UK waters and that he stuck by his arguments.
I also heard more recently that the Hong Kong authorities are reducing light dues by 20 per cent. They are bringing in similar efficiencies. I understand that in many of the old colonies, shall we say—they are now independent—where a similar structure of lights occurs, there is the potential to make similar reductions.
Since last year, the new Government have made a lot of progress and I am pleased that they have. First, they have made progress on what we have come to call the Irish question. Since 1922—or since for ever, actually—ships entering UK ports have contributed to the cost of maintaining the lights around the Republic of Ireland. I remember putting down a Starred Question about that a few years ago. The noble Baroness, Lady Crawley, answered it by saying that the Irish Government were not keen to negotiate. Well, they wouldn’t be, would they, if they would have to spend somewhere between £15 million and £20 million more because ships coming into British ports no longer had to contribute to the maintenance of the lights around Ireland. After all, they do not contribute to the lights around France, Belgium, Germany or anywhere else.
The present Shipping Minister, Mike Penning MP, has reached agreement with the Irish Government to stop this transfer of funding by the end of this Parliament. I certainly welcome that. He will need all the support that he can get given the state of the Irish economy. I believe that the Irish Minister whom he met a week or two ago resigned yesterday, so I hope that the agreement will still stand.
The Government have also finally started to tackle the costs of running the three lighthouse authorities around the coast. I understand from a letter from the Lights Advisory Committee that the Government have set the GLA the target of making cuts of 17 per cent over the next five years. That is welcome—it is a major step forward—but they could go further. Anyone in the position of being a monopoly supplier, effectively government-funded in the way that it operates, could cut costs a lot more.
I have already written to the noble Earl, Lord Attlee, and other speakers whose names were on the list when I wrote the letters to tell them that, if the Bill is given a Second Reading by the House today, I will introduce amendments to make it much simpler. These amendments would do two things. They would require the Government to reduce light dues for ships entering the UK ports by codified reduction targets annually for a five-year period—probably by 50 per cent in five years, which is achievable. I would also support the present Shipping Minister in his work in dealing with the Irish Government by requiring the Government to cease payments by a certain date.
Lord Reid of Cardowan
My Lords, I know from my time at the receiving end as Transport Minister that my noble friend is extremely knowledgeable and an assiduous campaigner on these issues—rightly so, given their importance to a seafaring and trading nation. Is he in a position to estimate the deleterious effect on trade of such a large increase over a short period of time, even if only in very round figures?
Lord Berkeley
My Lords, that is an interesting question. When I quoted the chief executive of the Harwich Haven Port Authority, I quoted only part of what he said. He also said:
“This action by four major carriers has already deprived the General Lighthouse Fund of £2.4M in annual light dues”.
He did not estimate the reduction in business for the Haven ports, but the noble Lord will appreciate that, if four major container lines cease coming into the UK but go to the continent—Rotterdam, Antwerp or Hamburg—and feeder across, there will be a serious and significant reduction in jobs. Of course, shipping lines take extremely seriously even small changes to the amount that they have to pay.
The Earl of Caithness
The noble Lord mentioned making amendments. Will he tell us in precise detail what parts of the Bill he proposes to remove?
Baroness Garden of Frognal
My Lords, the noble Lord is entitled to make his Second Reading speech without interruption at this stage of the debate.
Lord Berkeley
I am grateful to noble Lords. I was about to come to what I intend to remove, which will be a significant part of the Bill. I will replace it with what I would call an output specification, which, as I said a moment ago, would be a clause that would require the Government to reduce light dues, to codify reduction targets by probably 50 per cent over five years and to cease providing the Irish subsidy.
I was proposing to leave in the clause on pensions, because that came from the draft Marine Navigation Bill, for which the previous Government did not get round to finding parliamentary time. I wrote to the Shipping Minister asking whether he thought that it was a good idea to leave it in or whether he wanted anything else to be put in. As the noble Lord will know, there is already a Commons Private Member’s Bill, promoted by Therese Coffey, on wreck removal. So it is for me to have further discussions with the Minister, and a substantial reduction in the Bill’s scope will be proposed. However, I have checked with the Clerks and they seem happy with that. I have also been advised that in Private Members’ Bills in your Lordships’ House we can propose reductions in charges, costs or anything else, but we are not allowed to propose increases. That is the advice that I have had from the Clerks. Again, however, we can debate that.
All organisations that are under pressure will say that they have squeezed their efficiencies as far as they can and that they cannot do any more without compromising safety. However, we have seen in many areas that, when push comes to shove, they can do it. I believe that a bit more pushing on the GLAs will enable them to reduce costs. They will have to reduce costs and it will not compromise safety.
I welcome the Government’s action in particular in respect of the Irish question. However, I think that it would be useful for the Government to have some legal support in the shape of this Bill in case the Irish want to change their mind at any time. I have talked to many people in the shipping industry, as I said, who have confirmed the view that Mr Davidson has suggested—that reducing the costs of the GLAs by 50 per cent is reasonable and achievable and that, if the costs come down, the charges will come down. I very much look forward to noble Lords’ comments and, no doubt, if the Bill is given a Second Reading, to further discussions. I beg to move.
The Earl of Caithness
My Lords, I declare my interest as Minister for Shipping from 1985 to 1986 and from 1992 to 1994. I did not take part in the Second Reading debate last year because I thought that the noble Lord, Lord Berkeley, was wasting the time of the House. At that time a major report into the lighthouse authorities was due and it would have been a much more efficacious use of the House’s time had he waited for the report to be published before putting his Bill before the House for Second Reading. I fear that this year the noble Lord is abusing the House. He has told us that he will substantially revise his Bill—and that he is entitled to do. The Bill comprises 14 clauses and one schedule. From what I managed to elicit from him a moment ago, only one of the clauses will remain, Clause 12, on the pensions funding, and he will introduce some other clauses. Those of us taking part in this debate have spent a lot of time doing preparation on the Bill as it is before us, but that time has been completely wasted.
The noble Lord had the courtesy to write to my noble friend Lord Attlee on 14 January advising him what he was going to do. He did not write to me until 19 January, and I got the letter only this morning. I was very lucky to receive a copy of the letter that he sent to my noble friend Lord Attlee. Why did the noble Lord not write to those of us who are taking part in this debate at the same time as he wrote to my noble friend Lord Attlee, on 14 January? Why has he allowed us to waste our time in this fashion? I fear that this is an abuse of the House. Perhaps he should do the right thing, withdraw this Bill and bring forward for Second Reading a Bill that he actually intends to pursue through the House. I do not dispute that his proposed amendments will make the Bill a lot better, because there are amendments that I would wish to put forward anyway, but I feel that I have wasted a considerable amount of my time, as has everyone else taking part in the Bill, because the noble Lord has not had the courtesy of letting us know exactly what he is going to do.
When the noble Lord spoke he repeated much of what he said last year, and of course he told only one-half of the story. He mentioned the increase in light dues. What he did not tell the House is that the light dues are the same in absolute terms as they were when I was Minister for Shipping in 1993, and that it is a 32 per cent reduction accounting for inflation. So, far from a massive increase, there actually has been a substantial reduction. He wants a 50 per cent reduction; well, he has got a 32 per cent reduction since I was Minister for Shipping. So the situation is not nearly as bad as the noble Lord has tried to portray to the House.
What was wrong—and what I fear my honourable friend the Minister of Shipping is wrong to do—was to freeze the light dues. That is why there was such a substantial increase. There was no increase from when I was Minister for Shipping until the increases were made in the past couple of years, and the Minister for Shipping has said that he will not increase light dues for the next three years. I think that that is unfair on the shipping industry. It is far better to have gradual increases—or, one hopes, reductions—rather than having a period of a freeze. Labour Ministers were very wrong to do that, because it then catches up with you: you get a deficit and you suddenly have to have what appears to be a substantial increase.
I do agree with the noble Lord, Lord Berkeley, in congratulating my honourable friend the Minister for Shipping on getting an agreement with the Irish Lights. This is an old problem which I tried to deal with in 1985-86 and in the early 1990s, but that was not a sensible time to try to negotiate that sort of agreement with the Irish. It is very good that the Irish Lights cover the whole of Ireland—I think that it is the Irish rugby team, the Irish Lights and a third organisation which I cannot remember that cover the whole of Ireland. I agree that the partial subsidy that we gave towards the Commissioners of the Irish Lights will be phased out by 2015-16.
The noble Lord, Lord Berkeley, also said that there ought to be a continuing reduction in light dues. Of course he probably has read the Atkins report; and he probably knows that all the lighthouse authorities are currently working on a reduction and that, this year, all the running costs in real times will be decreased by at least 3 per cent. They have to meet, over a five-year period, an RPI-X formula, and they are well on their way to doing that.
There is now a joint strategic board at non-executive director level which is a result of the Atkins report and I think that it is a sensible way forward. This board is for the first time looking at all the corporate plans for the three separate lighthouse authorities. It is interesting to recall that the Atkins report did not recommend that the three GLAs should be merged into one, but said they would operate much more efficiently as three individual bodies. That is certainly beginning to prove the point.
The strategic board has a lot more to offer in the running of the lights. When something as new as that is introduced, of course it takes a bit of time to settle down. The Northern Lighthouse Board, Trinity House and the Commissioners of the Irish Lights are trying to get together. I think that there were some difficulties early last year but they seem to have worked their way out of the system and the board is now doing a very good job. I wish that I had been able to do something like that when I was the Minister for Shipping.
With the work that has taken place with the lighthouse authorities since the Atkins report—the reductions in the light dues and the continuing RPI-X indices—the running costs are coming down. In fact, the running costs will be reduced over the next four years by more than 17 per cent. That is not quite the 25 per cent that some would have liked, but it is very good over four years. That is fairly comparable to the Department for Transport’s CSR outcome of 14 per cent.
I hope that given perhaps a more balanced view of where we are with light dues, the noble Lord will not pursue this Bill. I would repeat only that, as far as I am concerned, he has behaved extremely badly towards the House and all of us who are taking part in this Second Reading debate.
Baroness Scott of Needham Market
My Lords, I am sure that the whole House will recognise the tenacity and commitment of the noble Lord, Lord Berkeley, to this important issue. I am sure that he will understand that for the reasons expressed by the noble Earl it is difficult to have a debate today in anything other than general terms on the important question of the UK system of providing aids to navigation.
However, it is useful to have such a debate at this time. It is also refreshing to have a debate on shipping in your Lordships’ House because it is a topic that we seldom cover, which is interesting when we consider how important the shipping industry is to this country’s economy and to our maritime heritage. I believe that it is timely to revisit the question of light dues. We are the only country in the world to have a user-based scheme for the funding of light dues. While that is not in itself a reason to change the system, it should at least give us the opportunity for pause for thought and to reflect on why we are the only country left which does it in this way.
Clearly, money is the essential driver, as it so often is. The budget shortfall within the General Lighthouse Authorities can be dealt with only in the way that any organisation deals with budget shortfalls; that is, you increase your income, you cut your costs or you do both. The original proposal to increase the budget at a time when all other departments were slashing theirs was ill advised. I am very glad that the Government have stepped in and have given some firm guidance that this is not acceptable.
I very much agree with the point made by the noble Earl that having a stop-start approach to light dues where they are frozen for many years and then increased very fast is not a sensible way to treat the shipping industry, which now has far more options available to them. As we have heard, a large number of companies are simply deciding to go to Rotterdam or to Antwerp and to use feeder ships to try to ship. This is having a serious effect on the maritime industry generally and has the effect of making the budget crisis within the GLAs even worse because they are trying to bring more money in and actually are bringing in less. They then get into a vicious circle from which it is difficult to escape.
The Government need to reconsider the principle of whether a 41p per tonne levy on ships in UK waters is still an appropriate way forward, given that it is described as a user tax, when there is no mechanism for measuring whether these ships are using the lights at all. With modern navigation and so on, things have moved on. The Chamber of Shipping is adamant that this is a tax on trade. We need some clarity of thinking as to whether that is what it is.
The budgetary problems will be eased by the recent announcement of the agreement with the Irish Government that they should take on responsibility for their own lights. I congratulate the Minister, Mr Penning, on achieving what previous Governments said was impossible. Therefore, either Mr Penning has been very persuasive or we have a lot of extra leverage after having written some large cheques to the Irish Government lately. Whichever way it is, we certainly seem to have made progress that has eluded us before.
I understand that the subsidy to the Irish Lights this year is around £12 million, which will come as a significant benefit to the budget. Will the Minister say whether this saving will in part or in whole be reflected in reduced fees to the ship operators or will simply disappear into the lighthouse funds to help to deal with the pension deficit?
The issue of operating costs is important. I know that the Government are working with all sectors of the transport industry to look at why UK costs are much higher than overseas comparators. They are doing that for rail, roads and so on. I suspect that this is as much of a problem with marine navigational aids as with any other sector. As we have heard, an article in the Lloyd’s List of 23 August 2010 by the former chief executive of the Australian Maritime Safety Authority has highlighted how Australia transformed its lighthouse system during the 1980s, improved service quality and reduced costs. I know that a lot of other countries are looking at the Australian model and I hope that our Government are too.
On 14 January, the Government in Hong Kong announced that they will reduce fees for a range of maritime services, including lights, by about 20 per cent. Clearly, there is a wealth of international experience on which to draw. That is appropriate because shipping has well established international organisations, including the International Convention for the Safety of Life at Sea in this area.
The noble Lord, Lord Berkeley, has done the shipping industry a service by bringing this forward today, although I hope that he will accept the difficulties of scrutinising a Bill that has disappeared before our eyes. Nevertheless, I thank him.
Lord Boyd of Duncansby
My Lords, I declare an interest as chairman of the Northern Lighthouse Heritage Trust and as a former commissioner of the Northern Lighthouse Board.
As other speakers have recognised, we have been here before—the same Bill had its Second Reading less than a year ago—but, nevertheless, like my noble friend Lord Reid, I pay tribute to the tenacity of my noble friend Lord Berkeley in bringing this issue of lighthouses before the House. As has been said, shipping is a vital part of our trade and it is important that these issues are looked at properly.
Much has happened since the Second Reading last February. First, there has been an agreement between the British and Irish Governments on the so-called subsidy to the Commissioners of Irish Lights. The Minister, Mr Penning, can take real credit for having reached that agreement, particularly in the face of the difficulties that the Irish Government face. Of course, the Minister was building on work that had been done by his predecessors, but, nevertheless, to have secured that deal last week is significant.
The second major thing that has happened since last February is the publication in March 2010 of the Atkins report. I am sorry that my noble friend did not say more about that, given that the new Government quickly accepted most of the report’s recommendations, which have now been implemented or are in the process of being implemented. The report was established by the previous Government to look at the structure and funding of lights in the UK and the efficiencies that could be made by the general lighthouse authorities. We now have a joint strategic board, which I understand has settled down well after a shaky start and is producing real benefits. The authorities are now monitoring each other’s business plans with a view to co-ordination. Another recommendation that has been accepted is the rationalisation of the buoy yards, with a buoy yards study addressing significant overcapacity in Harwich and Swansea.
The RPI minus X formula, which is designed to produce a year-on-year reduction in running costs, has also been accepted. Each GLA has its own value for X because they start from different bases. The Commissioners of Irish Lights, as I understand it, has accepted a target of just over 6 per cent given the need to achieve a significant reduction in manpower. For the Northern Lighthouse Board, the target is just over 3 per cent. To be clear, that means that, if the RPI is under 3 per cent—which may be just a hope at the present time—there will be real and absolute savings through efficiencies. The savings will be 17.4 per cent over the next four to five years. I understand that the recommendation on light dues was not accepted by the Government, but Mr Penning has made it clear that there will be no increase in light dues for at least the next three years, which is to be welcomed.
What should happen to this Bill? First, I commend my noble friend on his decision to drop the restructuring of the general lighthouse authorities and the establishment of a marine navigation aids commission and office of marine navigation aids regulation. For various reasons that I will not go into now, I believe that to be the right decision. However, I will make one comment, which is that, given the deal that has been reached between Mr Penning and the Irish Government, it is important that we bolster the Minister and make sure that we are not accused of bad faith by trying to restructure the general lighthouse authorities.
My noble friend has informed the House that he contemplates a radical restructuring of the Bill. Of course I bow to the Clerks and the House authorities on whether those changes are within the scope of the Bill, but I draw to the attention of noble Lords that the purpose of the Bill is to,
“Establish a Marine Navigation Aids Commission; to establish an Office of Marine Navigation Aids Regulation; to amend the Merchant Shipping Act 1995; and for connected purposes”.
