Grand Committee
(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Energy Bill [HL]
(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Deputy Chairman of Committees (Lord Skelmersdale)
We continue the Grand Committee on the Energy Bill. If there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells have rung and resume after 10 minutes.
Clause 66 : Power of Secretary of State to require information: carbon emissions reduction targets and home-heating cost reduction targets
Amendment 30ZA
“( ) to assess whether the person’s obligations under section 41B of the Electricity Act 1989 or section 33BC of the Gas Act 1986 are, in particular, being discharged transparently, cost-effectively and consistently throughout the duration of the obligations and achieving value for money; and( ) to assess whether these obligations are consistently targeting priority groups and properties”
Baroness Smith of Basildon
My Lords, this is a fairly brief and self-explanatory amendment, which gives us the opportunity to have an assessment of the obligations to ensure that they are,
“discharged transparently, cost-effectively and consistently”,
throughout the time period and to ensure that we have those areas covered so that we can make a full assessment of the effectiveness of the obligations. It is very straightforward and I hope that the Minister will be able to accept it. We have all learnt from past examples when the programmes in place may have been extremely valuable but we have also learnt lessons about how much more valuable they could have been if there had been such transparency in place. This is about getting the best approach. I beg to move.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I welcome everyone back to the Committee and thank all noble Lords for their great contributions to date. May it continue. As I have said repeatedly, this is only one stage in the passage of our Bill, and there will be opportunities between now and Report for further advice to be given and listened to, further discussions to be had and further detail to be discussed.
Before I begin, I should say that in the debate on 26 January, I referred to a target of reducing carbon emissions by 10 per cent. I should clarify that this target refers to emissions from central government. I did not want any uncertainty there. We are keen for local authorities to play their part in reducing emissions. This will help the UK meet its legally binding carbon budgets, but local authorities are not formally covered by the 10 per cent central government target.
Amendment 30ZA would amend Clause 66 to provide further information-gathering powers. This is entirely consistent with the Government’s intention for greater transparency under future energy company obligations. The powers in Clause 66 allow us to gather such information as is necessary to help the Government to decide what provisions to make in future secondary legislation, powers which also enable the Government to review the operation and effect of policies that are under way. The matters that the noble Baroness seeks to cover are all, I believe, potentially germane to these issues, and are therefore covered in principle by the existing powers. Information could include, for example, exactly which measures the companies are delivering where, and how much those measures are costing the energy companies to acquire and install.
I hope that this has provided satisfactory reassurance and ask the noble Baroness to withdraw her amendment.
Baroness Smith of Basildon
My Lords, on the basis that the issues are covered, I would be happy to withdraw.
Baroness Maddock
“Promotion of reduction of home heating costs: reduced VAT rate
(1) For the purpose of enabling consumers to purchase energy efficient products in order to reduce home heating costs and carbon emissions, the Chancellor of the Exchequer must within 12 months of the coming into force of this section lay before Parliament an order to reduce the rate of VAT to 5% on—
(a) passive flue gas heat recovery systems; and(b) energy efficient windows in specified premises.(2) An order pursuant to this section shall be made by statutory instrument subject to the negative resolution procedure.
(3) In this section—
“passive flue gas heat recovery systems” means technology that can use the waste heat from condensing boilers in order to heat water;
“low emissivity glass” has the same meaning as in Part L of the Building Regulations.”
Baroness Maddock
My Lords, this is a new clause concerning proposed reductions in VAT rates and adds to the new clause I moved at the last sitting of this Committee. Members will be aware that most energy-saving materials enjoy the reduced VAT rate of 5 per cent; it makes no sense taxing energy saving more than energy use. There are some exceptions, however, and there are new technologies, as I mentioned last time.
I apologise for the wording in this amendment. As originally worded, subsection (1)(b) referred to “special glass” and not “energy efficient windows”, and when I changed the amendment I regret I did not change the explanatory paragraph below, which talks about the glass. I anticipate the amendment in this form is unlikely to be accepted by the Committee but if the Minister was minded I am sure he could change it.
It is important that we try to encourage people, as we are in this Bill, to spend their money on energy efficiency measures, but we have some that carry rather a high rate of VAT. The supply and installation of this equipment can be charged at a 5 per cent rate and I hope the Minister will look at this favourably. I suspect the Minister will say that this is something he must talk to the Treasury about, and I appreciate that point; but if we are serious about this we need to be consistent across the board on how we apply VAT to energy efficiency measures, products and installation. I beg to move.
Lord Jenkin of Roding
I was a member of the Treasury team when VAT was first introduced in 1972. It was one of the principles of the then Government that it should be as simple a tax as possible. There were of course some major exclusions from VAT, for instance all food and children’s clothes, but I well remember my noble friend Lord Higgins, who was dealing with the Finance Bill, saying that it was a simple uniform tax to be extended across the range of products and services, apart from those that were specifically excluded.
Since then Governments, no doubt of all persuasions, have found themselves led down a path of adding more complications to VAT. I have sympathy with what my noble friend has suggested, because these are clearly energy-saving and carbon-saving measures, which one would wish to encourage. However, to use VAT and the tax system to do that seems to me to go against the principle of keeping VAT as simple a tax as possible.
VAT is now substantially higher than it was when it was first introduced, for reasons that we can all understand, although that is not within the competence of the Committee. Wisely, my noble friend’s amendment places this firmly in the hands of the Chancellor of the Exchequer, although it could not be with anybody else, as my right honourable friend the Chancellor is the Minister in charge of the tax system. However, I sound a note of caution on beginning to extend lower rates of VAT to other services and products, notwithstanding that one might have some sympathy with what is being sought. Having said that, I should be interested to hear what the Minister has to say in reply.
Lord Davies of Oldham
My Lords, the noble Lord, Lord Jenkin, is right to remind us that exempting certain goods from the normal rate of VAT is a matter for the Treasury. We are all too well aware that the Treasury looks at these issues with a sharp eye and intensive scrutiny at any time, but in this age of austerity that position is likely to be intensified. As the noble Lord indicated, the noble Baroness, Lady Maddock, is seeking to build on the 5 per cent reduced rate of VAT that already applies to a number of installations that relate to energy conservation, both to encourage householders to install energy-saving facilities and as a clear earnest of the Government’s intent that these issues are significant enough for us to look at them in this regard, albeit not quite as we do food and children’s clothes, which attract no VAT. Nevertheless, the 5 per cent rate relates to a clear priority area; it is an exclusive area. In her amendment, the noble Baroness wants to extend that area.
I am not in the slightest doubt about the merits of doing that and I think that, in the framework of the Bill, we should indicate that we think that this will give substance to the Bill’s principles. However, like the noble Lord, Lord Jenkin, I acknowledge—no doubt the Minister will also indicate this to the Committee—that it is difficult to write Budgets in the framework of energy legislation when that is the preserve of the Chancellor of the Exchequer and the Treasury. I would not be at all surprised if we had a somewhat guarded response to the amendment. However, we already have provision of the reduced rate in this area and the amendment would not add a great deal, although the Treasury might argue that the cost would be significant. Nevertheless, the amendment fits in with the pattern of reduced rates of VAT in this area and I hope that the Minister will indicate that, at the very least, the Government have an open mind on the issue.
Baroness Northover
My Lords, the purpose of Amendment 32 is a perfectly understandable aim. However, we have been advised that this proposal would not fall within the scope of the Energy Bill, since taxation can only be amended in a Finance Bill. Therefore, as my noble friend Lady Maddock anticipated, I can confirm that taxes are indeed a matter for the Treasury and that the Chancellor keeps all taxes under review and announces any changes as part of the Budget process. We understand the thrust of what she is arguing, but I hope that on the basis of what I have said, my noble friends will feel able to withdraw the amendment.
Baroness Maddock
My Lords, I apologise to the Committee for jumping the gun and moving my amendment before it had actually been called. I thank my noble friend for her reply. It was anticipated that that might be the case, but I think that it is important to flag up that we are not consistent in this area. A Bill of this nature seems to provide a good opportunity to raise the inconsistency. May I ask the Minister if he will have a conversation with his Treasury colleagues about this to see if we cannot be a bit more consistent? After all, a lot of time and energy is being spent on the green deal and other things. This was particularly aimed at how we might help community buildings and so on. So the message is: please could somebody try to bring a bit more consistency in this area, and could we have conversations about it? In the mean time, I beg leave to withdraw the amendment.
Lord Whitty
“( ) In subsection (2), after paragraph (a), insert—
“(aa) requiring the holder of a licence to—(i) abstain from any sales activities while they provide or install, or facilitate the provision, installation or operation of, meters of a particular kind;(ii) only supply marketing material in written form while they provide or install, or facilitate the provision, installation or operation of, meters of a particular kind;(iii) supply independently written information outlining how to use the smart meter while they provide or install, or facilitate the provision, installation or operation of, meters of a particular kind”.”
Lord Whitty
My Lords, we are now moving on to Chapter 5 of the Bill and the issue of smart meters. We have touched on it from time to time at earlier stages, and I have said that some of the issues that arise in relation to the Green Deal also arise in relation to smart meters. The Government will need to consider the implications of the two programmes. I should probably make it clear at the outset that I am in favour of a roll-out of smart meters, but there are a significant number of consumer issues which arise in relation to the installation of such meters which, if wrongly handled, will lead to some resistance and backlash against them.
Smart meter installation is different from the Green Deal because the Green Deal is ultimately a voluntary scheme that the householder or landlord can take on board, and then he can decide whether it had been a good deal for his premises. With smart meters, the obligation is on the supply companies to install them. They are already beginning that installation, and some of them, particularly British Gas, already have a substantial programme under way. However, we should look at the implication for consumers. As colleagues will know, one of the problems in the energy market has been the ease with which people can switch and the potential cost of switching in terms of both the supply company and the method of payment.
If we have a wholesale introduction of smart meters—which make it more difficult, more costly or more of a hassle for the consumer to be able to say, “I’m fed up with the way this company is dealing with me; I want to switch to the next company”, or “I’m fed up with paying by pre-payment meter; I want to go on to direct debit” or whatever the choice is—and if the meter itself, the system under which the meter operates or the terms on which it is supplied make that more difficult, then we have significant consumer detriment. We must remember that the energy market is not one that is characterised by deep trust of consumers in their suppliers. Nor is it the case that the regulator has substantial powers over the peripherals: it has substantial powers over the supplier, but there is no real protection in relation to energy products or services in the same way. Installation of smart meters could lock people in to their current system unless we provide that the meters are reasonably interchangeable, compatible and available in a way that allows people to switch both method of payment and supply.
We have to bear in mind that the introduction of smart meters is not so universally supported as it probably is in this Room. Research by Consumer Focus a couple of years ago, as well as evidence from Which?, showed fairly deep resistance to it, and some misunderstanding. So there is some mistrust at the consumer end, to put it at it mildest. We also know that in other countries where similar programmes have been adopted there has been some resistance—for example in some states of America and, on broader human rights grounds, in the Netherlands. So it is a delicate area. If we are to achieve introduction with minimum consumer resistance and minimum delay and challenge, we need to be able to reassure the householder that the meter that they are installing will not stop them switching should they wish to change tariff, company or the method by which they pay.
So, Amendment 32C deals with the degree of compatibility. This is not just an issue of standards, because we have been talking about standards for smart meters for at least 10 years before we have introduced a single one, and we are still at a position where we do not have a common standard. It would obviously help if at this point we already had a standard, but the issue here is compatibility, which need not necessarily mean a single standard or specification. It is important that we can reassure consumers that installing a meter will not inhibit their choice.
Amendment 32B deals with a slightly more ticklish issue. When the supply company or their agent is required to go into households and install a smart meter, how will it deal with trying at the same time to sell other products that are related to the smart meter, or that could be made to be related to it? Protecting consumers during the installation process is essential if we are not to meet with some resistance. On the one hand, there is the possibility of mis-selling in these circumstances; on the other, some devices are coming on to the market that would make it much easier for consumers, on the basis of the smart meter, to know what was causing their energy consumption to increase and how they could control it. The basic smart meter primarily gives the supply company that information, although it also tells the consumer at any given time what their level of consumption is and the cost of it.
The amendment would allow information to be given to householders about other products that could help them to make sense of and use smart meters, but in a way which does not amount to hassle or to a situation where their mandatory presence inside the consumer’s house can be misused to sell particular products. The amendment effectively requires the marketing material to be in a written form so as to protect the householder from being misled or mis-sold a related product.
I have no doubt that the Minister and his officials will have comments to make on the exact wording, as will the supply companies; but unless we recognise this as a potential problem, we could find ourselves in some difficulty. In one sense we are ahead of the game in that some installation programmes are going on and we know that there will be no standard design or specification before 2014 at the earliest. We could therefore already be locking people in. We need to ensure that, as the programme rolls out, we minimise the degree to which that can happen in future.
I hope the Government can at least take on board these concerns and look at the best way of dealing with them in terms of the legislation and reassuring householders that smart meters will not inhibit their choice or lead to their being ripped off in some other way when the installation takes place. I beg to move.
Lord Jenkin of Roding
My Lords, like the noble Lord, Lord Whitty, with many of whose remarks I entirely agree, I, too, have been trying to keep in touch with what has been going on—indeed, ever since I was offered the chance of installing a smart meter by one of my suppliers, only to be told that I could not possibly have it because it was in a porch and, therefore, accessible to anyone passing the house. It seems to me that these are the kind of things that must be dealt with.
I think that the noble Lord, Lord Whitty, has not fully taken account of the extent of the discussions, which have been going on now for some time, between the Government, the industry, Ofgem and consumer groups. These discussions have been extremely positive and seem to me to have been exactly the right way forward. We now have the Government’s prospectus—issued in July, I think—and a draft code put out by the Energy Retailers Association, which works with Energy UK, that sets out how a code might deal with precisely the points to which the noble Lord, Lord Whitty, drew our attention.
I am told that this has attracted comments from the consumer organisations, which are clearly interested in seeing how it will develop. In terms of securing a system that is both clear and at the same time offers flexibility—and flexibility is something that the industry has tried to build into the system; there must be some flexibility in how this will be done—a code which can be more easily amended in the light of experience may be better than trying to establish firm statutory rules, such as those in the amendments which the noble Lord has moved.
One of the points right at the heart of these discussions is that the right of changing your supplier has to be built into the system. I have had a letter from my noble friend’s department only this morning in response to a representation that I made to him a couple of weeks ago. It states:
“Common specifications will also be the means for achieving ‘inter-operability’, which means that suppliers can use smart meters installed by other suppliers, allowing easy switching.”
It seems to me that that is the kind of standard which the noble Lord, Lord Whitty, was looking for, and I think it is now firmly taken on board by both the industry and the department. Indeed, I have been told that the question of maintaining the right to switch suppliers has been regarded as a sine qua non. It has to happen with the installation of smart meters, and nothing in the system should prevent it, given that it is the way in which competition can be made to produce benefits for the consumer. A voluntary code that balances flexibility to provide the customer with information, while at the same time guaranteeing their rights, would be a very desirable way forward. I do not know what my noble friend will say but, against that background, the amendments might be regarded as being overprescriptive.
Lord Grantchester
My Lords, we agree in large measure with the amendments tabled by my noble friend Lord Whitty. We thank him for introducing the subject of smart meters so that we may discuss certain aspects of their operation. On his first amendment, on marketability, we understand that a balance must be struck between information provided to the consumer and possible salesmanship at the time of installation. He is quite right to draw the attention of the Committee to the fact that only 20 per cent of consumers view their energy supplier as “most trustworthy”, which is a huge gap to bridge in getting to a degree of confidence for the consumer.
On the question of smart meters and interoperability, as we know, at present consumers cannot change supplier without changing meters. We understand that there could already be something approaching 2 million smart meters in the marketplace, although the exact number is not known. It would be very interesting if the Minister could provide us with any figures. At Second Reading, my noble friend Lady Smith raised the question of interoperability. The Minister has since written to us to say that he has had discussions and will do his utmost to make sure that, as far as possible, interoperability will be maintained. What exchanges has the Minister had with the energy companies in this regard? I draw to his attention that this is a vital area for consumer confidence, and ask whether there are indeed ongoing conversations with the industry.
The noble Lord, Lord Jenkin, drew to our attention the fact that the Energy Retail Association has produced a draft code of conduct for consultation, building on suppliers’ current work on a draft voluntary code of practice on vulnerable consumers and accurate billing. Our understanding is that, when the code of practice comes into place, this interoperability should be a standard requirement. Perhaps the Minister can comment on whether, by the time the regulations are drawn up, smart meters will be not only entirely interchangeable between credit and pre-pay systems but completely interoperable between energy companies.
That leads me to ask the Minister a few general questions that are afforded by this opportunity. Does he have in mind perhaps undertaking a review of consumer protection in this field? It is a huge area and could benefit from such a constructive operation. Furthermore, does he have in mind a strategy to deliver consumer benefits? These smart meters are not simply a new device that will allow the “market to provide”, as he said. Perhaps we cannot simply install them and hope that they will work. There will have to be a strategy to ensure that the consumer benefits are realised and, indeed, a constant interactive review of the rollout strategy to ensure that all the opportunities are not missed. At the moment there does not seem to be any monitoring framework in mind. There are also no minimum standards to encourage not only general acceptance among consumers but some knowledge of what they are looking at when they see a smart meter. The whole consumer field could be greatly augmented by undertaking a constant interactive review. Lastly, has the Minister thought about an independent smart-metering delivery campaigns body to monitor these situations and perhaps to give him guidance on extra help to low-income and vulnerable consumers?
Lord O'Neill of Clackmannan
I welcome this amendment. It is important that we have a code that is as robust as possible, not least because this process will be carried out without a clearly identifiable body responsible for consumer protection. We have previously had gas and electricity consumers councils. After that, we had the combined one and Energywatch, which was folded into Consumer Focus, which, of course, will disappear. Many people have grave doubts about whether the citizens advice bureaux as presently constituted have the resources. They certainly have sufficient locations, but the question remains whether within these locations they will have people with the expertise to take on the protection of consumers when matters such as smart metering arise.
As has been pointed out, there is a great lack of public confidence in the energy suppliers in this country. That is quite a sizeable achievement, because for many years we were able to point to British Gas, the Post Office and one or two other companies as being the kind of companies that people could depend on and trust. Now, in large measure, either through commercial incompetence or greed—in the case of the Post Office it is not really greed, but I certainly would not acquit the others of a charge of greed—the public lack confidence in these companies.
The rolling-out of meters will go on for some time. We will have something like 18.5 million households with gas and another 24 million with gas and electricity, and then there are small businesses, shops and the like. So we could be talking about somewhere in the region of 45 million-plus meters being installed over a relatively short period.
One of the hallmarks of this process at present is that it is shrouded in secrecy. The lack of transparency about the discussions taking place between the Government and the companies is, in many respects, quite astounding. There is not that much that we need to concern ourselves with in terms of commercial secrecy, but we need to know a great deal more. If we are not going to have what many of us would regard as appropriate bodies for consumer protection, if we are likely to have a lengthy period in which this rollout will take place and if we have a conspicuous absence of transparency in the planning and the bringing down, even intermittently, of tablets from the mountain, it is important that we have as robust a code as possible.
While we may get the usual claptrap from the Minister about the words in the amendment not being the exact words, we want reassurance. The public deserve reassurance. We as consumers will be paying for the installation of these meters even though they will be owned by some electricity or gas supplier. It must be made clear that we will have these meters for a long time. I remember that one of the past arguments against smart metering, at a time when there was not quite the environmental edge to the debate that there is now, was that these meters were robust enough to last for 40 years. It was the “If it ain’t broke, don’t fix it” kind of argument. We are going to be saddled with these damn things for a long time, so we should ensure that they are the right ones, that they are sufficiently flexible, that we begin to get clear indications of the intentions of the companies and that there is to be a sufficiently strong and robust process of consumer protection throughout that period.
To each of those requests, I would expect some kind of lukewarm response from the Minister, such as, “We’ll do our best. We’re all trying very hard, chaps”. Until such time as we can get something more robust than that, the least that we can hope for is a decent code of practice. My noble friend Lord Whitty has made a reasonable stab at that. The words may not be exactly what are required but, if the message can be got through and if at Report we can get something to reassure and protect consumers, we will not have made too bad a fist of this part of the Bill.
The Lord Bishop of Chester
My Lords, when the Minister does indeed bring the tablets down the mountain at the end of this short debate, I wonder if he could put on record what the Government anticipate will be the average capital and installation cost, which will be an additional burden on the energy consumer.
Lord Teverson
My Lords, perhaps I may make a short comment on the contribution of the noble Lord, Lord O’Neill. Of all the things that the Minister has or has not done, the one thing that he has not done is to come back on amendments and say that they are not exactly right and will not therefore work. I have never heard him make that particular response, to put the record straight.
Lord O'Neill of Clackmannan
It is usually the Whip who gets the dirty job of saying, especially to his noble friends, that they have a nice amendment but it is not quite good enough and they will have to come back. The noble Baroness has already done it several times, but perhaps the noble Lord was not in the Room at the time.
Lord Marland
My Lords, I am grateful to my colleague the Energy Minister, Charles Hendry, for coming down with his tablets from the other place to listen to the quality of this debate and indeed, according to the noble Lord, Lord O’Neill, the “claptrap” that I am about to tell him. I am sure that he did not mean that.
Lord Marland
We will wait and see. I am disappointed to hear that from a man who was on the government Benches for 13 years. We all know that smart meters started before we got into government and that consumer protection was not high on the noble Lord’s list then. Maybe he was internally debating with his own party; I hope so.
I am also extremely grateful to the noble Lord, Lord Whitty, and the opposition Front Bench, who telegraphed to us their message on these important issues before this event. It is a fundamental subject for us to address. At its heart, as the noble Lord, Lord Whitty, would say, is unwelcome sales activity on the one hand and interoperability between companies on the other. Those are the two salient points of his amendments.
I begin with a couple of factual issues to set the scene. We estimate that there will be 46 million smart meters. The noble Lord, Lord O’Neill, was right on that, which is excellent. We know that British Gas has rolled out around 250,000 so far; it told me so this morning. We also know that the average cost to British Gas is around £300 over a lifespan of 20 years. I hope that that deals with the comments of the right reverend Prelate.
On the thrust of this argument, it is absolutely fundamental that customers are protected from unwarranted and unwelcome sales activity. However, we must not ignore the fact that at times sales activity may be welcome, which we must bear in mind in legislating on this matter. Thanks to the previous Government, we already have powers available to us for consumer protection in the Energy Act 2008, which stands at the moment. It is fundamental that Ofgem is carrying out what I could not believe was called a “spring package” and will issue recommendations on how interoperability and the various issues that are absolutely fundamental to smart meters will be rolled out this summer. As I said, the Energy Act gives us powers to act on this. I do not believe that, as the noble Lord, Lord O’Neill of Clackmannan, suggests, companies go into smoke-filled rooms for clandestine meetings with Ministers to discuss these things. These matters have been discussed and aired openly because it is to companies’ advantage to work with the customer. After all, it is the customer who will be taking these on board.
As I said earlier, I am so concerned about these two issues that the noble Lord, Lord Whitty, has raised that I had a meeting with the chief executive of Centrica this morning. We went through it line by line. I must say that I was impressed by the way in which that company is determined to roll this out. I am also impressed that it is co-operating in a very difficult technical area with Scottish Power and E.ON and has relationships with RWE and EDF. Understandably, they are looking at how the technology develops, particularly in the use of telephones. British Gas is currently working with Vodafone and we hear now that British Telecom has come in with a product. It is a complicated product that is evolving. As Ministers, we will monitor and make sure that this has the consumer confidence that all of us in this Committee want to see. With that in mind, I hope that the noble Lord will withdraw his amendment.
Lord Oxburgh
On cost, does the Minister agree that the purpose of rolling out smart meters is to save money and to make our electricity generating system more robust and less expensive? It is unlikely to offer the prospect of reduced prices, but it could offer electricity prices that rise a little less rapidly than they would have done otherwise. It should be a double win. The companies will avoid the inconvenience and cost of having people come round to read meters. They will also get a much better understanding of the power requirements of different parts of the community at different times, which will allow them to manage the electricity system better. From the consumer’s point of view, they avoid the inconvenience of inaccurate and late bills, with which we are all familiar. They also get the opportunity, if they so wish, to manage their consumption in a way that will lower their costs. This should be a win-win proposition. The Government and the companies—if they believe this, as I hope they do—have a responsibility to spread the word abroad.
The Lord Bishop of Chester
My Lords, the noble Lord, Lord Oxburgh, provokes me to ask a further question, either of him or of the Minister. On the basis of the figures that have just been given, the cost will be about £14 billion over 20 years. What hard estimates have been made of the savings when set against £14 billion, which is not an insignificant amount for consumers to have to bear?
Lord Grantchester
My Lords, I asked the Minister whether he had anything in mind regarding consumer protection in the field. Perhaps I could press him again on that, because I understand that some consumer protection provisions are contained in the Energy Act 2008. Does he think that they are sufficient, or will they be repealed? As we all appreciate, energy companies are working on behalf of their shareholders rather than consumers. What discussions has the Minister had with consumer groups in addition to those with energy companies?
Lord Marland
I am grateful to the noble Lord, Lord Oxburgh, for his commentary on this issue, which partly answered the question of the noble Lord, Lord Grantchester. It is mutually beneficial to both parties that smart meters are introduced. As I mentioned, Ofgem has consulted all groups closely to find a way forward. It is for it to report and to determine whether there should be a tightening of existing powers under the Energy Act following its spring package.
The total financial benefits of introduction are as yet unknown. There are a number of ways in which one could look at them. An executive of British Gas told me this morning that, when she was young, her father used to sit her down in front of the electricity meter to see it going round and round and to show the cost that was being incurred in the household. As I have said, I have sat my own children down and said, “Look, this is what’s going on”—I have one of those little boxes, which I commend to your Lordships. They are horrified that, at one point, it shows 298 an hour and then, at another, 130 an hour. There will obviously be a lifestyle change, which we cannot begin to assess, as people seek to reduce the cost of their electricity. I discussed with Centrica this morning the likely impact on bills. We estimate that there will be a saving of £14 to £15 on an electricity bill net of the cost of installation.
Lord Whitty
My Lords, I am grateful to all noble Lords who have taken part in this debate. The Minister said that provisions exist in the 2008 Act and it is clear, as the noble Lord, Lord Jenkin, said, that some progress on a voluntary code of practice has been made. However, this section of the Bill is intended to move that forward in a way that meets anxieties that interoperability and householders’ freedom of choice are protected.
I should probably have declared a past interest: until last month, I was the chair of Consumer Focus. There has been some engagement, but not all our points have been met, in particular the issue that, from the word go of the rollout, consumers should not be subject to cost when they switch. The Minister has already consulted with British Gas and Centrica. There are about 250,000 smart meters out there. The estimate is that, by 2014, there will be 4 million, most of which will be British Gas. This is before the standards on interoperability have risen. My understanding is that, at the moment, if British Gas customers who have one of these smart meters want to switch, they will effectively be in dumb mode if they switch to another supplier whose meters are not compatible. Likewise, if they are on pre-payment but wish to switch, the smart-meter systems for pre-payment and for direct debit, for example, are not compatible.
In many ways, I am pleased that British Gas has taken the initiative in starting to roll these things out for all the reasons that people have given—we want them out there as soon as possible. However, the fact of the matter is that we are going to have a whole number of them that are not compatible and, unless we lay down principles in this Bill, that will continue. Those principles need to apply to the ongoing rollout and they need to apply to the standardisation that is introduced beyond 2014.
I agree with the noble Lord, Lord Jenkin, that the manner of meeting those requirements can be flexible. I am in favour of a strong voluntary code of practice covering this area, but the principles that lie behind my amendments should surely be in primary legislation. I accept that these amendments are probably too complicated and that ongoing discussions and outcomes need to be taken into account when we reach the final draft, but I would be concerned if we were to pass the Bill without the principles of, in particular, no detriment in terms of choice and no mis-selling being written into the primary legislation.
Lord O'Neill of Clackmannan
Is my noble friend not concerned that, from what the Minister has said, the ongoing discussions will probably be completed by the summer, by which time this Bill will have become an Act? Therefore, it will not be possible for us to deal with the outcome of these discussions in relation to this legislation. It will require a subsequent electricity/gas Act to accommodate it, unless we are going to have some kind of magic SI brought in at a later stage to take account of the discussions. Has my noble friend thought of this point?
Lord Whitty
My Lords, we get energy Acts rather frequently and one would hope that this would not provoke an even speedier reversion to new primary legislation in this field. As I understand what the Minister was referring to, he was speaking about the discussions involving the regulations that Ofgem is going to bring forward as part of its spring package, which—confusingly, as he says—will emerge in the summer. That is not necessarily the end of the line. I hope that, by the time the discussions are finalised in, shall we say, the late spring, the outline of this part of the Bill will be clear to Ofgem and those with whom Ofgem is consulting. If it is not, the situation to which my noble friend Lord O’Neill refers arises.
Lord Marland
I thought that I had explained this but, for clarification, Ofgem is dealing with this short-term interoperability under its existing licensing and code. We have the primary powers, which the previous Labour Government created under the Energy Act 2008, to enact the necessary changes that are thrown up as a result of this. Indeed, we will use them if we need to.
Lord Whitty
I am glad to hear that, but my recollection of the 2008 Act is that it does not deal specifically with this point.
Lord Whitty
It deals with interoperability, but it does not deal with the cost to the consumers of not having interoperability, which is what lies behind this point. It may be that the Government can interpret that sufficiently widely to intervene, but I am not necessarily convinced of that. This is effectively the last piece of legislation before the main part of the rollout is going to occur and, unless we have those principles embedded in primary legislation, the Minister’s leverage with Ofgem and the supply companies will be more limited as we go down the line.
I shall return to this amendment in perhaps simplified form at a later stage in this process. Some of us who sit through energy Bills are pretty convinced of moving in this direction. As the noble Lords, Lord Teverson and Lord Oxburgh, said, the aim is to reduce the cost of electricity, both in terms of supplying it and in terms of the cost to the consumer. That will work only if the consumer is in a position to interpret the information that a smart meter gives effectively and proactively and if the smart meter installed at the beginning of the process is still relevant to a changed supply tariff or method of payment for the householder at any given point. The principles need to be laid down here. This is not a matter that we should avoid as we go on through the passage of the Bill. I beg leave to withdraw the amendment.
Lord Teverson
“Energy tariffsEnergy tariffs
(1) After consultation with electricity and gas retail sellers, and consumer groups, the Secretary of State shall introduce regulations that make it mandatory for electricity and gas through pipeline supply companies supplying to domestic properties to configure their tariffs so that the initial units of energy supplied are at a lower cost to the consumer than remaining units.
(2) The principles of the scheme shall be—
(a) that the number of lower priced initial units shall represent the average amount of energy required for a household of that size to keep warm, clean and fed to a modest but acceptable standard; (b) the tariff price for the initial units shall be equal to the medium term marginal cost of the production of that energy;(c) overall, the new combined tariff should be revenue neutral to the energy supply companies.(3) The scheme and its tariffs will be assessed and audited by the Office of the Gas and Electricity Markets, who will also be responsible for the capture, analysis, and reporting of all information to the Secretary of State regarding the implementation and management of the scheme.”
Lord Teverson
My Lords, there are many strange things about electricity bills. This amendment caused me to look at mine more carefully. There are four pages of information, which normally I fail to look at—and most of the time when I need to look at it I find it too complex and I understand it less after I have read it than I did before I read it. On tariffs, the first tranche of units used by a normal consumer is at a significantly higher level of charge than the ensuing tranche. Some consumers may have even more divisions, but I have two and, as it is for most people, the first units used are far more expensive. On 23 December 2010, my first units were 20.1p each and the next units after I had finished those were a quarter less at 14.55p. I do not know whether that completely replicates what other people have, but it seems fairly representative.
We have two issues affected by tariffs generally. When I learnt economics as a corporate economist, we learnt that on the whole when prices were high you demanded less and that when they were less you demanded more. That was a demand curve, in which I am sure all noble Lords are well versed.
We are really trying to do two things in the Bill. One is to reduce the amount of electricity and energy used in the nation, thereby reducing carbon emissions. The other is to reduce fuel poverty by investment in making houses, dwellings and business premises more energy efficient. Yet these types of tariff—higher at the beginning and less at the end—mean that the market signals that we are trying to do exactly the opposite. That is why I have tabled my amendment in this way. I will be interested to know whether the Minister criticises the way in which it is written, as the noble Lord, Lord O’Neill, seems to think he might.
I would like to probe this area particularly. There should be a better way of doing this, which is what my amendment attempts. First, it says that things should be the other way round, so that there is an incentive to keep energy consumption relatively low and that those normal consumers who suffer fuel poverty are charged less. Having tried to table a suitable amendment, I absolutely agree that it is difficult to encapsulate exactly how that should happen, which is why it suggests a general scheme of what we are trying to achieve. At the end of the day, the arbiter would probably have to be Ofgem. We want the electricity units used by an average household for essentials to be at the lower rate, with a higher rate after that. Overall, the outcome should be revenue neutral. I say, maybe from my work as an economist, that the existing dual-pricing function is probably an indication of a monopolistic marketplace. You certainly do not have perfect pricing here. At another time, maybe we will want to address that.
Unfortunately, the amendment does not state that pre-payment meters should not charge significantly more than ordinary electricity tariffs, thus heavily and severely working against the poor and the fuel poor. We might consider that another time; perhaps it goes back to the smart meter issue. However, that is not what the amendment is about. It is about trying to bring a much more just tariff into the industry. The only way in which that can happen is through legislation. I beg to move.
Earl Cathcart
My Lords, I certainly support the thrust of the amendment, as I devoted almost my entire Second Reading speech to the subject. When I looked at my own electricity bill, I noticed that I was being charged nearly 30p for the first 900 units, after which the price dropped to about 13p; I obviously must have a word with the noble Lord, Lord Teverson, to see where he gets his from. I argued that that way of charging seemed cack-handed. As my noble friend said, it seems to defy the laws of supply and demand and their relation to price. The greater the demand, the greater should be the price. When I asked other customers and neighbours, they confirmed that they, too, were charged nearly double for the initial units that they consumed.
I further argued that the first few thousand units should be relatively cheap—near the break-even point of the supplier—and that the more you consume, the more expensive the units should become. Therefore, the more you use, the more you pay per unit. I am afraid that I have no idea what the break-even point for energy suppliers is but, if they are able to charge some customers below 10p a unit for daytime use, it must be somewhere below that—around 6p or 7p per unit. I presume that Ofgem would know exactly what the break-even points are for each supplier and, if not, it could find out. It begs the question whether energy companies should be required to disclose the break-even points and the changes throughout the year, which could then be verified either by auditors or by Ofgem.
I like the wording in the new clause proposed by my noble friend Lord Teverson. Subsection (2)(a) says that,
“the number of lower priced initial units shall represent the average amount of energy required for a household of that size to keep warm, clean and fed to a modest but acceptable standard”.
I suggested at Second Reading that it would not be too difficult for energy companies to obtain the council tax banding of each property, so that they could differentiate between, say, band A and band D properties. Obviously, a single person living in a bedsit would not require the same amount of energy as a couple with 2.4 children living in a three-bedroom or four-bedroom house. As things stand at the moment, there is little or no difference in the tariffs for living in a bedsit or a six-bedroom house. That is wrong. The person in the bedsit is paying a much higher proportion of their energy bill at the higher initial rate that is currently charged. Perhaps the electoral roll could help in determining how many adults live in each property.
If we are going to try to do something about fuel poverty, I believe that the way in which we charge customers must be changed, which is the whole thrust of my argument. In 2008, there were 4.5 million households in fuel poverty. I believe that, after the recent cold snap of November and December, this figure jumped dramatically, perhaps to 6.5 million households, 50 per cent of whom are pensioners. Those in badly heated homes are more prone to illness, which just pushes the problem and the cost on to the NHS. It was not surprising to read in the papers recently that energy companies have been cashing in on the cold snap and increasing their profit margins by 50 per cent. I am glad that Ofgem is investigating; it will report its findings on excessive profit margins in March. Consumers feel hard done by. Some whom I have asked feel that they are being ripped off.
Can Ofgem make energy companies change their tariff structure? I realise that energy companies are profit-making public companies, some of which are foreign owned. Can, as the amendment provides, the Government introduce regulations to force companies to change their tariff system so that the initial units supplied are at a lower cost to the consumer than the remaining units? Subsection (2)(c) of the amendment provides that,
“overall, the new combined tariff should be revenue neutral to the energy supply companies”.
I hope that the energy companies are willing to discuss this.
The thrust of my argument is to get as many of the 6.5 million households currently in fuel poverty—that is 26 per cent of total households—out of fuel poverty. I believe that progressive charging may be one way of achieving this. It would act as a real incentive for all households to reduce their consumption and to take up the Green Deal.
I received a useful letter this week from my noble friend Lord Marland, saying that the Committee on Climate Change looked into introducing rising block tariffs two years ago, before the recent hike in energy prices. It said that rising block tariffs would have an adverse impact on fuel-poor households, as they generally require more energy to heat their homes to an acceptable level. This is because the fuel poor tend to live in less energy efficient homes. Many of them, including pensioners, tend to spend more time in their homes. This suggests that a rising block tariff would make it more expensive for them to heat their homes to an adequate standard and make it more difficult to remove them from fuel poverty. The Committee on Climate Change concluded that rising block tariffs,
“should not be introduced until fuel poverty has been addressed through targeted energy efficiency improvement and other fuel poverty measures”.
Quite so; I cannot argue with that. But is this not exactly where the Green Deal comes in? If the tariff system was changed and these households took up the Green Deal, they should be much better off.
Lord O'Neill of Clackmannan
I find this a confusing debate. First, we have an elegant contribution from the noble Lord, Lord Teverson, explaining how there is a failure in the structure of the market and the present pricing arrangements. We then get an endorsement of this from the noble Earl, Lord Cathcart, who, with the greatest respect, is riding one of his hobby-horses. We are all entitled to do that, but half way through the business he changes horses and is not very sure whether he is going one way or the other.
One of the factors in making the Green Deal successful for consumers will be rising gas and electricity prices, because the Green Deal will make the savings that much greater. It will make the savings that much greater that much earlier if the initial block of electricity or gas units consumed is as high as possible; it is then the second tranche from which you may make some savings. That appears to be a recognition of the fact that we anticipate that, certainly for the rest of this decade, energy prices will continue to rise for a variety or reasons—changes in generation, shortage of supply or volatility of supply because of Middle Eastern uncertainties. All these things will, in varying degrees, result in a steady increase. That is one of the attractions—perhaps not the most compelling one—of the Green Deal. The amendment would in many respects undermine the attractive features of the Green Deal.
Equally, the climate change committee has argued that the majority of fuel-poor households have structural deficiencies which require more electricity to be used in keeping the rooms warm. Therefore, the priority must be to get people’s homes improved. The apparent attraction of making the price of the initial tranche lower is complicated by the fact that these people are always going to be the ones who will go into the second tranche to keep their houses warm. There are elements of contradiction in both arguments.
We have mentioned the role of Ofgem as a potential arbiter—a body that could hold the ring. Although Ofgem’s function is in part to protect the consumer, it is also to promote competition. The argument advanced by the proponents of privatisation and subsequent liberalisation was that, after liberalisation, you would have a competitive market in which the players would change the manner in which the old state monopoly had dealt with pricing issues. In fact, as we have seen, while it was apparently in the interests of the state monopoly to behave in a particular way, it is in the interests of these private oligopolies to behave in much the same way, in that they have not radically changed the nature of pricing.
Some of us have sought to introduce arguments about the injustice of the pre-payment meter to many households, although not all, as pre-payment meters suit consumers in a number of households, perhaps because people are there only part-time—the house may be a second home in a rural area, for example. The point that I am getting at is that it was only through the threat of intervention on the part of the last Government that we began to move on this issue. I think that only one company—Scottish and Southern—was prepared to change its pricing structure in relation to pre-payment meters. There may have been others, but that is the one that I remember from the big five or six in this area.
I do not think that Ofgem has the power to do this at the moment and I am not sure that it would want to do it. The argument advanced by the climate change committee is somewhat tentative, but it has some weight. If we are going to try to deal with the question of consumption and price, the speech of the noble Lord, Lord Teverson, provided an elegant solution. I respect him for that, but I am not sure whether it is the ideal solution. We have had a reasonable excuse to have a good debate, but I am not sure whether at this stage this is really the best way in which to deal with the problem. It would be preferable if we gave the regulator powers that it ceased to have some time ago to go in and explore this, if not independently to change it. I know that its powers are being reviewed; it certainly does not have the powers to interfere at this stage, as I understand it. But if it was to be given those powers following the government review, that might be a way in which to deal with the matter.
I am not certain that this amendment will achieve what it is trying to do in respect of the poorer households that spend a fair amount of money heating their homes. It is unlikely that we could get a tariff structure to enable all the heating of the poorest people’s homes in the country to be done on the lowest tariff. If we could get that, we would go some way towards alleviating the problems faced by the disadvantaged. Equally, we might well put ourselves in the position of having disproportionately higher prices for the second tranche, which might reach a level that brings additional people into fuel poverty. So we seem to be damned if we do and damned if we do not.
I am a bit confused and I am sure that other noble Lords are as well. It may be that listening to me has made matters worse. If we are to deal with this issue, we really need to deal with it on the basis of far stronger and more comprehensive evidence than we have at the moment. The present system does not work, but I am not sure whether something as flip as this amendment will necessarily come up with the answers that quickly.
Baroness Maddock
My Lords, I support my noble friend in raising an important issue, which has led to rather a long debate. In reply to my noble friend, could the Minister tell us where we are in getting the utility companies to simplify their bills and make them clearer? If the Green Deal is going to work and people are going to understand where their energy savings are, the bills need to be better. In the past, you might try to work out the payback on new technology. We had a condensing boiler and it was really complicated to look back over a year—we had changed suppliers at the time—to work out what we were saving. I think that in the end I did work it out and we had saved at least a quarter of the gas in a year with the condensing boiler, but it was no mean feat. Given that the Green Deal depends on people understanding such things and that we know that we will not all have smart meters in the near future, it would be helpful if the Minister could tell us a little about that.
I support my noble friend Lord Cathcart on what we need to do to help those in fuel poverty, but I cannot agree with him on trying to do it on council tax bands. The banding of your house does not relate to your ability to pay the council tax or any other bill. That is why I have been so against it for so many years. However, I support him in his aim to do something about fuel poverty. I have probably declared my interest before but, like the noble Lord, Lord O’Neill, I am involved with National Energy Action, which is a charity trying to do something about the fuel poor. We have been doing it for over 25 years now.
Lord Oxburgh
My Lords, the step tariff to which the noble Lord, Lord Teverson, has drawn attention clearly has its origin in the old concept of the standing charge—a charge that companies levied to cover people coming round to read the meters, preparing paper bills and all that sort of thing. The smart meter arrangements, which we have just been describing, will remove nearly all the justification for that concept. It would be useful if the Minister considered how he might ensure that the benefits of introducing the meters can be passed on to the consumer; it will obviously be some time before the whole system is drawn out. If any step is needed, it really should be a very small one. Smart meters should certainly make the handling of pre-payment meters identical to conventional ones; there need be no difference in charge. I presume that pre-payment meters will be managed the same way as top-up phone cards, so the whole thing should be straightforward.
Inverted tariffs can work. They have been used for water in Sydney, Australia—you get your first so-many cubic metres of water at a particular price and, as your water use goes up, so does your price. That is not quite the same, because a lot of subsequent use of water would be for watering large lawns and things of that kind, which is not quite what we are talking of here. Also, in my Shell days, we used something like this in Nigeria, where the company gave away a certain amount of electricity—enough to run a refrigerator, a number of light bulbs and a television—and charged consumers only when they went above a particular level. Those things have worked and have been used to alleviate poverty. Whether this is quite the way to do it, I am not sure; I am with the noble Lord, Lord O’Neill. However, there is an important idea here.
Lord Whitty
My Lords, the noble Lord, Lord Teverson, is to be congratulated: he has really put his finger on what is utterly wrong with the whole structure of tariffs in the energy market. It is an object of public policy to reduce fuel poverty, and it is an object of public policy to reduce consumption of energy, yet we have a structure of hugely complicated tariffs for households—2,500 tariffs, or whatever it is—the net result of which is that the poor pay more, and that the more you use the less you pay. That is an absurdity arising from a combination of an oligopolistic market, a history of the standing charge, and a sort-of ideology behind the Ofgem intervention about cost reflectivity. If you were really trying to achieve the outcomes that successive Governments have declared, you would restructure and regulate the market in the direction proposed by the noble Lord, Lord Teverson.
Obviously, there are complications. There will be winners and losers. I disagree with the climate change committee and, to some extent, with my noble friend Lord O’Neill—the bulk of the fuel poor are fuel poor because of the price that they pay for electricity, not because they have to use more of it, even though it is true that a programme of improving the energy efficiency of buildings would ideally predate any change in the tariff structure. A sub-group of the fuel poor have to spend to use an enormous amount of energy to meet minimum comfort levels, but the majority are hit because of the prices that they have to pay within the properties that they occupy.
There would have to be some sophistication of the proposition made by the noble Lord, Lord Teverson. The crude definition is a rising block tariff, but it is not necessarily the only way in which to act. The Government would be well advised to ask Ofgem, the energy companies and everybody else in the field to look at the whole concept. Until we effectively reverse the structure of tariffs, we will not achieve those two objectives and—via the objective of using less energy—the energy-security objective of energy policy. The noble Lord, Lord Teverson, has a big idea here. I suspect that the noble Earl is correct that the Minister will not leap overboard and grab this amendment, but we need to think radically here and ensure a proper analysis of how the restructuring could be done effectively with minimum collateral damage.
Lord Davies of Oldham
My Lords, I am going to offer a word of solace to the Minister: I recommend that he suggests that the noble Lord withdraws his amendment, not that the Government should accept it. I doubt whether the Government will accept it, not least because although this has been an interesting and informed debate, the cross-currents have been very sharp and very obvious. In seeking the objectives that we all seek, the question of strategy is difficult. I doubt whether this Bill can stand the strain of carrying an amendment which indicates that the whole of the tariff position should be restructured as far as the electricity companies are concerned, particularly given that we are short of information.
First of all, the companies are short of information about which households ought to have preferential treatment. I very much enjoyed the thoughtful and considered speech of the noble Earl, Lord Cathcart. He took us with him in terms of the objectives, but council tax will not do as a measure of the relative strength or weakness of household economies. We are in the historic position—as the noble Lord, Lord Oxburgh, identified—that this initial tariff is the old standing charge written into a new pricing framework. Now there are elements of a standing charge which companies have to meet.
However, our consideration with this Bill is, how do we make the Green Deal effective? I listened very carefully to my noble friend Lord O’Neill, who indicated the difficulties of both ends of the spectrum in this argument. In terms of making the Green Deal effective, it would complicate matters enormously if we were also saying that in a short period of time, we would be changing the nature of the pricing policy. There is enough of a problem with pricing anyway. We all know that we have a terrifying situation at the moment with world energy prices and the issues faced by consumers. None of us knows what lies ahead, but it is unlikely that energy will become significantly cheaper in the foreseeable future. Therefore households treat energy bills with great seriousness.
Can this be solved along the lines of this amendment? In due course, I think it would probably need to be. We have to get away from the issue of why the pricing policy is as it is. The Bill has to deliver the drive towards the Green Deal. The priority has to be to emphasise to households that they must pursue strategies to reduce the consumption of electricity. It is consumption that we have got to reduce or, more accurately in many cases, we have got to reduce waste, given that our houses are so ill-equipped for the circumstances.
We have to deliver the Bill’s objectives before we move, and expect the industry to move, to that dimension identified by the amendment of the noble Lord, Lord Teverson. This has been a very useful debate, but I fear that if the concept in that amendment was put into the Bill, we would complicate matters enormously in terms of the impact on households. We would therefore fail with the main strategy to which we are all committed under the Bill. I hope the Minister will take a similar view.
Earl Cathcart
The noble Lord, Lord O’Neill, said that there were inconsistencies in my argument. What I was doing was reporting from the letter that my noble friend had sent to me, where there may have been inconsistencies. I said in my remarks that putting rising block tariffs in this Bill would be like putting the cart before the horse. I agree with the noble Lord, Lord Davies; I am not expecting to have an amendment to get rising block tariffs into the Bill. I am asking the Minister to assure us that this will be looked at, so that the Green Deal can take effect first, and then the whole issue will be considered after the Bill is done and dusted.
Lord Marland
My Lords, I am grateful to the noble Lord, Lord Davies, for summing up so well—he has done most of my job for me, which is extremely kind. The noble Earl, Lord Cathcart, drew this matter to my attention several months ago, as did the noble Lord, Lord Teverson. I am extremely sympathetic to it, but this debate has thrown up the different and slightly schizophrenic aspect of this tariff system. On the one hand we have the inequality of it, and on the other we have to take into consideration things like the fuel poor, inefficient houses, time tariffs, colder parts of the UK and so on.
There are two fundamental things that I can suggest to the Committee. The first, as I said earlier, is that we are going to carry out a full-scale review of fuel poverty and its implications. We will be announcing that review in the very near future, and it will look into the various aspects that noble Lords have brought up here. Secondly, I recognise that this is a complicated issue, not a simple matter which the Committee can debate now and then present a conclusion on. I can therefore suggest—and we have already started work on it—that officials within the department should look very closely at this in order to determine its operability without reference to the climate change committee, and between Committee and Report stage we will have the opportunity to explore it further with noble Lords who may wish, with officials, to see whether there is merit in this amendment. That is a genuine offer. I agree with the noble Lord, Lord Davies, that this is not a matter for this Bill as it is a complicated issue that needs considerable thought. Therefore, despite the merits of the amendment, I ask the noble Lord, Lord Teverson, to withdraw it.
Lord Teverson
My Lords, I thank my noble friend the Minister for his reply. I suppose that I ought to feel very comforted by having both the opposition and the government spokesmen speak against me. That ought to feel like old times and add a feeling of warmth—which is obviously lacking among the fuel poor—but it does not. I thank noble Lords for their discussion of this. As I said in my opening remarks, as you try to write this sort of amendment, you find all the difficulties about applying it. The words of the noble Lord, Lord Whitty, summed it up in many ways.
Again, the quantum of fuel poverty concerns not so much the amount of energy used but the cost of that energy. That is what we have seen in the huge increase in the number of fuel poor, which has risen primarily in response to the very substantial increases in energy prices. This debate has exposed the problem that the current tariff structures are just not right They are not right in terms of a competitive market, in terms of serving consumers, or in terms of justice within our society. For that reason, I welcome the Minister’s remarks that this area is to be looked at further and that, although this might not be exactly the right solution, it is something that will be pursued. I look forward to hearing the outcome of that.
I say to the noble Lord, Lord O’Neill, that I do not see the conflict between this and the Green Deal, which is not about reducing emissions or energy consumption in a household to zero but about making energy efficiency within our stock of dwellings much better—as I know that he knows, and which I know he supports. So I do not see them in conflict at all.
With that undertaking from the Minister that this area will continue to be looked at in the Department of Energy and Climate Change, I am happy to withdraw the amendment.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)
My Lords, this may be a convenient moment for the Committee to take its customary short break. I suggest that it recommences at 5.25 pm.
Lord Grantchester
“( ) requiring the disclosure of sufficient information to enable green deal participants, improvers and bill payers to decide what measures may be appropriate for a property”
Lord Grantchester
My Lords, the Bill contains welcome changes to the energy performance certificates, but reform may need to go further to inform householders better on the energy efficiency of their homes and provide sufficient information so that householders are enabled in their decision-making when considering the Green Deal. We have also added our names to the amendment proposed by the noble Lord, Lord Whitty, about introducing a 12-week delay to energy tariff changes, which I shall leave to my noble friend to speak to.
Clause 70 concerns access to the register of energy performance certificates, and the Government have suggested through subsection (1) that access to these documents or data on the register should be determined through regulations. Subsection (2) contains a list of such issues that may be included in the regulations. As we raised in our amendment earlier, it would be helpful if the Government could clarify whether the regulations and list of areas in subsection (2) are intended to be discretionary and what other areas the Government have in mind. Can the Minister confirm whether the legislative approach adds more or less certainty to the process?
In Amendment 33ZA, we aim to clarify what should be included in the regulations relating to the disclosure of energy performance certificates. We consider that in this area it would be helpful to make linkages with other aspects in the Bill such as the Green Deal. The information contained on an energy performance certificate provides a helpful baseline for understanding the energy efficiency of a property and helps Green Deal improvers and bill payers to track how efficient a particular improvement has been. The regulations made under the clause should include provision to disclose such information to enable Green Deal participants, improvers and bill payers to make informed decisions about what Green Deal and energy efficiency measures may be appropriate for their property. This amendment is based on a belief that consumers and their advisers should have the best information to decide what measures may be appropriate for a property. Baseline information through these energy performance certificates is vital for the decision-making process. If the Government agree with the sentiment and are as concerned as we are that the Green Deal scheme should work, we would hope to see them come forward with an amendment of that nature at Report.
Baroness Noakes
My Lords, I have Amendments 33B and 33C in this group, and my noble friend Lord Jenkin has Amendment 33A. Having heard what the noble Lord, Lord Grantchester, said in introducing his amendments, I think that it would be for the convenience of the Committee if I dealt with the rather different issues raised by our amendments by degrouping them. I shall therefore not speak to them now.
Baroness Northover
My Lords, I should like to start by countering comments made by the noble Lord, Lord O’Neill, during a previous discussion. Far from feeling that I have drawn the short straw as the Whip, the opposite is the case. Not only is my noble friend Lord Marland taking the particularly complicated areas but—far more importantly—this is such an easy Bill. It is a Bill on which we are agreed across the Committee, so it is a great delight. Our purpose here is to refine how best to achieve the Bill’s objectives. That may not have been the noble Lord’s experience in the past, but if he watches me through these proceedings, he will notice how happy I am.
Amendment 33ZA provides that sufficient information must be disclosed to enable those involved in the Green Deal to decide what measures are appropriate for a property. However, Clause 70 is not intended to make data available for this purpose. If someone was considering how to improve a building’s energy efficiency, they would commission an EPC, which would include recommended measures to improve the energy efficiency of the building and form the basis of advice by a qualified Green Deal adviser on the most appropriate measures for the property.
The Green Deal adviser would calculate exactly how much money would need to be borrowed and the number and amount of repayments et cetera. This is all part of the discussion that a householder will need to have with the Green Deal adviser as part of the potential transaction. We do not consider it necessary or appropriate to stipulate this level of detail in legislation.
Amendment 33CA provides that, where a property is to be sold or rented out, the seller, prospective landlord or their agent must provide an EPC free of charge to a prospective buyer or tenant, the EPC should be no more than a year old and the person providing it must not believe that it is inaccurate. It has been a statutory requirement under existing regulations since October 2008 that an EPC is made available free of charge to a prospective buyer or tenant when a property is put on the market by the seller or prospective landlord. In the case of domestic sales, there is a duty on the agent to be satisfied that an EPC has been commissioned before marketing a property. A similar duty will be extended to agents in respect of domestic rentals and non-domestic transactions later this year.
As for the accuracy of EPCs, which is what the noble Lord is flagging up, I assure noble Lords that, under existing regulations, a duty of care is placed on the energy assessor to carry out energy assessments with reasonable skill and care. The only change that this amendment would introduce would be to provide that EPCs must be less than a year old. At present, an EPC can be up to 10 years old. In deciding on an appropriate validity period, we need to strike a balance between ensuring that an EPC contains up-to-date information and not requiring sellers or prospective landlords to incur unnecessary costs. In future, where improvement works are funded through the Green Deal, there will be an obligation to produce an updated EPC to capture the impact of the work on the energy efficiency of the property. While there will not be such an obligation where Green Deal finance was not used, it would be sensible for them to obtain an updated EPC that reflected the impact of any other work, because it will benefit them when seeking to sell or rent out the property. However, it is unnecessary to introduce a statutory obligation in such circumstances. I hope that noble Lords have found my explanation reassuring and will withdraw their amendment.
Lord Grantchester
I thank the noble Baroness for her understanding and for clarifying the situation regarding our two amendments. However, I may puzzle her for one second further—although she has been very clear in explaining the situation. If the information were to be inaccurate, would the costs then be passed on to the new owner or tenant? How would that situation be challenged?
Baroness Northover
As I mentioned, under existing regulations the duty of care placed on people in terms of producing the EPC could be relevant in this kind of circumstance. I will seek further clarification. Clearly, if somebody has already done work, that should assist. It is also the case that the energy assessor would be liable if the EPC was inaccurate.
Lord Grantchester
The noble Baroness is entirely correct. I thank her for bringing further light to the subject. I beg leave to withdraw the amendment.
Baroness Noakes
Baroness Noakes
My Lords, we are still dealing with Clause 70, which deals with energy performance certificates. My Amendments 33B and 33C do not concern the substance of the regulations that will be produced but the parliamentary procedure to be applied to them. At present, by virtue of Clause 70(6), only the negative procedure applies to any regulations made under Clause 70. That includes regulations made under subsection (2)(e), which allows sanctions for non-compliance. Here we return to the eighth report of the 2010-11 Session by the Delegated Powers and Regulatory Reform Committee, which pointed out that where sanctions could include financial penalties, the Bill should provide—as a minimum—for the affirmative procedure. That is what my amendments would provide. The committee went on to say that the Bill should also provide for a maximum, which my amendment does not provide. I hope the Minister will be able to satisfy me on how the Government intend to respond to the report of the Delegated Powers and Regulatory Reform Committee. I beg to move.
Lord Davies of Oldham
My Lords, it will not surprise the Minister to hear that I agree entirely with the case made by the noble Baroness, Lady Noakes. The sanctions are a different and important dimension, which is why the Merits Committee referred to the issue. The Minister will know only too well that regard for the Merits Committee is such that, when it recommends the affirmative procedure rather than the existing negative procedure, Ministers normally agree, as I hope the noble Baroness will.
Baroness Northover
My Lords, the Bill does not intend to create any new criminal offences or impose financial penalties. However, we hear what the noble Baroness, Lady Noakes, says and we are indeed happy to look at this again on Report.
Baroness Noakes
My Lords, it is a handsome offer definitely to come back on Report. How could I possibly refuse? I beg leave to withdraw the amendment.
Lord Whitty
“( ) The information to be provided about a tariff by virtue of subsection (2) with regards to the amount of the tariff must be guaranteed not to change for a period of 12 weeks.”
Lord Whitty
My Lords, this amendment was originally in a group, but it has been disentangled, as it may be more logical for it to stand alone. It deals with the requirement in Clause 72(2) that a supplier must provide its domestic customers with information regarding one or more of its lowest domestic tariffs. In other words, it is an obligation on the supplier to ensure that the consumer knows what the lowest tariff is so that they can move to that tariff. This was so central to the coalition’s programme that it was referred to in the programme itself, which said:
“We will increase households’ control over their energy costs by ensuring that energy bills provide information on how to move to the cheapest tariff offered by their supplier”.
I therefore welcome the clause and its fulfilment of that commitment.
Of course, it is also true that there is a history of people moving to heavily advertised tariffs only for that tariff to change after a reasonably short time, often without notice during the period of the switch. This is a relatively modest attempt to ensure that this does not happen. If the householder switches on the basis of the supplier’s advertised lowest tariff, there should be no change to that tariff until after a period of 12 weeks. This seems a reasonable protection for the householder and would make a reality of Clause 72(2), which in itself is an important principle and one that I welcome. I beg to move.
Baroness Northover
I thank the noble Lord for his amendment. He makes a good point: it would not help consumers if information on lowest tariffs was often quickly out of date. The amendment would require the Government to guarantee that a supplier’s lowest tariff was available to customers for 12 weeks after information about that tariff had been provided to them on their bill, thereby allowing them sufficient time to consider the information on their bill and to act on it before their supplier could move the goalposts and change the price.
The powers that we are seeking in the Bill would allow the Government to require suppliers to inform customers about their lowest tariff and how to switch to it. It is a feature of our competitive market that energy suppliers are able to react to changes in the market through dynamic pricing. The amendment would effectively prevent suppliers from making changes to the price of a tariff for a period of 12 weeks, which is not the intention of these proposals. Such a requirement would limit suppliers’ ability to react to changes in the market and may lead to a more conservative pricing strategy, risking higher prices for customers across the board—in other words, the law of unintended consequences, which we have been looking at in other areas.