We are now informed that the purpose of this Bill is to be significantly altered. However, I make no complaint that I did not receive the letter, as I did not put my name down to speak in this debate until yesterday and the letter was in fact passed on to me by friends in the Northern Lighthouse Board, so I was aware of it.
As I understand it, there are two elements to the amendments that my noble friend wishes to make to the Bill. The first would require the Government to reduce the light dues for ships entering UK ports by codifying reduction targets annually for a five-year period. The second would require the Government to cease providing the Irish subsidy by a certain date. In my submission, the second proposal is now otiose, given the agreement between the UK and Irish Governments. I do not see any merit in providing some sort of legal backbone to the agreement, because there is no reason to suppose that the Irish Government will renege provided that we keep our side of the bargain. On the proposal to issue some kind of reduction target, I have to say that I am always sceptical of attempts in legislation to impose rigid budget constraints, which require us to attempt to look into the future to see how financial circumstances may or may not change.
A better method would be to give some stability in the setting of light dues—I have already welcomed the announcement of the freeze that is to apply for at least the next three years—and to ensure that operating costs are reduced so that efficiencies are obtained. We have already seen that with the progress that has been made on implementing the Atkins recommendation on RPI minus X. That will produce real and significant savings. I accept that progress has to be monitored, which will happen through the lights users committee and the work of the department.
Mention has been made of different funding methods such as those that are used in Australia. It is clear that our system of funding is now unique—in other countries, the funding comes out of general taxation—but I think that we should be careful when we seek to draw analogies between different systems of funding. It may be that there is time to look at whether the current method is the right one for the future, but I have to say that many of us would be concerned if we moved away from the principle of the user pays to placing a burden on the general taxpayer. However, that is a debate for another day on a different Bill.
I believe that the right course for my noble friend would be to withdraw this Bill and to bring forward legislation in a more proper form that we can debate on its merits.
Lord Greenway
My Lords, I agree totally with what the noble and learned Lord, Lord Boyd, and the noble Earl, Lord Caithness, have just said. We have discussed this Bill once before, so it is rather extraordinary for us to discuss it again in its original form when the noble Lord, Lord Berkeley, was good enough to write to us all to tell us that he is going to change it substantially. I declare an interest as an elder brother of Trinity House, which is an unpaid position. In view of the wise remarks that have already been made, I will confine my own to just a few points.
My first issue, which I did not raise when we discussed this almost a year ago, is that “Marine Navigation Aids Bill” as a short title is, strictly speaking, not correct because marine navigation aids include any aids that you might find on the bridge of a ship, including radar and so on. The correct title should be “Marine Aids to Navigation Bill”, which would limit it to the work done by the general lighthouse authorities, which is what the noble Lord is concerned about.
The noble Earl, Lord Caithness, has already taken issue with the general cost of light dues. It is true that such dues were reduced five times between 1993 and 2006, in which year the previous Administration reduced them by a further 13 per cent at a time when shipping was enjoying the best boom that it had had for years. With hindsight, that was unfortunate, because of course the time came to raise the dues again as the General Lighthouse Fund had in effect been running at a loss. In 2009, there was a large increase, which was followed by a second increase a year later in April 2010. As the noble Earl said, those increases came when we were in recession and shipping was going through a hard time. I can understand ship owners’ resentment, but they did slightly ignore what had been happening over the previous 10 to 15 years.
We have always collected light dues under the user pays principle. That is not unique to this country. Things may have changed a little but, as I mentioned on the previous occasion, quite a number of other countries collect light dues either in whole or in part in the same way, so it is not correct to say that our system is unique. Governments of both persuasions have supported the user pays principle. The problem is that our charges are transparent and ship owners can see them when they get their bills, whereas in other ports around the world the charges are either covered by government funds or included in port charges. There is no evidence to suggest that it is any more expensive for a ship to call at our ports than ports on the continent.
I also take slight issue on how business has been affected by the recent rises. The figures that I have seen do not suggest that there has been any reduction in ships calling at our ports. Some individual ports may have been affected, but container lines are notorious for switching from port to port as it suits them. A lot of them now work in consortia, so any decision—for example, to switch from Felixstowe to Southampton or vice versa—may be strategic.
Much has been said about the Atkins report, which is now in the process of being implemented. Reductions in costs are in the pipeline. Certainly, Trinity House has committed to reduce costs by 26 per cent over the next few years, which is broadly in line with departmental cuts. I think that it is safe to say that light dues will have to remain stable for the next three years so that one may see how the situation pans out. Let us give Atkins a chance. We all agree that the Atkins report was very useful. Let us see how its implementation works out before we think of any further changes to light dues. I feel certain that dues will come down in time, but the increased efficiencies now being made in the general lighthouse authorities will ensure that the reduction can be made in time. It would be unwise to think that any reduction could be made within the next three years.
One aspect of the Bill that the noble Lord, Lord Berkeley, has introduced that is in many ways welcome is the proposal to give lighthouse authorities increased power to use their ships for commercial purposes. Under existing powers, such ships can undertake commercial work, which brings in more than £3 million a year that is paid into the General Lighthouse Fund. Any means of increasing that ability would be most welcome. In view of what has happened, that is one the few aspects of the Bill that would be welcomed. However, as the noble Lord mentioned, there is the problem of another Private Member’s Bill in another place that seeks to deal with wreck removal. Both those matters, as well as the pensions issue that has been mentioned, were included in the draft Marine Navigation Bill. Although we are all disappointed that the Government did not bring that Bill forward, it would now seem sensible for them to do so at the earliest opportunity. That would be the best course of action and would make the noble Lord’s Bill and the Bill in the Commons unnecessary.
Lord MacKenzie of Culkein
My Lords, my noble friend Lord Berkeley should be congratulated on his persistence in introducing this Bill again. It gives us a further opportunity to look at the important matter of the safety of seafarers and the maritime environment. We can, as has already been done, note the progress made since we last debated this matter on 5 February last year.
It is a pity that we could not have had this debate in a few days’ time, because we could then have marked a very important anniversary in aids to navigation: the lighting of the Bell Rock lighthouse, the oldest sea-washed lighthouse still in commission anywhere in the world. Now, like all UK lighthouses, it is automated, but tonight, as on every other night apart from some nights in both world wars, it will give one white flash every five seconds. It will have done so for 200 years on 1 February.
I have a long interest in shipping and aids to navigation. I was born and brought up in the lighthouse service. I was for a few years a fourth-generation lighthouse keeper. Before joining the service, my dad was a merchant navy officer. I have a stepson who is a senior engineering officer and a cousin who is a deck officer in the Royal Fleet Auxiliary. I can say to my noble friend Lord Berkeley that I know a little bit about Australian lighthouses as well. My brother was a serving light keeper for the Northern Lighthouse Board and then, for most of the rest of his career, a lighthouse keeper in Australia. From what I gather from him, there is little or no comparison between looking after Orkney, Shetland, the Western Isles and the Pentland Firth and looking after Australia, except perhaps for the Bass Strait. You can go along almost the whole coast of the south of Australia and see not a single light anywhere.
My noble friend’s Bill seeks to abolish the three GLAs and replace them with a new commission and a regulator. The role of the Secretary of State will be replaced in relation to his responsibilities for the lighthouse authorities and the General Lighthouse Fund. It also seeks to cast adrift the Republic of Ireland, which has always been an inherent part of the present tripartite GLA structure.
There is no doubt that shipping companies complain about light dues. They did it when I was a light keeper all those years ago; they have complained about the size of light dues for most of the history of the general lighthouse authorities. They would prefer Governments to abandon the principle of user pays and for the taxpayer to pick up the bill. As has already been said, that would not be terribly popular, particularly among parties opposite. I do not think that it would be popular with anyone else either, except for the shipping companies.
Shipping is a tough business—I understand that—and one which is of great importance to this country. Clearly, ship owners and charterers have to have a close eye on their financial bottom line. However, as has already been well said in the House, they have enjoyed a long holiday from increases, which has included substantial reductions in light dues. For people who enjoy holidays, there is always a day of reckoning, as I, as a pension fund trustee, know to my cost, having not persuaded employers to keep on paying in the good times so that we might have avoided the sudden problems that crop up.
If memory serves me correctly, there was not an increase in light dues for some 15 or 16 years, until 2008 or 2009, with dues being about one-third lower in real terms than in 1993. Of course, that has led to a deficit in the General Lighthouse Fund and to the consequent and recent increases about which there has been so much complaint. However, as we have also heard, there is to be no further increases in light dues for the next three or four years, which should bring some stability.
No doubt ship owners will continue to have issues, and not just about light dues. I know that they have issues about other charges such as port costs, ship dues, mooring costs, conservancy costs and pilotage—you name it and ship owners will have something to say about it; for example, discharging and loading costs, including craneage. In reality, light dues are a relatively small part of the whole in terms of inward and outward trade to and from this country.
My noble friend seeks to deal also in his Bill with the so-called subsidy of the Commissioners of the Irish Lights. That has, I agree, been a running sore for a very long time and is happily on the way to being resolved. We now know that it has been decided that the funding of the Republic of Ireland aspect of the CIL will cease by 2016 at the latest. That work has been going on for many years and I agree that the Shipping Minister should be commended on the agreement which has been reached. It is good to see that the British Chamber of Shipping has welcomed the agreement. It will be interesting to see in the fullness of time whether the campaign to end the Irish subsidy will lead to an increase in trade into the UK, which the shipping industry has promised.
The new intergovernmental agreement destroys any further argument about the disbanding of the Commissioners of the Irish Lights as presently constituted. The CIL has always been a cross-border body and responsible for Northern Ireland coasts as well as those of the Republic. I am pleased that the Shipping Minister confirmed this week that the existing structure of the three lighthouse authorities is to be maintained. That is sound common sense.
What has changed since we discussed this matter last year? I suggest that there are two big issues. The first has been discussed already: the Atkins review, which was published in March and has brought forward a whole host of recommendations, many of which are already in train. The most important of them are: the establishment of the Joint Strategic Board to drive far greater co-ordination between the GLAs; the recommendation to centralise monitoring and to look at the rationalising, as my noble and learned friend Lord Boyd, said, of the number of buoy depots, of which there are presently four—Trinity House has two, at Harwich and Swansea; the Northern Lighthouse Board has one at Oban; and the Irish Lights has one at Dun Laoghaire; to reduce running costs in real terms using the RPI minus X formula; and to look at the GLF funding of costs incurred by the Commissioners of Irish Lights.
The Atkins report did not recommend any amalgamation or change in the present structure. As I said on 5 February last year, the review found that financial costs would outweigh any benefits of a merger of the lighthouse authorities. It also stated that the operation was too small to justify a separate office of regulation.
The Joint Strategic Board has been set up. It is relatively early days but it now appears to be working well and includes, for the first time, the close questioning and examination of each other’s corporate plans. It would seem, therefore, that the Joint Strategic Board can do much or all of the job that my noble friend envisaged for his Office of Marine Navigation Aids Regulation.
The three monitoring centres will be centralised for out-of-hours working and at weekends. This has been found to be a better alternative to complete centralisation. As my noble and learned friend Lord Boyd said, the buoy depot issue is under close examination to see what further savings can be made. The three GLAs have worked out what their X is in the RPI minus X formula which will lead to reductions in running costs in real and absolute terms over the next four or five years.
The noble Earl, Lord Caithness, said that the Shipping Minister sought a reduction of 17 per cent—I thought it was 25 per cent—over the next three or four years. If that cannot be done, the GLAs will have to tell the Minister why it cannot be done. That will concentrate minds at all three headquarters. So the GLAs are not being spared the scrutiny of this Government despite the fact that the savings will not accrue to the public purse.
I have no doubt that these savings can and will be made through further developments in technology, such as e-Loran and the potential of the Galileo system to name but two. The GLAs will move forward, review and desperately try to be more efficient, but that must be done in a way which must not compromise the safety of the mariner or the marine environment. It is always wise to recognise that there is a tension between safety and costs, which is why, of course, we have the international SOLAS conventions, and it is our obligation as a state to adhere to these.
There is a view among many ship owners that costs can be reduced by the decommissioning of more and more lighthouses because of the use of global navigation satellite systems, electronic charts, AIS and so on. I agree that the continued development of e-navigation represents much of the way forward, but if you talk to the masters of the ships rather than the owners, they will tell you that for the foreseeable future there have to be lighthouses as a back-up, as a secondary system, as a failsafe. Reduced manning on ships in recent times has led to very poor watch-keeping practices on far too many vessels. There is too much reliance on GPS. There is no such thing as a completely safe radio-based navigation system. For example, GPS can be interfered with and readily jammed—cheap jammers can be obtained which can readily jam GPS signals and make them unavailable for many kilometres; and, beyond a 30 kilometre range, can interfere with a signal with potentially disastrous results—and so it is necessary to keep the secondary system of lighthouses, certainly for the foreseeable future.
GLAs do not exist in a vacuum; they work with shipping interests. There is a continual review by all three GLAs as to what lights may be decommissioned or have their ranges reduced. In some cases even today, new hazards are being lit. That process has continued since we last debated the Bill at Second Reading last year, with a further number of lighthouses being decommissioned, including one not terribly far from the territory of the noble Earl, Lord Caithness. Clythness lighthouse was decommissioned a few months ago. Costs are continually being reduced through more reliable technology, less maintenance and fewer visits by ships and helicopter. Other stations are now subject to review, many where, only a few years ago, it would have been unthinkable for that part of the coast to be unlit. I hope the Minister will acknowledge that there is no useful purpose in a merger of GLAs and a new regulator, which will not and cannot produce anything more than is already being done in the existing structures.
I hope the Minister will also acknowledge that, as a result of the Atkins review, there has been considerable progress in terms of more co-ordination, closer working, achievable savings being made and a positive response from the GLAs to the Government’s requirement to shadow the CSR and the working of the RPI minus X formula. These, together with the road map to resolve the Republic of Ireland subsidy issue, go much, if not all, of the way to meeting the concerns and outstanding issues raised by my noble friend Lord Berkeley.
I hope that my noble friend will recognise this and not seek to take the matter further. A more useful way forward would be to concentrate our energies and try to persuade the Government to bring forward the draft Marine Navigation Bill. It has received pre-legislative scrutiny and has been considered by the Transport Select Committee in another place. That draft Bill has been gathering dust ever since, with neither the previous Government nor the present coalition Government seeming to find time for a Bill that is non-contentious but very useful legislation. I hope the Minister will say something about the possibility of it being brought forward in the near future.
I again thank my noble friend for giving the House the opportunity to discuss this important matter. It may be esoteric to some, but it is of significant importance to all who use our seas for business or pleasure.
Lord Newton of Braintree
My Lords, I intend to speak briefly in the gap—as does the noble Lord, Lord Prescott—to thank the noble Lord, Lord Berkeley. I came into the Chamber at the beginning of the debate as an innocent and out of interest. I find myself likely to leave it at the end as a much improved person with greatly enhanced knowledge, not least about the Irish question, of which, in this context, I had never heard.
Two things prompted me to intervene. First, I was born and brought up in Harwich in the days when the port was rather less important. Certainly, the massive port opposite, Felixstowe—now the country’s largest container port—was in those days a home for rather spectacular flying boats which, as a boy, I used to watch from across the estuary. My interest was sparked when the noble Lord, Lord Berkeley, referred to the haven ports. He made a point, on which I hope my noble friend will be able to comment, which was not picked up in the rest of the debate: that, whatever the other lines of argument, trade is being lost to British ports as a result of the present situation. I did not hear anyone follow that up, but it is an important point which may be of interest to the noble Baroness, Lady Scott, who cannot live very far from Felixstowe.
Secondly, having strayed into the Chamber as an innocent and despite thanking the noble Lord, Lord Berkeley, I want to put on record that an overwhelming case has been made by almost all noble Lords for him not to push the Bill too hard. In addition, an equally overwhelming case has been made for the Government to bring forward a wider Bill to embrace these and other issues. I hope we shall hear a clear-cut response on that matter.
Lord Prescott
My Lords, I start with an apology; I did not realise that the Bill of the noble Lord, Lord Berkeley, was before the House until I came in, switched on my television and heard him speaking. I declare an interest having spent 10 years as a merchant seaman and having been a Minister for merchant shipping in the previous Government.
Having heard the argument’s today, I should say that ship owners have always been concerned about cutting costs. But we are talking here about a very small part of their operating cost. Whether right or wrong, whether it should be paid by the taxpayer or the user, it has been subject to the user principle. As the Minister for shipping, I constantly had to deal with the problem that the noble Earl, Lord Caithness, raised, of how to deal with the Irish and how to get a proper agreement between us. I am pleased to hear that agreement apparently has been reached. The Bill proposed by the noble Lord, Lord Berkeley, is trying to bring greater efficiency and effectiveness into this operation and the payment of navigational aids. I am not too sure whether that is the right approach, but there is certainly a problem.