Lord O'Neill of Clackmannan
Could the Minister give us any evidence that this has taken place with any degree of consistency? We normally find that upward changes in prices as a consequence of market conditions are introduced almost immediately but that, when there are downward movements as a result of the same market circumstances, it takes rather longer. It seems that the customer in the middle is left having to pay more for longer and getting the benefits of lower prices for a shorter period.
Baroness Northover
The noble Lord might be reassured if I could conclude. We are sympathetic to what the noble Lord, Lord Whitty, intends. We have to give careful consideration to the amendment to make sure that the unintended consequences that I have just mentioned are not brought to bear. I therefore propose to him that we take away the amendment for further consideration, because we understand the principles behind it. On that basis, I wonder whether he might be willing to withdraw the amendment.
Lord Whitty
I am grateful to the noble Baroness for her recognition of the issue. Given her assurance, I beg leave to withdraw the amendment.
Lord Grantchester
Lord Grantchester
My Lords, the Bill is concerned with energy efficiency and reduction of carbon emissions. In that regard, we found it curious that it made no mention of renewables and low-carbon generation. The Minister may say, “Well, please understand that all that is included by what we mean by the generation of electricity and the storage of electricity”. Nevertheless, we thought the omission most curious and that we should perhaps underline our encouragement and enthusiasm for low-carbon generation and renewable energy by including reference to them in the Bill.
In light of our debates at the start of the year on energy market reform and on the mix of energy sources that will be needed for the foreseeable future—including new nuclear—we thought it important to draw renewable and low-carbon generation into our debate today so that the Minister might underline those aspects of it that he sees as being important within the framework of the Bill. It is important to encourage the Government to deliver on their promises, most notably that they demonstrate how new nuclear will be up and running by 2017-18, despite the proposals for operators to take on much more of the cost and liability. We also think it important that the Government deliver on the further stages of CCS and provide clarity on the future of fossil fuels as part of the energy mix and their relationships with the Green Deal. The Government should also provide clarity on the future of ROCs and FITs—the feed-in tariffs for renewable energy. We think that it is important for the Minister to explain this, because it will be important for consumers, both businesses and households. The price element of this is the subject of the next amendment. I beg to move.
Lord Jenkin of Roding
My Lords, I would just like to ask the noble Lord why he thinks that these are not already included in the words “generation of electricity”. That is exactly what they do, so in what way are they not covered? I see his reasons for wanting to put them in explicitly, but it seems to me that that would not actually add anything.
Lord Grantchester
I thought that I had explained in my opening remarks that we could well understand that they could be thought to have been included in the Bill already. However, for the reasons that I outlined, we wished to make sure that the words “renewables and low-carbon generation” are included to underline their importance in the energy mix of the future.
Lord Marland
I am grateful to the noble Lord for his amendment, but the noble Lord, Lord Jenkin, puts it rather succinctly. Obviously, at the moment, we are carrying out a serious consultation on electricity market reform, and these vital subjects are part of that consultation process. Whereas I completely support the thrust of these amendments and the importance of these sources in the general electricity market, I think that the noble Lord will agree that this is a matter for the electricity market reform consultation, where we are grateful for any views or comments in this area. I hope that, on that basis, the noble Lord will feel able to withdraw his amendment.
Lord Grantchester
I thank the Minister; I quite well anticipated his reply and the remarks of the noble Lord, Lord Jenkin. I am happy to beg leave to withdraw the amendment at this stage.
Lord Davies of Oldham
“( ) the impact of supply on consumer prices”
Lord Davies of Oldham
I think that the noble Lord, Lord Jenkin, if he is not careful, is going to have to rise again and make exactly the same speech, although he made it in such a convincing fashion that he convinced me. It will be seen by the Committee that we were interested in making sure that these issues were very much to the fore. Following the intervention of the noble Lord, Lord Jenkin, we got the assurance from the Minister that the consultation that is going on includes these issues. That is all that I have to say.
The Deputy Chairman of Committees
Does the noble Lord wish to move his amendment?
The Deputy Chairman of Committees
I think that we will regard that as not moved.
Lord Jenkin of Roding
“36D Strengthening the Authority’s powers with regard to Public Service Obligations on suppliers
The Authority may modify the arrangements contained in Gas Licence Agreements to impose further obligations in the PSO requirements, as follows—
(a) the Authority may modify the gas storage Public Service Obligation for gas suppliers in the United Kingdom;(b) the Authority may set new industrial and commercial PSOs on suppliers requiring suppliers to meet the mandated levels of gas storage as set by the Authority;(c) the Authority shall publish gas storage targets annually and may monitor supply licence holders’ compliance with such obligations.”
Lord Jenkin of Roding
My Lords, noble Lords will remember that at Second Reading I raised the whole question of gas storage and its contribution to a greater certainty of supply in the event of something untoward happening. I have tabled this amendment to strengthen the incentive to invest in more gas storage. I took account of what my noble friend said in response to the amendment, but I have now made it my business to gain a better understanding of the considerable complexities of this sector of the energy market. How to ensure security of gas supply has become increasingly important, particularly in the light of the anticipated running down of the UK’s own indigenous supplies from offshore sources. It is for this reason, no doubt, that the industry, successive Governments and the regulator have all rightly been very concerned to make as sure as they can that gas consumers will be assured of a continuous supply.
Since Second Reading, Ofgem has published—on 11 January—a consultation paper headed Gas Security of Supply Significant Code Review. I will come back to that. However, several other important reports were published in earlier years. In May 2007 a long report was published by the consultant Oxera, headed An Assessment of the Potential Measures to Improve Gas Security of Supply. Three years later the previous Government commissioned a report, this time by the consultant Pöyry, headed GB Gas Security of Supply and Options for Improvement. In April the previous Government published a policy statement headed Gas Security of Supply. Last November there was a joint DECC and Ofgem report, Statutory Security of Supply Report. Noble Lords will be relieved to know that I do not intend to quote more than a tiny portion of those reports. It would have been quite an effort even to bring them to the Moses Room.
The reports, which I hope I am summarising accurately, come down to this: although the risk of what one might describe as a “black swan” event—one of low probability but high impact—hitting the supply of gas to the UK market is very low, it is acknowledged by all that it is not impossible. It could be a combination of adverse events, such as pipeline accidents, import interruption or the withholding of supplies by overseas suppliers. The previous Government’s provisional conclusion, therefore, was that some additional measures are needed to deal with that remote possibility.
The various reports examined and evaluated several options in great detail. The DECC policy statement of last April concentrated on five options. I will read the relevant two paragraphs from that April 2010 report to the Committee. On page 7, paragraph E.30 of the executive summary says, under the heading “Enhanced financial incentives to balance demand and supply”:
“The Government supports Ofgem’s work with industry to examine the case for greater use of market prices with enhanced incentives in the balancing regime”—
one needs to hang on to those words—
“in particular by … unfreezing cash-out prices in an emergency; and … further finessing the cash-out regime in market conditions (outside an emergency)”.
The next paragraph, under the heading “Supplier obligations”, says:
“The Government is considering the case for strengthening shipper/supplier obligations, such as through Public Service Obligations”,
or PSOs, as they are widely known in the business. Those are the two preferred options that have been considered.
Lord O'Neill of Clackmannan
My Lords, I support this amendment and compliment the noble Lord, Lord Jenkin, on covering pretty well the whole of the case. Like him, I was approached by a company called Gateway, which is in the business of constructing storage facilities—or would like to be in the business of constructing storage facilities. My understanding, which the Minister will perhaps confirm, is that at the moment we have around 5.9 billion cubic metres of gas storage facility in the UK, and that we could need in extremis to double that or—instead of storing the four or five days’ worth of gas that we have at the moment—go up to 20 days’ worth. The consumption of this additional gas is not on a pro rata basis; it tapers because other things would happen.
My point is that the balancing mechanism is essentially the market mechanism, which assumes that this will be fine if we have a gas storage facility that blows up, as happened a few years ago. World market conditions were not affected to any great extent by that but we still had to buy in additional supplies. If something happened in the United Kingdom that in some way interrupted or interfered with our present indigenous supplies, we would not be affected by world prices. On the other hand, there could be a world crisis and an interruption to supply because we may well be the last in line for Russian gas supplies. There are reasons why we would be last in line in a world crisis, not least because for a long time we were self-sufficient and exported gas. There were periods in the 1990s when we changed the nature of our gas contracting and, as a consequence, we have tended more towards short-term contracts than long-term ones. Therefore, we have less of a claim on access to the world market.
The point I want to make is that it is fine to use the market-balancing mechanism when there is, in effect, a UK problem, but when there is a world problem, it becomes exceedingly expensive. If we are to be prudent, it is necessary for us to look at what would be regarded as getting the balance right between the two options. Neither of them is exclusive. In the case of the PSO, we would give a signal to the market that our very low level of storage ought to be increased.
When we touched on this subject at Second Reading, the Minister told us, “I have just signed the document offering planning permission”, and said that this may well go ahead. Something like 15 projects at present enjoy planning permission but nobody sees the need to act on them because there is no clear indication that the Government are prepared to give them active support by way of a PSO. We need additional supply if what I have been told by Gateway is true. I have no reason to doubt that, although I accept that Gateway is in this business and will want to enhance its case, which is not unreasonable. The same could be said for the gas traders who have been successful in tipping the balance the other way. It is necessary for us to have a clearer indication.
Lord Hannay of Chiswick
I too would like to say a few words in support of the amendment, which is designed to strengthen the powers of the authority with regard to public service obligations on gas suppliers, like the obligations that already exist on oil suppliers. The debate has so far shown that UK gas storage capacity is too low in terms of the crucial insurance policy that it represents for this country either against a direct cut-off of gas supplies; or against sharply rising prices of such supplies, perhaps due to a cut-off somewhere else when we find ourselves at the end of the supply line. It would be helpful if the Minister could confirm that UK gas storage capacity is much lower than that of other EU member states—not just the ones cited, but quite a few more. Is our vulnerability really also not lower than theirs? Now that North Sea gas is running down, I believe that our vulnerability is every bit as high as theirs.
Gas storage has to be an important element of both our and the European Union’s long-term energy security policy, along with other elements such as the diversification of supplies, the diversification of pipelines, more interconnectors between member states and more competition in the single market. The right honourable gentleman the Prime Minister is going to Brussels at the end of this week to discuss all those issues, because that is the topic of the European Council this week. I hope that it will make progress on all those issues. We need to put ourselves in a better position than we are now, so far as gas storage capacity is concerned. As the noble Lord, Lord Jenkin, said, the simple way to achieve that is through the PSO. That is the thrust of the amendment and why I support it.
I ask the Committee’s forgiveness for straying slightly outside this piece of legislation when I ask the Government whether they are considering a minimum requirement for gas storage in the European Union on each member state. That is highly desirable, as it has proved for oil. If it were to be introduced, it would likely be helpful for this country. There was a great deal of opposition from the suppliers when the oil requirement was introduced in the 1970s, but you do not hear anything about it now. It is taken as the most natural thing in the world that we and every European Union country hold—I think—40 days’ supply of oil. Working now for an EU minimum that would apply to all member states would be worth while. If we were to move down that road, the amendment would put us in a position to meet any obligations. It would therefore make our position in the negotiations for a minimum requirement in the EU much stronger. We would be showing other member states that we were serious about working for this, even though we were merely introducing a potential power to do it.
I see no particularly good arguments for resisting the amendment. After all, it does not impose an actual obligation on anyone; it merely makes it possible to do so without further legislation if it can be shown objectively to be both necessary and desirable. I therefore hope that the Minister will give serious consideration to it in his reply.
Lord Oxburgh
My Lords, I briefly add my support to this amendment. The noble Lord, Lord O’Neill, is right that our dependence on gas will undoubtedly increase over the coming decades; as renewables and other sources of low-carbon energy come in, gas will be very important. It is equally true that the amount of storage that we could get away with when we had the North Sea producing at full rate could be relatively small, but it is also clear that the storage that we have today is inadequate. I will not go into the details, but something like 10 to 20 days’ supply is what we should be thinking of today. This will not happen without regulation of some kind. The supply companies have no incentive to do it, and what both industry and the consumer need is gas, not compensation.
Lord Davies of Oldham
My Lords, all that needs to be said about this amendment has been said by informed Members of the Committee. I congratulate the noble Lord, Lord Jenkin, on his amendment, which was supported so strongly by my noble friend Lord O’Neill, who also knows energy issues so well. It reinforces the case.
I am always worried when this issue of days crops up. The noble Lord, Lord Jenkin, indicated that France and Germany are different from the United Kingdom. They have been massively different historically because we have had our own indigenous resources. Our needs for storage are therefore very different from the needs of those and other countries in Europe. When I was charged with responding on energy matters for the previous Government, I always used to shudder when the “Today” programme would say, “The French have 90 days’ security of supply and we have four”. One felt the shudder go round the nation because of a colossal risk that we were all taking with energy. That is not so, and we must not spread alarm, but we must make provision for the future in a significantly changing situation, and we need to adjust to it. As the noble Lords, Lord Jenkin and Lord O’Neill, indicated, we are talking about a significant increase over present storage capacity. However, we are different from those other countries.
There were one or two occasions in the past when the United Kingdom’s position at the end of that supply line cost us and we paid higher prices for gas in some circumstances. One remembers that enormous row with the Germans, who had to go to the European Community over the extent to which German companies seemed rather better at availing themselves of the available gas from Russia than we were. So this is an immensely serious issue, and there is no doubt that storage is the key issue. We have a range of suppliers, but a range of suppliers is no good if we do not have the storage capacity to deal with potential interruptions. There will always be limited supplies as far as gas is concerned, and it is obviously the case that we have issues regarding our own supplies.
I hope the Minister will accept the crucial point made by the noble Lord, Lord Jenkin, in his amendment—that this is in addition to what is in place at the moment. It is an empowerment that we might need. We might not need it, but if we do not, then it will not be utilised. However, it would be remiss of us if we did not guarantee that this power was in this Energy Bill. I therefore hope the Minister, who I know has to wrestle with all sorts of difficulties in responding to even the most constructive of amendments, will appreciate that the Committee expects a positive response.
Lord Marland
My Lords, I thank my noble friend Lord Jenkin for raising this issue and, in particular, for this canter through the gas situation as it is today. When I was shadowing my current role during the Labour Government and spoke on a number of occasions about gas storage, they reassured me that we had enough storage and that we were in very good shape. Indeed, now that I have got to the position that I am now in, I largely agree with them. That does not mean that we should be complacent or should not press hard for greater gas storage. But the facts are as follows: we have 16 days of storage available and we have under construction another 25 per cent. Maths is not my strongest suit, but as the noble Lord, Lord Moynihan, can tell us—because maths is his strongest suit, along with running and jumping and other things—that gives us just over 20 days’ storage.
Lord Marland
The noble Lord has such talent in one body. So we have 20 days’ storage. The noble Lord, Lord Hannay, said quite reasonably that we should compare ourselves to other countries. Obviously, Germany and France have more than that, but they do not have their own gas supply. They are entirely reliant on what used to be called the old Iron Curtain countries for their supply. I would be concerned about the security of supply in the light of some of the endeavours that they have been through. We in this country still produce 50 per cent of our own gas and we are still finding more gas, which will not, admittedly, stop the supply being eroded, but will decelerate the erosion. We have a secure contract. The noble Lord, Lord O’Neill, suggested that we must have good long-term contracts; we probably have as good a long-term contract as any country in the world with Norway, from whom we receive 20 per cent of our supply, managed by Shell, the former company of the noble Lord, Lord Oxburgh—and a marvellous job it does as well. My own view is that we have a very significant secure supply.
Let us look at the matter of storage. Yes, we have given planning permission to various endeavours, but at the moment the cost of storing gas is significantly higher than the price of storing oil, so not unsurprisingly people are giving due consideration to the commercial viability of this project. Of course, part of the thing that we must do in government is to weigh up the pros and cons and absolutely ensure that the nation has security of supply, which is fundamental to all Governments, and to be able to gauge that. We have not had a greater opportunity to gauge that than the unfortunate months of November and December last year, which were beyond record for bad weather, when we came through with flying colours. There were certain countries—and we shall not mention the names—that did not do so. Given the tests that we have had, we have come through with flying colours.
We should not be complacent, of course. That is why we have acted swiftly to engage in planning permission and to make it much easier for big infrastructure projects to be authorised quickly. But we cannot sit in government and insist that certain things are going to be carried out unless they have gone through proper consultation. In many ways, the noble Lord, Lord Jenkin, gave me the answer to the question posed by his excellent amendment. Ofgem is already considering our requirements and carrying out a significant code review consultation, which will be produced at the end of February, on the resilience of our gas energy supply. It would be right for us to take on board what Ofgem has to say, to review it and then carry out what powers are necessary to ensure that, if there are areas that need to be dealt, the Government deal with them.
I hope that that sets the scene for the current gas supply situation. I hope that it answers a number of the excellent questions that noble Lords have asked and allows my noble friend Lord Jenkin to withdraw his amendment.
Lord O'Neill of Clackmannan
Perhaps the Minister could answer two questions. First, could he give us the number of billion cubic metres we have in storage at present? Secondly, am I right in saying that the effect of the amendment would be permissive rather than prescriptive? If it is only permissive, why not include it?
Lord Marland
I thought that I answered the question on the storage available. I do not know precisely what amount is in storage as of today, but we have capacity for 4.6 billion cubic metres with another billion cubic metres of capacity in construction.
As for enablement, it is not for the Government to be too prescriptive. Already, in months, 25 per cent of gas storage is under construction. Already, we have tested that against difficult winter conditions. Already, we have found that it is satisfactory. As I mentioned, Ofgem is carrying out the review, so it would be wrong at this point in proceedings to pronounce on findings that might be different from those of the Government or us in this Room. We should listen to what it has to say, take it on board, and perhaps use powers available to us.
Let us not underestimate the difficulties. The noble Lord referred to Gateway, a company with which I am familiar. Its issue has been one of planning. The problem has been in Lancashire, if my memory serves me right. There is nothing that we in government can do about that if the local authority does not determine that it is the right thing to have.
Lord Hannay of Chiswick
Could I just follow up the Minister’s point about the work that Ofgem is doing? I thought I understood him to say—perhaps he did not—that if it came to the conclusion that the UK needed more gas storage as part of its studies, action would be taken. Does that mean to say that its findings could come in time to make an amendment to the Bill? That could be important. My second question about the Ofgem inquiry is: is he willing to make sure that Ofgem is brought quickly up to date with this debate, so that it can take it into account in its study?
Lord Marland
The noble Lord makes a point. Of course Ofgem will be brought up to speed with what we are doing. I do not think that its review will have drawn the conclusions that we want by the time we have finished the Bill. There is some presupposing that people are sitting in knowledge. I have heard many different suggestions in this Room already today about how much we have or do not have in storage, and about what we should or should not have. It is up to the Government to look carefully at the facts and accelerate procedures where we think that should be done, as we have already done by 25 per cent—and we have been in government for only nine months; maybe a bit longer now. We have a level of comfort that is correct—not just in our own judgment; a whole range of sources tell us that we have it correct. The previous Government felt that it was the correct figure. If the information that results from the review shows us that we need to enact, we will. Ofgem itself has existing powers to modify licences and introduce new licence requirements, and may well do it itself. Of course this is very much a subject for debate, evaluation and continuing process, and I hope that satisfies the noble Lord.
Lord Jenkin of Roding
My Lords, few movers of an amendment such as this could have had such powerful supporters as the noble Lords, Lord O’Neill, Lord Hannay and Lord Oxburgh. I feel greatly reinforced by the strength of the case which they have made. It would not be wholly unfair if I said that I was a little disappointed by the Minister’s reply.
The noble Lord, Lord Hannay, asked whether it would be open to Ofgem in its consultation to come forward with a proposal which said, “Yes, all right, we will strengthen the balancing mechanism but we also think that there is a case for increasing the amount of storage and that this will require some further measures”. That was a critical question, and I am not sure that I understood the answer.
We are talking about future demand and supply over a number of years. I have been provided with a chart, compiled by a consultant, which draws on all the various forecasts of demand for gas. If one looks ahead up to 2025, which is after all only 15 years ahead, one sees that the forecasts vary from a reduction in demand to three-quarters of the present level to an increase of a quarter. Those are huge variations, reflecting the uncertainty with which we are confronted when dealing with supply. We have tended to talk about supply, but the balancing mechanism is essentially a balance between supply and demand. If there is such a wide variation in the estimates made by experts—people who know what they are talking about—we should take that into consideration.
Yes, it is true that we have an indigenous supply, which is why our figure would, for the moment, be lower than that in our neighbouring countries—as I indicated in my opening speech. There may also be another Buzzard-type discovery in the North Sea. A recent discovery of gas quite close offshore certainly helped supply here. However, we must be cautious about what we say after the past two winters. Everybody has recognised that the electricity supply has been quite seriously affected by the recession and that the point at which we reach concern has therefore moved three or four years further forward. Why is that not the same for gas? We got through these last winters because there was a considerable measure of operating below capacity, which I hope will not continue. So here is another element of uncertainty.
We need to give more consideration to these matters. I shall certainly discuss what the Minister has said with those who have advised me. It may be that the noble Lord, Lord Hannay, is right and that we will get the Ofgem report before we reach the Report stage of this Bill—it looks a little less likely than it did before the weekend, but it is a possibility. We have another energy Bill coming up, which will affect among other things energy prices and the powers of Ofgem, so we may have another opportunity. I shall reflect; I hope that the Minister will do so, too. In the mean time, I beg leave to withdraw the amendment.
“Accidental petroleum releases: verification of financial costs
After section 3 of the Petroleum Act 1998 insert—
“3A Accidental petroleum releases: verification of financial costs
(1) At the time of applying for a licence under section 3, the applicant must provide the Secretary of State with information showing that the applicant has sufficient funds to compensate any damage caused, or loss suffered, as a result of petroleum being accidentally released during the operation of that licence.
(2) The information provided in subsection (1) must be approved as a true and accurate record of the financial affairs of that person by an independent and qualified auditor and must meet any other standards specified in regulations made by the Secretary of State.
(3) The Secretary of State must make regulations, in particular, to provide for the type of financial and supporting information to be provided under subsection (1).
(4) Before issuing a licence under section 3, the Secretary of State must be satisfied that—
(a) the applicant has provided a complete and accurate record of information required by this Act and any regulations made under this Act; and (b) on reviewing that information, the applicant has sufficient funds to compensate for any damage caused, or loss suffered, as a result of petroleum being accidentally released during the operation of the licence.””
Baroness Smith of Basildon
My Lords, I put this forward as a probing amendment to clarify the issue of liability in the event of an oil spill. There are two triggers for the amendment. The first is the group of clauses that we are coming on to discuss and the second is the debate that we had thanks to the noble Lord, Lord Moynihan, towards the end of last year on the Deepwater Horizon oil spill. It was while researching for that debate that I thought more about the issues of liability if we had a spill in this country. I understand that with the Deepwater Horizon spill the costs are huge—around $20 billion and still counting. I am not clear on the issues of liability in this country, which is an area of concern. This seems an opportune moment to raise it during our proceedings on the Bill.
There is a two-pronged approach to this. First, there are technical ways in which to do everything that we can to avoid such a spill. Secondly, we could have an insurance policy in case a spill was to occur. That is the reason for proposing this amendment. At the moment, should there be a significant oil spill, the costs would fall on the taxpayer. Would that be at a national or a local authority level? This amendment seeks increased liability cover to be required before drilling in the UK. The recent report from the Energy and Climate Change Committee in the other place dealt with this issue and highlighted liability as an area that needed significant improvement to protect the taxpayer. The financial requirements currently placed on the industry are under the offshore pollution liability agreement, but my understanding is that they are quite weak. A significant oil spill would leave taxpayers disadvantaged, because they would face potentially huge costs in order to clear a major spill from the ocean off our shores.
In proposing this amendment, we want the Government to ensure that any new offshore drilling licence is granted only when the licensee has proved its ability to meet the full costs to address the direct and indirect consequences of an accidental release of oil that occurred as a result of any operations on the UK continental shelf. The Government should also ensure that compulsory third-party insurance cover is obtained for all small exploration and production involved in drilling operations in the UKCS. When we discussed this issue before, the Minister was content that the current arrangements for monitoring in the UK were perfectly adequate. Indeed, we have some of the toughest regulations and inspections in the world, but the HSE has warned about the increase in the number of serious accidents and spills. It has said that the industry’s performance is not good enough and has urged it to up its game.
The monitoring and regulations that we have in place are significantly better than those that existed in the US at the time of Deepwater Horizon. However, I was concerned that the department’s evidence to the committee confirmed that just one inspection of a deepwater rig will take place in 2010-11. I appreciate that the Government will be vigilant, but we need some clarification on the costs and who would be responsible.
There are technical improvements that the Government could undertake. I am sure that the Minister is aware of the issues surrounding blow-out preventers and how they could be improved. Obligations might be placed on companies installing such rigs to have significantly improved blow-out preventers, doing everything that they could to prevent a blow-out and an oil spill. However, in case there was an oil spill, it would be helpful for some clarification as to where responsibility lies and whether measures could be taken via insurance on the licensees, as indicated in my amendment. Could the Minister consider that?
Baroness Noakes
My Lords, the noble Baroness, Lady Smith of Basildon, raises some interesting points with her amendment but I wonder if its terms are quite right. She is asking for an ascertainment of financial capability at the time of the granting of a licence. However, if a requirement is to be imposed, it needs to be a continuous obligation—that is, something that is tested at regular intervals. A licence is granted at one point in time but a spill may occur many years later, when the financial position of a company is quite different.
Secondly, it is not so much a question of whether the applicant has sufficient funds, but of whether it has access to funds via insurance. It is probably much easier to demonstrate that there is adequate insurance to cover what might reasonably be expected to follow than to look at a company’s balance sheet. I also say to the noble Baroness, wearing my accountant’s anorak, that auditors do not certify things as being “true and accurate”. Doubtless if this amendment found favour with the Minister the correct wording could be formulated.
Baroness Smith of Basildon
I am very grateful to the noble Baroness; her contribution was extremely helpful. Certainly, it was not the intention that the time of applying for a licence should be the only time when financial capability was assessed. The insertion somewhere in the wording of “continuous” would be extremely helpful, as is her point about access to funds via insurance. The contrast I was trying to draw was with the Government’s policy on the nuclear industry. Currently it is the Government’s policy that a nuclear power company would have to be responsible for all the costs of decommissioning for some time—indeed, for the foreseeable future. In our previous debate we talked about 100 years or so. It seemed that equal responsibility should be taken by oil companies. I am grateful to the noble Baroness for her suggestions.
Lord Moynihan
My Lords, I was not going to intervene on this, but I have just watched, at some length, the follow-up proceedings in Congress on the first presidential commission report on the BP Deepwater Horizon disaster, which was published several weeks ago. Most of the cross-examination on this issue highlighted the fact that caution should be the order of the day in assessing the level of cover that an operator would require. Caution is needed because there is a massive difference between the majors and the independents. The representatives of the commission, when cross-examined in the last few days, highlighted the fact that they had not had the opportunity to discuss this issue, which is a valid and important one to raise. I welcome the fact that an amendment has been tabled so that we can consider it. However, the representatives had not had an opportunity to sit down with the insurance industry to look in detail at the exposure—the level of cover required—and the impact on the industry as a whole.
We in this country have a proud and, in my view, wise policy of encouraging independents to come on to licences alongside the majors to add further expertise and bring additional value to the table on safety, drilling expertise and well knowledge. I would be cautious about taking too much of a blanket approach to this at the moment—one which did not take into account the exposure that was being sought by the noble Baroness for different licence-holders and different companies on the same licence. The direction of travel in which she is heading is one that the industry will need to follow. This will inevitably be a major issue as the industry moves forward, both in the United States and elsewhere. It is a subject that will require detailed consideration between government, the industry and the insurers to come up with the best possible method of moving forward to ensure that, on the one hand, there is cover but, on the other, we do not end up with just a handful of majors and lose the independent sector. It has contributed so much to the development of the North Sea and has a commitment to safety that is as great as that of anybody else operating there. That is my only word of caution.
This is a highly complex area, which needs a good deal of further reflection, but I welcome the fact that the noble Baroness has brought this to the Committee. It is an important issue and she knows my interest in the subject. I hope the Minister responds equally positively about the importance of this issue and of continuing discussions between the Government, the insurance industry and the operators—and not just the operators but the drillers—to make sure that there is appropriate cover, but that cover is not required to the point at which we lose a significant section of the industry, which so far has contributed greatly to the development of the North Sea.
Lord Marland
My Lords, this is an excellent amendment and the Government are entirely in agreement with its broad principles. I am grateful to my noble friend Lord Moynihan for his comment as a practitioner in this field. I should preface any remarks that I make with a reminder that, in my former life, I spent most of my time trying to sell insurance to oil companies and to make myself even richer, so I was all in favour of them buying as much insurance as possible. However, in my current role, I see that a balance has to be struck and that I was wrong at the time—or only partly right. My shareholders thought that I was right.
The Government are in full agreement on this. We have seen the Select Committee’s recommendations and we are evaluating them at the moment. The noble Lord, Lord Moynihan, makes the point that we must not rush into this or have knee-jerk reactions. Of course, when the Government issue licences, a fundamental part of that is that the company awarded the licence becomes a member of the Offshore Pollution Liability Association; it has to purchase £250 million of cover and it then goes into a pool that offers greater cover. This pooling arrangement is fairly unique and it gives us a number of solid assurances. There are two imponderables that need evaluation. One is the quality of insurance cover. Obviously, if the insurance provider is not of A-graded quality, particularly with a longer-term liability situation, that would be a concern. That needs looking at rigorously. Then there is the matter of the quantum.
Two things are going on, as the noble Lord, Lord Moynihan, said. The first is the inquiry that is happening in the United States. We would not want to prejudge what is happening in that inquiry, which we want to evaluate. Also, we want to evaluate the Select Committee’s comments, which are valid. I hope that the noble Baroness will understand that the Government take this matter seriously. She has been persuasive in taking an important line. It is very much in the country’s interest that the subject of pollution should be managed very carefully indeed.