I want to address my remarks to whether the user cost, mentioned by the noble Baroness, Lady Scott, is a disincentive to British shipping. The facts are clear: more tonnage is coming into Britain by ship than ever before. We are roaring in trade. That is true not only in Britain but in most countries; it is the nature of the global economy. So I do not think that they have been put off by the cost in those circumstances. I have been concerned about the cost of the crews, however, to which the noble Lord, Lord MacKenzie, referred. Over the past few decades, the reduction of crews on ships has led to a reduction in navigational skills and the loss of ships. Crews have been reduced by more than 25 per cent. That is a real saving—there is no doubt about it. Most of our shipping was flagged out to what we call the flag-of-convenience countries, such as Liberia and Panama, which sold their flag. The ship owners, many of them British, were very happy to take advantage, because it was a reduction in costs. It was also a reduction in skills and navigational abilities. Having achieved that real advantage, they now talk about the costs of navigational aids.
I should point out to the noble Baroness, Lady Scott, that what happened to containers happened years ago. A decision was made on whether Britain was going to be the area for container centralisation and distribution to Europe. We lost it. The tidal advantages to Rotterdam and other places gave them an advantage. Therefore, there was a great deal of redistribution from Rotterdam and to the British ports. Nevertheless, the container trade has been considerable; there has been massive growth, even in the UK.
I shall return to the point about user tax. Is this a disincentive to the British industry? Does it wish to reduce its costs and have an advantage? Of course it does—I understand that—but should they be paid by the taxpayer or met in user payments? When I was Minister for shipping, I was faced with a decline, as the noble Earl, Lord Caithness, must know. The British navy as registered under the Red Ensign was 30 million tonnes in 1970; when I came in in 1997, it was down to 2 million tonnes, and it had flagged out to other countries. I introduced the tonnage tax, which was a user payment and a means by which the ship owner could have greater control over his costs and profits by paying a known tonnage tax rather than a profit tax, which might be changed by various Governments. By using the tonnage tax we had a transfer back to the British fleet, and from 2 million tonnes in 1997, we now have 17 million tonnes under the Red Ensign. I am delighted about that, although I do not think enough jobs came out of it.
Baroness Garden of Frognal
I remind the noble Lord that speakers in the gap should restrict their comments to four minutes and he is now in his fifth minute.
Lord Prescott
I bow to the noble Baroness’s knowledge, and I am sorry about that. I shall finish on this one point. User tax did not discourage the fleet—it actually encouraged it. So I am not convinced that the small amount of tax that we are talking about would be a disincentive to the British ship owner.
Lord Davies of Oldham
My Lords, this has been a stimulating debate on what looked to be a constructive and fairly modest Bill. I have found few joys in opposition, but it is one of them today that it is not my job to settle this kettle of fish. The Minister certainly has to produce some coherent replies, while my noble friend also has a few issues with which to wrestle.
I thought that it was slightly unfair that the noble Earl, Lord Caithness, was chided for interrupting the opening speech. This is a fairly unusual situation, as my noble friend Lord Berkeley said. As he was about to propose a major structural change to the Bill, in which only Clause 12 would survive in its existing form, he was bound to expect that some anxiety would be expressed on that score. I think that the noble Earl would accept, along with other noble Lords, that whereas my noble friend wrote to the Minister and to me on behalf of the opposition Front Bench, it would have been difficult for him to inform all Members who were going to participate in the debate, because he did not know who they would be at that stage. That is why things came late to other noble Lords. That is a genuine difficulty and not one that I have seen before with regard to a Private Member’s Bill. We all recognise the problems there.
Lord Redesdale
I rise not to speak about this Bill but to point out that the Dog Control Bill was pulled from business last night because at 5 pm the opposition Front Bench tabled amendments, one of which was a wrecking amendment. There has to be some care in putting forward these points. I am not sure whether that was done on purpose to destroy a Private Member’s Bill or whether it was simply done, unfortunately, at the last minute, but neither I nor the Whips’ Office was informed. I hope that the noble Lord can take that back to his colleagues on the opposition Front Bench.
Lord Davies of Oldham
I reassure the House that I am not responsible for dog control for the Opposition, so I have no knowledge of those instances. A dearth of my colleagues in support on the Front Bench may have been noted; a major meeting of the Front Bench is going on, from which I am the only absentee, so I shall take to that meeting the point that the noble Lord, Lord Redesdale, has made.
With this Bill, my noble friend is trying to respond to the reality of a significant and changing situation. The Bill was drafted in advance of his knowledge of the agreement on the Irish lighthouses. We all welcome that agreement and congratulate the Government on the progress that has been made. Two successive British Governments had looked for a long time at what was almost a historical accident, which had somewhat outlived its justification. It is a slight irony, I suppose, that the Government hand out billions to the Irish Government and seek to take a small amount of money back in relation to this Bill, but this is scarcely the place for major economic debates on such issues.
I understand the point made by the noble Earl, Lord Caithness, reinforced by the noble and learned Lord, Lord Boyd, that there was a case for withdrawing the Bill. My noble and learned friend is wise enough in these matters to be able to conduct his own affairs but on the whole I agree that, if the Government follow up the suggestion that they should bring in a more comprehensive measure, this Bill could be and ought probably to be dropped. However, until we see the colour of the Government’s money, my noble friend would be well advised to continue with a Bill that has significant constructive possibilities to it. If the Government can give absolutely clear assurances on the way forward encompassing the objectives of the Bill, then so be it, but there should not be a premature withdrawal. Therefore, I hope today that, despite the strong points that were made in this regard—the noble Lord, Lord Greenway, also emphasised this—the Bill will be given a Second Reading, if only because we have had the occasion for a very enlightened debate, which I am sure will continue until we see the full picture. Only in this debate and in this House could we have such contributions of expert opinion on a shipping issue. I speak as someone who has been seasick on the Solent, so I defer to all those who have that vast experience of shipping issues and I appreciate the contributions that have been made.
The main debate was on the question of how the dues have been organised over the years. It is undoubtedly the case that a catch-up that occurs because a freeze has obtained for a time is deeply resented—it is bound to be. There is no doubt at all that, as the noble Lord, Lord Greenway, reflected, this has been a prosperous time for the British shipping industry, which has been the beneficiary of frozen fees. We probably need to ensure that there is a process that has a rather less dramatic impact on the industry, although I take on board the points that my noble friend Lord Prescott made when speaking in the gap. However, other noble Lords also emphasised that those questions of costs are not such as to see a major deterioration in the competitiveness of British ports vis-à-vis Rotterdam or other continental ports. We have to keep these things in some degree of context. Nevertheless, they are a factor. Consequently, we should use this legislation or ensure that the Government are pressed to identify how these matters will be dealt with in future.
We must all be in favour of the saving of costs. Quite frankly, even a landlubber like me would look somewhat askance if costs could not be reduced, given the enormous technological advances that have occurred regarding safety at sea. Those surely give us an opportunity to guarantee what is absolutely essential—safety—but must we then make a trade-off between safety and how the services that are withdrawn are organised? Nevertheless, there must be that opportunity on administrative costs and we should welcome that. The only thing to say on costs of that kind is that, if any vehicle is difficult to organise in terms of how one considers operating costs, I would guess that it is a Private Member’s Bill, but that is for my noble friend to answer when he replies to the debate.
This has been a most stimulating occasion. I think that we have all genuinely enjoyed the debate. There has been a clash of opinion, which I quite understand, given that the Bill is being recast significantly, but everyone in the House will know that my noble friend Lord Berkeley is stimulated by a commitment to improvements in transport. He has put this Bill forward in good faith. It can still be, in our view, a vehicle for progress in an important area. I therefore hope that the House will give the Bill a Second Reading.
Earl Attlee
My Lords, I thank the noble Lord, Lord Berkeley, for once again bringing forward his Bill. As he has said, this is the second time that he has done so but he has initiated a very good debate. The noble Lord will know that it is normal practice for the Government not to support or oppose Private Members’ Bills and I do not propose to break with this convention. I do, however, hope to demonstrate that the need for the main thrust of his Bill has been overtaken by events, as many noble Lords pointed out. I am grateful for their contributions.
Since the noble Lord first introduced his Bill, the report by the Atkins consultancy, entitled Assessment of the Provision of Marine Aids to Navigation around the United Kingdom & Ireland, has been published. It is a particularly well researched and well received document, which has provided us with a blueprint on the governance of the general lighthouse authorities and the provision of marine aids to navigation around the UK and Ireland, without the need for immediate legislation to enable the implementation of its recommendations.
I recognise that many of the clauses in the noble Lord’s Bill are consistent with those contained in the previous Government’s draft Marine Navigation Aids Bill. I shall comment on some of those clauses. Clauses 1 to 5 provide for the creation of the commission and its regulator. As I stated in my speech in February 2010, I do not see the need for either. Indeed, the Atkins assessment did not see fit to recommend the creation of either of these two organisations which, if the noble Lord’s Bill were to progress, would effectively replace two existing bodies with two more.
I applaud the noble Lord for his versatility and ingenuity in attempting to achieve his aims, and note that he is seeking to achieve some of his goals by means of amendments to the Public Bodies Bill as well. However, I draw his attention to page 245 of the Atkins assessment, which concluded that there was “a weak case for” amalgamating the two UK-only lighthouse authorities into a single organisation such as the noble Lord’s Marine Navigation Aids Commission, because the estimated costs of doing so were likely to outweigh the potential benefits generated. Indeed, I addressed the matter of the illusory benefits of such a merger at last February’s Second Reading of his previous Bill.
Atkins did recommend the creation of a general lighthouse authority Joint Strategic Board, responsible for identifying synergies and driving through efficiencies. Last summer, with the Shipping Minister’s endorsement, such a Joint Strategic Board was set up at no cost to the General Lighthouse Fund. The board has since worked closely with the Department for Transport and the three GLAs to identify efficiency measures and drive down running costs—several noble Lords referred to that work. The Joint Strategic Board is still at an early stage of development but is achieving positive results. I believe that this continued, gradual evolution of integrated working, driven by the Joint Strategic Board, is far preferable to any of the radical, rapid and uncosted changes in marine aids to navigation provision that the noble Lord’s Bill would effect.
The General Lighthouse Authorities co-operate in the provision of marine aids to navigation around the UK and Ireland. Each authority carries out largely similar tasks; however, the regional skills and knowledge that each employs reflects a localism in the service delivered. The Commissioners of the Irish Lights have continued as an all-Ireland body since the establishment of the Republic of Ireland. However, the noble Lord, Lord Berkeley, is less concerned with the commissioners’ history than with their present funding. In his opening comments, the noble Lord mentioned that my honourable friend Mr Mike Penning, the Shipping Minister, has been in discussion with his Irish counterpart on the matter. It is to my honourable friend’s credit that he has reached an early understanding with the Irish Government on self-financing, which will nevertheless preserve the tri-GLA structure and the historic links of marine aids to navigation provision across both countries.
The stated goal of both the UK and Irish Governments is now that the Commissioners of the Irish Lights will become self-financing in their work in the Republic of Ireland by 2015-16, as relayed in my Written Ministerial Statement of 18 January. I hope that this understanding will go some way to reassuring the noble Lord that no undue financial burden will in future be borne by UK shipping, and that the continued cross-border co-operation of the UK and Ireland on this safety service is desirable and should therefore continue. The noble Lord, Lord Davies of Oldham, who touched on this point, called it a government subsidy to the Irish lights. It is of course not a government subsidy but a shipping industry subsidy, as many noble Lords mentioned. I am sure that was just a slip of the tongue by the noble Lord.
On Clause 7, the measure to clarify the extent of jurisdiction up to the outer limit of the pollution control zone will help to assist the providers of aids to navigation in operating an efficient safety regime in the seas around this country. That provision is therefore welcome. As I said last February, Clause 8 meets an important need, as the General Lighthouse Authorities are currently restricted in their ability to undertake commercial activities. For instance, those authorities may in some circumstances be unable to purchase the necessary tooling to carry out some evolutions that the industry might require.
The generation of income from commercial activities that maximises the utilisation of assets and resources is without doubt desirable and can only be of benefit to light-dues payers. It is inevitable that there has to be some spare capacity in a system that needs to be capable of rapid response to emergencies. However, it is important that the commercial activities of public sector bodies should not unduly impede the commercial activities and structure of the market.
Turning to Clause 9, the UK has many local marine aids to navigation in addition to those required for general navigation. The General Lighthouse Authorities seek to ensure local aids to navigation are established and maintained to internationally recognised standards through the discharge of their functions of superintendence and management, including their aids to navigation inspection regimes. Indeed, subject to the consent of the Secretary of State, the General Lighthouse Authorities may direct a local port or harbour to provide such aids to navigation as are appropriate. This alone is normally sufficient to ensure the appropriate provision of local aids to navigation, particularly when backed up by existing safety-related legislation.
On Clause 10, the noble Lord believes that as many users as possible of marine aids to navigation should pay for them, including the Royal Navy. However, I set out my position robustly in the debate on this Bill last year, and do not intend to do so again; my position has not changed on this matter.
On Clause 12, in the past, the General Lighthouse Authorities employed many more staff than they do now. The automation and de-manning of lighthouses and other technical advances have reduced staff levels substantially. Nevertheless, there remains a large number of former GLA employees who are now pensioners drawing their entitlement. This is not an unusual situation. Many other public bodies that have downsized due to efficiencies have exactly the same problem. The General Lighthouse Authorities’ pension liabilities are far from unique. As we are all aware, such legacies are not limited to the public sector, with many private organisations in a similar position. That said, as part of the Government’s wider public sector pension reform, we expect the General Lighthouse Authorities to review and modernise their pension arrangements, to keep them on a sustainable footing.
My noble friend Lord Caithness, in his well thought out contribution to the debate, dealt with the issue of GLA efficiencies far better than I could have done. I did not know that he was concerned about the approach of the noble Lord, Lord Berkeley. I am bound to say that I agree with everything that he said. He has certainly saved me much work.
My noble friend Lady Scott of Needham Market made a number of points in her excellent speech. She made her case very well, as usual, particularly when she queries our principle of light dues. However, in common with other transport modes in the UK, the Government believe that transport providers and not the general taxpayer should pay for the essential safety services needed for reliable operations. It would also be unfair for the Treasury to pay for the GLAs directly, as the majority of commercial shipping services calling at UK ports are owned by companies based outside the UK where beneficial tax regimes for those industries exist. Like any other form of revenue-raising activity, light dues remain unpopular with those asked to pay, regardless of how much they benefit. Many noble Lords have made that point.
The noble Lord, Lord MacKenzie of Culkein, also made an interesting and well delivered speech. Yet again, I find myself in strong agreement with the Benches opposite. I hope that this trend persists. The noble Lord talked about the vulnerability of GPS navigation systems. Last year, I attended the GPS jamming trials organised by Trinity House and my handheld GPS gave me some most peculiar results, telling me that I was somewhere in central Europe.
My noble friend Lord Newton of Braintree talked in the gap and touched upon the loss of trade to British ports. I have just explained the logic of the light dues policy. We were also joined by the noble Lord, Lord Prescott, and I was shocked to find myself in agreement with him as well.
Earl Attlee
We had strong contributions from the noble and learned Lord, Lord Boyd of Duncansby, and the noble Lord, Lord Greenway. This is a great example of the House showing itself to be a source of expertise. I strongly agree with everything that both noble Lords said. On the query of the noble Lord, Lord Greenway, about the Wreck Removal Convention Bill, we of course support that piece of legislation.
I always enjoy listening to the noble Lord, Lord Davies of Oldham, and his contributions from the Front Bench. I am grateful for his whole approach to this matter.
When my noble friend Lady Garden intervened, she did so only to remind the House that it is customary to allow the mover of a Bill to lay out his stall without constant interruption. That is a much better way for the House to proceed.
I have already touched on the point of the noble Lord, Lord Davies of Oldham, about the Irish Lights.
I thank all noble Lords for their contributions. I have found them to be very helpful. I hope that I have gone some way to reassuring the noble Lord of the fitness for purpose of the General Lighthouse Authorities and the Department of Transport’s administration and governance of them in my comments today. I hope that the noble Lord will consider substantially scaling back should the Bill proceed into Committee. The noble Lord could also consider drafting a new Bill, as suggested by many noble Lords.
Lord Berkeley
My Lords, I am grateful to all noble Lords who have contributed to the Bill. I am also grateful for one or two interventions, because it was a slightly unusual way of proceeding after I decided to change it. However, I thought very carefully and consulted quite widely on this. I was advised that it was quite in order to do it like this. I felt it was therefore important to inform as many noble Lords as I could see on the list beforehand of my intentions. I am sorry that the noble Earl, Lord Caithness, did not receive it; I sent them all by e-mail but I could not find his e-mail address. Perhaps that is an opportunity for thinking again. I am very sorry; I apologise for that.
The Earl of Caithness
If the noble Lord had scrolled down to “Caithness” he would have found my e-mail address.
Lord Berkeley
We can have a talk about that afterwards.
We have had a great variety of comments, some of them complimentary, some of them not. I have learnt a great deal from different people’s views today. I should of course have mentioned the Atkins report in my opening remarks. It has made progress. I still believe that more progress could be made. If one reflects on this, the key issue, when one is talking about RPI-X, is probably what X is. We can debate that, and I am sure that we will.
The key is what the noble Lord, Lord Greenway, suggested as the answer to having two concurrent Private Member’s Bills and the draft Marine Navigation Aids Bill. The noble Earl, Lord Attlee, did not really comment on the Government’s intentions on that in his summing up.
I could go through and thank all noble Lords who have spoken and comment on what they have said, but it would take a little bit of time. I know that one or two colleagues are waiting to get on with the next debate. However, I cannot resist responding to my noble friend Lord MacKenzie who complained, quite rightly, that we have got the date wrong for the Bill. If it had been on 1 February, it would have been 200 years from the start of the Bell Rock Lighthouse, which was a fantastic piece of civil engineering construction in its time.
Whether I want to take the Bill forward is really a question of whether we can somehow incorporate, or get moving on, the navigation aids Bill that the previous Parliament was unable to take forward. I have been talking to some people, and Clerks, about whether much or some of the content of that Bill could be incorporated into a Private Member’s Bill. It could be within the Long Title. I am advised of that for this Bill, but I do not think that it could be with the one in the Commons, because that is called the Wreck Removal Convention Bill—apart from the “wreck” bit of it.
There has been much discussion of how much the present Government want the Bill to go ahead, but in draft form it had a lot of support in the previous Parliament. As the Bill stands, I do not think it is appropriate to take it forward, even with the amendments I have tabled and much further thought. We have progressed and I have heard many useful comments today. However, it would be useful to keep it open for Committee stage to see whether the contents of the Marine Navigation Aids Bill could be incorporated. That is in the absence of any commitment from the Government to find time for it; I would not expect them to do so anyway.
My inclination, therefore, is to ask the House to give the Bill a Second Reading but, clearly, I would not take it forward in its present form or with these amendments without a discussion as to what else could go in and whether it is necessary to take it forward at all. On that basis, I beg to move that the Bill be now read a second time.
Rehabilitation of Offenders (Amendment) Bill [HL]
(13 years, 4 months ago)
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Lord Dholakia
My Lords, this Private Member’s Bill is designed to reform the Rehabilitation of Offenders Act 1974. The Act provides that, after a specified rehabilitation period, ex-offenders do not have to declare spent convictions when they are applying for jobs, except in sensitive areas of work, such as criminal justice agencies, financial institutions and work with young people or vulnerable adults. Since it was enacted in 1974, the Act has helped many ex-offenders to leave the past behind. However, there is now growing acceptance that the Act is in need of reform. The Government’s stance on reform is very much appreciated. The Green Paper Breaking the Cycle, which was published in December, says in paragraph 114:
“The Act is often criticised as being inconsistent with contemporary sentencing practice, with the result that it can fail in its aim to help reformed offenders resettle into society. The reasons cited are that the rehabilitation periods are too long and do not reflect the point at which reoffending tails off following a conviction; the threshold at which a sentence never becomes spent (30 months) is too low given that sentencing lengths are much longer today; and the Exceptions Order exempts an ever growing number of occupations from the Act”.
The rehabilitation periods laid down in the Act are lengthy and many genuinely reformed ex-offenders can never benefit from it. For example, if an offender is fined, the offence becomes spent five years after the date of sentencing. If an offender is given a three-month prison sentence, the offence takes seven years to become spent. If he or she gets a nine-month sentence, the offence does not become spent until 10 years later. Sentences of more than two and a half years never become spent.
These provisions are notably less generous than the rules that apply in other European countries, which typically apply rehabilitation periods to sentences that are longer than two and a half years. Those rehabilitation periods are much shorter—often half the length of ours or, in some cases, even less. Since the Act was implemented, sentence lengths have significantly increased. What is the reality today? Many offenders who would have received sentences of two and a half years or less back in 1974 today receive sentences of between three and four years. This means that many offenders who would previously have been helped by the Act now find that their offences will never become spent in their lifetime.
In 2001 the then Home Secretary, Jack Straw, set up a review group to examine whether, three decades after the Act’s implementation, there was a case for reform. The review group was chaired by a senior Home Office official and included representatives of the police, the probation service, the legal profession, the judiciary, employers, voluntary agencies, victim representative organisations and ex-offenders. In 2002, the review group published its conclusions in the report Breaking the Circle.
Following a consultation period, the then Government published their own conclusions in April 2003. The Government accepted a modified version of the review group’s proposals, under which the current rehabilitation periods would be replaced by new buffer periods, which would begin after the sentence, including any post-release supervision, was completed. The buffer periods would be four years for custodial sentences of four years or more; two years for custodial sentences of less than four years; and one year for non-custodial sentences. These periods would apply to all offenders, except those serving life sentences. To allay fears, the new provisions would not apply to jobs in sensitive occupations, for which applicants would still have to declare their full criminal record. I have incorporated this proposal for reform into my Bill.
A reformed system along these lines would greatly reduce the scope of unfair discrimination against ex-offenders in the job market. Regrettably, such discrimination is still widespread. I declare my interest as the president of the National Association for the Care and Resettlement of Offenders, a charity working in the area of crime reduction. Surveys of ex-offenders that we have undertaken in projects have shown that 60 per cent have been explicitly refused jobs because of their criminal records. Nacro’s report Change the Record, published in 2010, stated that,
“employers are increasingly demanding ‘clear disclosure’ from applicants. This means that employment is conditional on having no record whatsoever”.
A study in 2006 by the Chartered Institute of Personnel and Development also found that 36 per cent of employers would refuse jobs to all ex-offenders, whatever the nature their record.
It is sometimes reasonable to refuse an ex-offender a job because of his record. For example, we must obviously bar offenders with a history of offences against children from working with children and we should bar offenders with a history of defrauding elderly people from work caring for elderly people. However, in many cases employers are turning down applicants because of offences that have no relevance whatever to the jobs for which they are applying. The scope of discrimination is wide, because decisions to employ or to refuse people jobs are not made at the top of companies; they are made by large numbers of individuals, managers and personnel staff, who have usually had no specific training in how to deal with applications from people with criminal records. A large-scale study by the Joseph Rowntree Reform Trust found that no private sector employers and only one in seven public sector employers in the sample had provided specific training on this point to staff making recruitment decisions.
The risk of discrimination against ex-offenders in the job market is even greater at a time of economic difficulty, when the country has not long emerged from the recession and employers have a wider choice of job applicants. The Home Office review group’s report, Breaking the Circle, estimated that reform of the Rehabilitation of Offenders Act would save the country £125 million, something that I am sure would appeal to my noble friend Lord McNally. This was based on the estimate that it would result in 12,500 additional people finding work each year, saving £50 million in welfare costs together with savings to the criminal justice system of £75 million. This estimate was a very conservative one as it did not take into account the extensive social cost of continued unemployment, such as physical and mental health problems or a return to drug use.
I pay tribute to the organisations that have been very helpful over many years in campaigning for reform of the Rehabilitation of Offenders Act. I pay particular tribute to Nacro, UNLOCK and the Prison Reform Trust. Nacro’s report, Change the Record, points out:
“The current Act is at odds with the Government’s rehabilitation revolution, its initiatives to get people off benefits and back to work and its big society plans to create a more equal society in which everyone has the chance to contribute to the prosperity of their communities”.
Unfair discrimination against ex-offenders is wrong in principle, as it imposes an additional illegitimate penalty of refusal of employment on people who have already served the judicially ordered punishment for their crime. It also reduces public safety, as an ex-offender’s risk of reoffending reduces by between a third and a half if he or she gets, and keeps, a job. The whole community benefits when offending is reduced, but employers benefit in particular because crime such as cheque and credit card fraud, shoplifting and burglary of commercial premises have a particularly damaging impact on their businesses.
I was therefore delighted to read in the Green Paper Breaking the Cycle that the coalition Government are taking a fundamental look at the objectives of the Rehabilitation of Offenders Act with a view to reform. I am particularly pleased that the Green Paper says at paragraph 115 that the Government are considering,
“broadening the scope of the Act so that it covers all offenders who receive a determinate sentence”,
and,
“reducing the length of rehabilitation periods”.
Those are two key aims of my Bill and I welcome the Government’s support for them. The reform contained in my Bill would allow many more people with criminal records to start again with a clean slate. They would thereby reduce the risk of further offending by former offenders excluded from the job market. I look forward to the Minister’s reply with confidence that the long-awaited and long-overdue reform of the Act is now at last in sight. I beg to move.
Baroness Morgan of Huyton
My Lords, I am very grateful for the chance to support the Private Member’s Bill of the noble Lord, Lord Dholakia, today. It is clear to all of us that the Rehabilitation of Offenders Act is in need of long overdue reform. That is widely understood but has not been acted upon.
The original Act was a hugely important measure that recognised that rehabilitation is essential to the prevention of reoffending and needs to be designed intelligently and practically, but the Act is now increasingly out of date and ineffective. The original ambition must not be lost, but the Act has to be made to work as it was originally intended. In an age when sentences have lengthened considerably, rehabilitation periods have lengthened in parallel but that is not because the severity of the crimes has changed. In addition, the introduction of the Criminal Records Bureau has introduced a whole new dimension. Arguably, the whole working of the CRB should be the subject of a thorough review so that its work is more targeted—it has become so widespread that, arguably, the most important cases are not receiving the attention that they need.
There has also been a more process-driven and risk-averse approach to recruitment among many employers. Although there are excellent exceptions that many of us know, for all too many ex-offenders, once the box is ticked, their application has no chance of progressing further regardless of any further positive information that might be available about them. Again, that issue would warrant a proper piece of work, which should focus not necessarily on the legislation but on best practice and ways in which that might be shared. That should involve the CBI, the Chartered Institute of Personnel and Development, the TUC and others. I hope that at some point somebody will grasp that and move ahead with it.
I want to focus briefly on young offenders, particularly as we know that the youth unemployment rate is at such a high level and is still increasing. We all know that since the early 1990s Britain's prison population has experienced a significant increase, including in the number of young offenders. One of the characteristic features of the prison population is its lack of skills. Almost 40 per cent of prisoners have a reading level below literacy level 1—equivalent to that of an 11 year-old—while young male offenders are nine times more likely to be unskilled than non-offenders of a similar age and young female offenders are 15 times more likely to be unskilled.
As chair of the charity Future Leaders, which trains potential head teachers for disadvantaged secondary schools, I have a lot of contact with schools, as do many other noble Lords here today. The message that I see often is clear and somewhat depressing: poor children are disadvantaged from birth. In urban areas in particular, such children are often without a father in any real sense who can play a full part in their lives and their parents often lack the parenting skills that are necessary to nurture, develop, stimulate and guide young children. Such children arrive at nursery school unused to social interaction, unable to sit at a table and eat with cutlery and without any of the basic knowledge—be that about colours or early counting—that is automatically passed on by many parents. If the children take their reading book home at the end of the day, it often comes back unread. Life is often chaotic for them outside the school gate. Without intensive intervention, that gap develops further. We know that high-ability poor children are overtaken by low-ability rich children early on in their school lives. By age 11, only half of pupils eligible for free school meals reach the expected level in English.
Such problems may be somewhat masked up till the end of primary school, where the friendly environment and one-teacher relationships often manage the problem without really dealing with it, but in secondary school they often escalate quickly. Without the literacy level to access the new wide curriculum that they face, such students find that the constant moving between lessons and teachers means that they are not supported or even tracked. They fall further behind, are embarrassed and then they misbehave. The next sad change is internal exclusion, then external exclusion, and then, for many, full exclusion and inadequate outside provision. As soon as they are away from the security of school, they are prone to gang culture. Indeed one head teacher with whom I work says that the biggest plea that mothers make to him is, “Please keep my son safe. Don’t let him be outside the school building”. They support his tough approach, involving intensive schooling and a long day, as they think that that is the only chance for their sons. Some head teachers are great exceptions to what I have described and people are doing fantastic work to change this culture, but it is still there in far too many of our schools.
For too many youngsters the next stage after trouble at school is offending, which leads to an inexorable journey into the criminal justice system and the prison system. I am sure that other noble Lords have, like me, sat on exclusion inquiries and agonised about whether to exclude a child that is known to be causing massive disruption in school when you also know that excluding such children puts them on that journey to the next stage of offending.
Inquiries by Ofsted and various other inquiries, several of which were held as recently as 2010, have identified a range of concerns about young offender institutions. Young offender institutions often have the wrong information about the skills levels of young offenders when they arrive. The vocational learning that young offenders receive is limited and basic skills are poorly delivered. People are often transferred between institutions, so even where good practice exists it is not continued. There is no work on the soft skills that we all know are needed for the employment that young offenders will seek when they get out. Often, people cannot gain accreditation for work that they have done, especially in short sentences. In addition, colleges and work-placed learning providers do not understand the young offending world, so it is extremely hard for ex-offenders to continue their education. The information available to young offenders is pretty hopeless and they struggle with accommodation. The recent IFLL study found that, unless ex young offenders find employment or training and somewhere to live within three weeks, they are likely to reoffend. We know that the reoffending rate among young offenders aged 18 to 20 is 75 per cent.
On top of all that, there is the effect of the unreformed Rehabilitation of Offenders Act. Of course, the rehabilitation rate for an offender who committed a crime when they were under 18 is lower—typically half that of those over 18—but it is still enough to hugely damage the chances of an ex-offender being able to get into work or training. Thus, there is a massively increased chance of reoffending and of a subsequent downward spiral. For young people aged 18 or over who offend, the normal adult rehabilitation rates apply.
Reports from Nacro and others always feature case studies, and I have a case study of my own that struck me recently. A young man whom I know well was hard-working and ambitious but got in with the wrong crowd. He was on the edge of that group, but he was nevertheless there and he ended up, sadly, with a drugs conviction and a custodial sentence. He lost his job, where he had been doing really well and was well regarded. His employer came to court and appealed on his behalf, but to no end. He lost his flat. He lost his support systems. He was 20 and he had never been in trouble before. He came out of prison recently but has been unable to get a new job. He is still ambitious and he even thought about setting up his own company—he is a computer repair technician—but he cannot get a loan because no one will consider him. He is trying to find any job and he gets bits of unskilled work, but he cannot get back into the sector that he was in, where his skills are needed. However, he is still skilled, bright and ambitious and, crucially, has a family supporting him. If you meet him, you will know that he has learned his lesson and that he will not go back there. He cannot get beyond the application-form stage, yet he is reasonably well educated and has a great mum and dad backing him.
I do not pretend for one moment that reform of the Act will transform the life chances of young offenders. In many cases, much goes wrong before they reach that stage. However, I strongly believe that a combination of better education and skills while in prison and a reformed Act would at least give more young offenders a chance. Crucially, that could also reduce the reoffending rate, which must be in everyone’s interests. I strongly support the noble Lord, Lord Dholakia, in his effort to bring forward a much-needed reform in this area.
Lord Addington
My Lords, this is not the first time that I have spoken on this subject, but our basic problem is the fact that a well intentioned Act has simply become out of date. It needs to be brought up to date for the world in which we live.
The noble Baroness, Lady Morgan, has done us all a service by doing some of the hard pounding on the background to this issue. My connection with the world of offenders and ex-offenders is probably a little out of date, but I am assured by everyone that things have not changed much. Those who are involved are predominantly young males, who offend and reoffend repeatedly. As the noble Baroness said, they may not be the most promising candidates for employment, because they tend to have quit school at 14—that is about the average age at which they leave. They do not achieve after the transition to secondary school. When they suddenly find themselves in difficulties, they ask, “Why should I be here?”, if they come from an environment where educational attainment is not regarded as the norm. The situation is accelerated.
I have discovered from my work and various interests in the field of dyslexia that a high percentage of such young people are dyslexic, but they may also have every other type of educational problem. Often, they and the social services sector work in a downward spiral together. This group of young people will be difficult to employ anyway. If someone who has got involved in comparatively petty, low-order crime when they were very young discovers that they have to disclose that and that people can just say no to them, they have virtually no incentive to try to get out.