Baroness Smith of Basildon
I am grateful to the noble Lord for his expression of support and agreement with the intention of my amendment. I am not quite sure what he means by knee-jerk reaction and rushing into this. As new licences are being issued for drilling, probably as we speak, this is clearly an issue that needs to be addressed with some urgency, although I take on board entirely the points made by the noble Lord, Lord Moynihan. I understand from the Minister’s comments that the Government are looking at this matter and that we will return to it. With that information, I am happy to beg leave to withdraw the amendment.
Baroness Smith of Basildon
My Lords, to be helpful to the Minister, I was able to give him advance notice of the kind of questions that I wanted to ask about this clause. I am grateful that, earlier today, someone from his department e-mailed me, although I have not had a chance to look through those responses in detail. It would be helpful to raise some of these issues in Committee and to hear his responses.
I feel that there is a lack of clarity about why this chapter is coming forward at this time. It is entirely appropriate—indeed desirable—that the Government move to consolidate the four pieces of legislation that currently exist in this area. That is helpful to the industry and to government. In consolidating, these clauses go a little further than the existing legislation. That is the area on which I seek clarification.
I understand that in the future, where there is a dispute about a third-party operator seeking access to upstream petroleum infrastructure, the Government will seek commercial agreement. These clauses provide for the Government to seek to resolve the issue. Their role almost seems to be that of an arbiter, though it seems stronger than that.
Baroness Northover
My Lords, this chapter is designed to replace the current legislation on third-party access to upstream petroleum infrastructure. Perhaps I can further clarify what information the noble Baroness has already received; she obviously has a good grasp of what this section seeks to do. It relates to access to offshore pipelines, platforms and processing facilities and to the onshore terminals and pipelines to which they connect. The existing provision, which in part dates back to 1975, has grown piecemeal. As the noble Baroness said, it is scattered over four Acts of Parliament. The procedures are not fully consistent; the definitions are not well aligned and some kinds of facilities are not explicitly covered, which is why the provision needed to be updated.
The need for third-party access is increasingly important. This is the significant point. Even after four decades of exploitation, there are 20 billion barrels or more that might still be produced from the UK continental shelf. The remaining pockets of oil and gas are typically individually small. Many are not large enough to justify dedicated pipelines or processing facilities. Economic development of these discoveries will increasingly depend on getting timely access to existing pipelines—where these have spare capacity—and on getting reasonable terms for that access. This is the kind of shift that helps to explain why this has been brought about. The time is therefore right to overhaul the existing legislation and to make sure that it is fit for purpose in this situation.
Of course, dispute resolution should not be a routine process. Third-party access can be and in the overwhelming majority of cases has been, as the noble Baroness acknowledges, agreed amicably between the parties involved. We have every intention that this should remain the case. We are fully engaged in and fully support the industry’s work to develop its own voluntary code of practice for infrastructure access. Disputes will nevertheless happen and negotiations will from time to time break down, so it is necessary that the Government should have the means of resolving an impasse where it occurs. This chapter therefore re-enacts the existing legislation, but as a unified process that has full coverage of all relevant pipelines, platforms and terminals.
Clause 78 sets out the basic procedure for resolution of disputes about access. It specifies the scope of the procedure—that is, the pipelines and other facilities to which it applies; the right of a person seeking such access to apply to the Secretary of State for the rights if unable to secure them by negotiation; the procedure that is to be followed; certain matters that are to be taken into account; and appropriate safeguards for the interests of the owners and others with existing rights. Finally, subject to that procedure and the safeguards, it sets out the powers of the Secretary of State to issue a notice granting appropriate rights to the applicant.
These provisions make two key changes. First, the current legislation provides a safeguard for the reasonable requirements of the owners for transport or processing of oil and gas and for the entitlements of other users who already have rights to the infrastructure for transport or processing. The Secretary of State must be satisfied, before making an access notice, that doing so will not prejudice these requirements or rights. In general principle, this is clearly right but, on reflection, we think that an unqualified requirement on this point will prove unduly restrictive. There will be circumstances in which introducing a third party into an existing facility will reduce, at least temporarily, the capacity available to others. If nothing else, the making of a physical connection is required, which entails a risk of interruption to operations.
We think it desirable that the Secretary of State should have a similar flexibility in determining terms for access. Accordingly, we have qualified the safeguard provision for existing capacity requirements or rights so that such rights and requirements can be effected, provided that suitable compensation is available to the affected users. The other innovation is that the access notice has effect only if accepted by the applicant within a defined time. This meets a concern that has been raised in discussion with the industry. We think that it will provide a helpful degree of clarity for all involved.
The noble Baroness made reference to this being left to the market. I emphasise that the market model applies to the Green Deal, and we are moving on to another part of the Bill here. I hope that she can see the case that is being made for why, in these circumstances, these measures need to be taken forward.
Baroness Smith of Basildon
I am grateful to the noble Baroness for giving a detailed explanation, although I am not really sure that she understood fully the points that I made. I apologise if there was not enough clarity in what I said. I have asked that a copy of the brief that was e-mailed to me today by her department should be given to her as well. I shall make sure that she receives that.
We have heard so many times about what the market mechanism will provide under the Green Deal. Previously, in this area of policy, it has been more about the commercial arrangement than market mechanisms, but the Government seek to alter that—as I understand it, on the basis of one case in which the Secretary of State has been asked to intervene. Is this an appropriate way in which to progress? Although the Secretary of State has been asked to intervene, the new clause gives the Secretary of State powers to seek information on how negotiations are going and then to issue a notice granting rights. I am concerned that the Government feel that they could be acting on behalf of one of the participants in a commercial arrangement. I am not sure that that is prevented from happening in the clauses we are discussing.
I am happy for the noble Baroness to take this away and come back to me on this matter. There was another point that she did not address. Some companies have put it to me that such a clause, whereby there can be direct intervention by the Secretary of State in what was a commercial arrangement, could impact on the investments of those companies in the industry. That is quite a serious matter, and I asked whether there had been any discussions with the industry on investment. I appreciate that she does not have the information to hand, but if she could let me know it would be very helpful.
Lord Teverson
I like this part of the Bill. Good questions have come from the noble Baroness, which we would not have dealt with in Committee otherwise. First, as the Minister says, these provisions give the opportunity for small oilfields to be exploited when the infrastructure and investment in that would not otherwise allow that at all. Secondly, to pick up the point made by the noble Lord, Lord Moynihan—although he is not in his place—it must make it possible for smaller, independent oil companies to exploit those opportunities, which would not otherwise be there if there was no sharing. The pipelines that are already there are in a certain way a ransom strip. They are a monopoly of a facility that has been invested in, rightly, by those organisations, but they give undue leverage to those organisations. Also, the fact that this legislation is here means that commercial deals will almost certainly be done, whereas they might not be if it was not here. So this is a good clause in the Bill.
Baroness Northover
I welcome what my noble friend Lord Teverson has said. I note several things in relation to what the noble Baroness said. I point out that the briefing, which I hope she received all of, says that, while there are understandable differences of view—infrastructure owners are wary of change, but potential users are often strongly in favour—the industry is broadly speaking supportive of the case for change. On the point of whether the Government should be involved in something like this or whether it should simply be left to commercial negotiations, EU law requires the provision of a dispute resolution procedure for access to upstream gas pipelines.
My noble friend Lord Teverson pointed out that we have a responsibility as the UK Government to ensure that these resources are accessible. The fact that they are, as I have mentioned, in smaller pockets and may need that kind of sharing of infrastructure makes it even more important now that this is addressed. That is why that is being done: it is in the national interest that it is done and not simply left to market forces to resolve in these circumstances. On that basis, I hope the noble Baroness will feel that I have adequately addressed the issues that she has raised. If she remains concerned, we can have further discussions. In the mean time, I hope she is happy for this clause to stand part of the Bill.
Baroness Smith of Basildon
I am grateful to the noble Baroness, who has sought to address my concerns. I have had a note from the officials to say that there are many legal complexities around this. On that basis, I am happy to discuss further—that would be helpful for my peace of mind and in understanding why certain provisions have come forward in the way that they have. I am grateful to the noble Baroness for that offer.
Lord Jenkin of Roding
“( ) In the application of section 157(2), insert “or” at the end of paragraph (a) and omit paragraph (b).”
Lord Jenkin of Roding
My Lords, I am conscious that we are nearing the usual time for the Committee to adjourn so I will try to be brief. I just make a point by way of introduction. Nobody reading this amendment could have a clue what it was about. The reason for that is that it is a striking example of the Bill adopting the process of legislation by reference to earlier Bills. I am sorry my noble friend Lord Marland is not here. I have raised this matter with the Law Commission because the gas and electricity Acts are now virtually indecipherable; it is impossible to find one’s way around them. It is high time that there was a consolidation. Having said that, I will move on.
The real problem that the amendment addresses is that one of the provisions of the Energy Act 2004 that is being applied to this Bill is Section 157. Section 157(2) established three grounds on which an energy supply company can be put into administration. One is that the company is unable to pay its debts. Another is that it would be just and equitable, under Section 124A of the Insolvency Act, to wind up the company in the public interest—for instance to stop fraud or criminal activity. The third ground—this is what the amendment is about—is that the court must be satisfied that the company is likely to be unable to pay its debts. The 2004 Act applied to network companies; this Bill would apply it to supply companies. My amendment would delete that third ground—of a company being likely to be unable to pay its debts—for administration as it would apply to supply companies.
To put it in layman’s terms, this means that the petitioner for a special administration order must be able to convince the court that, while the company in question is currently quite solvent, it is at risk of becoming insolvent, perhaps because the scale of liabilities that it faces looks excessive in relation to the foreseeable value of its assets. How far ahead? It is a very uncertain test. The reason for the third test was that it enabled a company’s directors, who after all should have the best view of the likely future circumstances, to apply for insolvency administration. That cannot possibly apply here because the only people who can apply for administration under this Bill are the Minister or Ofgem. The directors cannot do so.
There is another reason why the test should not apply here. Those who followed closely the tangled affairs of Railtrack in 2001 can recognise that it is open to political abuse. I do not propose to go into the long and tangled story, which was reported the other day in the Times, but it was the very looseness of test, which was in reality just a call by an accountant, that enabled the Government of the day to put Railtrack into special administration, even though the company was at the time solvent. It was only on the basis of cash flow projections over a lengthy future period that the Government could proceed.
A test that requires that kind of assessment to be made is quite different from the other two tests. It is inherently inappropriate, particularly here where we are dealing with energy supply companies which are operating in volatile, competitive markets. It is made doubly inappropriate by the fact that the tests can be abused for political purposes.
My amendment would simply remove that test altogether as it would apply to energy suppliers. My noble friend may have better ways of doing this, but I do not think that that test is appropriate in such a case as we have here, where only Ofgem or the Secretary of State—not the directors of a company—are able to use it and where it would be inherently very difficult to apply. I beg to move.
Lord Davies of Oldham
My Lords, like the noble Lord, Lord Jenkin, I served on the Committee that produced the 2004 Act. It went on at least twice as long as we are destined to do. The noble Lord indicated that he has found a slight impediment in that Act. All I can say is that I did not see it at the time and I do not understand it now, so good luck to the Minister.
Baroness Northover
My Lords, I must say that I am incredibly impressed at the thoroughness with which my noble friend Lord Jenkin has read this Bill and that I hope that he very much liked Clause 78, which indeed consolidated and hopefully improved existing provisions.
Lord Jenkin of Roding
I had intended to say just that, because I was checking the Bill and saw that, indeed, the earlier clauses had been repealed.
Baroness Northover
The clauses on special administration in the Bill largely follow the tests and procedures for ordinary administration laid down in the Insolvency Act 1986. If a party applies to the court for an ordinary administration order, the court may grant it if it is satisfied that a company is unable to pay its debts or is unlikely to be able to pay them. Administration under the Insolvency Act 1986 is a business rescue procedure with the survival of the company as its primary objective. If entry to administration were available only to a company that could not pay its debts at the date of commencement, the rescue of viable businesses might be jeopardised. For this reason, administration can be entered also when a company is likely to become unable to pay its debts. The provisions in the Bill apply these same principles to energy supply company administration. They follow the same tests for insolvency as the Insolvency Act. My noble friend’s amendment would require the court to apply a stricter test for insolvency when considering applications for energy supply company administration than it does for applications for ordinary administration.
I make it clear that the Secretary of State would apply for an energy supply company administration order only as a last resort and to prevent the risk of financial failure spreading to other companies. I hope that I have reassured my noble friend that we are seeking simply to keep the procedure in line with that which applies elsewhere for other companies. I hope that he will withdraw his amendment.
Lord Jenkin of Roding
My Lords, I am grateful for my noble friend’s explanation, but I have to say that I do not think that she has taken account of what I said. Under the Insolvency Act, which introduces this third test, the directors of a company can apply to put the company into administration. After all, they are the ones who are best able to decide whether the company is likely to be unable to pay its debts in the future. In this case, that does not apply. The directors are forbidden to do it; only the Secretary of State or Ofgem can make the call. I see that my noble friend has been given an explanation. It would nice if the Committee could hear it, too.
Baroness Northover
It is amazing what enlightenments can come when one listens to one’s noble friends. Funnily enough, I have come to this conclusion: the Secretary of State will no doubt wish to discuss any application for an energy supply company administration order with company directors in advance. Directors will be able to contest the application in court. However, enshrining a duty to consult directors in the legislation could lead to delay. The Secretary of State needs the flexibility to act quickly if the company’s position is posing a threat to the rest of the market. When we see what has happened recently in other areas, we realise why this is extremely important. I hope that that helps to elucidate why this is in this provision.
Lord Jenkin of Roding
My noble friend has made a persuasive case and I am grateful to her. This has caused anxiety, particularly in the light of the Railtrack case. However, having heard her, I beg leave to withdraw the amendment.
Baroness Northover
This may be a convenient moment for the Committee to adjourn until Tuesday 8 February.
House of Lords
Introduction: Baroness King of Bow
Introduction: Baroness Randerson
Introduction: Lord Noon
Airports: Heathrow
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Gavron
To ask Her Majesty’s Government what was the impact on the economy of delays and cancellations at London Heathrow Airport in December 2010.
Earl Attlee
My Lords, the department is considering the economic impact of the delays and cancellations at London Heathrow Airport in December. The number of terminal passengers travelling through Heathrow in December 2010 was down by around 10 per cent compared with 2009, mainly due to severe weather disruption. As a result some UK firms might have lost revenue, although there is currently no basis for quantifying this. In some cases firms might have mitigated impacts, for example through video conferencing.
Lord Gavron
My Lords, I thank the Minister for his reply. The Spanish owners of Heathrow borrowed the money to buy it, thus leaving themselves too impoverished to invest in the infrastructure necessary for a reliable service to passengers in difficult weather conditions. This is confirmed by the Financial Times of 21 December. Do the Government think that so many of our key national institutions should be available to anyone, from anywhere, who can borrow the money to buy them?
Earl Attlee
My Lords, the noble Lord makes an important point about the importance of transport infrastructure to our economy. That is why we are continuing to invest in our infrastructure despite the economic situation. As for the ownership of BAA, there was an agreement with airlines about the level of residence to be provided this winter. However, 16 centimetres of snow in one hour far exceeded the agreed provision. I am not sure that ownership is relevant.
I have to apologise to the House, as last week I said that Heathrow had 24 aircraft stands with snowbound aircraft on them. I should have said that there were 200 such stands.
Lord Mawhinney
My Lords, given the economic and social importance of Heathrow, and indeed of Gatwick, after further consideration will my noble friend invite the Government to commission an independent inquiry into the resources and processes at Heathrow and Gatwick for handling snow and ice compared with those at New York and Boston, and then agree to publish the result?
Earl Attlee
My Lords, I listened with great care to what the noble Lord said today and last week. The Civil Aviation Authority is taking forward work to understand more fully the impact of disruption on passengers to help to inform a decision on whether regulatory change is needed to balance the cost of disruption to passengers and business against the cost of dealing with severe weather.
Lord Campbell-Savours
My Lords, if the owners have no money, surely ownership is very relevant.
Earl Attlee
My Lords, it is not relevant. Heathrow experienced 16 centimetres of snow in one hour. It does not matter who owns it; the airport will come to a stop in those circumstances.
Baroness O'Cathain
My Lords, will my noble friend the Minister confirm that Heathrow was actually purchased by the Spanish company under the previous Government, so the supplementary question asked by the noble Lord, Lord Gavron, should really focus on lessons to be learnt rather than on encouraging people to think that we were responsible?
Lord Brooke of Alverthorpe
My Lords, is the Minister aware that the last Government also placed 51 per cent of the shares of National Air Traffic Services in the hands of the public through the Government? The Government are contemplating privatising NATS. Would he assure the British public that it will not fall into foreign ownership?
Earl Attlee
My Lords, I look forward to answering a Question about NATS in due course.
Baroness Scott of Needham Market
My Lords, does the noble Lord agree that a bad situation last year was made infinitely worse by the seeming inability of the airport operator and the airlines to give passengers adequate information that was not contradictory? Have the Government looked at the matter and at who should be giving information?
Earl Attlee
My Lords, the noble Baroness is quite right; we touched on this last week as well. There are two reviews. One was commissioned by BAA. The other will come from the South East Airports taskforce. No doubt both reviews will consider that very important point and come back with suggestions on how we can avoid the problems in future.
Lord Davies of Oldham
My Lords, last week the noble Lord indicated that these reviews were taking place, but did not indicate the degree of urgency. It is 31 January and there is still plenty of winter to come. When will these reports be published and when will any action based on them be taken?
Earl Attlee
My Lords, the reports will come in due course. However, if there are any lessons to be taken on board immediately, we will listen and take action on those points.
Lord Forsyth of Drumlean
My Lords, is it not rather ridiculous to try to turn this into an argument about public versus private? The motorway between Glasgow and Edinburgh was closed for two days, yet as far as I know has not been privatised. Is not the real issue whether we will have winters like this on a regular basis, and whether we need to invest in our infrastructure—our roads, our airports and the rest—to prevent our country from looking ridiculous in the eyes of the rest of the world?
Earl Attlee
My noble friend is absolutely right. That is why my right honourable friend the Secretary of State has asked Sir John Beddington to give us some scientific data on how likely it is that we will experience such severe winters in future.
Lord Clinton-Davis
I declare an interest as the president of BALPA. Is it not obvious, without any inquiry, that there are serious disadvantages in on-stand de-icing, including leaving parking stands awash with fluid overspray that could lead to serious health and safety risks? Is there not a real lack of de-icing rigs? Will the Government make a statement about that?
Earl Attlee
My Lords, it is important to understand that there are two areas of responsibility. BAA is responsible for keeping the runways and taxiways clear, but the airlines are responsible for de-icing the aircraft. I asked about the environmental impact of the de-icing fluid, which is a glycol-based chemical. I was advised that the de-icers are intercepted and the effluent is reprocessed.
Employment Law
Baroness Turner of Camden
To ask Her Majesty’s Government whether they have plans to revise employment law; and, if so, what consultations have been undertaken, and with which organisations.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Department for Business, Innovation and Skills is leading a review of employment laws to ensure that we maximise flexibility for employers while protecting fairness for employees and provide the competitive environment required for enterprise to thrive. This is a rolling programme over the length of the Parliament, and individual departments are engaging with representatives of employer and employee groups. As part of this, last Thursday we announced a consultation on reforming the employment tribunal system, which followed discussion with a range of stakeholders including the CBI, the TUC and the British Chambers of Commerce. This consultation will last until 20 April 2011.
Baroness Turner of Camden
My Lords, I thank the noble Baroness for that response, but the Business Secretary last week announced a revision of employment law to make it easier for employers to dismiss people and more difficult for employees to allege unfair dismissal and to refer cases to a tribunal. Indeed, it will be impossible to seek redress unless the employment has lasted for two years or more. In other words, that will apply to a large section of the workforce. This is at a time when many working people are already concerned about employment and their future prospects. What does the Business Secretary think he is doing? Surely he should be doing everything possible to keep people in employment rather than on benefits.
Baroness Wilcox
My Lords, we have announced that we are considering increasing from one year to two years’ service the qualifying period before an employee can claim for unfair dismissal. This change, if implemented, would return the law to as it was until 1999. We believe that this is fair to employees and employers. It is fair to employers, because it gives businesses the confidence to take on staff that they may not have employed otherwise, particularly in small and medium-sized companies. It will also encourage employees to have a longer time to prove that they are the right person for the job and a longer time to prove their skills, and we hope that fewer and fewer cases will finish up in the courts. We feel that this is a good move and we hope that the Opposition will help us to develop it through the consultation period, which will last until 20 April.
Baroness Gardner of Parkes
My Lords, is the Minister aware that someone is trying to set up an all-party micro-business group? Is it not a fact that in order for this economy to recover, lots of little businesses need to be set up and to develop? They, above all, need to have these extra consultations—I speak after 20 years of sitting on an employment tribunal—and to be able more easily to establish themselves and provide the jobs that we all think are so necessary.
Baroness Wilcox
I thank my noble friend for that encouraging question. We are hoping to achieve earlier resolutions to workplace disputes so that both parties can resolve their problems in a way that is fair and equitable for both sides without having to go to an employment tribunal. We want to ensure, when parties need to come to an employment tribunal, that the process is as swift, user friendly and effective as possible. We hope very much indeed that we will be able to use ACAS more and more, and we are consulting with it at the moment.
Lord Borrie
My Lords, does the noble Baroness agree that extending from one year to two the period for which one must be in employment in order to claim for unfair dismissal in the industrial employment tribunals would represent a serious reduction in employee rights, which have been developed over the years? As she rightly said, the legislation has been there since 1999, due of course to the efforts of the Labour Government at that time to ensure that where there is inequity between the power of the employee and the power of the employer, fairness should be achieved through the work of the employment tribunals.
Baroness Wilcox
My Lords, we really feel that this will be a better way of going forward for both sides. What we are looking for here is flexibility for businesses, especially small and medium-sized businesses, to give them confidence, and fairness for employees. We hope and we know that the so-called “day one rights” will stay in place. The proposals will not affect the existing “day one rights” of people when they start to bring a case for unfair dismissal; for example, when they believe that gender, race or some other form of discrimination has taken place, or where someone is dismissed for exercising their legal rights, such as asking for a written statement or to be paid the national minimum wage. The proposals relate to the areas where we do not wish people to rush first to a tribunal. If the qualifying period is only one year, it means that everything starts to happen too quickly. I know through my business experience people who have come to work with no experience. It takes them a while to get used to the job, and extending the time will make the employer and employees take a better look at each other and see whether they can keep themselves together, rather than rushing to tribunals and not going to ACAS first.
Lord Newby
My Lords, does the Minister agree that the proportion of employment tribunal claims involving employees who have been working for between one and two years is very small indeed—well under 5 per cent—whereas the impact of the Government’s changes will, at this particularly crucial point, encourage employers across the country, particularly in small and medium-sized enterprises, to take on additional staff?
Baroness Wilcox
My Lords, I believe that not to be so. We hope to put in place all sorts of measures to ensure that employers behave as they should. The consultation period should be open to as many people as possible. We hope that many will take the opportunity to help us to ensure that we get this legislation correct.
Lord Young of Norwood Green
My Lords, is the Minister really saying that it will take more than a year for an employer to assess whether an employee is suitable in their employment?
Baroness Wilcox
I heard a voice from behind me. I apologise. Would the noble Lord mind repeating his question?
Lord Young of Norwood Green
My Lords, is the Minister really saying that it takes more than a year for an employer to assess whether an employee is suitable in their employment? Does she agree that part of the problem, and the reason why there are so many employment tribunals, is the lack of knowledge and application of current employment laws?
Baroness Wilcox
I shall be careful how I answer the noble Lord because, just a little while ago, he was standing where I am standing. I think we are on the right track with this. We have so much evidence that small businesses in particular are not employing people. They are not growing as they should and they are afraid of taking on people and having to go to tribunals. All in all, I think this is the right way to go forward.
Monetary Policy Committee
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Myners
To ask Her Majesty’s Government what assessment they have made of the impact of the Monetary Policy Committee missing its monthly inflation target repeatedly over the last 10 years.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, the UK’s monetary policy framework gives operational responsibility for maintaining price stability to the independent Monetary Policy Committee of the Bank of England. Although the rate of inflation has increased over the past months, the committee’s view is that inflation is likely to fall back to target during 2012, as the impact of temporary factors wanes, but the timing and extent of that decline in inflation are uncertain due to the margin of spare capacity in the economy.
Lord Myners
My Lords, in the final quarter of last year, we saw a reduction in GDP of 0.5 per cent, which is the thickening of a trend back towards recession, a trend that the UK alone is experiencing. Economic output is now at the same level as in the first quarter of 2008, and output is running 8 per cent below trend growth rates. Real incomes are being squeezed. The Governor of the Bank of England has forecast that they will be back to the level of 2005. House prices are falling and unemployment is rising. I put it to the Minister—
Lord Myners
Members on the other side do not like these economic facts and it is not surprising that they react as they do. I put it to the Minister that the Bank of England is having to take risks on inflation because of the severe cuts in economic activity consequent upon the Government’s reckless fiscal policy.
Lord Sassoon
My Lords, that was a nice long lecture. I think there was a question at the end of it. It is precisely because the Government took resolute and early action to restore the fiscal position to one that pulls us back from the brink of the disaster which the previous Government left us with that the Bank of England can conduct monetary policy on a prudent basis and, as I said in my earlier Answer, all forecasters that I know of are forecasting that inflation is likely to come back towards the target range.
Lord Barnett
As the Minister appears to agree with the Chancellor on almost everything, does he agree with the Governor and the majority of the members of the MPC that the interest rate should be kept at its present level?
Lord Sassoon
My Lords, I will not fall into the trap of second-guessing the MPC. As I have said, the Monetary Policy Committee of the Bank of England runs monetary policy on an independent basis. That was an establishment of the previous Government to which I pay tribute. I am certainly not going to do anything other than restate the critical importance of the independence of the Monetary Policy Committee. It is up to the committee to decide how to hit the inflation target, which it is doing with the full confidence of the Government.
Lord Newby
My Lords, does the noble Lord agree that the principal reason for having an inflation target was to bear down on domestic demand inflation, particularly wage inflation? Would he further agree that at the moment such pressure does not exist—wages are flat—and therefore it would be a mistake to put interest rates up primarily in response to external factors?
Lord Sassoon
My Lords, I am grateful to my noble friend because, while again I will resist the temptation to second-guess the Bank of England, it has indeed attributed the recent rise in inflation, which has been significantly to the depreciation of sterling, to the increase in VAT which the last Government put in place and to the rise in energy prices. These are external factors.
Lord Eatwell
My Lords, the noble Lord in his Answer earlier referred to temporary factors accelerating inflation and reducing the living standards of the British people. Is not one of the most important temporary factors that are accelerating inflation through the rest of this year the increase in VAT to 20 per cent?
Lord Sassoon
My Lords, I absolutely did not refer to the reduction in anyone’s living standards. Absolutely at the heart of the Government’s response to the situation that we inherited is the need to get growth back into the economy, and we need fairness as we do it. That is why the Government are taking steps to take almost 900,000 people out of the tax net this April; that is why, under the coalition Government’s plans, 23 million taxpayers will be up to £170 better off next year than they would otherwise be; that is why we are reducing corporation tax from 28 to 24 per cent with other measures to make sure that we get the economy growing again.
Lord Forsyth of Drumlean
My Lords, can the Minister confirm that the Government are nevertheless concerned about inflation? Does he recall the very wise words of the former Prime Minister the late Lord Callaghan, who reminded us in the 1970s that inflation is the father and mother of unemployment?
Lord Sassoon
My Lords, I absolutely agree with my noble friend that the Government are concerned about inflation. It eats into the savings of people who did all the right and prudent things through the last decade. We are concerned and are taking actions to make sure that the hard working and lower-income families in this country are protected in the current difficult economic circumstances.
Lord Lea of Crondall
My Lords, is the noble Lord aware that the City correspondents seem to be briefed that the inflation increase is attributable significantly to employment incomes rising? In fact they are not rising because, according to the ONS, the statistics now include, for the first time, three public sector banks, which pay out about £25 billion to people. That has given the impression, incorrectly, that average workers in the public sector are getting an increase.
Lord Sassoon
My Lords, forgive me but I did not quite follow the logic of all of that. All I can say is that, if we are talking about the City, the Treasury’s latest comparison of independent inflation forecasts from City and other commentators in mid-December shows that the City is forecasting inflation to come down to 1.8 per cent in 2012 and then to be steady at 2 per cent thereafter.
Cluster Munitions (Prohibitions) Act 2010
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Williams of Crosby
To ask Her Majesty’s Government what arrangements they have made for temporary exceptions to the Cluster Munitions (Prohibitions) Act 2010.
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, this Government have made no arrangements for temporary exceptions to the Cluster Munitions (Prohibitions) Act 2010. Section 8 of the Act permits the Secretary of State to grant authorisation for visiting forces of states not party to the Convention on Cluster Munitions to possess cluster munitions on or transfer them through UK territory.
Baroness Williams of Crosby
I thank my noble friend very much for that Answer and congratulate him on the fact that the UK was able to say that all cluster munitions had been removed from United Kingdom territory well within the deadline of December 2010. May I press just a moment further? Is the Indian Ocean territory of Diego Garcia part of the areas under British control? Will there be a removal of stockpiles from Diego Garcia by the target date of 2013?
Lord Howell of Guildford
I am grateful to my noble friend for the good wishes. The whole House took an active part in seeing this cluster munitions legislation on to the statute book and I think we are all very proud that it has been adhered to very closely. The United States is actually ahead of schedule and has cleared all stockpiles of cluster munitions from all UK territories, including Diego Garcia. There is no problem there. The matter has already been completed. The deadline was 2013, but we are well ahead of schedule on that operation.
Lord Hannay of Chiswick
My Lords, what progress are the Government making in getting other countries to sign up to the cluster munitions convention and the Dublin convention? Also, are they making progress in working out with industry a voluntary code; and, if not, in making it mandatory to prevent any British companies helping companies outside our jurisdiction to manufacture cluster munitions?
Lord Howell of Guildford
On the second point, a working group has been set up to work out the problem of remote financing to which the noble Lord rightly refers. Would he repeat his first point?
Lord Hannay of Chiswick
I asked what progress the Government are making in getting additional countries to sign up to the Dublin convention.