The proposals in my noble friend’s Bill to change the rate at which disclosure of previous convictions is required are a huge step forward. I hope that the Government will have some positive words to say to my noble friend about why his Bill is unnecessary because real attempts will be made to deal with this issue in the immediate future. We will probably find a huge degree of consensus around this House—although I am sure that at least one person will disagree—that the way forward is, if not this Bill, something very like it. If the Government picked it up—like many Private Members’ Bills, it has been polished by time and effort to get into good shape—the world would be a slightly better place as a result. The Bill is no magic bullet, but it will make it slightly easier for, and give a slightly better incentive to, young people to get out of the cycle of reoffending. The Bill reflects the modern world and the group that it is dealing with in a way that the current legislation does not, although that legislation set a good precedent when it was introduced.
I suggest that, by accepting the Bill or being assured that something like it is on the way, we would be taking a step towards dealing with the problems of offending and reoffending.
The Earl of Erroll
My Lords, I want to say a few words on the Bill because it is a good time to raise an issue that has been a problem for some time.
I remember that one of the problems with revising the legislation was raised by a working party on the issue about 10 years ago. The working party became bogged down in trying to decide when a sentence started and ended, because sometimes proper records were not kept on when offenders moved to the first prison. Was the period calculated from when the offenders first went into the police station cells? When were they released? The working party lost sight of the objective—that was the trouble.
I hope that we do not lose sight of the objective, which is to allow people to get back into society in such a way that they can support their families. If you cannot support your family, you are a bit stuck. Providing such support is at the bottom of Maslow’s hierarchy of needs—for those who have heard of him—which is the need for food and shelter. If you cannot get a job, what are you going to do? You have to support your family and you probably turn back to crime. It is rather obvious. The major objective of the Bill is to allow people properly to earn some income again.
However, you have to protect people from employing others who may be dangerous in certain ways. How do we get around the fact that a financial services employer is allowed to reject someone on whatever grounds, because they can look at the criminal record, whereas a small company may have to employ someone with a known history of fraud who can bankrupt it? That is difficult, because what matters is the type of crime that was committed and the type of job that the person will do. If someone is prone to violence, you do not want them to deal with people. If someone is prone to fraud, you do not want them to handle your money. If someone is prone to violence, you might well let them handle your money as long as they are not working close to someone whom they might damage. The problem is that we throw everything out of the window together.
A couple of years ago, the papers had a wonderful report—it was not wonderful but, rather, quite the opposite—about a head teacher who was caught fishing without a rod licence and duly prosecuted. Immediately, the school governors said that they would have to consider whether he could stay on as a head teacher. Honestly, have we no common sense at all? I do not know what actually happened, because I read only the first newspaper report.
There is also the point raised by the noble Baroness, Lady Morgan, about drugs. People often commit crimes in order to try to pay for their drugs. They will mug people and nick things. If you deal with the drug problem, they are cured and on the straight and narrow, so there is probably no danger of them mugging people. There would be no purpose to that. We need to look at some of the circumstances behind this issue. It is essential to get such people back into work.
One issue that I really want to tackle is reprimands and cautions, which I have discovered are highly dangerous. The police will say to someone, “Just accept a caution and you will not hear anything more about it, and it will all be okay”. The same happens with children who are under 16—or who are 16 and under—who receive what is called a reprimand. You are told, “Once you are 18, it will be off your record. Don’t worry. People will not hear any more about it”. However, that is not the case. If a young person accepts a caution or a child accepts a reprimand, the police have stated that a crime has been committed and that guilt has been admitted. The person then has a criminal conviction. On the police records the matter is simple: “Crime committed; cleared up”. That looks good on the police records and there is much less paperwork, yet in reality the records do not stay under the table but remain for life for certain crimes.
If there is a CRB check and the criminal record relates to something that is not too serious, there may not be a problem, but what if it has an effect on a US visa application? Let us examine the life of an active child who is going places but gets into playground spats and has a fight with another child in the playground. These days, teachers are not allowed to interfere or touch the children so they have to ring the police, who come along, separate the children and say, “Shall we take them down to the station and give them a reprimand? Then they will take this seriously”. Off they go to the police station and the police say, “Accept the reprimand and that will be it. Do not misbehave again”. So the children accept it, but they now have ABH, affray or GBH on their record. Those are serious offences. In future, the person will not be allowed to work with children, youths or adults or become a coach or anything like that—or possibly even get an American visa, because they will no longer qualify for the visa waiver. This may come to light only when they are a rising market trader in a large city bank that wants to move them to America—and then their career is over. We should look at this because it is not as simple as it seems.
Perhaps it is worth recounting another typical story. A child is walking the family dog on a footpath. A jogger comes a bit close. The dog does not like the look of him and gives him a nip. The man runs on and then complains to the police, because a village argument is going on and he thinks that he is being clever. The police interview the child, nothing happens for about three months and then they decide to prosecute under the Dangerous Dogs Act. That is a serious, high-level criminal offence. The police tell the child that his dog will be destroyed. Why did they not use the 1871 Act—the so-called “postman Act”—which makes it a civil offence and does not result in the destruction of the dog? Normally that would have been done, but probably they wanted to get the conviction rate up. In this case, which I know about, the child was advised to say that he would plead not guilty and the police withdrew charges. I hope that the magistrates would have thrown out the case. However, most children would have accepted the advice of the solicitor to admit the charge so that their dog would survive. This sort of thing goes on behind the scenes. If the child had accepted a conviction, his life would have been the same as those of many others: a serious offence would be on his record for ever. We need to look at that side of the system, because it is not working at all.
My final point concerns the big challenge posed by the internet world, in which I live a lot, and in particular by social networking sites such as Facebook, LinkedIn and XING—all the bits and pieces that look at your life. One can look up someone and find out other things about them, such as the companies they worked for in the past, the things that they have done and the associations that they have had. It is difficult nowadays totally to rehabilitate oneself and erase all the pictures of what has gone before. I do not know whether that is a good thing or a bad thing. Perhaps we will have to be more accepting of certain behaviours and, instead of a blanket ban on anyone who has a criminal record, we will come round to saying, “They did something a bit silly, but we can handle it”. Perhaps society should be a bit more tolerant. When I think of half the people I know, I have no idea how we would teach people to be like that. It is a perpetual problem.
I would like to know, if the Minister has the figure to hand, what proportion of adults have a criminal conviction stemming from their childhood that they carry for the rest of their life. I have no feel for whether it is one in 100 or one in 20. I suspect that the figure is higher than we think. In that case, we would have to think about how society can handle it. Therefore, I welcome the Bill. I hope that it will get people thinking properly about the issue and move the discussion forward in a sensible and constructive way.
The Lord Bishop of Wakefield
My Lords, I, too, am very grateful to the noble Lord, Lord Dholakia, and for the opportunity to take part in the debate. I also look forward to a number of maiden speeches, not least that of the noble Baroness, Lady Kramer, who follows me.
Clergy suffer from stereotyping at least as much as any other profession. Saturday nearly always brings me the greeting, “Your busy day tomorrow, padre”. Still more does Christmas elicit from many: “Just coming up to your busy period, father”. Whatever the truth of this, Christmas and Easter present regular and essential moments for clergy. For me, with two prisons in my diocese and one in my see city, it is the regular service at Wakefield prison. I am there like clockwork every year at those great feasts.
Why do I visit the prison? Prisons play a part in the way that we organise human society. They are witness to myriad failures in our living together in human society. Christmas even more than Easter is a moment for each of us to be caught up in the wider human community: be it the family, the office party, the local town service or, in our case, the Huddersfield Choral and the “Messiah”. Christmas spells community and humanity. The Christian story professes God's presence among us as one of us, so Christmas is a good time to reflect on the failure of community and the nature of humanity.
I begin my contribution to this debate there because it is the flourishing and fulfilment of our humanity—or, sadly, in the case of many prisoners, the lack of such flourishing and fulfilment—that lie at the centre of our dilemma. The need for custodial sentences points to a failure or weakness in our humanity, both in individual men and women and in society as an organic whole. Such failure or weakness points to the tragic element in human nature. No realistic penal theory ignores this element in the tapestry of our experience. In a seminar in this place on penal reform earlier this week, we were reminded of a poignant phrase of the Russian writer Alexander Solzhenitsyn, who reflected that the line of good and evil cuts through every human being.
This realisation points us to a deeper truth about the significance of people and personhood. Put baldly, it is that people matter. This unmusical Anglo-Saxon concept is a key element in any theory of justice. Many years ago, I read an essay entitled Why Mattering Matters. If anything matters, people matter. Retributive justice is an unpopular concept for some liberal penal theorists. However, it contributes to that positive sense of taking seriously every individual and community of people. People are punished because we take them and their culpability seriously. People matter.
However, mattering requires of us more than crude theories of retributive justice might suggest. Mattering requires of us more than simple vengeance, or similar human reactions and responses. It requires of us more than simply balancing evil. Instead, it says something much richer about our personhood. This speaks directly to the reasons for, or purposes of, custody. From its introduction onwards, the recent Green Paper, Breaking the Cycle takes the issue seriously all the way through. Although protecting the public and preventing crime remain at the centre of the Green Paper, rehabilitation, transparency and accountability are listed as key principles. This, as other noble Lords have hinted, suggests a radical shift in attitudes and policy that is welcome.
Of course, it would be both unfair and inaccurate to suggest that there has been no restorative work in prisons. Over the past years, various attempts have been made to enrich and develop such work. Sadly, much of the effort in this direction has been blunted by lack of finance and resources. Doubtless we all give thanks for the educational and developmental work with prisoners that has already been achieved.
Nevertheless, despite all the good work, imprisonment does not only protect and punish. In the end, the use of custodial sentences cannot but diminish the person as well. In diminishing the individual, it diminishes society. It does so in two ways: first, by extracting the individual from the community, and secondly, in diminishing the individual, it reduces that person’s potential contribution to our wider culture. This diminishment impoverishes us all and, most dangerously, reduces the person’s, and ultimately the wider community’s, self-esteem. I hardly need say that the collapse of either individual or community self-esteem is one of the most serious corrosives of our broader humanity.
None of this denies the continual need for custodial sentences. The public need protection and, if people matter, offenders should be punished. However, issues of mattering and diminishment direct us immediately to the questions of spent and unspent convictions that lie at the heart of the concerns of the noble Lord, Lord Dholakia. Issues about disclosure of spent convictions are key here. Appropriate handling of disclosure or nondisclosure can mean a move towards renewed self-esteem and a growing potential for a person’s flourishing and fulfilment, thus moving towards a proper, esteemed humanity.
This means an unlocking of an individual's potential, which has significant effects on the community. My plea is for a realism about the tragic element within our humanity, clearly demonstrated in the propensity of all of us being unable to live by the light given to us. Therefore, it should be a proportionate and directed realism. This points ineluctably in the direction of proper appropriation of a clear policy on rehabilitation. The Green Paper indicates how much wider society can benefit from such a shift, but it also takes on a proper care for the individual offender. I cannot overemphasise the need for urgent action here, however. After all, the earlier paper, Breaking the Circle, was published as long ago as 2002, and it is a matter of some shame to us all that financial considerations may have meant that it has received low priority.
In a well rehearsed fragment of John Donne's 17th-century meditation, we should all remember the sentences:
“If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend's or of thine own were: any man's death diminishes me, because I am involved in mankind”.
Imprisonment is a kind of death. If people really matter, then prison will remain tragically necessary. It is there to protect and punish, but after death there must be the possibility and reality of resurrection—I use the terms figuratively, of course. I wholeheartedly support the noble Lord’s aims. We must counter diminishment with the opportunity to nurture a full, esteemed humanity, spent in diminishment but rich in aspiration.
Baroness Kramer
My Lords, as I rise to make my maiden speech, I am incredibly conscious of the honour and privilege of joining this House. I particularly thank the right reverend Prelate the Bishop of Wakefield for his words of welcome a moment ago. I have to admit that when he went on to say that the clergy are also subject to stereotyping, for a panicky moment, I thought we were about to get an embarrassing declaration. He went on to make a powerful moral argument, for which this House has its reputation. The quality of such arguments makes me particularly conscious of the privilege of serving here.
As your Lordships know, I come from the other place. I served there for five years as a Member of Parliament for Richmond Park, but I also come determined to shed its habits and to be a proper Member of this Chamber. I have to say that this week has perhaps not been the best start. My much adored granddaughter explained very carefully to a friend that, “Granny goes to work for sleepovers”. However, I am assured that that is not the norm. In these first days, I want to pay tribute in particular to the staff of the House, who have been so generous and supportive and who have brought so much experience to help me and others join the ranks here. If I may, I will refer again to my granddaughter, who asked me if I would give particular thanks to the lovely people in the black clothes who were so kind to her at my introduction. The quality of the staff is an outstanding hallmark of this House.
I was introduced by two noble Lords for whom I have great admiration, my noble friends Lady Hamwee and Lord Watson. They are old companions and compatriots of mine. I find that I join what may now be called the Lords’ Richmond mafia. I think that there are nine or 10 of us from the same neck of the woods in south-west London. I must say of all of them—another is making her maiden speech today—that they set a fine example for how to act as a Peer of the realm.
I understand that it is a custom in a maiden speech to talk a little about one's background and of one's passions. I am a Londoner born and bred with a great affection for and deep attachment to this city. I stood as the Liberal Democrat candidate for Mayor of London in 2000, a circus of an election, but one which showed me the potential to achieve change through politics. I then served on the board of Transport for London until elected to Parliament in 2005. In that period on the board of Transport for London I was very much part of introducing the congestion charge and of battling against the part-privatisation of the Tube, so I have frequently found myself both hated and applauded essentially within the same sentence. That was an incredibly important learning curve for me.
In 2005, I was elected to Parliament by the people of Richmond Park. That was such a privilege. I have lived in the area for 20 years; it is, I think, one of the most beautiful in the country with some of the finest constituents that anyone could hope for. I look back to very fond memories of campaigns with local constituents on issues such as opposition to the third runway at Heathrow, a campaign that was ultimately successful. Unfortunately and sadly for me, my constituents thought it right not to re-elect me in 2010, but so goes politics.
There are years before the political years. I lived for nearly 18 years in the United States, the consequence of marrying an American. A number of noble Lords knew my husband John, who died four years ago. Although I lived in the United States for 18 years, I never became a citizen. America is not my country, but I came away infected by that American sense of optimism and possibility. I bring that to this House. My career otherwise—my trade, in effect—is banking. When I left banking to enter politics, one constituent said to me, “Why are you leaving one despised profession simply to join another?". I have a lot of work to do on both fronts to restore the reputation of both the trades in which I am now spending my life. My background in banking was in the United States and eastern Europe. I very much hope to bring to the House the expertise that I gathered, particularly in this time of financial stress. I hope to focus on two issues for which I have a great passion: one being community banking and the other green infrastructure financing. We will see if that holds true.
I wanted to speak in this debate today because of the vital issues involved. The Bill was introduced by my noble friend Lord Dholakia who is, frankly, one of my political heroes. It is an incredibly important and well crafted Bill. In my years as a Member in the other place, I worked closely with Latchmere House, a resettlement prison, one of only three in this country. There are 207 prisoners, who are serving the last 12 to 18 months of their sentence. Because that prison focuses on resettlement and rehabilitation, the reoffending rates from Latchmere—every prisoner is serving a long sentence for serious crime—are as low as 25 per cent, very different from the prison system as a whole. The focus is on reintegrating prisoners with their families, which is crucial, introducing and linking them to AA and NA groups in the areas where they have lived and will live again.
The most important part of the work of Latchmere is reintroducing prisoners to the life of work and to jobs, helping them build working habits, rebuilding a CV and creating possibility for the future. I pay real tribute to the employers who support the programme and who are willing to give prisoners a second chance. I know the kind of work that has to take place to give an employer the confidence to have a prisoner work as part of the establishment, and to trust them with their business, their clients, the people they work with and, sometimes, with their financial affairs. It takes a great deal of courage but it takes a great deal of training and teaching. It is impossible to make that kind of offer sweepingly to employers at large. Therefore, the purposes of this Bill are not only to keep in place essential safeguards but not unduly to hang around the necks of prisoners a stigma attached to a past which they have now moved beyond—a point that seems to me particularly crucial. For that reason, and because I believe very much that rehabilitation, when done properly, can be incredibly effective—it really does work—I ask your Lordships to support the Bill brought forward by my noble friend today.
Lord Ramsbotham
My Lords, at the end of a week when the customs and courtesies of this House appear to have been honoured in the breach as much as in the practice, it is a great pleasure and privilege to be given the opportunity to congratulate the noble Baroness, Lady Kramer, on her most impressive and interesting maiden speech. I am not a citizen of Richmond but I have many friends who live in her constituency, and the affection that she records for it is recorded by them for her. Many of my friends said how sorry they were that she was no longer their Member of Parliament.
The noble Baroness brings to this House wide experience. She mentioned banking but she was also the shadow Trade and Industry Secretary, shadow International Development Secretary, her party’s spokeswoman on work and pensions, and shadow Transport Secretary in the House of Commons, so I am quite certain that in future years we can look forward to her contributions on many subjects that are of interest to us.
When I was given this opportunity to speak, I was particularly interested to see whether there were any connections between the noble Baroness and me. She triggered a story about Latchmere House which perhaps I may share with your Lordships. One of the people from Latchmere House was working with a bus company during his resettlement, and one day the bus company owner rang up the governor and said, “What crime did this man commit? He’s very good and we want to give him a job but we’re worried about the crime”. The governor said, “Sorry, I’m not going to declare that. That’s up to him”. The response was, “Well, it must be very serious because he had a 15-year sentence and presumably violence was involved”. The governor sent for the prisoner and asked, “Why have you not declared that your crime was violent?”. The prisoner said, “It wasn’t violent”. However, the governor said, “But you did kill your wife, chop her into little bits and distribute them around the country”, to which he replied, “That wasn’t violent because I drugged her first”.
The three things that the noble Baroness, Lady Kramer, and I share in common are that, like her, my mother and two aunts were all at St Paul’s. My mother never ceased to tell me throughout my life how far superior St Paul’s was to Haileybury, where she sent me. She never disguised what was almost her contempt at the fact that I had chosen a career in the Army. One day after the Falklands war, the headmistress of St Paul’s invited me to talk to the school about the way in which we worked with the media during a war. Afterwards, I wrote to my mother saying, “I’ve just been to a school called St Paul’s and the only reason I got there was because I was in the Army”.
The second thing that the noble Baroness and I have in common is a view about the replacement of Trident, which I have no doubt we shall be discussing in future. Thirdly, we share an interest in a wonderful organisation called HomeStart, which works particularly with new mothers. I first became associated with it in a garrison in Germany. While congratulating the noble Baroness on her maiden speech, perhaps I may say that she has made a marvellous start in her new home.
I turn to the Bill before us. I congratulate the noble Lord, Lord Dholakia, on, once again, bringing this Bill forward. This is not the first time that we have had a Second Reading on his Bill and I am very glad to see it being brought forward now. However, I like to think that today we are in a slightly better context than we were on the previous occasion, because, as has already been mentioned, the Government have declared in the Green Paper, Breaking the Cycle, their intent to do something about the Rehabilitation of Offenders Act, and indeed we are requested to ask specific questions about which parts of the Act need to be reformed.
The noble Lord, Lord Addington, mentioned that the Act is out of date. I submit that it is more than that: it is a positive inhibitor to making the sort of progress that we all want in achieving a rehabilitation revolution. Here, I must declare an interest as president of UNLOCK, formerly the National Association of Ex-Offenders and now the National Association of Reformed Offenders. In the spirit of the Bill, I must share with the House my delight that in the New Year Honours List the chairman of UNLOCK, Bobby Cummines, himself an ex-offender, was awarded the OBE. The ripples of pleasure that that has sent around the whole sector is very marked. If ever there were a mark that offenders can be rehabilitated, Mr Cummines getting an OBE is, I think, it. It is absolutely splendid in view of the enormous amount of dedicated work that he has put into the whole process.
I do not propose to comment on all the statistics and facts that the noble Lord, Lord Dholakia, has given the House, except to agree with them 100 per cent and to pay tribute to Nacro for the work that it has done, and continues to do, in this area. I think that Nacro is making the most significant contribution to the whole debate, and I know that all Members of this House have benefited from the information that has been given.
I absolutely accept the need to review all the provisions for adult offenders but, as other noble Lords have said—the noble Baroness, Lady Morgan, concentrated on this— it is young offenders more than any others in the sector who most need the effects of the reform of the Act. I once went to a sixth-form college and was shown around by two of the pupils. I asked one of them, “What is the best thing about this place?”. She immediately replied, “The fact that none of the staff remembers me when I was 12”. That is very significant, because you grow up and move on. I was fascinated when inspecting the young offender prison in Barbados to find that at the age of 18 a young offender’s criminal record was automatically looked at and only the very serious crimes were carried forward. Everything else was eliminated on the grounds that the offenders were children and it was not fair to inhibit people in adult life with crimes committed at that time and of that kind. That is something I have always felt that we could do with advantage.
I said that the Act was an inhibitor. Yesterday, in this House, a number of us launched the Young Offenders Academy, which is a new idea for youth justice. It is based on two understandings of the current situation. One is that too many young offenders or people who come into contact with the criminal justice system come there having been denied long-term contact with a responsible adult. If you look at how the criminal justice system for young offenders operates, the one thing that it does is deny long-term contact with a responsible adult.
The second thing that has been shown over and over again is that if local people are involved in the care, rehabilitation, resettlement or whatever you like to call it of young offenders, they will contribute much more than if they are working with someone else. London feels that perhaps more than anywhere else because there is only one young offender institution in London at Feltham. I found boys from Feltham as far away as Northumberland. What interest in the resettlement of a boy in London will a voluntary organisation in Northumberland take? There could be nothing other than pure humanity; nothing practical.
The Young Offenders Academy will have on one site, within a radius of one hour by public transport, workshops, education centres, activity centres, mental health and drug treatment centres and so forth. At the heart of the idea is the opportunity, which has been welcomed by the chambers of commerce, to give aptitude tests to everyone there and see whether they can fit that aptitude to a job. At the same time, they will identify what special skills might fit future jobs and start the training for them.
However, the Rehabilitation of Offenders Act is an inhibitor to all that process. The fact that it sits there as a block to so many initiatives in this area should encourage the Government—I hope it will encourage the Government and I am delighted in thinking that it will—to do something about it. In doing so, they must listen not just to the noble Lord, Lord Dholakia, but to all the good things that were in that report Breaking the Circle, which gave us so much hope nine years ago and which I hope today marks the move forward to something that has long been needed.
Baroness Doocey
My Lords, I also begin by saying that it is such an honour and privilege to make my first speech in your Lordships’ House. I feel that I have been here months rather than just a couple of weeks, but that is perhaps to do with the hours that the House has been sitting. I would like to say a particular thank you to my dear friends and sponsors, my noble friends Lady Harris of Richmond and Lord Oakeshott of Seagrove Bay. I also thank all the Members on every side of the House who have made me feel so very welcome since I arrived. I also thank all the wonderful, outstanding staff who could not have been more helpful.
I come to the House with a varied background. I have been a finance director. I have managed an international fashion company and have been a management consultant. My political experience includes eight years as a councillor in the London Borough of Richmond-upon-Thames, where I chaired the housing committee. Since 2004, I have been a Member of the London Assembly and I currently serve as its chair. My duties on the Assembly include membership of the Metropolitan Police Authority and serving as a member of the Home Office’s Olympic Security Board.
I congratulate my noble friend Lord Dholakia on introducing his Private Member's Bill to amend the Rehabilitation of Offenders Act. The Bill recognises that getting ex-offenders back into the labour market is a key element of rehabilitation. Like other noble Lords who have already spoken I, too, would like to confine my remarks to juvenile offenders.
I shall always remember my first visit to Feltham young offender institution in west London. It is just a few yards from where I live. I was both shocked and deeply saddened by the acceptance of the offenders that they would never escape the cycle of crime. It was almost as if they thought that that was their lot in life. Many of them had really harrowing stories to tell about their upbringing. As someone who grew up in a deprived community in Ireland, I found it very easy to understand the issues. However, I was very lucky. I had the love and support of a close-knit family, something that most of these young men had never known.
Your Lordships may be aware that Feltham was the subject of controversy several years ago, with reports of violent assaults and allegations of racism; but significant progress has been made, and Feltham has been praised for its effective reception and induction facilities, the outreach team that deals with self-harm issues, and the measures in place to deal with race relations issues.
I should like to pay particular tribute to the innovative work that the Mayor of London and the London Metropolitan Police Authority have done in Feltham. In 2009, a pilot scheme called the London Reducing Reoffending Programme was launched, better known as Project Daedalus. This project aims to break the cycle of youth reoffending through intensive support which begins inside custody and continues beyond the prison gates after release into the community. The target group for the project is young men aged 17 to 19 who are subject to a detention and training order and who are from one of six London boroughs. These young offenders have also been assessed as motivated to address their offending behaviour, a crucial element in resettlement.
To date, 43 young people have been placed in the unit, with 24 of them subsequently released into the community. It is still early days but the initial signs have been very positive indeed. The rate of reoffending has been reduced to less than 20 per cent, which compares to a national average of juvenile reoffending of 78 per cent. In addition, security incidents in this unit are 90 per cent lower than in other units in Feltham. The success of this project is such that similar projects are being rolled out to other young offender institutions and I hope that the money will be found to continue this excellent scheme.
However, that is not the only good work being done in London. I should like to pay particular tribute to other schemes that help prevent young people offending in the first place, in particular the superb work being done by Decima Francis of the From Boyhood to Manhood Foundation and Camila Batmanghelidjh of Kids Company. Both of these truly remarkable women do extraordinary work providing help and support to some of the most vulnerable young people in our society.
However, the good work being done at Feltham and elsewhere in London will be undermined if unnecessary barriers to ex-offenders entering the labour market are not removed. Fortunately, government policy is moving in the right direction. The Green Paper on the criminal justice system published last month states:
“The … way to improve public safety and reduce the number of victims is to reform offenders to reduce reoffending”.
I am delighted that Project Daedalus is singled out for praise in the Green Paper.
It is essential that we do much more to rehabilitate young offenders, in particular by training and equipping them to enter the labour market and by removing discriminatory barriers to employment. Of course this is not the complete solution to the problem of crime and reoffending, but it is vital if we are to break the cycle of reoffending which a policy of imprisoning offenders without rehabilitation does absolutely nothing to address. Those and many other issues are some of the things that I look forward to pursuing in your Lordships’ House.
Lord Judd
My Lords, it is a real privilege to follow the noble Baroness, Lady Doocey. Her maiden speech will, I think, rate with some of the most respected in the history of the House. We are fortunate to have someone with her experience joining us. Her experience in local government and her experience in the London Assembly, which she now chairs, are highly relevant to our work here and can contribute much. Her business experience also is important. But what I like is the fact that she has chosen this debate for her maiden speech. It speaks of a tradition of liberal humanitarianism which is a very important quality in our democratic political system, one which many of us in other parts of the political structure of this country have always admired and to which we have frequently related. She has represented that well in what she has said today and also in her practical commitment to having effective arrangements and policies in place to further that kind of commitment.
I understand that with her family background she loves theatre, which is the mark of a very civilised person. But I also understand that she likes listening to easy music. I hope that we may provide some theatrical and, if not actually putting it to music, good listening for her in her experience in this House. I wish the noble Baroness well and I think that we shall benefit from her presence.
I am very glad to speak in support of the noble Lord, Lord Dholakia, at this Second Reading. The noble Lord has stuck with perseverance and commitment to this particular legislation, but that is only part of a consistent and admirable general approach to social and penal policy. I should like to repeat what I have just said about the noble Baroness in her maiden speech. I always feel that the noble Lord, Lord Dholakia, is an epitome of liberal humanitarianism at its best being applied practically. That liberal humanitarianism is very special and it is something to which I say without hesitation that over our political lives many of us in my political party have always related as well as admired, and may it be preserved in the political future.
I have always felt that any sane and relevant penal policy must have rehabilitation as its overriding, unqualified principal objective. This matters because it makes economic sense. The noble Baroness spoke about getting people back into the labour market, but it also matters because of the cost of reoffending if we do not get rehabilitation right. It is absolute madness not to have rehabilitation at the centre of our purpose in penal policy.
I was deeply moved by the remarks of the right reverend Prelate in this debate. He spoke not only of the labour market and its place in the economy, he spoke of people and of people mattering. It seems to me that in a civilisation that is worth the title “civilised”, we should be concerned about every individual who faces imprisonment and should be second to none in our determination to see those individuals, wherever possible, becoming full, flourishing members of society. It matters that they should be able to live creatively and positively.
Other people have given personal anecdotes. I should like to refer to two conversations that I have had in this context, which have deeply influenced me since they took place. I may have referred to them previously in deliberations to the House, but I think that they bear repetition. One conversation was with a retired chief constable who very modestly was doing a lot of practical voluntary work in a young offender institution. He told me of a conversation that he had with a young man who was coming up to the time of his release. As they were talking, the young man began to cry. The former chief constable was rather thrown and disturbed by this. He said, “But you are coming up to your release, why are you crying?”. The young man said, “I am crying because the work being done by you and others in this young offender institution is the first time that I have felt in my life that I mattered. It is the first time that I have begun to discover myself and to face the realities of what I could be and of what I have allowed myself to do in the past. I am frightened of what will happen when I come out of this community back into society”. The former chief constable and I pondered that. Going back to what the right reverend Prelate said, it seems to me that every time we see someone in prison we have to ask ourselves how far we are responsible for that sad situation, because it is a sad situation to see someone in prison.
As a society we have a responsibility, and while of course it is not always the case, we have to realise that many people who are incarcerated are themselves victims, and that is why they are there. This applies particularly to those in young offender institutions. They are highly damaged people in terms of their own experience. When I visited prisons and young offender institutions, and heard about someone’s experience and how they had been treated in life, I sometimes thought that it would have been an absolute miracle if they had not ended up in prison.
I also recall how a much-loved colleague, the late Baroness Lestor, a close personal friend and godmother to one of my children, had been to visit the young people involved in the terrible murder of James Bulger in Liverpool. I had never seen Joan—I refer to her affectionately as “Joan”—more disturbed and deeply upset. She said of one, “I came to realise that this young man had never been loved in his life”. That brings home to us all our collective responsibility. The Bill is a practical and important part of getting things right because, as things are on this front, they are clearly not in harmony with the wider purposes we are spelling out.
The other conversation was with a chief superintendent of police who was coming up to his retirement. He said, “You know, Frank, as I reflect on my experience of working with criminals, one thing I have always felt is that when a person is sent down to prison, however much the bravado and bluster on their part, it is a very lonely moment in their life. To get it right as a policeman, I have come to the conclusion that that is the moment when someone should be there and gently take their elbow, saying, ‘Come on Joe or Jill. This is a hell of a mess. How do we begin to sort it out and get it right?’”. If we are going to get penal policy right, we need to realise that it is not just a matter of having the right administration or the right pieces in place in terms of treatment, it is about love and friendship and having relationships because they are crucial to the whole process of rehabilitation. There need to be friends who can walk with people through the experience of imprisonment, into rehabilitation and then back into the full and creative life we hope to see them fulfilling.
Because of my general orientation on this, naturally I am delighted to see the new trend in government policy. Also, if I may put it this way, I am glad to see that my old but mis-seated colleague and friend the noble Lord, Lord McNally, is to reply to the debate. I often reflect on the days when the noble Lord and I worked quite closely together, I as a Minister of State in the Foreign Office and he at No. 10. I am just reminiscing, but I remember how, through a little conspiracy together, we once saved the budget for the BBC Overseas Service. So I am very sad to see him where he is at the moment, but I must not go down that road.
One thing which worries me about the new proposals is that they are so often presented—I think that the noble Lord, Lord McNally, if he will forgive me for saying so, has sometimes done it, although I understand the pressures which make it necessary—as saving money. I have just put forward that argument myself: if you get rehabilitation right, you will save money; you will save the cost of reoffending and the rest. However, we must not let this become a Treasury policy as distinct from a policy about rehabilitation, because rehabilitation will not be a cheap option. We have not yet begun to face up to the real costs of making this enlightened and sensible policy a success. We must have the psychiatric services, the housing advisory services, the medical services, the educational arrangements and other practical arrangements in place, with, I hope, someone walking with the individual through the handling of all these different pressures and arrangements. That will be an expensive process. We cannot just say, “Well, we’re going to run a pilot scheme and we’ve got various voluntary agencies piling in”. Having spent much of my life in the voluntary sector, I know that voluntary agencies may have a very important part to play, but how satisfied are we that all the people involved, however sincere and highly motivated, have the training, experience and professionalism to do the job well? I remember what happened with lunatic asylums. It was thought that it was a terrible thing still to have such institutions and that the people concerned should be rehabilitated in society. The arrangements were not made, and we saw as a result many personal, collective and family tragedies.
Above all, I congratulate the noble Lord, Lord Dholakia, on another practical manifestation of his lifelong commitment to getting penal policy right.