Lord Howell of Guildford
I am so sorry; the noble Lord is quite right. Of course, a number of major countries have not signed, including the US, Russia, India, China and Pakistan. We are in regular touch with them at official level and are raising the matter with them all the time. Frankly, progress is not swift, but we have not relaxed our efforts to push for a complete, global ban on those horrific weapons, and we will continue to work very hard at all levels.
Lord Boateng
My Lords, the Minister will be well aware of the menace that unexploded cluster munitions present, not least to people going about their ordinary business, trying to farm their land and live life, often in extremely difficult circumstances. Will he join many of us in the House in commending the work of the HALO Trust, which does so much to remove mines and unexploded ordnance and therefore promote not just humanitarian relief but sustainable economic development? Will he ask his right honourable friend the Secretary of State for International Development why that department, which has to date funded the work of the trust in both Angola and Somaliland, has now decided that those two countries are no longer priorities for mine clearance, when clearly they are?
Lord Howell of Guildford
I will certainly check out what the noble Lord says. My understanding is that considerable funds are still used to promote the excellent and incredibly valuable work of removing those horrible weapons from various areas where they lie around. I will look at the two items raised by the noble Lord and write to him about them.
Lord Chidgey
I thank my noble friend for the Answers that he gave me in December to Written Questions that I put to him on this very issue. Can he absolutely assure your Lordships that there will be no question ever again of cluster munitions being kept in British territories—offshore British territories, within coastal waters, or whatever? It may well benefit your Lordships if the records of the discussions that must have taken place to provide for the exceptions for the United States are placed in the Library so that we can see exactly what happened.
Lord Howell of Guildford
As my noble friend knows, the one exception was made very properly by the previous Foreign and Commonwealth Secretary, Mr Miliband, allowing the US a temporary extension of its right to keep cluster munitions while it went through the process of getting rid of them as part of the running down of cluster munitions stores in UK territory and in the United Kingdom. That is the only exception that has ever been made. For the future, we will consider bringing to Parliament and recording any decisions that may be proposed for temporary extension, and we will do that on a case-by-case basis. I have to say that in a number of instances it could be governed and limited by security considerations.
Baroness Symons of Vernham Dean
My Lords, do we retain some cluster munitions for the right purposes of training personnel in the detection and destruction of such appalling weapons? Do we export any weapons to foreign Governments for the purposes of training their personnel in detection and destruction of those weapons; and, if so, which countries do we export to for those purposes?
Lord Howell of Guildford
In this country we have destroyed 48 per cent of all cluster munitions weapons and intend to destroy the remaining 52 per cent well within the schedule—by 2013. As for the training and technology associated with their destruction and the necessary designs of equipment to destroy them, that continues. I cannot answer the noble Baroness precisely on whether there are export clients for this technology but if there are this would be a positive area where the more information we have in the rapid destruction of these weapons and the better the training we can press round the world for their destruction, the better off we all are.
Arrangement of Business
Baroness Anelay of St Johns
My Lords, immediately after proceedings on the first group of amendments later today to the Parliamentary Voting System and Constituencies Bill—Amendments 94 and 94A—my noble friend Lord Howell of Guildford will repeat a Statement on the situation in Egypt.
Budget Responsibility and National Audit Bill [HL]
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Sassoon
“( ) The members appointed under paragraph 1(1)(c) constitute a committee of the Office to be known as the Non-executive Committee.”
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, we usefully teased out a number of issues on this Bill in Grand Committee, so I am pleased to be able to come back to the House with a number of amendments, of which this group is the first. Our amendments very much reflect a number of critical points that we discussed in Grand Committee.
Perhaps I should start with Amendment 4, on which Amendments 1 and 2 are essentially consequential. We are talking here about the independence of the OBR. Amendment 4 will formalise the role of the non-executive directors in reporting on the extent to which the OBR’s duty has been performed, in accordance with Clauses 5(1) and 5(2) of the Bill. To ensure the OBR’s credibility, it is important that the OBR is able to operate with the complete discretion provided for at Clause 5(1) and in line with the principles of Clause 5(2). Amendment 4 provides a mechanism for the non-executive directors to report on anything that they believe has prevented the OBR from carrying out its duty with complete discretion and “objectively, transparently and impartially”. Such a report will feature as part of the OBR’s annual report, which is to be laid before Parliament. For example, the non-execs might report on any interference with the preparation and publication of the OBR’s reports or any attempt to control the OBR through manipulating its budget.
Amendment 12 will remove the provision that states that the charter may include guidance on Clauses 5(2) and 5(3). That will address the particular concern raised in Grand Committee that the charter could be used to redefine the commonly used terms “objectively, transparently and impartially”. It is not the Government’s intention to subvert what these terms mean through the charter. The amendment will therefore remove the marker that strongly indicates that the charter will define what these terms mean.
Amendment 13 will change the process for amending the guidance in the charter. Concerns were raised in Committee that such modifications could be done too easily, which would again undermine the independence of the OBR. Amendment 13 requires the Treasury to publish any revisions to the guidance at least 28 days before the modified charter is laid before Parliament for approval in another place. This period of 28 days, which is consistent with the period used in other secondary legislation, will provide further opportunity for scrutiny of and comment on the guidance before it is voted on. If appropriate, the Government could respond to, or make changes in the light of, this scrutiny before the formal version is laid for approval.
Other safeguards remain in place. The charter is limited to considering the functions conferred on the OBR in the Bill and cannot add or distort them. The charter must also be approved by an affirmative resolution in another place before it comes into force.
Lord Eatwell
My Lords, this is a rather heterogeneous group of amendments. In fact, the only common theme that I can see running through the amendments is that most of the ideas in them were proposed by the Opposition in Grand Committee. We are delighted that the Government have accepted many of the arguments made by this side concerning important failings in the Bill as originally introduced.
An essential difficulty with the structure of the OBR is that the OBR is to be both outside government and yet of government. The goal of the Bill is to make the OBR independent—a goal that we on this side fully support—yet, as the provider of the official forecast, the OBR is an essential part of policy-making and must be closely involved with the development and costing of government programmes. As the draft charter states,
“The Government will have full and timely access to information and assistance from the OBR”.
A very obvious manifestation of the resultant ambiguities is that the Treasury is planning to retain forecasting skills in order that Ministers may make informed judgments on the impact of various policies. As the noble Lord made clear in Committee, this may lead to the extraordinary situation in which the Treasury could reject the official forecast. Such paradoxes are the inevitable outcome of the peculiar, ambiguous status of the OBR.
Given this peculiar status, it has been the objective of this side of the House to reinforce the independence of the OBR wherever we might. After all, if there is not widespread confidence in that independence, the legislation will have failed. To that end, I am pleased that the Government have—in the form of Amendments 1, 2 and 4—accepted our argument that the non-executive members of the OBR should be given clear roles, including, most importantly, that of guardians of the independence of the OBR and, as we shall see in later amendments to be considered by the House, that of securing third-party monitoring of the OBR’s performance. We are pleased to support Amendments 1, 2 and 4.
There are two other important amendments in this heterogeneous group—I am sure that, listening to the Minister introducing the amendments, noble Lords might have been rather puzzled about why they are in a single group. Following suggestions made by this side and by the noble Lord, Lord Newby, Amendment 11 clarifies the previously obscurantist Clause 5(3). Will the Minister confirm that Clause 5(3) as amended will ensure that the evaluation of the relevant government policies will essentially be part and parcel of all the OBR’s work, including the work outlined and defined in the charter?
Amendment 12 is an acceptance of our argument that it is preposterous that the Treasury should, via the charter, be able to qualify the meaning of the requirement for the OBR to perform its duties “objectively, transparently and impartially”. I am delighted that the amendment will remove that nonsense. Will the Minister make it clear that the remaining requirement—which is, so to speak, all that is left—in Clause 6, which provides that the charter
“may include guidance to the Office about how it should perform its duty under section 4, including (in particular) guidance about … the time at which it is to prepare any forecast, assessment or analysis”,
can now refer only to the time at which the OBR should perform its duties under Clause 4? Do any wider, unspecified powers of direction remain? It would helpful if the Minister could clarify that, since Clause 6 will now have been changed to such an extent that it is not entirely clear what subsection (3) now refers to when it refers back to subsection (1).
Finally, in Amendment 13 the Government have responded to our criticism about the lack of adequate parliamentary scrutiny of the charter by requiring that a draft of any modification be published 28 days before the charter is laid before Parliament to be approved by resolution of the House of Commons. This is an important improvement on what went before, but even so—as the noble Lord, Lord Newby, said in Committee—the charter is subject only to vestigial parliamentary scrutiny. The important word in this context is “vestigial”.
That raises an important issue mentioned in the notes distributed with the amendments for the Report stage. Noble Lords will recall that several elements of the charter came in for stiff criticism in Grand Committee, yet the notes that accompany this stage declare that the revised charter will be published only after the Bill has received Royal Assent. That cannot be right. The failure to provide a revised charter deprives Members of another place of the opportunity to relate the charter in the Government’s preferred form to their substantive discussion of the Bill. In effect, this is the Government stifling debate on the charter. Will the Minister give me an assurance that this underhand way of going about things will be rescinded and that the revised charter will be published in good time for its consideration by another place?
Lord Newby
These government amendments are welcome because they recognise the discussions held in Committee. The Minister has a gone a long way towards responding to the concerns that were expressed.
I am particularly pleased with Amendment 11 because we spent a lot of time on this issue. Clearly, the original drafting was inadequate. Pride of authorship means that I am unhappy that the words that I suggested in Committee are not being used, but the wording in Amendment 11 will do exactly the same job, so I welcome that.
I also welcome Amendment 13 for the reasons suggested by the noble Lord, Lord Eatwell. I have some sympathy with his last point. I cannot see why the charter cannot be presented in its final form before the Bill goes through another place. I cannot believe that there will be much to change—the charter is not a very long document—so, for the reasons given by the noble Lord, that would be an improvement on what is currently proposed.
I want to make a final comment on what the noble Lord, Lord Eatwell, said about the Treasury retaining its own forecasting ability and what would happen if there was a dispute with the OBR. We discussed at some length in Committee why it was essential that the Treasury should retain it own forecasting abilities While it would clearly be a major source of embarrassment if the Treasury disagreed with the OBR forecast, the one good thing about the new system is that, presumably, any such disagreement would be transparent because the Treasury would have to explain that it has disagreed with the OBR and give reasons why, and there would no doubt be a huge row about it. Although that might be uncomfortable for the Government, that will at least expose all the issues that are in dispute. In the interests of transparency, surely that is a good thing.
Lord Higgins
My Lords, I intervene briefly to express appreciation to my noble friend for the way in which he has kept us in touch during the period between Grand Committee and now with the way in which his thoughts have been developing. Certainly this is a non-controversial Bill, but the House is succeeding in improving it still further and that is a good thing.
Lord Barnett
My Lords, I thank the noble Lord, Lord Sassoon, for his amendments. He referred again to the independence of the OBR but, as he knows, I have all along been concerned with both its relevance and independence.
On relevance, there are dozens of truly independent forecasting bodies all over the country, including the Institute for Fiscal Studies, which used to be chaired by the present chairman of the OBR. The issue concerns itself with the expense of a body such as this when we have not only the forecasts of the independent outside bodies but the Treasury forecasts, the Bank of England forecasts and the OBR forecasts, most of which probably will be broadly in line with the current situation.
We will never know—I have tried to find out on many different occasions—the Government’s view on what should happen when they have the forecasts. The Minister has found all kinds of different ways of not answering my questions about what the Government’s policy is and whether they agree with the Bank of England on keeping interest rates at 0.5 per cent, given the growing pressure—wrongly in many quarters—on the need to increase interest rates. He will not say whether he disagrees—I appreciate that he cannot disagree with or say anything different to what the Chancellor has said—but it would be nice if, at some time or another, he could answer the question of what the Government’s policy is, as opposed to accepting the forecasts, which he has done on numerous occasions.
On the question of independence, I am worried by the constant references in the media to “the Government’s in-house forecasting body, the OBR”. This does not lend itself very well to the independence that we would all like to see in the OBR. I am sure Robert Chote will do his best to ensure that it is truly independent but, if it is no more independent than the dozens of existing bodies, why do we need the OBR at all? That is the question I put to the noble Lord while thanking him for the amendments he has brought forward.
Baroness Noakes
My Lords, I add my support for the amendments. It is to the great credit of the Minister that he took away the good discussions we had in Committee and has produced this and the other amendments today.
The noble Lord, Lord Barnett, referred to the OBR being regarded as the Government’s in-house forecasting body. I have never heard it referred to in those terms, although I know that noble Lords on the Benches opposite have tried to make that accusation stick. I believe it is already regarded as a properly independent body under its chairman, Mr Robert Chote, and we should rejoice in that.
Lord Burns
I also welcome these amendments. We spent a great deal of time in Grand Committee trying to bring greater clarity to the remit of the OBR and protecting its independence. We also tried to clarify the governance of the OBR and, particularly, the role of its non-executive members. The Government have responded positively to those discussions. The amendments deal very well with the bulk of the issues that were raised, particularly in clarifying those areas of the remit where there was ambiguity and the role of the non-executive members in relation to their oversight of the forecasting process and as the protectors of the external review process. That has been a success.
I fear that there will always be a certain amount of tension between observers when it comes to the relationship between the forecasts of the OBR and the activities that take place within the Treasury. I pointed out at Second Reading that whatever arrangements are put in place for the OBR, you cannot strip the Treasury of its own skill set and the resources it needs to monitor the progress of the economy and to make judgments on whether the economy is following the track that was intended at the time that measures were taken. This is an arrangement that we have to live with. I am sure that as time goes on, we will see much more clearly the way in which those are worked out and how the OBR relates to the internal activities of the Treasury. I hope that noble Lords will not get too exercised about this. That is a natural tension that exists in this type of arrangement and I would be surprised if it cannot be made to work.
Lord Sassoon
My Lords, I am grateful for the general support around the House which this group of amendments seems to command. I am very happy for noble Lords to take credit for the ideas in there, if they wish to do so. Although the noble Lord, Lord Eatwell, may not quite understand or want to appreciate why we have grouped these amendments together, they all touch critically on the independence of the OBR.
I am grateful to my noble friend Lady Noakes for pointing out that in the OBR’s short existence—even before it is within a statutory framework—Robert Chote and his colleagues have done a remarkable job through the quality and extent of their work to carve out an unchallenged reputation for quality of thinking and independence. Of course, we need to make sure that the Bill underpins that. In that context, I am grateful to the noble Lord, Lord Burns, who speaks from a position of great authority as a former Permanent Secretary at the Treasury, for pointing out that for all the OBR’s independence, HM Treasury will need to retain a separate capability to monitor and assess the progression of the economy. I thought that his admirable summary was the answer to the question of the noble Lord, Lord Barnett.
I had a sense of déjà vu, because I thought we were going back to Oral Questions with the first part of the noble Lord’s intervention. We will pass over our regular sparring about the Monetary Policy Committee, but his questions on why the OBR is needed and its independence were partly answered by the noble Lord, Lord Burns. Fundamentally, over the past few years, as the previous Government redefined the cycle, there was not an appropriate degree of transparency around the forecasts, which is why we believe the OBR is necessary. I do not want to dwell on that because we spent a lot of time on that at Second Reading and in Committee.
The job now is to get that independence properly enshrined in the Bill, which takes me to the suggestions from the noble Lord, Lord Eatwell. Also, on the comment from my noble friend Lord Newby, I am sorry that the parliamentary draftsmen did not precisely agree with his wording but grateful for confirmation that we got to the same result. On the couple of questions from the noble Lord, Lord Eatwell, on Clause 5(3), indeed the OBR now has a clear and explicit duty to consider government policies in its work. That is what the OBR is essentially all about: assessing the impact of government policies and, on the back of that, whether the fiscal mandate will be met. Clause 5(3) is indeed now quite clear on that.
Clause 6(1) is quite explicit that the charter may still give guidance on other topics but there is a particular signal that the charter may give particular guidance on timing. When the noble Lord comes on to press me on the draft charter, I think that we will all agree on how important the transparency of the remit is. The critical point, as I hope noble Lords would agree, is that we published the draft charter early on in our discussions, to enable that to be fully considered in Committee. As my noble friend Lord Newby said, any consequential redrafting of the charter as a result of our discussions will be small.
The essential point is that we issued a draft charter in very good time for discussion now. There is no overwhelming need to issue a new draft, simply because not a lot will have changed. We have been clear on the issues that we have looked at again. While I hear what has been said, I do not want to prejudice how the charter and the Bill might be looked at as they go through the stages in another place, as and when we send the Bill there. I hope that answers the various points that have come up on this group of amendments.
Lord Sassoon
Lord Sassoon
“Review by Non-executive Committee12A The Non-executive Committee must keep under review the way in which the Office’s duty under section 4 is performed.”
Lord Sassoon
My Lords, producing high-quality work requires the OBR to have access to all relevant information and expertise. The Bill provides for this through a right of access to information, a Budget Responsibility Committee of experts and a duty to act transparently. In response to the discussion in Grand Committee, these arrangements are intended to be bolstered by the two amendments that we are bringing forward.
Amendment 3 gives the non-executives a duty to keep under review the processes that the OBR uses to assure that it is producing the best possible work. These are likely to be management processes that the non-executives will be well placed to consider. Examples might include: whether the OBR is consulting with a wide and appropriate range of experts, including academics and internationally; whether it is working effectively with the rest of government to produce analysis; and, to make sure that it follows up lessons from internal reviews.
Amendment 5 requires the non-executives committee periodically to commission independent expert reviews of the OBR’s work. In detail, it needs to consider frequency: these reviews could be carried out at times considered appropriate by the non-executives, but “at least” every five years. In scope, the review will consider work published in the relevant period. The non-executives will determine which of the OBR’s reports are to be considered. That could be all the OBR’s work or a particular theme could be focused upon. This flexibility is important to ensure that maximum value is always gained from the reviews. There is then the question of the reviewer. The non-executives would appoint a person or body with the appropriate knowledge or experience to carry out each review. Although we expect the reviews to have minimal costs, there is provision in the Bill for the OBR to make payments to the reviewers—for example, for their expenses. Each review will be published and a copy laid before Parliament. I beg to move.
Lord Eatwell
My Lords, I think that everyone who took part in Grand Committee will feel that these amendments should be dedicated to the noble Baroness, Lady Noakes—who I am afraid is not in her place to hear this—as it was she who, at Second Reading, raised the issue of writing one’s own school report and the necessity of having an independent assessment of the OBR’s performance. Amendments 3 and 5 therefore establish the responsibility of the non-executives to keep under review the activities of the OBR, relative to its main duty. An important component of this monitoring will be the commission of the third-party reviews of the OBR’s performance, as described by the Minister.
We are entirely supportive of the Government’s amendments in this respect, other than in one crucial aspect. Amendment 5 proposes that an assessment by an independent person or body should be carried out,
“at least once in every relevant 5-year period”.
The final part of the amendment, proposed in new sub-paragraph (7), says,
“the period of 5 years beginning with 1 October 2010”.
However, as will be evident from Amendment 6, which I shall be moving, we on this side think that five years is too long a period. First, as a professional economist, I feel that five years is much too long for an organisation to be running before its activities are assessed independently. After all, the OBR will be producing more than one report a year—in fact, there will be three or four reports—so within three years there will be a substantial body of material for an independent assessor to consider. The independent review will also have value for the OBR. It will provide informed third-party input into its techniques and procedures, and postponing that for five years will unnecessarily weaken the expertise that feeds into the OBR’s work. Of course, expert appraisal of the OBR’s activity will also be an important input into parliamentary scrutiny, and I think that in parliamentary terms we should want more regular consideration than is provided by this amendment.
That parliamentary element leads me to the second reason why five years is too long. Setting a five-year appraisal period politicises a process that should be entirely apolitical. If the Government secure the constitutional reforms that they have proposed, five years will be the length of a fixed-term Parliament; hence the OBR review will become part of a five-year political cycle. Indeed, as I emphasised to noble Lords just now with regard to proposed new sub-paragraph (7) in the amendment, the timing has been set carefully so that a review takes place just after the next election. Review of the work of the OBR should be divorced from the political cycle and not linked to it in any way. That is why my Amendment 6 sets the review period at three years. This will achieve the dual objective of allowing timely consideration of the work of the OBR, giving Mr Chote and his colleagues the benefit of that professional input and stimulus, but most important of all, establishing a cycle of review which is divorced from the political cycle. That is a crucial aspect in maintaining independence and cross-party respect for the work of the OBR.
Lord Burns
My Lords, the noble Lord, Lord Eatwell, describes his proposed change from at least five years to at least three years as “crucial”, but his whole argument as set out implies that, on all occasions, the non-executive committee would choose to have this review at the very end of the period during which it is allowed to have the review. I cannot for one moment imagine that that is what it would do. If we are to have confidence in the non-executive committee that is being set up in the Bill, it seems to me that we have to give it quite a lot of discretion about the timing of when it thinks it is appropriate to have a review. That will be governed in part by the extent to which the outcome of the work of the OBR comes under criticism, the extent to which we think there are lessons to be learnt. I am content with the five years not because I think the review should take place every five years, but because I think that the onus should be upon the non-executive members to take the decision about the timing—one should not box them in too much.
By bringing this forward and suggesting that it should be every three years, we are setting a clear timetable as to when those reviews will take place, rather than leaving it in the hands of the committee that is being set up in the Bill to make that decision. I hope that the noble Lord, Lord Eatwell, will reflect on the emphasis that he has given to this five-year period and his interpretation that the committee will always let it run the full length. I would rather show more confidence in the role of the non-executive body and give it discretion as to when is thinks is an appropriate time to have that review in the light of circumstance and events and how the work of the OBR is seen.
Lord Myners
My Lords, I support Amendment 6 to Amendment 5. I was not in the House for the beginning of Report, but I add my congratulations to those that I understand were expressed to the Minister on rejecting the advice that Ministers so often receive to resist and instead listening carefully to what was said by all sides in Committee, taking that into consideration and bringing forward a set of very constructive and welcome amendments. That shows the House performing its correct and proper function of revision, being professional and efficient, enhancing the quality of the Government’s intention and not unduly delaying the House in so doing.
I repeat my support for the concept of the Office for Budget Responsibility. I hope that, just as the Minister reminded us during Oral Questions that the previous Government established the Monetary Policy Committee which is now an important part of our financial and economic infrastructure, the OBR will be a similar testament to this Government’s contribution to building a sustainable and effective architecture. However, I support the amendment put forward by my noble friend Lord Eatwell because it seems to me that the symmetry between the electoral cycle and five years is simply inappropriate for something which should be established to stand well apart from day-to-day politics and the electoral cycle.
It is particularly important that the work of the OBR should be subject to independent review in a shorter period than five years at commencement. It is new, and it is going to be establishing a lot of new ways of working and new formats for reporting that no doubt will evolve over time. It would be unfortunate if we did not have a chance to stand back and look at how it was performing and how its contribution could perhaps be further enhanced before five years had elapsed—before we got to 2016.
There is a strong reason for having these reviews in periods of not more than three years, rather than in periods of not more than five years, as proposed. However, the noble Lord, Lord Burns, is right to remind us, as I am sure the Minister will in his closing speech, that the current draft says that, as it should not be more than five years, it could well be that the committee, the membership of which has not yet been selected or identified, could choose to make the reports earlier. For the purpose of good order and good process and, frankly, to strengthen further the integrity of the OBR and the confidence that it will be able to sustain from the broader public, these reviews should take place more frequently than once every five years. Once every three years would be a better outcome. It is for that reason that I support Amendment 6.
Lord Newby
My Lords, I support the government amendments to introduce an external review. The debate in Committee and, to an extent, at Second Reading demonstrated why that was a good idea.
As for whether three years or five makes better sense, I have a lot of sympathy with what the noble Lord, Lord Burns, said about the benefits of five years. The amendment is very flexible. It does not say that the review will be commenced on 1 October five years hence. It says that at any point a review can be undertaken; as soon as the non-execs were appointed, they could cause a review to be undertaken if they were worried ab initio that the office was not performing well. If they then felt that it carried on causing them concern, they could have another review relatively quickly. The draft gives the non-execs a lot of flexibility.
What we are doing here is a belt-and-braces job. On the assumption that the office is doing a reasonable job, and bearing in mind that it will be subject to a huge amount of external scrutiny—this body is not operating in the closet with no one looking at what it is doing; every time it produces a report, 50 economists mark it—to do that roughly once a Parliament sounds about right.
Lord Barnett
My Lords, as from time to time I disagree with my noble friend Lord Eatwell, I make it clear that on Amendment 6 I strongly agree with him. It makes sense to separate the review from the political cycle. I will disagree with him at a later stage, but on this I thought that he made a very good point.
I am never surprised at the noble Lord, Lord Burns, speaking as if he is on the Treasury Front Bench. We should not be surprised; he has been doing it all his life. He did a marvellous job in the Treasury, particularly for the five years that I was there.
I thought that my noble friend Lord Eatwell made a good point about the cycle, as did my noble friend Lord Myners, and I hope that on reflection the Minister will accept the amendment. It makes a lot of sense and he might, on this occasion, accept it.
Lord Sassoon
My Lords, I start by welcoming the noble Lord, Lord Myners, back to the Chamber. I am not sure that he had quite got his script co-ordinated with the Front Bench, but I accept his congratulations. I will put aside their slightly backhanded nature. Next time I think he should speak to his Front Bench, which seemed to be taking sole credit for the government amendments that have come forward. Nevertheless, I am grateful to him.
Lord Myners
My Lords, the Minister will recognise that, speaking as I do from the Back Benches, I speak independently. I reach my own conclusions and express my own views. My congratulations to the Minister are in no way fettered by what those on my Front Bench might have said.
Lord Sassoon
I heard the noble Lord say that he wanted to add to the congratulations, but there were none before. Anyway, I am grateful to him. Perish the thought that he might have been out of the Chamber briefing the press on his mildly diverting, if somewhat predictable, contribution to Oral Questions, but let us move on. Noble Lords have focused on only one point in responding to this group of amendments, which is whether the backstop date, because I regard it as a backstop date—the noble Lord is obviously distracted by something in the corner of the Chamber. I want to address the point about the five-year backstop dates.
Lord Sassoon
I thought that I heard support from across the Chamber on this point. As I say, the issue is one of a backstop date. The noble Lord, Lord Eatwell, is seeing chimera where none is to be seen in trying to link the political cycle with this five-year backstop date. We think that it is appropriate to have a date in there to ensure that the independent review happens at some stage, but it is most likely that the non-executive directors will indeed choose to have reviews on some other cycle or whenever they think it is appropriate. I absolutely agree with the noble Lord, Lord Burns, that we have to allow—it is proper to allow this—the non-executive committee the freedom to make up its own mind on this. A shorter period may well be decided on, particularly in the initial period of operation, just as, in the context of the Monetary Policy Committee, a review was carried out a couple of years into the new arrangements. Therefore, we should leave this to the committee’s judgment and not impose a rigid pattern on it.
It might be relevant to consider read-across or precedents from other comparable bodies. However, I have been able to tease out only one comparable read-across involving the Dutch Central Planning Bureau, which has a provision for external reviews every five years and has stuck to that model since 1945. That continues to work for that body.
Lord Eatwell
Does that body hold the review every five years or over a lesser period?
Lord Sassoon
I believe that it has the review every five years, but I think it would be wrong to have a fixed provision of five years. One of the dangers of having a shorter time such as three years is that it might become a regular feature. What we need here is flexibility but with a sensible and appropriate backstop date. It is also important to remember in this context that these external reviews are far from the only means through which the OBR is being and will be scrutinised. I remind noble Lords that the package of scrutiny goes much wider. First, there is the duty on the OBR to act transparently, which means that all its work is open to ongoing challenge and review—this is proving to be the case already—from any of the well regarded and distinguished think tanks and academics looking at its work. The OBR is required to produce an annual assessment of the accuracy of its fiscal and economic forecasts.
There is also the fact that the OBR intends to establish an advisory panel of experts to support and challenge its work on an ongoing basis, which not only is an important additional element of external challenge and review but brings the OBR into line with the best practice, drawn in this case from the United States’ CBO. I see the noble Lord nodding on that point.
On the basis of the argument put forward by the noble Lord, Lord Burns, and backed up by my noble friend Lord Newby, and considering the other elements of scrutiny that are ongoing and challenged externally, I ask the noble Lord to withdraw his amendment.
Lord Sassoon
“( ) The report must include, in particular, an assessment by the Non-executive Committee of the extent to which the Office’s duty under section 4 has been performed in accordance with section 5(1) and (2).”
Lord Sassoon
“External review14A (1) The Non-executive Committee must, at least once in every relevant 4 5-year period, appoint a person or body to review and report on such of the Office’s reports as the Committee determines.(2) In sub-paragraph (1) “the Office’s reports” means the reports which— (a) have been made in pursuance of the Office’s duty under section 4, and(b) have been published since the relevant date.(3) The “relevant date” is—
(a) in the case of the first review carried out under this paragraph, 1 October 2010;(b) in the case of subsequent reviews, the date of the last review carried out under this paragraph.(4) A person or body may be appointed under this paragraph only if the person or body has knowledge or experience likely to be relevant to the performance of the Office’s duty under section 4.
(5) The Office may, with the approval of the Treasury, make payments to the person or body in respect of the performance of the person’s or body’s functions under this paragraph.
(6) The Office must—
(a) publish each report prepared under this paragraph,(b) lay it before Parliament, and(c) send a copy of it to the Treasury.(7) In this paragraph “relevant 5-year period” means—
(a) the period of 5 years beginning with 1 October 2010;(b) each successive period of 5 years.”
Lord Eatwell
Lord Eatwell
My Lords, I will not speak to this amendment again except to say that I think that it would be very unfortunate if there were to be a delay of more than about three years to an external assessment of the work of the OBR. While one wants confidence in one’s non-execs, one also wants some framework within which to work, as my noble friend Lord Myners said.
I welcome the news that an advisory group will be established. I think that that is an excellent idea and I am delighted that it is going to happen. It is regrettable that the Government have not accepted this amendment but, in the context, I will not move it.
Lord Eatwell
“( ) The budget for the annual operations of the Office of Budget Responsibility shall be published, and be available for scrutiny by the Treasury Committee of the House of Commons.”