Lord Loomba
My Lords, it is with some trepidation, but a lot of courage, that I rise to address your Lordships for the first time in this magnificent Chamber. I was introduced to your Lordships' House by the leader and the deputy leader of my party, my noble friends Lord McNally and Lord Dholakia, for which I am most grateful.
I was introduced last Monday, just four days ago, but it feels as if I have been here much longer. Nobody warned me about long night shifts. The good thing is that I have enjoyed my short time here, but it would be so nice to get back to normality soon.
Your Lordships may like to know that I am a businessman. However, during the past 13 years, I have been engaged with my charity, the Loomba Foundation. It is committed to raising awareness of the plight of widows and their children around the world who suffer through poverty, illiteracy, HIV, conflict and social injustice.
I am glad that my charity has been able to give respect and dignity to widows, but we need to do more. My work in the poverty, education and empowerment of widows has crossed political boundaries. It has also crossed geographical limitations, because disadvantage does not honour national boundaries.
The Loomba Foundation has educated thousands of children of poor widows in India. It has also provided financial aid to their mothers so that they can live a life of dignity. As part of our global work, we are empowering unfortunate widows by setting up businesses for them in Kenya, Rwanda, Malawi, South Africa, Sri Lanka, Bangladesh, Nepal and Syria.
We are hugely proud that on 22 December 2010 the United Nations recognised 23 June as International Widows Day. It was launched by the Loomba Foundation at the House of Lords in 2005, and we continued to campaign for its recognition by the United Nations.
Noble Lords may ask what is the relevance of my charitable work and the Private Member’s Bill of the noble Lord, Lord Dholakia. Let me explain. Those trapped in a cycle of deprivation find it almost impossible to get out of it. Furthermore, many are dragged into crime, drugs, alcoholism, abuse and human trafficking because these are the only avenues open to them. I support the Bill on the basis that giving offenders opportunities for rehabilitation is a matter of elementary justice. When an offender is sentenced by a court, he or she receives a sentence which the court considers the just punishment for the crime. When an offender has paid the penalty, it is surely wrong in principle for society to inflict further non-judicial punishment on the offender, such as making it difficult or impossible for him or her to obtain employment.
However, rehabilitation is not only in the offender’s interest; it is also a vital part of public protection. The more effectively we can rehabilitate offenders, the fewer crimes there will be in the future. Rehabilitation not only helps former offenders to avoid wasting their lives in criminal activity, it also reduces the loss, distress and injury suffered by victims of crime. There is nothing more distressing for a former offender who is genuinely trying to put his past behind him than to be refused a job because of past offences he is trying not to repeat. There is nothing more distressing for a former offender seeking insurance so that he can get honest employment in a driving job than to be refused insurance because he has a criminal record.
Yet these things happen to former offenders day after day. Many employers and insurance companies will not consider people who have a criminal record, however sincerely they are trying to reform their lives. In a government-commissioned research study by the National Institute of Economic and Social Research, employers said that they were likely to reject people with criminal records for half their vacancies and to reject those with more serious convictions for 90 per cent of their vacancies.
The human cost of the current position was well illustrated in a letter received by the noble Lord, Lord Dholakia, from a former offender who had read about his Private Member’s Bill. The letter said:
“I am an ex-offender who committed a single criminal act at the age of 18 whilst in the grip of an addiction to gambling, for which I was sentenced to three years in a young offender institution. At the time I thought the loss of my liberty and my chosen career was the greatest punishment but I was so wrong. Having to live in fear at every job interview that I will be asked ‘the’ question has hung over me like a cloud since the day I was released over 21 years ago, even leading to bouts of depression”.
When this happens, there is always a risk that in despair and depression the individual will return to the criminal way of life that he has been trying to leave behind. Therefore, I strongly support the provision of this Bill, which will reduce the number of old and irrelevant convictions that ex-offenders have to declare to employers.
The extent to which society supports rehabilitation of offenders is a key test of that society’s civilised values. Do we want to live in a society that offers those who have made mistakes in their lives an opportunity of rehabilitation and inclusion, or do we want to live in a society that continues to inflict punishment on former offenders for the rest of their lives, driving them further and further to the margins of society and making it difficult or even impossible for them to find redemption and reform? I believe that the first kind of society is in every way morally preferable and ask noble Lords to join me in supporting this Bill as a step towards a society that reflects the values of compassion, fairness and justice. This is something that has shaped my life and is the basis of a decent, civilised society.
Lord Hodgson of Astley Abbotts
My Lords, we have had a veritable panoply of talent on display in maiden speeches today. Although I have yet to have the opportunity to meet the noble Lord, Lord Loomba, it gives me the greatest pleasure to be able to congratulate him on an excellent maiden speech. I see from his published curriculum vitae, which he referred to in his remarks, that the themes that he proposes to follow in your Lordships' House are equality, fairness and justice. It is fair to say that he has made an excellent start in fulfilling that pledge today.
As the noble Lord told us, his major work has concerned the plight of widows. Women are the first and major victims of conflict and violence. Sexual abuse and widowhood are the inevitable consequences, and it is really excellent news that the noble Lord is focusing attention on these unfortunate women and the plight of widows generally.
The other reason why I wanted to congratulate the noble Lord is not just for what he has said but for who he is and what he has achieved. I see from his CV that he was born in the Punjab in India in 1943 and that he has now come here and is a British citizen. At a time when, too often, the media are preoccupied with problems with immigration, it is good to be able to redress the balance with an example of someone who has arrived in this country and made such a significant contribution to our national life. I am sure that I speak for the whole House when I say that we look forward to hearing from him again very soon.
I am of course pleased to able to support my noble friend Lord Dholakia. People say that the progress of legislation in this House is made up of equal proportions of perspiration and inspiration. There is plenty of inspiration on display here and, of course, the noble Lord has shown perspiration by the number of times he has pushed and kept this Bill moving forward and reintroduced it.
As some Members of the House will be aware, I am chairing a task force that is looking at the bureaucratic and regulatory burdens inhibiting the establishment and development of small charities and voluntary groups. We have been taking evidence for some four months and hope to publish by Easter, and we have received many submissions giving examples of the bureaucratic burdens, some of which verge on the risible. But there is a read-across to my noble friend’s Bill and purposes, and I shall return to that in a few minutes, after saying some words of endorsement of the Bill itself.
As many noble Lords have pointed out, we have to face the fact that the level of reoffending among prisoners on release from jail is unacceptable, on at least two counts. First, there is the issue in human terms, with a group of people locked in a cycle of deprivation which is affecting not just them but their relatives. Most depressingly, when you visit young offender institutions and learn how many people there are already fathers, what will that mean for those children and what chance will they have to fulfil any chance of a reasonable life with reasonable aspirations? In this, I very much follow the comments made by the right reverend Prelate the Bishop of Wakefield. Secondly, there is the issue of financial terms: the cost to the state and therefore to the taxpayer is not inconsiderable.
I am sure that we need to agree steps that can be taken to reduce reoffending rates. I am very pleased, as other noble Lords are, to see the emphasis given to that in the recent Ministry of Justice consultation document, Breaking the Cycle, for all surveys show that the key to stopping reoffending is to have a home—somewhere to live—and the opportunity for a job with a chance of earning a living wage. However, we have to do that against a background of affording a proper degree of protection to the public, because all of us who wish to achieve this happy state have to guard against the very adverse publicity that will occur if people who are released commit some terrible crime and end up on the front page of the newspapers. That sets back the whole cause and case at which my noble friend’s Bill is aimed. This Bill nevertheless represents a significant step towards achieving and reconciling these difficult and often conflicting objectives.
I am afraid that it is not just about changing the law; it is also about changing attitudes. Turning briefly to some of the work that we in the task force have been doing, it is clear that charities can provide a very helpful route back to full-time paid employment. They do so for the following reasons: first, they operate in a more non-judgmental and more supportive way than commercial operations can, so that there is less potential for damage to the newly released prisoner’s often fragile sense of self-esteem. Secondly, they provide a more flexible approach to work. Newly released prisoners can find it hard to live and respond to the demands of a nine-to-five, five-days-a-week existence. They need an environment in which to build up their endurance to that pace of life. It is like someone coming straight out of hospital and trying to run a marathon; like a runner, they need to develop their strength. Finally and most importantly, they provide an opportunity to help others. Often, the disadvantaged of our society and released prisoners have an opportunity to set their own lives in the context of others.
Yet there are a couple of significant impediments to achieving that happy outcome. The first, too often, appears to be our social security system—not in the regulations themselves but in their interpretation in jobcentres up and down the country. From time to time, we have had evidence that working for a charity is seen as a reason to reduce the social security entitlements because the person in question should be required to take any paid work in preference to that. That seems to me an entirely unhelpful approach which robs charities of volunteers, prevents ex-prisoners moving towards full-time employment and, in the longer term, probably costs the state money. As I say, regulations do not require that but the size of the workforce in the social security system and the rapid turnover of staff often mean that regulations are not properly understood.
The other inhibition, both for charities and commercial companies, is the system of the Criminal Records Bureau that was referred to in the Nacro briefing and whose checks have grown exponentially in recent years. Here, I shall respond to the challenge laid down by the noble Baroness, Lady Morgan, in her excellent speech. Let me be clear to begin with: this is not going to be a rant about the Criminal Records Bureau regime. We need proper protection for children and vulnerable adults but there are some important improvements to be made in administering the regime. The first is in the frequency of checks. It may astonish the House to know that 100,000 people in this country were checked 40 times each last year and that the winner of the table was someone who was checked 53 times. That is because there is no passporting system. We have a passport; it would enable individual health authorities, schools and government departments, which currently all require a separate CRB check, to carry the record of the individual. When a Punch and Judy man operating on Brighton, Hastings and Eastbourne beaches has to be checked three times, things have reached a pretty pass.
The second aspect is to give the person being checked control of his or her passport. That is because, in the first instance, you can be certain that the contents are accurate. There is quite a lot of attribution of the wrong data to the wrong person. Secondly, if my noble friend’s Bill comes to fruition, ensuring that the record is struck clean at the appropriate moment will be very important. It also enables the person to set the offence in context, so that they can have a chance to say, “I did something wrong. I was this age. It was this offence. Will you therefore please consider my application?”, on all fours. The present system whereby the potential employer and the individual get the check at the same time means that the individual has no chance to set the scene and is therefore always trying to play catch-up and redress the balance of the impression left with the potential employer.
I hope that the CRB will be prepared to give a sympathetic hearing to these sorts of proposals. However, the really depressing attitude and terrible situation is the frequent absence of any self-confidence and common sense among our fellow citizens on the value of CRB checks. The default option has become to have everybody checked every time, as if this somehow reduced risks. It does not reduce the risk in any way. It merely provides air cover for the company or organisation and shifts responsibility to somebody else. How often does one see, in the evidence about child abuse cases, for example, phrases like, “Oh, but we had him or her CRB checked”, as if that were somehow an excuse.
That default option of asking for CRB checks puts off people and inhibits employment, and the CRB checks are not necessary. If you read the CRB regulations, they refer to “frequent and intensive contact” with children or vulnerable adults. That phrase is not given sufficient weight by employers, be they charities, central or local government, the NHS, schools or commercial companies.
We move in these circumstances from issues which are stupid and silly to other instances where they are absolutely malign. Noble Lords will have seen the story of the ladies in Gloucester Cathedral, arranging flowers. They have had to have CRB checks because, in executing their duties as flower arrangers, they come into contact with the choir, which of course contains young persons. The jobsworth who managed to think up that particular CRB check is hard to imagine.
More malign is the issue represented by a retired doctor, aged 67, wishing to give a couple of hours a week to helping out Alzheimer’s patients, who had done so without trouble for several years. Then the decision was made that she should have a CRB check. As a matter of principle, she said they she was not going to do this. The society for whom she was working said that it would fill in the form for her. She said, “No, that is not the point. The society should trust me and recognise what I have done in the past, that I am a volunteer giving up my free time and that I am not ‘frequent and intensive’ in my association with the people I am helping”. There the matter rested, and she no longer provides the service to the Alzheimer’s patients that she had been helping before. If a doctor, who has an audit trail that probably stretches for 40 years since she first qualified, is unable to proceed without these sorts of intrusive checks, what chance for an ex-prisoner?
To conclude, of course I support my noble friend’s Bill. I hope very much that it will have a speedy passage in one form or another to the statute book. However, there is a lot to do to change public attitudes in society among our fellow citizens on this important topic.
Baroness Warwick of Undercliffe
My Lords, I first congratulate those noble Lords who made three remarkable, riveting and very sensitive maiden speeches. I feel fortunate to be taking part in the same debate and I look forward enormously to hearing their further contributions to this House. I join other noble Lords in congratulating the noble Lord, Lord Dholakia, on his tenacity in pursuing this issue, and on his determination to effect this long-outstanding reform. I will make only a brief intervention, to offer him my strong support in his efforts to achieve concrete change that will, I hope, receive support on all sides of the House.
Every study and piece of research on reoffending identifies stable employment as the surest way of preventing reoffending. However, studies and many contributions in the House today also highlight the fact that former offenders, although they may be determined to rebuild their shattered lives and those of their families, face huge challenges and often outright unfair discrimination from potential employers. Our reoffending rates in this country are a social catastrophe. As our prison population has increased—it is now one of the highest of any developed country—the proportion of those reoffending has not changed. An attempt was made by the previous Government to break away from all this. In 2002 they commissioned a review of the Rehabilitation of Offenders Act 1974. That review made grim reading. More than a quarter of the working population had a previous conviction. However, it also went on to find that employment can reduce reoffending by between a third and a half, but that a criminal record can seriously diminish employment opportunities.
I looked in vain for any data that suggest things have changed. Most studies show that offenders face inevitable discrimination when they apply for jobs. As the noble Lord, Lord Dholakia, pointed out, 60 per cent of the offenders who took part in surveys by the National Association for the Care and Resettlement of Offenders were refused jobs because of their criminal records. This has been made even more problematic by the increase in the length of custodial sentences since the 1974 Act, as my noble friend Lady Morgan emphasised. Offenders who would have received a sentence of two and a half years or less in 1974 receive between three and four years today. Quite rightly, a great deal of care has gone into identifying those jobs for which former offenders must be carefully vetted and from which they should possibly be excluded, particularly in relation to children and vulnerable people. However, those who are genuinely reformed—who need only an opportunity to show that they can make it as good citizens—face an implacable barrier of rejection and discrimination.
I read with great interest the report on children and young people in the youth justice system from the All-Party Group on Children, which was published only two months ago in conjunction with the National Children’s Bureau. It reported overwhelming disquiet about, among other things, the current age of criminal responsibility in England and Wales. It particularly commented on the apparent emphasis in the youth justice system on punishment rather than rehabilitation. It found that the most vulnerable and most victimised young people are most likely to be persistent offenders and that at least a third of young people in custody should not be there at all. It found that prison is poor value for money; community service with early intervention, and family and other focused therapies, are much better value. It also gave specific ways—for example, through the work of the Foyer Federation—in which reoffending could be prevented.
I cite this to demonstrate that our justice system is clearly failing vulnerable young people, and that there are well documented ways in which rehabilitation can achieve great success. I draw the conclusion that we should do everything possible to encourage this approach and to encourage potential employers, particularly, to look beyond the stigma of a custodial sentence. Employers can be persuaded. Indeed, one scheme with which I have had close association has had remarkable success. The National Grid Transco scheme is championed by its chairman, Sir John Parker, and rolled out by its remarkable director, Dr Mary Harris, first within its own industry, then through the gas supply chain and now in several other sectors. It has reduced reoffending rates among its participating offenders by 70 per cent. One has only to talk to the employers involved to know how much they value these committed employees.
The recent Green Paper from the Ministry of Justice seems to take the same view. In breaking what it calls the “destructive cycle” of crime and reoffending, it says that its priority will be to stop the reoffending that blights the lives of individuals and communities and to get offenders “into honest work”. The proposals have been welcomed by NACRO. Its CEO, Paul McDowell, said:
“We must concentrate on reforming the system so that reoffending goes down and public confidence goes up”.
I hope that part of the strategy of the Ministry of Justice will be to focus on increasing public confidence, and increasing public and employer awareness of the enormous economic and social benefits of such a policy.
In conclusion, I hope that the noble Lord, Lord Dholakia, will be rewarded for his tenacity, and that he will succeed in achieving the changes which he has so valiantly promoted for so long.
Lord Bach
My Lords, I start by congratulating the noble Lord, Lord Dholakia, on achieving this Second Reading. I greatly admire his persistence in championing this Bill. He has shown huge patience, enormous restraint and, above all, a formidable strength of will to keep going with this legislation, which will for ever have his name marked on it. His reputation in this field goes before him. His work for NACRO and his work in this House on this important subject are widely known. For that and other reasons, the House is absolutely delighted that he recently received the honour of entering the Privy Council. This side of the House congratulates him very warmly on that achievement.
We have heard three wonderful maiden speeches, which formed an extremely impressive trio. I do not know whether three maiden speakers have ever sat side by side in the Chamber. They make an extraordinarily formidable combination. I do not wish to go into great detail but I was impressed by the fact that all three maiden speakers in their different ways demonstrated a huge passion for rehabilitation and breaking the offending cycle, and that they have all, in their separate ways, done a great deal in this field, not just spoken about it. The House enjoyed all the speeches very much indeed and looks forward greatly to their further contributions not just on this subject but on others, too.
However, we should not forget the more experienced speakers who have spoken in this debate who have shown their experience and expertise in this subject. It is a subject in which this House is particularly interested—I say that in the broadest sense. Sometimes that can be slightly uncomfortable for a Minister, to put it mildly, although perhaps not today. However, the noble Lord, Lord McNally, indicates that that is the case today as well. Speaking from personal experience, I can say that a Minister can feel uncomfortable in these debates. However, that does not take away from the fact that this House is extremely knowledgeable and takes this subject extremely seriously.
On this side, we welcome the fact that the noble Lord is reintroducing this Bill, and are, of course, happy to support its Second Reading. At a later stage—I think that that the noble Lord will thank us for this, rather than criticise us—there may be technical details that we will want to look into, as obviously the House will want to, to get the Bill right. One matter that was referred to the last time there was a Second Reading on this was the position with regard to Scotland. The noble Lord, Lord Dholakia, will remember that the Rehabilitation of Offenders Act is a devolved issue. However, I am sure that, like us, he believes that it is desirable to have similar schemes on both sides of the border. I look forward to hearing, perhaps not today, about the work the noble Lord has done on having a dialogue with Scotland on this issue.
I can be fairly brief. The rehabilitation of offenders is a subject of immense importance for our society. We were rightly warned by my noble friend Lord Judd that rehabilitation properly done is very expensive indeed. That has to be appreciated by Governments. It is not enough for them to say they are in favour of rehabilitation; they actually have to be prepared to put the money aside in order to see it through.
In our time in government, we did much to encourage rehabilitation in a number of ways. However, we also placed, as do the present Government, great emphasis on victims of crime. I want to comment on the linking of these two. For a long time, not enough had been done for victims of crime, and we make no apologies for the concentration that we placed on them. Part of protecting victims and potential victims is reducing the rate of crime, a reduction which I am delighted to say, from figures published yesterday, seems to be continuing. Secondly, it is of course important to stop people committing their first offence. Thirdly—this is where we come to the Bill—it is also particularly important that people who have committed previous offences have an opportunity of rehabilitating themselves without any more difficulty than the mere fact that they have had a custodial sentence or serious conviction. We believe that if you can successfully rehabilitate offenders, you are protecting potential victims of crime. That is how these two issues are linked.
I have a couple of questions for the Minister. I promise him that there will not be a whole catalogue of questions for him to answer. The main question that the House really wants answered is: what do the Government intend to do with the Bill? Will they take it over and produce a government Bill, or make it part of a government Bill? Or will they give time to the noble Lord, Lord Dholakia, in order that the Bill can complete its stages in this House and then pass on to another place? The other question is this: the debate has rightly been very much centred on young offenders, and stress has been placed on what we can do about them. How can the proposed abolition of the Youth Justice Board possibly fit in with the Government’s clearly stated concern about rehabilitating young offenders and keeping them away from offending? The House deserves an answer. The Minister will know that there is a lot of concern around the House about the proposed abolition of the Youth Justice Board.
In conclusion, from this side of the House, we support the Bill in principle. We will do our very best to improve it, if it needs improvement. I congratulate the noble Lord once again. He can tell that there is widespread support for his Bill in this House and we thank him for moving the Second Reading.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, I shall answer the questions first before going into the main body of my speech. I will attempt an impassioned peroration and I ask my noble friend Lord Dholakia to trust me. The Government intend to take on the main thrust of the Bill. We are in the process of consultation based on the Green Paper. Therefore, we would like to take on board the main parts of the Bill. I offer my noble friend full consultation on the form of government legislation. I do so with a sense of urgency and also in the full knowledge that if I do not deliver, he will be back with the persistence that he has shown already.
I turn to the question of Scotland. I am going there in about a month to talk to Scottish Ministers about their experience. The issue has been raised of bringing the work of the YJB into the MoJ. The matter will be fully debated in the Public Bodies Bill. I will explain to the House our intentions at that point. As I have said before at the Dispatch Box, the Youth Justice Board was one of the great achievements of the previous Government. It did a great deal to push the treatment of young offenders to the top of the agenda. However, we believe that we can justify bringing its work in-house to the MoJ without diminishing its effectiveness. We hope to learn some of the lessons of the youth justice experience over the past 10 years and apply them to the treatment of adult offenders. I hope that the noble Lord, Lord Bach, will be patient. I shall be back at the Dispatch Box at some stage next week with the Public Bodies Bill, because I assured my noble friend Lord Taylor that when we reached the YJB part of the Bill, I would do my duty and defend the decision.
It is good to end this turbulent week in the House by demonstrating both to ourselves and to the public what we do best, and by showing the side of the House that people most admire, which is our ability to draw on the experience and expertise of Members in a matter of public interest and concern. I fully share the view of the noble Lord, Lord Bach. His stewardship at the Ministry of Justice is still highly regarded, not least by me. I share with him the fact that in piloting a liberal approach to these matters, we have to carry with us people who have a genuine fear of crime and a genuine concern for its victims. There is not a great deal of difference between us. We are talking about getting the balance right between proper protection of the public and a genuine offer of the opportunity for rehabilitation and reform.
Before I go into the body of my speech, I will say that I take real pride in the fact that the three maiden speakers today all came from the Liberal Democrat Benches. They all demonstrated that the new intake maintains the reputation for quality on those Benches—a reputation that is appreciated on all sides of the House. Pause for those on all Benches to say, “Hear, hear”.
As was pointed out, my noble friend Lord Dholakia has vast experience as president of NACRO and in the way that he has associated NACRO, UNLOCK and the Prison Reform Trust in this campaign. He has rightly argued that the rehabilitation periods in the current Act are far too long, and prevent rehabilitated ex-offenders from making a fresh start. The Government have sympathy with that position; we believe that one of the more effective ways to ensure that an ex-offender becomes re-integrated into society is to offer them the chance of stability which, among other things, means employment.
The Government are well aware that the Act has not been reformed since its introduction in 1974. The result is that it does not reflect current, more severe sentencing practice and it can, therefore, fail in its aim to help reformed offenders resettle into society. The long-standing criticisms of the Act include the fact that rehabilitation periods are too long, and they do not reflect the point at which the risk of re-offending reduces. Also, the threshold at which a conviction never becomes spent—that is, all those convictions which attract a sentence of more than 30 months—is seen as too low. At the same time, the exceptions order exempts a growing number of occupations from the Act. The legislation is also criticised for being over-complex and confusing, with the result that some people may not realise that they benefit from its application.
The Government are therefore looking at what can be done to address some of those criticisms and to get a better balance between rehabilitation and public protection. The Government are currently consulting on potential changes to the Act through our Green Paper, which has been referred to several times, on sentencing and rehabilitation. The Green Paper explains that the proposals we are considering include: broadening the scope of the Act so that it covers all offenders who have a determinate sentence; reducing the length of rehabilitation periods; and producing a clearer, simplified classification of rehabilitation periods.
The consultation paper also asks for views on how we do more for young offenders, a point referred to by several speakers, so that minor convictions as a juvenile do not blight their future prospects, and how offenders with minor convictions a long time in their past, but who are subject to full disclosure of their convictions, might be treated.
We share similar aims to my noble friend Lord Dholakia and are committed to bring in reform in this area. It will also be apparent from the overall thrust of the Green Paper that rehabilitation is very much at the heart of our approach. We believe that the right way to improve public safety and reduce the number of victims is to reduce reoffending, and that an important aspect of that is to ensure that rehabilitated ex-offenders are offered a chance to reintegrate fully into society.
I noted a number of points that noble Lords made. I will try to cover most of them in my reply, but I will also say that the consultation period ends on 3 March, so there is still a month and a half for individuals and organisations to respond to the Green Paper. I urge noble Lords with contacts with interested organisations or individually to make a response to the Green Paper. I assure noble Lords that the team within the MoJ working on our next steps in this area will receive the Hansard of this debate, as itself a constructive response to the problems that we are discussing.
The noble Baroness, Lady Morgan, together with a number of other noble Lords, pointed out that the whole question of criminal records needs to be looked at. A Home Office working party is considering the matter, including a number of the points that the noble Lord, Lord Hodgson, made about the system being over-prescriptive and over-bureaucratic. We are hoping that the outcome of the working party will enable us to clarify and simplify the matter. Anyone who is faced with these things, as I am, sees the same issues coming up time and time again. Getting to the bottom of some of these problems involves something less than rocket science, although of course there are dilemmas. The noble Baroness mentioned exclusion. There is the dilemma of the impact that exclusion will have on the excluded child, but there is also the dilemma of what not excluding the child does to the rest of the class or the ethos of the school. There is not always a simple solution.
I welcome the contribution of my noble friend Lord Addington, who reminded us how many of these issues are related to educational problems, including the area of his own expertise, dyslexia. This comes up time and again. Along with the Department of Health, we are trying to identify at an early stage the mental problems of one kind or another which are a factor in offending.
The noble Earl, Lord Erroll, asked me a question which I think was partly answered by the noble Lord, Lord Bach. He asked how many adults had a criminal conviction. The best answer that the Box could come up with was that about one-third of all men have a recordable conviction by the age of 30. That sounds like an enormous amount to me, but I think that the noble Lord, Lord Bach, said that research carried out in 2005 indicated that the figure was 25 per cent. I shall check the figure again, although I have heard it mentioned before. However, it is extremely worrying because it means that convictions leading to a criminal record are very widespread, and the blight might be wider than we think.
Lord Hodgson of Astley Abbotts
I understand that the figure includes traffic offences, and therefore you are included if you have a speeding conviction.
Lord McNally
That is a great relief. It probably brings the number of adults with a criminal conviction, other than for traffic offences, down to below 5 per cent. I worked for my noble friend Lord Ashdown when he was leader of the Liberal Democrats in the other place, and he would tell me that he was going to get back to Yeovil in a frighteningly short time. As a result, my noble friend is probably among those statistics, which just goes to show that offenders can be rehabilitated. The noble Lord has made an extremely helpful point but I do not think that it takes away from the fact that there is a considerable build-up of these convictions, and finding a way of getting them spent would be extremely helpful. I am grateful to the noble Earl, Lord Erroll, for his intervention.
The right reverend Prelate the Bishop of Wakefield also made an extremely helpful speech, and I welcome his support for the Green Paper. Again, he emphasised that there should be a proportionate, not a vengeful, response in terms of the criminal justice system. Nobody denies that prison works in certain circumstances—for certain crimes for certain individuals. But—and this is an argument that we must win—so do the alternatives to prison. If we can get a proper debate about that—a proportionate response—then we have some success in moving forward.
I have already mentioned my noble friend Lady Kramer’s marvellous maiden speech. I was interested by her endorsement, and that of the noble Lord, Lord Ramsbotham, of Latchmere House, although I have not yet worked out how you find the space to make these visits—perhaps the noble Lord, Lord Bach, can advise me—other than by going into Opposition. Latchmere House looks an interesting place to go and have a look. On the question of not being re-elected, my noble friend might like to use a formula that I have used over the years. Whenever anybody asked me why I gave up being a Member of Parliament for Stockport South, I said that it was by public demand.
The noble Lord, Lord Ramsbotham, is another titan of this House in terms of this subject area and as president of UNLOCK. I thought that his comment about the chairman of UNLOCK, Mr Cummines, being given an OBE, was the living example of what we are trying to do. I hope that the Green Paper gives a real push to the work built on by the YJB of trying to prevent young offenders from coming into our prison system in the first place. To have fewer than 2,000 young people in custody of one kind or another is a success. That rate is falling. I also accept that the alternatives are intense.
I have been warned that I am running out of time. Along with the noble Baroness, Lady Doocey, I certainly think that Project Daedalus in London is an example that should be followed. We are hoping for other projects of similar local initiatives to be tested.
I say to the noble Lord, Lord Judd, that we have instinctively been on the same side on so many occasions over the past 40 years, and I am really glad that we are once again shoulder to shoulder on this. The only thing that I would say—this goes back to the original point of the noble Lord, Lord Bach, on victims—is that it is true that some of these young people are victims of their circumstances. However, without playing the old soldier, I should also say that I was born into a working-class area and I can think now of two lads in particular who were born into disruptive, dysfunctional families and had all the disadvantages that we find in people in young offender centres today—I had better not say what their chosen careers were, because some clever journalist will go and identify them—but they both succeeded past those backgrounds and made good lives for themselves. A disruptive, dysfunctional family does not mean that criminality is an inevitability; neither does poverty mean that criminality is inevitable—there is a choice. That is why I am very interested in rehabilitation. Some people have gone through this experience and said that it can be life-changing also for the young offender actually to meet their victim.
I say to my noble friend Lord Loomba that it is so valuable to have him, with his experience of work on poverty at home and abroad, as a Member of the House. I say to the noble Lord, Lord Hodgson, that I thank him not only for his intervention but for his work. I hope that he can de-bureaucratise the setting up of charities and voluntary organisations. The other thing that has impressed me over the past few months is the fact that it is often the smaller charities and smaller voluntary organisations that are doing the interesting work in this field. So I say to the noble Lord: more power to your elbow.
Like the noble Baroness, Lady Warwick, who also asked about the YJB, I pay tribute to the National Grid Transco scheme. However, I had better finish before the noble Lord, Lord De Mauley, gets overexcited about what I am doing. I always think that it is rather funny that we have to stop when we actually have hours and hours of time, but, given the experience of the past few days, we had better stick to the rules, and I had better set a good example.
We are trying to build on some of the previous work, Green Papers and studies, and we are doing everything that we can to bring the research up to date. People are invited to read the Green Paper and to respond to the questions, and they have until 3 March to do so. As I said at the beginning of these remarks, I would like the noble Lord, Lord Dholakia, to leave his Bill in abeyance because we are working urgently on the issue and will be introducing legislation. The Front Bench opposite knows how restricted I am in making commitments, but we are undertaking that work with urgency. I also promise my noble friend that he will be fully involved in our discussions so that when we bring forward proposals they will very much reflect the content and the spirit of the legislation that he has put before the House today. As I said before, this has been one of those debates that show the House of Lords at its best.
Lord Dholakia
My Lords, I thank the Minister for his very positive statement, and of course I am delighted to be able to co-operate fully, as he has proposed, in the forthcoming legislation. In his actions he has also established a deep bond between the leader and the deputy leader of the Liberal Democrats, and long may it continue.
I cannot miss this opportunity to thank all noble Lords who participated. We have had a very hectic week and I do not wish to inflict further pain but I cannot fail to point out that we have heard some remarkable maiden speeches from my noble friends who participated in this debate. As my noble friend Lord McNally said, the House is at its best when, despite some serious disagreements on occasion, it deals with social issues. This debate is an example of the unanimity that we can achieve in a cause for which we are all fighting.
I intend at some stage to have discussions with the noble Earl, Lord Erroll, about his concerns and to see how those matters can be taken up in discussions with the Minister. I would also be failing in my duty if I did not thank my own—completely voluntary—Bill team: Paul Cavadino from Nacro and Julie Wright of UNLOCK. They helped me to shape the Bill. I must also thank the noble Lord, Lord Bach, for his compliments. He also mentioned Scotland. We deleted part of those provisions for the very reason he suggested—that it is a devolved matter. We have had discussions with them, and I am glad that my noble friend Lord McNally will be visiting Scotland. I hope he will be able to take the matter up with them. I therefore ask the House to give the Bill a Second Reading.
Arrangement of Business
Baroness Royall of Blaisdon
My Lords, further to an intervention made by the noble Lord, Lord Redesdale, earlier about the Dog Control Bill, I wish to place on record that my noble friend Lord Grantchester tabled an amendment, about which he had been in discussion with Defra. It was known that it would not be a wrecking amendment. I want to associate myself with the words of the Chief Whip that Committee stage of the Dog Control Bill was postponed due to the number of speakers in this important debate on the Bill put forward by the noble Lord, Lord Dholakia.