Lord Eatwell
My Lords, I first moved this amendment in Grand Committee in which, of course, there are no votes, and the matter was simply left on the table. I regret that the Government have not seen fit to bring forward some proposals whereby the OBR’s budget would be formally exposed to independent scrutiny. My argument then was the same as my argument now. Given that our fundamental objective is to ensure the OBR’s independence to the greatest degree possible, one of the key means of controlling any independent organisation that is limiting its budget relative to its responsibilities must be constrained. In this amendment we have proposed that it be constrained by the requirement to publish the annual budget and make it available for scrutiny and assessment by the Treasury Committee in another place.
When we discussed this in Grand Committee, the Minister made the following points. First, he argued that the Treasury was incentivised to fund the OBR adequately, since the OBR performed important tasks for the Treasury. What worries me is that this argument is indicative of a failure by the Government to understand fully the need to ensure the independence of the OBR. Of course the Treasury is incentivised to fund what it wants done, but it is not incentivised to fund what it does not want done. Truly independent studies by the OBR that ruffle Treasury feathers will not attract enthusiastic funding from the Treasury. Therefore the incentivised argument really does not carry any weight.
Secondly, the Minister argued that the current funding agreement, outlined in a letter from Sir Nicholas Macpherson to Robert Chote, provided adequate funds to the OBR through to 2014, but what about after 2014? The creation of the OBR is not just for the next three or four years. We on this side of the House hope that it will become and remain for many years a valuable instrument in UK economic policy-making—valuable because it is independent—just as the Monetary Policy Committee has become a valuable instrument in UK economic policy-making. To argue simply that things are okay now is a quite inadequate way of providing confidence for the future. Therefore, the second argument does not stack up.
Thirdly, the Minister argued that there were other means of informing the Treasury Committee of another place of the OBR’s budgetary position, for example via the OBR annual report. Once again, he fails to grasp the substance of independence. It is not for the OBR to fight its budgetary corner, which is what it is being asked to do. It is for Parliament to ensure that its independence is protected. That is what we on this side seek to do in this amendment.
Finally, the Minister suggested—extraordinarily—that paragraph 15 to Schedule 1 provided protection for the OBR’s budget, whereas in fact it does exactly theopposite, leaving power with the Treasury to keep the OBR on as tight a budgetary leash as it wishes. Therefore, the arguments deployed in Grand Committee did not answer the case that was made. They were not simply unconvincing but disturbing, in that they betrayed a lack of understanding of, and commitment to, the concept of the independence of the OBR.
I have been working on this issue and my concerns deepened when I investigated what had happened to similar organisations in comparable jurisdictions. In Canada, the incoming Conservative Government established the Parliamentary Budget Office in 2008. Toronto’s Globe and Mail reported that a year later, after the Parliamentary Budget Office had produced two reports that were critical of the Government, the office’s annual budget was frozen despite earlier promises to boost it by a third. This was Canada's Macpherson moment, when the letter and the promise were withdrawn.
In Sweden, the Fiscal Policy Council was set up in 2007, once again by an incoming Conservative Government—there is a pattern here. On 18 November last year, the council wrote an open letter to the Government pointing to the discrepancy between its remit and its resources. What was the reaction? The Swedish Minister of Finance is reported to have reacted negatively to the letter and suggested—you guessed it—that the council's budget should be cut in response. Thus in Canada and Sweden—two jurisdictions for which we have great respect—critical reports have resulted in budgets being frozen or cut.
On 6 December last year, a letter appeared in the Financial Times in support of the independence of the Hungarian Fiscal Council—the Hungarian version of the OBR. One author of that letter was Mr Robert Chote, the chairman of our OBR. As well as making the case for the independence of the Hungarian organisation, Mr Chote and his fellow signatories argued that:
“Developments in Hungary are also of a more general interest for the viability of independent fiscal monitoring. It is easy for a government to be in favour of this in principle. It is more difficult to stand criticism when it is actually delivered”.
How true that is—and how important, therefore, is the amendment before us, the purpose of which is to support the independence and the financial integrity of the OBR.
If the OBR behaved in a manner that did not suit the Government, for example by undertaking extra studies that cast government policies in an unfortunate light, the easiest way to discipline those independent-minded souls would be to cut their budget, forcing them back to their core function and thereby diminishing their independence. Control of the budget is an important means of controlling any organisation, as the Swedish Minister of Finance made clear.
The amendment seeks to provide the OBR with the protection of independent scrutiny of its budget. The budget must be published and made available for scrutiny by the Treasury Committee of another place. The OBR would not have to fight its corner; Parliament would fight its corner for it. This would give the Treasury Committee the opportunity to have its say on whether any inappropriate limitations were being placed on the OBR’s operations by budgetary means. If you like, the amendment provides scope for the Treasury Committee to act as the financial champion and protector of the independence of the OBR.
The Minister should mark the words of Mr Chote in his letter in the Financial Times, and accept the amendment to ensure that the OBR’s budget is protected, even when it speaks unwelcome truth to those in power. I hope the Minister can give me some reassurance that this issue will be taken seriously and will be considered for government amendment at Third Reading. I beg to move.
Lord Higgins
My Lords, given that I was chairman of the Treasury Committee in another place for something like 14 years, I am naturally rather sympathetic to the amendment. However, it does not seem to do what the noble Lord, Lord Eatwell, said it does. It does not enable the Treasury Committee to control the budget, but enables it to ensure that the budget is scrutinised after being published. This is something which my noble friend should readily accept, because it would be very surprising if the annual operations budget were not to be published. I should have thought that that was consistent with the whole argument for transparency which we have heard from the Government throughout the debates on this Bill, and that it should be virtually automatic. It is equally likely that the Treasury Committee would wish to scrutinise the budget, once published. My noble friend might of course argue that it is unnecessary for the amendment to be made, but, if it were, some reassurance would be given to those expressing the kind of view expressed by the noble Lord, Lord Eatwell. It would certainly be right for the budget to be published and for the appropriate body to look at it to be the Treasury Select Committee in another place.
Lord Burns
My Lords, I will disappoint the noble Lord, Lord Barnett, by agreeing with the amendment, or rather with its spirit, because it is important that the funding of the OBR is as transparent as possible. We need an arrangement that will last. We all know that the Treasury has great power and I accept the argument that the OBR needs the protection of a transparent process. Of course, nothing would in the end prevent the OBR from suffering in respect of its budget if the Government wished that to happen and could get the support of Parliament, but it is important that that process should be transparent. I recognise the argument that it is already evident from the public expenditure process that there is nothing to stop the Treasury Committee being involved, but I support the principle of making a specific provision for the funding of the OBR that should be as transparent as possible.
The detail in the amendment that I am not happy with is the suggestion that the committee should investigate the annual budget. It is important that if you are to have a successful operation such as the OBR, it should know what the prospects for its finances are, stretching beyond one year. Subjecting it to an annual budget process might not do the job. The noble Lord, Lord Eatwell, already referred to Sir Nicholas Macpherson’s existing letter talking about a financing process that stretches some way ahead.
I therefore support the principle of the amendment and hope that it is possible to find a way of expressing its intentions that provides reassurance that a transparent process will be in place and will stretch for somewhat longer than the annual budget round.
Lord Barnett
The noble Lord, Lord Burns, never disappoints me. I am delighted to see that he agrees with the principle of the amendment. I agree with the principle but I disagree with the amendment. Once again, my noble friend Lord Eatwell ignores this House. He would like to see the scrutiny undertaken just by the Treasury Committee of the House of Commons. I have no objection to that and, indeed, I would be delighted if the Minister accepted it, because the Treasury Select Committee of the House of Commons, under different chairmanships, has usually done a great job and continues to do a very good job now under a Conservative chairman. Why does my noble friend not wish to have this scrutinised, as my noble friend Lord Peston and I proposed in Grand Committee, by the Economic Affairs Committee of the House of Lords? As a former chairman, I am prejudiced and my noble friend Lord Peston was a longer-term chairman of the committee. It has always done an excellent and very independent job in this House.
If the Minister is minded to accept an amendment occasionally, and can ignore the word “resist” in his brief, perhaps he might be willing to add to the amendment the words “the House of Lords Economic Affairs Committee should also carry out scrutiny”. We now have a former Chief Secretary to the Treasury chairing the committee and doing an excellent job. On this occasion, I hope that the noble Lord, Lord Sassoon, will accept the amendment as amended by my suggestion. I beg formally not to move.
Lord Sassoon
My Lords, perhaps I may just get my head round the formal non-moving of an amendment that has not been put down. I shall try to give the noble Lord, Lord Eatwell, the reassurance that he seeks in this area. The Government support the spirit of the amendment. Transparency and parliamentary scrutiny of the OBR’s budget are absolutely central to safeguarding its independence. I do not think that there is any difference between us on that point.
The next issue is getting a proportional arrangement which achieves the objective. The effect of the proposed amendment has already been achieved. In line with the Treasury Select Committee's recommendation, the annual budget of the OBR will be identified separately in the Treasury's estimate and it will be available for the Treasury Committee to scrutinise in another place. Nevertheless, we have gone further than the Treasury Committee asked for in order to enhance the transparency of the OBR’s budget and critically to protect it from any suggestion of politically motivated cuts. Again, in line with the Treasury Select Committee’s recommendation, the OBR will also be able to submit to the Treasury Select Committee an additional estimates memorandum alongside that of the Treasury in which it can explain for itself the reasons for changes in the available budget for the year ahead. I think that will go beyond what is proposed, in effect, in this amendment because the OBR will be free to explain in full what any changes in the budget mean.
I agree with the noble Lord, Lord Burns, that if we need to be concerned about anything here it is the multi-year aspects of it, which the proposed amendment does not address. The OBR has already been provided with an agreed and publicly documented multi-year budget, so that an annual budget exercise cannot be used to exert hidden pressure on the OBR. This specific element has been welcomed by the IMF.
I will divert for a moment to address one or two of the points raised by the noble Lord, Lord Eatwell, on some of the international experience in this area. While I am sure that the Toronto Globe and Mail is a fine source of reporting, I think it is relevant to remember that the Canadian Parliamentary Budget Officer is really not in any comparable position to the OBR. Its budget is not separately identified anywhere within the estimates of expenditure presented to the Canadian Parliament. It is a very different office from the one we are looking at. The Parliamentary Budget Officer in Canada was not given an agreed and published multi-year budget. I think we are in very different territory from Canada.
Hungary was mentioned. It is interesting to note that Hungary’s Fiscal Council chairman pointed out—I do not know whether this is correct—in the context of saying it was very, very rare to introduce substantial changes or abolish fiscal councils that the only example he could point to was Venezuela under Hugo Chavez abolishing its fiscal council. So there are one or two examples but they are not comparable examples. It is precisely to guard against any suggestion of such interference that we have put in place the measures that we have.
In trying to give the noble Lord the reassurance he seeks, we have discussed already the responsibility of the OBR’s non-executives. Critical to that is their duty to report on anything that appears to them to constrain the OBR’s discretion. Of course, that would include any attempt to control the OBR through manipulating its budget. To quote the chair of the Treasury Select Committee:
“It is vital that the OBR has the resources it needs. The Committee will monitor this carefully: the terms of reference suggest that the Treasury accepts the importance of transparency and separate disclosure, and we will have the information we need”—
we, the Treasury Select Committee—
“to do our work”.
The package of measures we propose for the OBR in the Bill follows the recommendations of the Select Committee and in the judgment of the Treasury fully reflects that intention. The chair of the OBR has already made clear that he has adequate resources and that he will promptly raise any issues on funding with the Select Committee—a very public forum in which to raise any concerns.
Finally, I will quote Robert Chote at his pre-appointment hearing in front of the Select Committee. He said:
“If you accede to my appointment and I find myself being squeezed in that way, this committee will be hearing about it very promptly. That’s how we make that public and ensure that those sorts of pressures do not go unremarked”.
I suggest that there are a considerable number of safeguards in place. Indeed, we go further than the noble Lord’s amendment because we believe that the multi-year dimension is as important as, if not more important than, the single year dimension to which his amendment refers. In view of the reassurance that I have been able to give him, in particular pointing to the role that we have just now confirmed for the non-executives, I hope that he will withdraw the amendment.
Lord Eatwell
My Lords, I am grateful to all noble Lords who have taken part in this short debate, not least because there seems to be a unanimity of purpose around the House. Perhaps I may address a couple of the points that were made. The first is the point made by the noble Lord, Lord Burns, supported by the noble Lord, Lord Sassoon, about the word “annual” in my amendment. I think they are absolutely right. It should refer to the budget; the word annual should be taken out, then everything would flow quite nicely. However, the noble Lord, Lord Sassoon, still does not quite grasp the idea that the OBR should not have to fight its own corner but should be given parliamentary protection in the budgetary field for the long term, not simply for the period for which Sir Nicholas Macpherson’s letter is relevant. We are looking beyond that provision.
The one element from which I derived some comfort in the reply of the noble Lord, Lord Sassoon, was the issue of a separate line in the Estimates, which will provide the Treasury Select Committee with the opportunity separately to identify the budget of the OBR. My amendment would require that to be brought for scrutiny, rather than it simply being available, but I am willing to accept that that is a small point.
I suppose that I should accept being chided by my noble friend Lord Barnett for leaving the House of Lords Economic Affairs Committee out of the amendment. I felt that since this was particularly an expenditure matter, it should be handled by the committee in another place. I am willing to stand corrected on that point.
However, I feel that there is general unanimity around the House that this issue is important in sustaining the independence of the OBR. I am grateful for the assurances that the Minister has given. I beg leave to withdraw the amendment.
Lord Higgins
“( ) a comparison of the fiscal and economic forecasts previously prepared by it with the corresponding forecast prepared by the Bank of England together with an analysis of the difference between the two,”
Lord Higgins
My Lords, I beg to move Amendment 8 in my name, with which it will be convenient to discuss Amendment 9, in the name of the Minister, and Amendment 10, which is my amendment to the Minister’s amendment. In some ways, this grouping is rather too extensive, but several important points are enshrined in the amendments.
I will start with the Minister's amendment, which states:
“Any Report which the Office makes in pursuance of its duty under this section must include … the main assumptions made by the Office, and … the main risks which the Office considered to be relevant”.
We debated both those points at considerable length in Grand Committee, so I certainly welcome the fact that the Minister has tabled the amendment. If we are to be able to appraise the forecasts made by the OBR, it is crucial that we should know on which assumptions they have been made, so I am glad that we shall now be able to do that. Secondly, we should also know the OBR’s assessment of what risks it considered to be relevant—with some indication, I hope, of the probability of this or that risk being realised—so I am strongly in favour of Amendment 9. I believe that the House as a whole will share that view.
I turn to my Amendment 8, which suggests that the OBR should not only assess the accuracy of its reports in a post-mortem assessment, as is already required in the Bill, but make,
“a comparison of the fiscal and economic forecasts previously prepared by it with the corresponding forecast prepared by the Bank of England together with an analysis of the difference between the two”.
Lord Sassoon
My Lords, I should perhaps speak briefly to Amendment 9 at this stage. I will respond later if other noble Lords speak to Amendments 8 and 10.
On Amendment 9, the risks and assumptions of the OBR in producing its reports are critically necessary for a full understanding of its analysis. Provision to require the OBR to set those out was originally included in the draft charter. However, we recognise that a key purpose of the Bill is to provide appropriate assurances that the good practice already adopted by the OBR will continue. For that reason, Amendment 9 will elevate the provision from the draft charter to the face of the Bill and broaden the requirement to apply to all reports produced under the OBR’s main duty.
Lord Eatwell
On Amendments 8 and 10, the noble Lord, Lord Higgins, will have to suffer the possibility of inconsistent forecasts because that is, in a way, embodied in the independence and separation of the Bank of England. The whole point of an independent Bank of England, and the way the Labour Government set up the independent status of the Monetary Policy Committee and the Bank of England, is that it should be allowed to take an independent view. That independent view will be informed by its own research. This can lead not just to forecasting inconsistency but to policy inconsistency, but that is the price we are going to pay if we think this is an appropriate policy mix. The very distinguished late economist Sir James Meade pointed out many times that this separation could lead to serious policy inconsistency, and he was entirely opposed to its, none the less, that is the way we have constructed policy-making in this country, and that separation will bring with it the possibility—indeed, the probability—of some forecast inconsistency. However, we should note that recently the Governor of the Bank of England has been making many statements about fiscal policy, which is not his territory. That is very unfortunate. He seems to have encouraged the Prime Minister to make comments on interest rates, which are not his territory either. If this separation is deemed to be a good thing by our Parliament and policy-makers, I hope that the governor and the Prime Minister will respect it.
The problem I have with Amendment 10, tabled by the noble Lord, Lord Higgins, is that I do not think the output gap is a precise notion which can be believed if you say it is 2.5 per cent or something like that. In the Budget debate and in the debate on the comprehensive spending review, I argued that it is a statistical construct. It has embedded within it a series of statistical assumptions. It was quite striking that in the first OBR report, the definition of the structural deficit was changed, to the benefit, I might add, of the Government’s arguments. Therefore, I do not want too much credibility to be put on what is a useful indicative statistic. The weight put on it can be taken too far.
I strongly support the Government’s amendments both on transparency of assumptions and consideration of the risks to which the economy might be exposed. The latter issue, with the OBR now being required to talk about the risks to which the economy is exposed, is very important. For example, let us suppose that we had had an OBR of 2006 vintage. That OBR could have expressed concerns about the fiscal risk the economy was subject to by being dependent on such a high proportion of tax revenues coming from just one sector of the economy, that of financial services. It would have had the opportunity to say, in facing that risk, that some diversification of revenue sources might be desirable. Similarly, in defining the sustainability of the public accounts, the OBR should take into account the risk to sustainability generated by the foreign balance and by the savings and spending behaviour of the private sector, and their interactions with the public balances. Providing these insights into the risks of public sector financial management would extend the debate about the public finances in a very useful way and would ensure that the debate is far better informed than it has been in the past. So I would like particularly to add the support of this side for government Amendment 9.
Lord Newby
I would like to echo the noble Lord, Lord Eatwell, in two respects; first, in his comments on Amendment 9, which I will not repeat, and secondly, in his comments on Amendment 10. I am dubious about the value of giving enhanced status to an assessment of the output gap or when the economic cycle is likely to end for reasons largely already given by the noble Lord, Lord Eatwell. The output gap is not an absolutely firm context and figure that is easily grasped and measured. As we saw with the previous Government, a lot of weight was put on the economic cycle because the golden rule about government expenditure and borrowing depended on it. The problem was that whenever a difficulty arose, lo and behold, the definition of the cycle changed to push the difficulty back. It proved to be a far more elastic concept than we thought, and the old Ricardian economic cycle that depended on grain crops just does not obtain in quite the same way today. So while I am sure that the Office for Budget Responsibility may well wish to opine on these matters, and it will be quite interesting to know what it thinks, it is of secondary importance in setting government policy. Indeed, because of its somewhat nebulous nature, I would not want us to put too much weight on it again.
Lord Sassoon
I am grateful to the noble Lord, Lord Eatwell, for his support for government Amendment 9, but let me say a few things in respect of Amendments 8 and 10 because my noble friend Lord Higgins has raised important issues. I agree with the spirit of the amendments in both cases, and I shall try to do justice to the points he has raised by explaining how I think the matters are or should be dealt with.
Amendment 8 concerns the question of economic and fiscal forecasts. On fiscal forecasts, a comparison is actually not possible because the Bank does not produce such a forecast. Rather, it incorporates the official fiscal forecast now produced by the OBR into its own economic forecasts, which reflects the expertise within the OBR and the information that the office as opposed to the Bank has access to. So that is dealt with because there is no comparison to be made.
Lord Higgins
I am grateful to my noble friend for his interesting comments and beg leave to withdraw the amendment.
Amendment 8 withdrawn.
Amendment 9
Lord Sassoon
“( ) Any report which the Office makes in pursuance of its duty under this section must include an explanation of the factors which the Office took into account when preparing the report, including (in particular)—
(a) the main assumptions made by the Office, and(b) the main risks which the Office considered to be relevant.”
Lord Sassoon
(a) must have regard to those policies, but(b) ”
Lord Sassoon
Lord Sassoon
“( ) If the Treasury proposes to modify the guidance included in the Charter by virtue of this section, a draft of the modified guidance must be published at least 28 days before the modified Charter is laid before Parliament under section 1(6).”
Lord Touhig
Lord Touhig
My Lords, I do not intend to detain your Lordships for very long because this is exactly the same amendment that we debated in Grand Committee on 9 December. I did not press the amendment or the argument at that time because I was greatly encouraged by the debate, and in particular by the response of the Minister who certainly seemed to be in listening mode on that occasion.
I was a little disappointed to receive a letter from the Minister dated 21 December, listing the amendment that he has tabled this afternoon. I refer to the Government’s Amendment 15. This says that the Public Accounts Commission will have a role in specifying who should be consulted by former Comptrollers and Auditors-General on possible future appointments that they might wish to take up. My amendment says that this advice should be given by the Advisory Committee on Business Appointments.
As I said, I do not wish to detain your Lordships, but I point out that the amendment is based on the 15th report of the Public Accounts Commission. My noble friend Lord McFall was a member of that commission when it reported in March 2008. It referred to the subsequent employment of former Comptrollers and Auditors-General and said that a,
“C&AG should be required under the terms of his or her contract to consult the Advisory Committee on Public Appointments”—
it should have been “on Business Appointments”—
“(currently chaired by Lord Mayhew) before accepting any employment whatever after leaving the post of C&AG and to abide by the decisions of that Committee”.
The advisory committee is now chaired by the noble Lord, Lord Lang of Monkton, and its remit is simple:
“The Advisory Committee on Business Appointments is an independent body which provides advice to the Prime Minister, the Foreign Secretary, or other Ministers if requested, on applications from the most senior Crown servants who wish to take up outside appointments within 2 years of leaving Crown service”.
That body has the experience and background to provide the proper advice for any senior civil servant who wishes to take up an appointment after leaving public service. It would in my view be the appropriate body to give advice to former Comptrollers and Auditors-General. For the life of me, I cannot understand why the Government have not accepted this. Perhaps the Minister might say why it is that the Government now want to involve the Public Accounts Commission—another layer in between the time when a former Comptroller and Auditor-General would have to consult before he can consider taking up some other appointment. It may well be that the Public Accounts Commission will say to that former Comptroller and Auditor-General, “You must seek advice from the Advisory Committee on Business Appointments”. I do not know why we do not go straight to that point in the first place. I had hoped that the Minister would have put that in his amendment. He has not done so and I should be grateful to hear his response.
Lord Sassoon
My Lords, I see the Chamber filling up. This amendment is clearly attracting a lot of interest but, just in case noble Lords have come for some other business, let me deal briefly at this stage with Amendment 15, together with Amendment 14 tabled by the noble Lord, Lord Touhig. Having reflected on the points made on this issue in Grand Committee, I agree that clarification is indeed merited on this question of the C&AG taking up future offices or appointments. That is why the Government’s Amendment 15 makes it clear that the Public Accounts Commission would specify the person or body, such as the Advisory Committee on Business Appointments, that a former Comptroller and Auditor-General should consult before he or she takes up another office or position having left the office of C&AG. We have come forward with that important clarification.
Amendment 14, tabled by the noble Lord, Lord Touhig, seeks to name the Advisory Committee on Business Appointments as the body that former C&AGs must consult. However, there is a difficulty in naming a particular body in legislation because names and responsibilities may change over time. The fact that the body recommended in the original report from the Public Accounts Commission is different from that in the amendment makes that very point. While we need to have a degree of clarification which was not in the original Bill, writing in a particular body that exists now but may not exist in time—and was not that recommended only a short time ago by the Public Accounts Commission—means that we need to have the balance of flexibility but the certainty that the Public Accounts Commission will nominate a body up front.
The Treasury has carried out a search to see whether we could find any similar requirement elsewhere in legislation. The only mention at all of the Advisory Committee on Business Appointments is in relation to the obligation placed on it under the Freedom of Information Act, so there is no equivalent hard-wiring in legislation of its other responsibilities to deal, for example, with appointments for former Ministers. We absolutely share the noble Lord’s desire that former C&AGs should not just listen to but take to heart the advice of the nominated adviser, just as Ministers and civil servants do. Perhaps it is relevant to say that my understanding of the position of the serving C&AG is that he would be willing to consult any independent authority that the commission nominates about any employment that he proposed to take up after leaving office. This was written into the letter of appointment that he signed before taking up office. What was not written into the letter was a requirement for the C&AG to abide by the decision of the independent authority. It was expected that the decision of that authority would be made public and that that would be sufficient to ensure compliance.
In respect of future C&AGs, I think it is fair that they should know which person they needed to consult at the start, before they take on the office. It is expected that the person to be consulted should be specified in the appointment letters of all future C&AGs, which would parallel the arrangements for Ministers and senior civil servants. The terms of the C&AG’s appointment are agreed between the chair of the Public Accounts Committee and the Treasury, on behalf of the Prime Minister, and would have to be signed off by the prospective C&AG before he or she takes up office. I believe that with the government amendment we are bringing forward, along with how I have described that it will work in reality, we have sufficiently covered all the bases intended by the noble Lord’s amendment without getting into a position where we might nominate a body that could be inappropriate in a number of years’ time. On the basis of that explanation, I ask the noble Lord to consider withdrawing his amendment.
Lord Touhig
I am grateful to the Minister because he is a man of his word: he has sought to clarify the matters that we discussed in Committee. He made a fair point in saying that, if we specify a body in legislation, that body could disappear or change with future legislation. The Public Accounts Commission referred to the Advisory Committee on Public Appointments, but I do not think that it even existed. I think that the commission was mistaken and that it should have referred to the Advisory Committee on Business Appointments. I suspect that ultimately we will reach the point that I have been arguing for and that it will in fact be the Advisory Committee on Business Appointments, although the Minister is going to take us on a bit of a route, going through the Public Accounts Commission, to get there. It is a bit like me travelling to Wales via Scotland but I am sure that we will get there in the end. I beg leave to withdraw the amendment.
Lord Sassoon
Parliamentary Voting System and Constituencies Bill
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, from time to time I keep the House informed about progress on this Bill, and this is one of those occasions. As we start this, the 15th, day in Committee on the Parliamentary Voting System and Constituencies Bill, I am delighted to be able to inform the Committee that there is now agreement among the usual channels on a timetable for completing Committee. As a result of a series of productive discussions, the usual channels agree that Committee should be completed by the end of business on Wednesday this week. This is within the time that has already been scheduled and indicated on the Order Paper. I am sure that all noble Lords who have followed proceedings on the Bill, and perhaps a few who have not, will welcome a return to the effective functioning of the usual channels on the Bill, and I sincerely hope that this means that there is no longer any need for me to ask the Committee collectively to come to a resolution on how proceedings on the Bill should be regulated.
During Committee so far, the Government have held meaningful discussions with the Opposition and with a number of other Members of the House, in addition to debate on the Bill in the Chamber. As a result, the Government will bring forward a package of concessions on Report, and I am sure that the whole House will welcome that. Therefore, we are in the welcome position of having agreement to complete Committee by the end of Wednesday this week. Equally, I am sure I have no need to remind the Committee that we need to return this Bill to the other place by the end of Monday, 14 February—that is, two weeks today—if the referendum is to be held on 5 May. From the soundings that I have taken, I feel confident that the majority of Members from all parts of the Chamber share this aim.
Lord Falconer of Thoroton
My Lords, I am obliged to the Leader of the House. As he has said, we have agreed through the usual channels that Committee on the Bill should be completed at the close of business this Wednesday. This is the product of good discussions on the substance of the Bill over the weekend and today. Focusing only on the key issues on Report and employing the economy and focus which your Lordships will expect on Report and at Third Reading, the timetable will depend on further agreement between the parties on substantive issues. The Cross-Benchers have played a critical part in getting us to the good point that we have reached, and we now commit ourselves to work hard to try to reach the necessary further agreement.
Lord Tyler
My Lords, on behalf of a number of us who have been here for long hours into the night, I congratulate and thank those who have been involved in these discussions, not least the Convenor of the Cross-Benchers. I hope that this spirit of compromise will extend into the planning of Report, on which we might otherwise find ourselves in a repetition. I remind the noble and learned Lord, Lord Falconer of Thoroton, that he and his colleagues endorsed the working group of Labour Peers, chaired by the noble Lord, Lord Hunt of Kings Heath, which recommended that a reasonable time limit be set for all Bills to complete their passage in the Lords. I also remind the noble and learned Lord that in endorsing that recommendation, in a speech to the Labour Party conference on 29 September 2004, he said very wisely:
“The Second Chamber should have the powers to revise, to amend, to scrutinise, but not finally to frustrate the programme of a legitimately-elected government”.
Lord Kennedy of Southwark
“(2) A Boundary Commission may cause a local inquiry to be held for the purposes of a report under this Act where, on publication of a recommendation of a Boundary Commission for the alteration of any constituency, the Commission receive any representation objecting to the proposed recommendation from an interested authority or from a body of electors numbering one thousand or more.
(3) In subsection (2) above, “elector” means a parliamentary elector for any constituencies affected by the recommendation.””
Lord Kennedy of Southwark
My Lords, I note that there is an amendment to my amendment in the names of the noble Baroness, Lady D’Souza, Convenor of the Cross-Bench Peers, the noble and learned Lord, Lord Woolf, and the noble Lords, Lord Pannick and Lord Williamson of Horton. I think that the Committee wants to debate that amendment. To facilitate this, I wish to move my amendment formally so we can move on and have the debate that we all want to have.
Amendment 94A (to Amendment 94)
Baroness D'Souza
“hundred or more.(3) A Boundary Commission is not obliged to cause a local inquiry to be held under subsection (2). They may only do so if—
(a) the objection raises substantive issues that might benefit from further comment or representation from other interested parties or individuals; and(b) any counter proposals it makes are prima facie within the stipulations of the Rules for the distribution of seats contained in Schedule 2 to the 1986 Act.(4) A local inquiry held under subsection (2) must be completed within six months of the close of the consultation period referred to in subsection (1) above.
(5) Once a local inquiry has been held under the terms of subsection (2) above in any given locality, no further inquiries shall be held in that locality under the terms of this Act into the same objection.
(6) In subsection (2) above, “interested authority” and “elector” respectively mean, in relation to any recommendation, a local authority whose area is wholly or partly comprised in the constituencies affected by the recommendation, and a parliamentary elector for any of those constituencies.””
Baroness D'Souza
I thank the noble Lord, Lord Kennedy of Southwark, very much indeed. Before I talk briefly about the amendment, it is unusual for a Cross-Bencher to intervene at this late stage in a Bill, particularly one that has become so politicised. As noble Lords know, Cross-Benchers are independent and not politically aligned. We are very mindful of that and I do not want to lead us in any way on one side or another. However, as many of your Lordships will know, something of an impasse had been reached towards the end of last week and I was encouraged by one or two people to see whether there was any useful role that we might play. I did so in great humility and, given that there seems to be very welcome movement, it is our wish to sink back into the background and again fulfil our role as occasional experts rather than being in the political fray. I say that with some feeling and certainly with some meaning.
The other thing that has moved me and a number of Cross-Benchers to see whether we could do something useful was the shadow, or the threat, of anything approaching a closure Motion in this House, which would have been historic. It has never happened before, and as many noble Lords have said it would undoubtedly impair the role that we play in revising and scrutinising legislation. Many of us felt that it was important to try to avert this threat. That is why I am here.
Last week, Amendment 93, moved by the noble and learned Lord, Lord Falconer of Thoroton, was discussed in the Chamber. The amendment seeks to reinstate the right to public inquiry on boundary changes, with many limitations, as set out in the 1986 Act. The outright ban in Clause 12 was felt to be unreasonable and possibly even not sustainable. Nevertheless, there was also a very general acknowledgement that a long drawn-out inquiry would necessarily delay the boundary changes that the Bill seeks to enact. The initial discussion on this amendment took place late on the evening of 26 January, and consequently was not brought to a vote. There is a feeling that if it had, it might have had wide support.
Amendment 94, tabled by the noble Lord, Lord Kennedy, makes it clear that there would be a reinstated right to oral public inquiry only if the Boundary Commission itself thought it necessary, and that the commission would undertake to limit any inquiries in order to ensure that any changes would be finalised by 31 October 2013, thus not affecting the proposed boundary changes for the election in 2015.
The question of oral public inquiry remains pivotal. On it hung the negotiation between the two sides of the House and the further progress of the Bill. Amendment 94A, in my name and those of distinguished noble Lords from the Cross Benches, builds on the original amendment moved by the noble and learned Lord, Lord Falconer, and on that moved today by the noble Lord, Lord Kennedy of Southwark, in that it caps the time allowed for such public consultation to six months by disallowing a second local inquiry. This makes clear the commitment to complete any inquiries well in time for boundary changes to be undertaken.
I understand that the noble and learned Lord, Lord Wallace of Tankerness, agreed to take Amendment 93A away and come back on Report, an offer that was greatly welcomed by all sides of the House. We are still at such a delicate juncture in trying to move forward on the Bill. My own feeling—my instinct, even—is that we need further clarification at this stage from the Minister on whether the Government can accept oral public inquiry in the Bill.
In doing so, I am trying again to underline the need to obviate the shadow of any kind of closure Motion. Additionally, although the amendment points to a rocky path ahead, that is nevertheless a pathway down which perhaps we could all go if there is the political will to do so. I believe that this is what we all actually want. I beg to move.
Lord Woolf
My Lords, it is not necessary for me to say anything but a few words more than what the Convenor of the Cross Benches has already said. I agree with everything that she said. Perhaps I could add something about judicial review, a subject with which, in a previous incarnation, I have had a certain amount to deal.
It is important to note that the amendment as drafted would reduce judicial review to its proper place in the context that we are discussing. The courts should rarely, if ever, become involved in the activities of this House. That is an approach that the courts always wish to adhere to, although sometimes it is impossible because the law as it is developed requires them to consider applications for judicial review. However, the amendment makes clear that the Boundary Commission is not obliged to cause a local inquiry to be held but gives it a circumscribed power to require a local inquiry. With the amendment worded in that way, I suggest to the House that it would be very unlikely that judicial review would be a problem in future.
If the Boundary Commission did not require a local inquiry, I cannot conceive that its decision could be reviewed. If there is a local inquiry, again I cannot conceive of circumstances in which it would be possible for there to be judicial review, because, under the clear language of the amendment, the situation into which the Boundary Commission could seek a local inquiry is obviously the sort of issue on which it should properly require the help of such an inquiry.
Lord Pannick
My Lords, I have added my name to Amendment 94A. I agree with everything that has been said by the noble Baroness, Lady D’Souza, and the noble and learned Lord, Lord Woolf. I thank the Minister and Mr Mark Harper in the other place for the courtesy they have shown in spending time with me discussing possible amendments to crucial aspects of the Bill. I take the view—I know that I am not the only noble Lord who does so—that the Government are certainly entitled to get their business through this House. However, the Bill would benefit considerably from improvements to Part 2. I am delighted to hear from the Leader of the House that concessions will be brought forward. The Clause 11 formula of a 5 per cent band either way for an electoral quota is simply too rigid to allow for proper consideration of geographical considerations and local ties. It is wrong in principle for Clause 12(2), which we are now debating, to abolish the power of the Boundary Commission to hold a public inquiry.
The Boundary Commission process, including public inquiries, has served this country very well. It has maintained public confidence by a transparent process which has avoided even the suspicion of gerrymandering which blights so many other democratic countries. The Boundary Commission needs to retain some form of discretion to call for an inquiry, at least in those cases where it considers that it is necessary, with appropriate safeguards. I am sure that improvements can be made to the statutory scheme to promote efficiency and reduce delays but there really is no case for abolition. I very much hope, and expect, that the Minister will tell the Committee that this is one of those matters on which the Government intend to bring forward concessions.
Lord Falconer of Thoroton
My Lords, we welcome the amendment spoken to by the noble Baroness, Lady D’Souza, the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Pannick. The amendment to reinstate public inquiries into Boundary Commission proposals provides your Lordships’ House with an opportunity to start edging back from the precipice. It builds on an amendment moved by the opposition Front Bench which your Lordships debated last Wednesday. Although the Cross-Bench amendment that we are debating is more restrictive than ours, we willingly support it in the interests of breaking the deadlock on Part 2. It is a sensible and practical proposal for which we are grateful.
Clause 12 will, if enacted, abolish completely—indeed, it would go further than that and ban—the right to hold a local public inquiry into the recommendation of a Boundary Commission. The Government have chosen to put in the place of a public inquiry an extended consultation period by written submission of eight weeks. It is our submission that this is not an adequate replacement. Part of the function of a local inquiry is to provide people with a fair hearing and an explanation of why a proposal has been turned down. That is essential to the legitimacy of the process and we believe that it improves the decision-making process as well. Perhaps one of the most telling facts is that in every single case where the Boundary Commission was proposing significant changes, such as an increase or a decrease in the number of constituencies in a particular locality, its initial proposals were in every case amended following a public inquiry, so public inquiries are at their most valuable when the recommendations under consideration are the most dramatic. That fact is particularly salient in the context of this Bill which provides for a boundary review based on a reduction of 50 constituencies and the new set of rules dominated by a rigid electoral parity rule.
As the heads of the four Boundary Commissions have made clear, those factors mean it is inevitable that the next review will result in considerable changes to the electoral landscape, so considerable in fact that the Bill states in Rule 9(2), in Clause 11, that the Boundary Commissions are not permitted to take into account Rule 5(1)(d),
“inconveniences attendant on such changes”,
when conducting the forthcoming review.
They can take account of inconvenience in future reviews, but not in this first one.
As we debated in your Lordships’ House last week—I recommend that your Lordships read Hansard to see the relevant quotes—even psephologists who are sceptical about the value of public inquiries have said that on this occasion, in this context, they should be retained. Indeed, they have made the point that, while political parties have tended to be the major participants in inquiries, the scale of change that will be brought about by the next review is likely to provoke a much greater level of involvement by individuals and groups of local people. That is one of the reasons why we on this side of the House have not been willing to drop this matter.
I accept that there is a case for amending the current provisions in the Parliamentary Constituencies Act 1986 so that boundary commissions have some discretion about whether to go ahead with an inquiry, even where the basic threshold is met. However, the amendment proposed by the Cross Benches addresses that issue. The amendment that we moved last week provided that element of discretion. The variation on our amendment, tabled by the noble Baroness, Lady D’Souza, the noble Lord, Lord Woolf, and the noble Lord, Lord Pannick, has tweaked the drafting on that point and made the position clear. We are grateful for that.
There is also the point about judicial review, made by the noble and learned Lord, Lord Woolf, in the dead of night last week, which he makes again today. I will not repeat what he said, because he said it a lot better than I ever could. His intervention on Wednesday was a powerful one and I very much hope that the Government will listen to it.
The Cross-Bench amendment keeps our initial six-month limit on a local inquiry but states that no secondary inquiry should be allowed. Given that these are very rare in practice, we have no objection to that change in the proposal.
I hope that the Minister, in responding to this debate, will be able unequivocally to accept this amendment. It has nothing to do with partisan advantage. It is a practical proposal concerned with the legitimacy of the process for drawing constituency boundaries. Helpfully and constructively, the noble and learned Lord, Lord Wallace of Tankerness, confirmed last week:
“It is not a fundamental principle of the Bill that there should be no oral inquiries.”.—[Official Report, 26/1/11; col. 1070.]
We have high hopes that the noble and learned Lord will enable us to progress in this matter by broadly accepting the proposal in the Cross-Bench amendment. I support the amendment.
Lord Mawhinney
My Lords, in the spirit of the Chamber, I want to make two simple and quick points. I make a comment about the thought of a local inquiry not only from the experience of twice having my constituency rejigged through the process, but also from my experience as the chairman of our party a number of years ago.
Local inquiries can occasionally develop a life of their own. I wonder about the six-month limit because I can fairly easily foresee a legal argument arising out of a consultation that had not been satisfactorily concluded in this six-month period. I say to my noble friends on the Front Bench that I have some concern about the concept of a public inquiry in this context. Having said that, I add something that they may not welcome quite so much. I very much agree with the noble Lord, Lord Pannick, when he said that the Boundary Commission needed some “discretion”—I use his word. I hope—indeed, I think the whole House hopes—that the Government will find it possible to meet the spirit reflected in what the noble and learned Lord, Lord Falconer, has said and what I am saying in sympathy with what has already been said: that whether it is a local inquiry or not—and I have concerns about the concept of a local inquiry—there needs to be some element of discretion for the Boundary Commission.
Lord Graham of Edmonton
My Lords, I will raise one point. The Leader of the House made a very welcome statement. The amendment that we are discussing is in the spirit of the statement. However, I do not see or hear anything about the conventions on Report. As the Leader of the House will be aware—although I stand to be corrected—the rule of thumb is that Report shall be allocated half the number of days of Committee. That is the convention of the House. This is what this side and that side have insisted upon in opposition. My simple question is: has there been any discussion or agreement on the number of days allocated to Report?
Lord Strathclyde
My Lords, perhaps it would help if I replied to the noble Lord, Lord Graham of Edmonton, who has enormous experience of this from being opposition Chief Whip for some time some years ago. The answer is that we have not yet agreed the number of days on Report. However, as I pointed out in my statement, we will need to complete Third Reading on the evening of 14 February in order to get the Bill back to another place in time for Royal Assent. Various conclusions can be reached from that.
As far as concerns conventions, almost from day one the Bill has been a scenario of broken agreements and conventions. I very much hope that we can all agree that it would be sensible to move forward on the basis of how the House traditionally handles Report, within the rules. I am hopeful that we will be able to deliver the Bill on time.
The Lord Bishop of Guildford
My Lords, I will not go into technicalities, but I wish to express strong support from the Bishops’ Bench for the amendment of the noble Baroness, Lady D’Souza, and fellow noble Lords, as a reconciling way forward at an impasse.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I start by thanking the noble Lord, Lord Kennedy of Southwark, for the way in which he introduced his amendment, which facilitated the debate on the very important amendment tabled by the noble Baroness, Lady D’Souza, the Convener of the Cross Benches. I thank the noble Baroness for her amendment and for the helpful spirit in which she moved it, and all noble Lords for the general tenor of the Committee debate. As was indicated in some contributions, we have already had debates on the shape of the consultation process, most notably last Wednesday evening, when opposition Amendment 93 was debated. It was similar to Amendment 94 in a number of respects, but not identical in one crucial respect. My colleagues and I have listened with care to the arguments and strong opinions of both sides, expressed last week, today and, it is fair to say, in a number of other debates in Committee when the issue of public inquiries was raised.
I thank the noble Baroness for the valuable contribution that she is making, not only with this amendment but in the process of discussion and negotiation on the Bill. I hope that she knows that I am as keen as she is to find a satisfactory resolution to these matters. A week ago, she made clear during a short debate the desire of the Cross Benches that both Government and Opposition should engage in discussions in order that progress could be made on the Bill “with dignity and resolve”—I think those were her words. We welcome that sentiment. As we have made clear, the Government are open to considering reasonable improvements to the Bill provided that they do not compromise its fundamental principles. The noble and learned Lord, Lord Falconer of Thoroton, quoted me saying last week that there was no objection in principle to the idea of oral hearings.
The Bill establishes a consultation process that the Government consider is already an improvement on the process set out in the Parliamentary Constituencies Act 1986. That Act allows one month for written representations followed by a local inquiry if objections are received from an interested local authority or from 100 or more electors. A further month for written representations follows where a commission revises its recommendations, with the discretion to hold a second public inquiry. The Bill extends the period for written representations from one month to 12 weeks, with a second period of 12 weeks where recommendations are revised.
Baroness D'Souza
My Lords, I very much thank the Minister for his words and for the spirit in which he expressed them. Before I perhaps comment on the detail, I also thank all noble Lords who supported my amendment. One of the major features was the comment of the noble Lord, Lord Mawhinney, when he said that there should undoubtedly be in the Bill some discretion for the Boundary Commission to do what it has to do, because it has a long history of doing some quite useful work.
What the Minister said about ensuring that there will be public hearings for political parties and the public is extremely important and very welcome. Indeed, that was what my amendment was aimed at. The facility and opportunity to express views is something that we should always cherish, and any opportunity to do so should be supported in any way possible.
I am particularly glad that the Minister feels that it is important that this process should kick in right at the start when the initial report is published by the Boundary Commission. That is also welcome. The words from the Minister, taking into account the long hours of discussion and negotiations—pleasant as many of them have been on all sides of the House— suggest that the Government have gone very far in meeting our requirements. I thank Members for their support and I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, having heard the debate and the Minister’s response on the amendment to my amendment, and to enable the Committee to consider other important amendments on the Order Paper, I beg leave to withdraw the amendment.
Egypt
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, with permission, I shall now repeat as a Statement the Answer given by the Minister for Europe to an Urgent Question in the other place this afternoon. The Statement is as follows.
“With your permission, Mr Speaker, I would like to make a statement on the situation in Egypt. First, may I apologise on behalf of the Secretary of State for his absence today? The House may be aware that he is attending a Foreign Affairs Council meeting today in Brussels, where this issue is at the top of the agenda.
While the calls for political reform have been peaceful, general unrest has become increasingly dangerous, with elements of violence leading to lawlessness in some areas of major cities such as Cairo, Alexandria and Suez. Severe restrictions on freedom of expression, including closure of both internet access and mobile phone services, have only fuelled the anger of demonstrators. We have called on the Egyptian authorities to lift those restrictions urgently.
I am sure that the House will join me in expressing our deepest sympathies to all those affected by the unrest in Egypt, including the families and friends of those who have been killed and injured. Casualty figures remain unclear, but it is estimated that at least 100 people have died. On Saturday, the army took over responsibility for security in Cairo, and its role has so far been welcomed by protestors. Our aim throughout these events has been to ensure the safety of British nationals in Egypt and to support Egypt in making a stable transition to a more open, democratic society.
I turn first to consular issues. There are estimated to be 20,000 British tourists in Egypt, the majority of whom are in the Red Sea resort of Sharm el-Sheikh, where, according to our latest information, the situation remains calm. We estimate that there are a further 10,000 British nationals in the rest of Egypt.
On Friday 28 January we changed our travel advice to advise against “all but essential travel” to the cities of Cairo, Alexandria, Suez and Luxor, due to the severity of demonstrations there. On Saturday 29 January, we heightened our travel advice further to recommend that those without a pressing need to be in Cairo, Alexandria and Suez leave by commercial means where it was safe to do so. Those in Luxor are advised to stay indoors wherever possible. A daily curfew remains in place throughout Egypt from 3 pm to 8 am.
Cairo airport is open but has been operating under considerable difficulties. The situation was particularly difficult yesterday, but our ambassador in Cairo reports that it has eased a little today. Flights are operating but are subject to delays or cancellation. The majority of British nationals have been able to leave Cairo airport today. We estimate that around 50 British nationals will remain at the airport overnight, to depart on scheduled flights tomorrow. The situation also appears to be improving in Alexandria, with road access to the airport now secure. We have staff at Cairo airport working around the clock to provide assistance to any British nationals who require it. We also have staff in Alexandria, Luxor and Sharm el-Sheikh, who are providing very regular updates about the situation on the ground in these parts of Egypt and staying in close touch with tour operators and British companies on the ground.
Additional staff reinforcements from London and the region have been sent to Egypt to help embassy staff to maintain essential services in these difficult circumstances. A 24-hour hotline is available for British nationals to call if they need assistance or advice. I am sure that the House will join me in recognising the hard work and dedication shown by all our staff, both in Egypt and in London, in responding quickly and professionally to the unfolding events.
I turn to the political situation in Egypt. The United Kingdom has major interests at stake in Egypt, which has played an important role as a regional leader, including in the Middle East peace process. We are also the biggest foreign investor, with a cumulative investment of more than £13 billion. The scale of these protests is unprecedented in Egypt over the past 30 years. We have called on President Mubarak to avoid at all costs the use of violence against unarmed civilians and we have called on the demonstrators to exercise their rights peacefully.
In response to the growing protests, President Mubarak announced on 28 January that he had asked the Government to resign. On 29 January, he appointed the head of the Egyptian intelligence services, Omar Suleiman, as his vice-president and Ahmed Shafiq, most recently Minister for Civil Aviation, as Prime Minister. Further Cabinet appointments have been made today. However, demonstrations have continued and are now focused on a demand for President Mubarak to resign.
It is not for us to decide who governs Egypt. However, we believe that the pathway to stability in Egypt is through political change that reflects the wishes of the Egyptian people. This should include an orderly transition to a more democratic system, including through holding free and fair elections and the introduction of measures to safeguard human rights. This kind of reform is essential to show to people in Egypt that their concerns and their aspirations are being listened to.
We continue to urge President Mubarak to appoint a broad-based Government who include opposition figures and to embark on an urgent programme of peaceful political reform. We are also working with our international partners to ensure that these messages are given consistently and that technical and financial support for reform is available. The Prime Minister has spoken to President Mubarak and President Obama. The Foreign Secretary has spoken to Egyptian Foreign Minister Aboul Gheit, Secretary of State Hillary Clinton and EU High Representative Baroness Ashton over the weekend. He will also be discussing the situation in Egypt with EU colleagues at the Foreign Affairs Council meeting today.
The situation in Egypt is still very uncertain. We are putting in place contingency plans to ensure that we are prepared for all eventualities”.
My Lords, that concludes the Statement.
Baroness Symons of Vernham Dean
My Lords, I thank the Minister for repeating the Statement to the House today. I declare an interest as chairman of the British Egyptian Society and a member of the British Egyptian Business Council.
The Statement makes it clear that the unrest that we have witnessed in Egypt has developed very rapidly over the past few days, particularly in Cairo, Alexandria and Suez, as the Minister mentioned. The casualty figures, at more than 100 dead and many more injured, are very high. They seem to be a high proportion of those who were demonstrating. The numbers have been estimated variously as 10,000 at the beginning of the demonstrations and 20,000 most recently and, given those numbers, the casualty figures seem very high. I wish to associate these Benches with the expression of sympathy given by the noble Lord to all those who have been affected, in particular the families and friends of those who have been killed or injured.
Can the Minister tell the House whether there were fewer deaths after the army was brought in to replace the police? From the reports that we have all read and certainly from the Statement that the Minister has made, it seems that the army was more acceptable on the streets as a regulating force and that possibly it did not use some of the lethal force that the riot police seem to have deployed originally. Can the Minister confirm that there were many more people demonstrating yesterday than had been the case the day before and that, as a result, the curfew hours have now been extended? I think he mentioned the time of three o’clock in the afternoon, but originally it was four o’clock. I wondered whether that was as a result of those increasing numbers on the street.
I hope that the Minister will be able to convey the good wishes and the thanks of the whole House to our embassy staff in Cairo and elsewhere in Egypt, particularly the consular staff who have been working so hard. On that point, the FCO’s business plan has a commitment to deliver a smaller consular staff in future. Is the Minister satisfied that our embassy has sufficient consular staff to undertake the very heavy burden that has fallen on them, given the large number of British people currently holidaying in or visiting Egypt? He mentioned a number who have been deployed in recent days. Is that the rapid reaction force from the Foreign Office and can he tell us how many consular staff are on the ground in Egypt at present? I trust that the travel advice which he was kind enough to detail will be updated regularly and that we shall be able to see that on the FCO website.
On the Egyptian Government’s reaction to demonstrators, can the Minister tell us whether the UK Government or the EU has reacted to the reported use of low-flying F16s by the Egyptian air force? Have they asked about why those aircraft were deployed? Clearly, the street demonstrations today and tomorrow will give us a clearer insight into what is going on, but that seemed to be a quite extraordinary use of F16s.
I have two more specific questions. First, can the Minister tell the House anything about what is happening to the financial markets in relation to what is going on in Egypt? There has been some reporting on that. I make it clear that I do not ask that because of the great British investment in Egypt—as the Minister said, some £13 billion—but because of the impact that further financial pressure will have on the Egyptian Government’s ability to look after its own people. Secondly, can he say anything about the widespread reports of looting, not particularly from houses but—as we have heard from Professor Zahi Hawass, who today I believe has been appointed as a government Minister—from museums? Egypt’s artefacts are a glory not only to Egypt but to the whole world and it is important that we keep track of what is happening in that regard.
Many of your Lordships will be very concerned about what will happen over the next few days in Egypt and in the wider region. Egypt has a huge and growing population and, as has been discussed at the UN and elsewhere, for the past 10 years there has been a desperate and growing shortage of jobs in the area, particularly for the fast growing youthful population. Unemployment and rising commodity prices over the past few months have been a real problem throughout the whole region.
I visited Jordan last weekend and Libya the weekend before and the impact of both unemployment and rising prices is evident, particularly in those countries where there are few natural resources to combat them, especially where there is a rising problem of debt and no ability to subsidise prices. In some areas there has been very heavy subsidising of essential commodities. Money has been put into the system to try to create more jobs and in some countries there have been direct subsidies into citizens’ bank accounts in order to keep these problems under control. However, these safety valves simply are not available where there are energy shortages and job shortages as there are in Egypt. Do the Government recognise that this is not just an Egyptian problem, but a regional one? We have seen what has happened in Tunisia and we have seen the unrest, albeit in a more limited version, in Libya, Jordan and Lebanon and elsewhere.
I think all human beings want a say in how they are governed—at least the overwhelming majority do. They want better functioning institutions; they want to see the growth of civil society and non-governmental organisations. However, the Minister may recall, as I do, the ill fated American initiative on this issue—which was spearheaded by President Bush and I think Vice-President Cheney—which tried to impose a view of Arab reform in the Middle East. That was rejected completely by the countries of the Middle East at the time and I hope the British Government will do everything they can to resist that sort of imposition. I have no reason to think they will be looking for that sort of imposition. It is enormously important that the solutions to these problems are found within the countries themselves. We have to recognise that there is an inevitable dilemma between the benefits of stability and security on the one hand and the benefits of freedom on the other.
The Egyptians did begin a reform programme. There were a number of constitutional amendments, as I am sure the noble Lord is aware. There was a move towards facilitating opposition parties and indeed the setting up of a human rights commission in Egypt. This is not nearly enough and we have to look forward to what can be achieved by the new Government to whom the noble Lord has referred, including, most importantly, free and fair elections and a programme of peaceful political reform. We wish that not only for peace and justice in the Middle East’s most populous state but for the wider Middle East and, in particular, the Middle East peace process. We should not forget that Egypt has been a real force for moderation and engagement in the Middle East peace process when other states in the region perhaps have taken a rather less constructive attitude.
In supporting the main thrust of the Statement which the Minister has repeated, can I ask him to assure the House that we will be kept up to date? Tomorrow there is a call for 1 million people to turn out on to the streets of the Egyptian cities we have been discussing. That will be a crucial day. I trust that the Minister will do everything he can to make sure that the House is kept informed of developments.
Lord Howell of Guildford
I am grateful to the noble Baroness for her comments. Of course she knows the region very well and I am particularly grateful for her expressions of good will on behalf of all of us to the consular staff who are carrying out their duties, often in very challenging and even very dangerous conditions. Those good wishes mean a lot and I am very glad to ensure that they are conveyed to those concerned. The rapid reaction force of staff, to which she referred, is involved in the process. She asked whether we are satisfied that in normal times, if one can use that phrase, we have the right kind of consular support for the substantial number of British tourists and for the still relatively small but growing trade, industrial and investment links with Egypt. The answer is yes, we do. We have examined the staffing very carefully and think it is the right amount, but we are in a highly abnormal situation and we must obviously reinforce the consular numbers as quickly and as effectively as we can. I am not sure of the precise number of consular staff now in Egypt but, as I mentioned earlier, 20 more have been added over the past few days.
I will deal now with the noble Baroness’s other points, which seem to me extremely apposite. I agree that the number of deaths seems high but we are dealing not just with what is going on in Cairo—an enormous city of, I think, about 20 million people, so twice the size of London—but with the many other areas and towns across the whole of this country of 80 million people as well. It is regrettable but not totally surprising that when real violence and anger break out on the streets the deaths are high. She asked whether there were signs that the army has been doing better in its relations with the demonstrators than the police, whose first wave of response was violent and insensitive. It seems it is. Again, there are variations across the country but there are all sorts of anecdotes indicating that the army personnel and the crowds are in some sort of rapport on occasions. That is a very healthy development, which one hopes provides the foundations for an orderly transition to some degree of stability.
The noble Baroness is right about the curfew. It was extended yesterday by another hour from 3 pm to 4 pm. She also asked about the low flying aircraft. I am afraid we are talking about internal decisions of the existing or recently renewed Egyptian Government regarding how they dispose of their security forces. I cannot add anything to that as to why those they chose to fly the aircraft or what the psychological impression was intended to be. On the whole, I am not sure it was terribly helpful in terms of reassurance because hands pointed skywards and said that they were American aircraft and so on, so it probably did not help the general atmosphere.
Regarding financial markets, the Egyptian stock exchange I think is closed again today; it may have opened for a short while. It was closed yesterday, obviously, and the ratings of stocks and shares are sharply down. The crude oil price in the region has hit $100 a barrel and seems to be moving upwards—that affects us all, as we well know when we go to the garage petrol pump. The region has 66 per cent of the world’s oil reserves—not so much in Egypt, although it does have oil and gas.
The noble Baroness asked about looting, and again I do not have details, but we have seen evidence of quite widespread looting and she asked particularly about how this might endanger the antiquities and museums which contain some of the most precious items, familiar to us all, marking the ancient glories of Egypt. Our understanding is that the Egyptian Government are well aware of their responsibilities and have posted special guards round the museums. As this is an internal matter, I cannot guarantee that is going to be totally effective. There were some demonstrations rather close to the museums, but there are guards round them and people are aware, and we have offered some reminders of the importance of preserving these precious objects at a time of violence on the streets.
The noble Baroness made some extremely penetrating and wise remarks about the causes of this remarkable transition that seems to going on first in Tunis and now in Egypt, and there have been riots in other countries in the region as well and protests on the streets. Many causes have been analysed by all sorts of experts on these occasions. These are countries with a very large youthful population who are very short of jobs. Youth unemployment is always a danger. It is an era in which protest becomes e-enabled, with the ability to mobilise through the internet vast organisations of protest with the click of a button. With mobile phones and the support of an endless cascade of television media the whole speed at which protests can spring up, as has happened in Egypt, is vastly accelerated. Add to that a toxic mixture of rising food prices, rising fuel prices and the longing which is always there—and is one we salute—for liberty and greater freedom, particularly of press and media expression, and you have the kind of mixture which simply requires a match to light it, and up it goes. That is what has happened.
I give a firm assurance to the noble Baroness and your Lordships that I and my colleagues will seek to keep the House fully informed as the situation unfolds but, for the moment, speculation as to how it will unfold is difficult. One wants to be optimistic and see moderate, balanced regimes emerge, aware of their international and regional responsibilities. That is possible, but it is also possible that the whole event could take a much darker turn.
Baroness Falkner of Margravine
My Lords, can my noble friend reassure the House about the transportation of British nationals? I assume that his figure of 10,000 includes dual nationals. Can other European carriers bring out British nationals, should British carriers be unable to accommodate the number who might need airlifting out of Cairo?
On a broader point, the United Kingdom does not have a good history in the Middle East. This situation, grave as it is, provides us with an opportunity to be on the right side of history. Does my noble friend agree that comments by senior British statesmen in the Middle East that stability is perhaps to be traded for pluralism and democracy are unhelpful, and that, although stability is deeply important in that volatile part of the world, pluralism is equally so? It does not behove our Government to take a position whereby we do not seek to uphold the wishes of the people and instead somehow trade off a peace process that is going nowhere with a desire for a false state of stability?
Lord Howell of Guildford
I know what my noble friend is getting at, but I think that that is a false polarity. Something that I have learnt—in particular, in my dealings with the Commonwealth, which does not really come into this issue—is that democracy, the rule of law and good governance are the foundations of stability, investment, jobs and trade expansion. Where those things are not adhered to, or at least there is no trend towards them, problems arise that lead to challenges—not in every country; we can think of exceptions to that generalisation, but that is the scene. I do not think that the pattern of differentiation hinted at in my noble friend's remarks is entirely justified.
The certain and central truth is in my noble friend’s other observation that the UK has a long history in the area, not all of it bad. I am always interested in the way in which many countries with which we might have had bad relations in the past are extremely pro this country—I am thinking of countries slightly further to the east in the Gulf—and are constantly asking for stronger renewed links with the United Kingdom. Some of them have recently been saying to me, “Where is the United Kingdom? Please will you come back?”, so not all the history has been bad, although some of it has been very awkward indeed. The history of our relations with Egypt has had its good moments and its terrible moments over the past century, and certainly for the past 40 or 50 years, as we all vividly remember.
As to the practical matter of routes to the airport and getting nationals out, we are watching that carefully. If it were necessary to think in terms of special charters and so on, we would move immediately, but so far we are finding that the commercial airlines, including British and some non-British airlines, have capacity. The airport is operating again today better than it was and, most importantly, the routes to Cairo airport are clear and properly guarded in a way that it was feared they were not the day before yesterday and yesterday. The situation can change at any time, but at the moment it looks a little better. I hope that that is helpful to my noble friend.
Lord Anderson of Swansea
My Lords, we should all devoutly hope that there will be a peaceful transition to democracy, notwithstanding the demographic explosion in Egypt, which leads to the lack of jobs and the water shortage, but there is another option. The spectre of the Iranian revolution still haunts the Middle East. The Minister will recall that at that time our embassy was rather dazzled by the Peacock Throne and that the revolution went downhill from Mr Bakhtiar, a liberal democrat, to end with the mullahs and Ayatollah Khomeini. How serious is the danger of such a decline? We must recognise not only how Egypt, the most populous Arab country, would be affected but, because of the linkage of the Muslim Brotherhood and other less moderate forces to the rejectionist forces in the Middle East, the blow that would result to the Middle East peace process.
Lord Howell of Guildford
Of course, the dangers are there. Revolutions and massive street protests can take unpredictable paths. I think that the analogy with the Peacock Throne and the fall of the Shah is not strong. There has been deep recognition for some time that the pattern of rule in Egypt and the far from fair and free elections conducted last year were paving stones on the route to trouble and that, although one cannot always assess the exact moment of conflagration, there were dangers. I said earlier that the power of electronic media, including the internet, in mobilising people and protests at lightning speed should not be underestimated. Some people have mentioned the machinery of Twitter, Facebook and all those other things. They can convey and gather information and organise people at fantastic speed.
The dangers were seen. Now the task, not for any individual country but for all responsible states men and women around the world, is to see that the pattern unfurls in a moderate way and that the more extreme elements—the younger hotheads in the militant Muslim Brotherhood, the jihadists, and so on—do not hold sway. My view is that there are many sensible, wise and talented people in Egypt and a strong middle class who, although they might be frustrated by past events, have a strong enough voice to give us some hope that moderation will prevail.
Lord Phillips of Sudbury
I ask the Minister to get his crystal ball out on what might be one of the more certain and important consequences of what is happening in Egypt. Exactly a year ago, I was with the Foreign Minister of Egypt and a party of parliamentarians from 15 European countries. We were en route to Gaza and could get in only via Egypt. It strikes me in particular that Egypt's alliance with Israel in effect to keep the lid on Gaza cannot possibly prevail in the aftermath of what is happening. Whatever Government come in, they seem almost certain to want to review that rather loveless alliance. Is the Foreign Office having due regard to the possible consequences of what seems to me to be almost inevitable? I think, for example, of the border between Gaza and Egypt. As the Minister will know, the Egyptians built the wall along that border only a year or two back, and it has been tunnelled under relentlessly.
One would hope that whatever the immediate consequences in that dimension, there might be the prospect—one hopes and prays—of a balance of voices within Israel itself shifting more to that part of Israeli opinion, political and non-political, that desperately wants to break out of the box that Israeli policy is currently in. That is in the hope that in due time—I realise that these are hugely complicated matters and that it takes all sides to tango—one could move away from the continued colonisation of the West Bank and East Jerusalem and into a positive mode that could in the end see a general resolution of this ghastly combination of factors. I ask the Minister whether the Foreign Office is alive to all this—I am sure it is—and whether it will be able to exert some constructive influence and pressure to reach a positive outcome.
Lord Howell of Guildford
I thank my noble friend. Foreign Office Ministers, particularly junior ones, have to be quite careful when it comes to taking out a crystal ball and making bold forecasts, because this is a particularly fluid situation. My noble friend has done a pretty good job himself in raising certain crystal-ball issues, and these are very much in my mind and that of my noble and honourable friends and their advisers in the Foreign and Commonwealth Office. He is absolutely right that we now have to look at implications and try to be one step ahead of the unfolding scene. Gaza and the Israel-Palestine situation, oil and energy supplies throughout the region, and the now increasingly unfashionable pattern of nepotism—which seemed to cause so much anger in Tunis and was clearly a feature in the riots in Cairo, and which was a feature in other contexts as well—all need to be looked at, together with the position of other countries all around the region.
Even in Lebanon we have a fragile situation, with a new Prime Minister who will we hope command sufficient support all round to achieve a delicate balance there. There are issues of potential turbulence in many other regions as well. This means not only that we are already in a new international landscape but that we now, as a result of what has been happening for the last few weeks, have to have a further reassessment. I can therefore assure my noble friend that every effort will be made to peer into the future—it sometimes seems very dark indeed—and to make proper provision for the interests of this country in a new and changing world.
Lord Jay of Ewelme
I thank the Minister for his Statement and join others in expressing sympathy for British citizens caught up in unrest and our admiration for the consular staff, both in Egypt and sent from London, who are helping.
I understand the pressure on the Foreign Office budget at the moment, including the consular budget, but will the Minister say whether the Foreign Office is considering developing the concept of rapid reaction forces to provide greater flexibility in the management of consular staff and increasing the chances of having the right number of people available in the alas increasing number of emergencies for which British citizens will quite rightly expect and deserve support from our consular services?
Lord Howell of Guildford
I am sure this is in the mind of the Foreign and Commonwealth Office, about which the noble Lord knows a great deal. He probably knows a great deal more than I do; he has spent more time there than I have. This is an age that requires agility, adaptability and rapid deployment as never before in handling international affairs, securing stability and peace, and protecting and promoting our interests, so this kind of design will be increasingly required alongside the stable institutions of Whitehall and the hierarchies of government that have prevailed in the past. We have to have some new thoughts on how to deal with the instant conflagrations and instant fires that can spring up in this globalised total communication, totally informational world.
Lord Foulkes of Cumnock
Will the Minister confirm that it is not always helpful to talk about countries in the region of North Africa and the Middle East as if they were the same, and agree that in Egypt there are some very active opposition parties—not just Mohammed El Baradei’s group and the Muslim Brotherhood but other parties who have MPs, some of whom have links with United Kingdom political parties. There is a vibrant civil society, and there are some free media, and we have in Dominic Asquith, as we had with Derek Plumbly, and their staff, people who know this situation very well. I found this out when I visited on a number of occasions with the Westminster Foundation for Democracy to try to promote democracy in Egypt. Will he agree that our top priority must now be to do everything that we can through all the international organisations of which we are members to make sure that there are free and fair elections for the President and the Parliament?
Lord Howell of Guildford
I agree, and I regard those as extremely helpful and constructive comments. They underlie a point that is often worth making: that international affairs is not just about Governments to Governments but a vast substructure of informal, non-governmental, voluntary and professional links that make up the whole fabric of relations between two countries. What the noble Lord has said reinforces that very strongly.
Lord Hylton
What is the current state of health of General Suleiman, who had been invited to become Prime Minister in Egypt? Did he accept, and more generally will the Foreign Office be revising and reviewing its whole approach to the Middle East and to North Africa, bearing in mind what the Minister has already said about transition from one kind of regime to another?
Lord Howell of Guildford
I cannot add much on General Suleiman. He is known to a number of people in this country and to a number of people working in and for the Foreign and Commonwealth Office. I cannot comment on the precise circumstances in which he came to be appointed, as they are internal to the Egyptian Government. That is the position, and I am sorry if I have not been helpful on that.
As to revising our approach, revision of approach has become the pattern of the age. We are in an era of constant evolution in our institutions and our arrangements, driven by the global information revolution and the globalisation of events and processes, so new approaches are having to be considered at all times in this transformed international landscape, and we will do our best, in close dialogue with the experts and think tanks and international experts and partners, to make sense of this fast-changing jigsaw world.
Baroness Hussein-Ece
My Lords, the Statement says that the Government are urging,
“President Mubarak to appoint a broad-based Government who include opposition figures”.
Is this not part of the problem? The massive movement of people on the ground who are demonstrating in Egypt see Mubarak as the problem, and for the Government to be calling on him to be doing anything at this time is not helpful. As the noble Lord, Lord Foulkes, has said, what is really needed is a strong cross-coalition Opposition that will include different parties that have been kept down and kept weak by Mubarak over the last three decades. They will inevitably include the Muslim Brotherhood in a minority. An alternative is needed, which people can look to, that can step forward and help that transition.
I follow Twitter, and there are hundreds and hundreds of voices on it saying, “We do not want Mubarak. He is the problem; he is the one who has repressed everyone”. The present generation of young people who have seen high unemployment and have no hope for the future see him as the problem. Is it wise of the Government to be calling on Mubarak to take a lead in a transitional time? I wonder about that and the fact that we keep hearing about the Muslim Brotherhood when it is in fact a minority. It does not enjoy widespread support but inevitably has some support and will be part of any coalition in any transitional period.
Lord Howell of Guildford
One should not overestimate the powers of the outside world nor underestimate the fact that the future of this nation and its pattern of government will be determined internally by the people of Egypt. We have to take the situation as it is and, at the moment, the leadership and the power remain in the hands of Mr Mubarak. It is perfectly true, as my noble friend says, that tens of thousands of people are calling for his removal, but others are equally determined that he should not be removed. We will have to see how this works out. In the mean time, it seems reasonable to suggest to those who are in the Government of Egypt, with its new personnel, that the right path is the one to which the noble Lord, Lord Foulkes, rightly referred. They must press towards democracy if they want the stability and better life for the people of Egypt that many in the streets are shouting for.
Parliamentary Voting System and Constituencies Bill
(13 years, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Falconer of Thoroton
My Lords, Clause 12 is headed “Boundary Commission proposals: publicity and consultation”. I am interested in a number of questions in relation to whether there will be a change in the notification process as a result of Clause 12. The new Section 5 that Clause 12 inserts into the 1986 Act provides:
“Where a Boundary Commission have provisionally determined to make recommendations affecting any constituency, they shall take such steps as they see fit to inform people in the constituency … (a) of the effect of the proposed recommendations and … (b) that representations with respect to the proposed recommendations may be made to the Commission during a specified period of 12 weeks”.
First, can the noble and learned Lord give us some indication of what timetable the Government envisage for the first boundary review under the Bill, which has to conclude by 1 October 2013? When do they envisage that those provisional reviews will be published? Do they envisage that there will be one review for each country or region, or will the review apply to the whole United Kingdom—perhaps excluding Northern Ireland—all at once? I am particularly keen to know how the resources of those who may have to respond to those issues will have to be deployed.
Secondly, how do the Government envisage that there will be notification to the public of their right to make representations? This might be apparent if I thought about it more, but what is the effect of subsection (3) of the new Section 5? Will its effect be that, where there are new proposals, new Sections 5(1)(a) and 5(1)(b) will apply again with exactly the same time limits? If the Boundary Commission makes a provisional proposal that is then changed for whatever reason, will it be necessary to advertise the proposal in precisely the same way and will the commission need to advertise again that representations can be made?
Separately, do the Government envisage that the boundary commissions will each issue guidance on what they will do to comply with the new Section 5? If the boundary commissions will issue guidance, will that be in draft form so that this House can see it before the conclusion of Report so that we get some idea about how the new Section 5 will operate?
Lord Foulkes of Cumnock
My Lords, I am particularly pleased that we are making such great progress on the Bill. It is very encouraging to have had that earlier response from the noble and learned Lord, Lord Wallace of Tankerness, to the amendment moved by the Cross-Benchers. It was particularly encouraging that the noble and learned Lord responded and took the initiative, because earlier today I was reading a blog—strangely enough—belonging to the noble Lord, Lord Rennard, in which there appears a comment by the noble Lord, Lord Greaves, who wrote:
“There has been a potential (and sensible) deal available on this Bill for at least the past two weeks and the failure to clinch it is (in my view) mainly on the government side. The irony is that the deal has substantial Liberal Democrat support”.
I am glad that the deal has been clinched, and I am glad that it was the noble and learned Lord, Lord Wallace, who came here to do the clinching, as it were.
On Clause 12, although almost everyone in this debate has talked about “the Boundary Commission”, I remind the House—the noble and learned Lord, Lord Wallace, does not need reminding—that there is more than one such commission in the United Kingdom. Although England and Wales might have a combined boundary commission—I am advised that they have separate commissions, but that means that my argument applies a fortiori—there is otherwise a different boundary commission in each of the four countries of the United Kingdom.
On this matter, and on other matters, how are the Government going to achieve a measure of consistency in the work carried out in Scotland, Wales, Northern Ireland and England in relation to, for example, appeals? Following the passage of this Bill, will guidance be issued to the boundary commissions that says, “This is what we expect you to do”, so that the Government take the lead, or will the Government perhaps say to the chairs of the four commissions, “You should get together and work out a modus operandi for your areas”?
Obviously, local hearings are the important issue that we have been dealing with recently, but there are a number of other issues on which it would be invidious if one decision was made in Scotland and different action was taken in England. It could be that in entirely similar circumstances, an oral hearing was held in Scotland but not in England, or vice versa. It would be helpful if the Minister in his reply could put this into a United Kingdom context and talk about the collaboration and co-operation that he envisages among the boundary commissions.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I thank the noble and learned Lord, Lord Falconer of Thoroton, and the noble Lord, Lord Foulkes, for their contributions and questions. I was just a bit wary when the noble Lord, Lord Foulkes, mentioned me coming here for the clinching, particularly for an amendment moved by the noble Baroness, Lady D’Souza, but I understood the spirit in which he made his remark.
I shall pick up on the point made by the noble Lord, Lord Foulkes. He was absolutely right to remind the Committee that in fact there are four Boundary Commissions responsible for Scotland, Wales, Northern Ireland and England. One of the issues that we will want to address in preparing the amendment which I indicated in the earlier debate is that of consistency. The important point is consistency, but it need not necessarily be one of exactness, which raises issues of how much should be set out in the Bill and what should be left to the guidance of the Boundary Commissions themselves. That is something we want to work through with them.
The noble and learned Lord asked whether the Boundary Commissions would provide guidance on how they will carry out the review. Prima facie this is a matter for the commissions, but the practice in the past has been for them to do so. It is my understanding that the secretary to the Boundary Commission for England confirmed for the Political and Constitutional Reform Committee of the other place that they intend to do so again for this review. However, the question of draft guidance is a matter for the Boundary Commissions. I do not think that it has been produced in the past, but if the noble and learned Lord has information to the contrary, I would be interested to hear it. Moreover, I am not aware of any being ready to be published at the moment. In fairness to the Boundary Commissions, it would be difficult for them to produce draft guidance given that we are still at the stage where changes are being made. Indeed, as I indicated in my responses to the amendment moved last week by the noble Lord, Lord Lipsey, and that moved by the noble Lord, Lord Kennedy, on how long it would take to put these matters online, and indeed the matter that was debated earlier today regarding public hearings, it might be rather difficult for the Boundary Commissions to produce draft guidance ahead of the Report stage when your Lordships are still debating what the actual shape of the consultation will be.
I was asked when the initial recommendations would be published. That is entirely a matter for the commissions. I was also asked by the noble and learned Lord whether the commissions have to advertise in the same way for the initial and the revised recommendations. My information is that, yes, they would have to do that. I shall give a little more clarification on a point raised by the noble Lord, Lord Foulkes. It is certainly not the Government’s intention to issue guidance on how the commissions should interpret the legislation, but I understand that the commissions work together on issues that are of common interest and common practice. While not issuing them with guidance on how to do that, we would certainly give them every encouragement to work together. It is also my understanding that each Boundary Commission will produce a report, and certainly I do not think it is intended that there would be one UK report. What I could not be certain about is whether there would be separate reports produced at different intervals for each of the regions of England. I really do not know whether that has happened in the past. But, again, it is certainly not my understanding or anticipation that there would be one mega-UK report. There will be reports from Scotland, Wales and Northern Ireland and, I assume, England, but I do not know whether the Boundary Commission for England would wish to break up its report into separate regions. At the moment, I am not in a position to say.
Lord Falconer of Thoroton
The way it is done at the moment is that Boundary Commission reports are issued within England or Scotland covering a particular part, usually a county, because there are limits on being able to cross particular boundaries. You have to decide within a particular area which constituency will go where. We know that that is not going to be the position here, so while I understand completely that there will not be a UK-wide report, I am keen to try to ascertain the extent to which the countries of England, Scotland, Wales and Northern Ireland will, as a matter of practice, be divided up between areas of, say, the eastern region, the East Midlands and the West Midlands. That is significant in terms of how resources are dealt with by political parties in looking at the particular issue, even though it may well be that the Boundary Commissions have not resolved how to do that at the moment. I would ask, therefore, whether they will produce guidance indicating how they are going to do it or does one just have to wait until a particular report covering, for example, the north-east or the south-west of England is produced so that resources can be put to dealing with the area at that particular point? That is what I was interested in.
The noble and learned Lord took my questions as relating to inquiries, but my question was really about the timing of the guidance. I have with me a document from the Parliamentary Boundary Commission for England covering the procedure at local inquiries. Of course the commission could not possibly have that ready yet because only this afternoon did we find that there are now going to be local inquiries. Having raised the matter, is it envisaged that further guidance relating to the whole consultation process, part of which will be in writing, will be issued? However, I am much more focused on the order of batting and the timing.
Lord Wallace of Tankerness
The answer I gave was not intended to be specific to the issue of public hearings, but rather was meant to be illustrative of where there obviously will be changes from what is set out in the Bill at the moment as a result of amendments to be brought forward at the Report stage in response to the amendment from the noble Lord, Lord Lipsey, about counter-representations. That is why I wanted to make the point that we cannot really expect the Boundary Commissions to produce draft guidance when they do not know what they are actually going to be asked to deliver. Clearly, we will have to examine what the issues of public hearings and counterproposals mean in terms of timing in the coming weeks. However, as I just indicated, it has been the practice in the past that, as the secretary to the Boundary Commission for England confirmed for the Political and Constitutional Reform Committee of the other place, the commissions again intend to issue guidance. The point I sought to make was that I did not think that they had issued draft guidance in the past, and I certainly would not anticipate any draft guidance before next week or whenever we debate the Bill on Report.
I am also advised that the Boundary Commission for England published its recommendations on a county basis, which coincides with what the noble and learned Lord said. It is certainly a matter for the Boundary Commission itself to determine how it will report. It could use regions, and I understand that it would be consistent with the powers in the Bill for it to do so. But I envisage that this matter will become much clearer when the Boundary Commissions get the Act of Parliament, as we hope, and they can respond. I have no doubt whatever that we will hear what the respective Boundary Commissions propose in terms of bringing forward reports.
Lord Campbell-Savours
The target size is 76,000, with the 5 per cent leeway making a ceiling of something like 79,500 per constituency. What will happen when a ripple effect is caused by the five-yearly review of constituencies which are all on the maximum and there is no slack in the system to take up? Surely the Boundary Commission will have to report on huge areas because of the ripple effect on each constituency which has already met the 76,000 plus 5 per cent limit. Will the Government take into account this ripple effect on Boundary Commission decisions when finally they make their statement on the commission?
Lord Wallace of Tankerness
My Lords, I hear what the noble Lord says. Whether it would work out like that is a matter of conjecture. However, it underlines the fact that these matters are probably better left to the Boundary Commissions. They should determine how they issue their reports and deal with these points, rather than Ministers or the legislation being prescriptive in that sense. It should be permissive rather than prescriptive.
Lord Howarth of Newport
My Lords, I respect the noble and learned Lord’s refusal to contemplate laying down the law to the Boundary Commissions on exactly how they should conduct their publicity and consultation. However, it might be helpful to them—it would certainly be helpful to the House—if the noble and learned Lord could be prevailed upon, either now or on Report, to think out aloud, to an extent, on this and to indicate in general terms his expectations as to what would constitute satisfactory publicity and consultation.
We live in an age in which there is greatly increased scope for publicity and consultation through new technologies. For example, the use of social networking would be available to the Boundary Commissions if they were intent on communicating with the generality of electors. I hope that they would be. This would be consistent with the principle upon which the Government have agreed that, after all, it would be proper to allow public inquiries to be held. The key principle is that the constitution belongs to the people—not to the Government and certainly not to the boundary commissioners—and we are all the servants of the people. However, it is through the drawing of boundaries and the subsequent election of Members to the House of Commons that the people of this country give their democratic authorisation to the political class, to Members of Parliament, to form a Government and to take decisions on their behalf; and it is through the drawing of constituency boundaries and the holding of further elections that Governments are called to account.
This is such a fundamental feature of our constitution that we have taken the view as a House—and the Government have agreed—that the public should have their say not only through written representations but in oral submissions, either uttered by themselves or their representatives, at public inquiries. However, if that process is fully to engage the citizens of this country and be fruitful, it follows that there has to be effective communication between the boundary commissioners and the people.
We cannot overemphasise the importance of the spirit in which this is done. I hope that the noble and learned Lord will be able to say that he expects the publicity and consultation to be much more than perfunctory; that he expects it to be full-hearted and thorough. There might be a temptation for the Boundary Commissions to make the process relatively abbreviated—not least because they are being asked to proceed on a more rapid timetable than in the past. It will be a genuine challenge for them to transact all the processes involved in redrawing the boundaries in the timescale that the Government have permitted. It should be possible, but it would more difficult to do it to the timescale set by the Government in the Bill if they are to be as thorough and as generous in their publicity and consultation as we hope they will be. It is important that the Government state that they expect a thorough and genuine consultation.
Lord Foulkes of Cumnock
I support what my noble friend Lord Howarth has said. Following on from what the Minister said on the briefing about the Boundary Commissions working together, as he knows only too well I am strongly in favour of devolution—as he is—and, where appropriate, different solutions north and south of the border. I am also not too keen on Governments giving directives—particularly this Government, but that is another story.
However, given that we are talking about elections in the United Kingdom, some degree of consistency and guidance is important. Earlier today I read the words of Bruce Millan, one of the greatest Secretaries of State for Scotland, who many noble Lords will recall with great affection. When he was shadow Secretary of State in a debate in the other place—this may seem a long time ago but it is still relevant today—he said:
“On Tuesday I drew attention to the fact that there were differences in approach between the English, Scottish and Welsh Boundary Commissions—for example, with regard to overall numbers. The Scottish commission uniquely among the three started with a pre-determined total and worked from that. Subsequently that total had to be adjusted. I thought that it was wrong in principle that the commission should start with a predetermined total. That approach is not compatible with what happened in England and Wales. It is worrying that there are different approaches to the interpretation of the same rules in the three countries. This is another argument for looking again at the rules.
There were differences in approach by the three commissions to rule 6—the geographical consideration rule. There were also differences in approach in practical terms as to what the commissions did about movements of population after the enumeration date. It is not clear that any commission is entitled to take into account any change in population beyond the enumeration date. The English commission believes that it is not empowered to take any movement of population into account. That has given rise to considerable dissatisfaction south of the border, because England’s enumeration date was 1976. There have been tremendous movements in population since then. The Scottish commission took a more relaxed view. Whether it was entitled to do so is a matter of considerable argument. That should be looked at”.—[Official Report, Commons, 3/3/83; col. 428.]
That points to some of the problems that can arise if there is not close co-operation between the four Boundary Commissions under what I think is the general benevolent guidance of the Government. I know that the Minister cannot give an instant answer, but I hope that he will take this away and look at it to see whether some more guidance should be given, particularly if the rigid figure of 600 is going to be adhered to. I imagine that that is going to make it very difficult for the Scottish, English, Welsh and Northern Irish Boundary Commissions to work in similar ways. They are working necessarily to different totals within different geographical areas, and some guidance from the Minister might be appropriate. I am not expecting an instant answer, but it is worth while having a look at it.
Lord Wallace of Tankerness
My Lords, perhaps I may first respond to the noble Lord, Lord Howarth of Newport. I hope he would not expect the Government to give directions to the Boundary Commissions, and I indicate that the Bill provides that the Boundary Commissions,
“shall take such steps as they see fit to inform people in the constituency—
(a) of the effect of the proposed recommendations and”—
to ensure that—
“a copy of the recommendations is open to inspection at a specified place within the constituency”—
that is unless, of course, no change is recommended for the constituency—
“(b) that representations with respect to the proposed recommendations may be made to the Commission during a specified period of 12 weeks”.
The provisions of this Bill are a bit different from those of the past. The 1986 legislation made a stipulation with regard to newspaper advertisements, and that is not in this Bill. We are leaving that to the discretion of the Boundary Commission. When I was replying to an amendment moved on Wednesday by the noble Lord, Lord Kennedy of Southwark, who was talking about online advertising, I indicated that again it was a matter for the Boundary Commissions. However, as there had been use of online advertising for the purposes of the Boundary Commissions’ work during the last general review, I have every confidence that it will be done again. I am sure there is no way in which the Boundary Commission is going to have a perfunctory regard in ensuring that the proposals are widely publicised. All parts of the House—it should be a matter not just for Government but for Parliament—should be confident that the commissions will continue to adhere to the highest standards that they have shown in the past, irrespective of seeking representations that will strengthen their recommendations. There is a high level of expectation there, and I do not think there has ever been any suggestion that the Boundary Commissions have not lived up to that.
With regard to the noble Lord, Lord Foulkes—
Lord Howarth of Newport
There will be a difference in the way that the Boundary Commission operates in future, because it is going to have to reduce the number of constituencies from 650 to 600, if that provision stays in the Bill, and it is also going to have to make the quota of 76,000 a paramount consideration. Those two factors are going to constrain it in new ways. I am sure, as the noble and learned Lord suggests, it will wish to be thorough in its consultation, but the question of what it may see fit by way of publicity and consultation, given the pressures it is going to be under, and the pressures of time as well, will depend to an extent on the standard and expectation that the Government express. That is why I hope we shall hear from the noble and learned Lord a sentiment very vigorously expressed, that he would expect no less of the Boundary Commission than the utmost thoroughness of engagement to ensure that every one of our citizens is aware of the proposals that would affect their constituencies and genuinely have the opportunity to make their representation should they wish to make them.
Lord Wallace of Tankerness
It is not just a matter of Ministers expecting it because Parliament would expect a degree of engagement. I am in little doubt that good publicity will be given to the issue, because I the political parties have a role to play, as we have acknowledged. As I indicated to the noble Lord, Lord Kennedy, when he proposed that representations should be published online within 24 hours, we would want carefully to consider that before Report. I raised a number of practical issues, but acknowledged that we are living in an age when online communication is probably the norm rather than the exception.
Lord Howarth of Newport
The noble and learned Lord says he is going to frame an amendment—effectively, to produce a new clause to replace Clause 12. Will he consider including wording that really indicates unambiguously the demanding expectation that the Government and Parliament will have for the Boundary Commissioners in this regard?
Lord Wallace of Tankerness
I am not sure that legislation is the proper place to express exhortation, but I have no doubt that the four Boundary Commissions will be looking at the debates in your Lordships’ House, as indeed in the other place. They will have heard the reasonable expectations with regard to publicity of their recommendations.
I will say to the noble Lord, Lord Foulkes, that perhaps it was a matter of controversy in some of our earlier debates, but one of the reasons why, for example, the British Academy report welcomed some of the features of the Bill with regard to the rules was the clear hierarchy we have laid down and which has not previously been the case. Therefore, I hope that the concern expressed by the former Secretary of State, Bruce Millan, will not arise in this particular case.
For completeness, I say to the noble and learned Lord, Lord Falconer, that, as I indicated earlier, it is the case, as stated in new subsection (3) proposed in Clause 12 (1):
“Where a Boundary Commission revise any proposed recommendations after publicising them”,
subsection (1), which contains the publicity part, would apply to the revised proposals, but it does not apply to any proposals that are revised for a second time. I give this for completeness.
Lord Campbell-Savours
I am sorry to come back on a question I asked earlier, but it is quite important. May I give the Minister a scenario with which many constituency organisations across the country may well be confronted? Imagine six Conservative seats in a county all on the margin of 79,800. In other words, they have taken up the 5 per cent slack above 76,000, making a total of 79,800. When the review takes place, they will all have to change. The date when that information is made public is very important because the constituencies in the county next door will want to know exactly what is happening on the boundaries for those six constituencies. Whatever decision is taken with regard to those six will affect the adjacent county where there equally might be Members of Parliament of the same party who are arguing over seats.
Is there a timetable which will be made available to deal with what would happen in those circumstances where all constituencies are on the 5 per cent-plus margin, at 79,800, and where automatically they have to start crossing boundaries to sort out the new quota?
Lord Wallace of Tankerness
My Lords, as I understood that question following on from the previous intervention from the noble Lord, Lord Campbell-Savours, we are now looking to the second review which we are looking towards publishing in October 2018. The answer does not vary, inasmuch as it will be a matter for the Boundary Commission to take into account the likelihood of any ramifications of its decisions at that point and the extent to which it publishes, either county by county or region by region. This is not a matter which, with the best will in the world, we could stipulate in legislation. We must leave that to the good sense and discretion of the Boundary Commissions.
Lord Falconer of Thoroton
I am grateful to the noble and learned Lord for answering the questions. I was trying to get at two strands. The first, as I think everyone agrees, including the secretaries of the Boundary Commissions, is that it is going to be a testing timetable to deliver the first review by 31 October 2013. I agree with the noble and learned Lord that it is for the Boundary Commissions to determine how they will do that, including when they will make their announcements of provisional proposals; how they will divide up the four countries; and the method by which they will announce how representations will be made. When legislation is going through Parliament, it is not unreasonable or unusual in this House to ask that the body concerned, without in any way infringing its discretion, sets out its broad proposals. That helps us then determine the validity or otherwise of a timetable, particularly a timetable such as this. I ask the noble and learned Lord—
Lord Tyler
While it is one thing is to express an opinion in the House, does the noble and learned Lord agree that having exhortation in the Bill implies that it is somehow necessary to encourage the Boundary Commissions to operate in a particular way? That implies a degree of a lack of trust in the work that they do. I wonder whether he would take this opportunity to reject the suggestion from his noble friend Lord Howarth that to express that sort of exhortation in the actual Bill is not helpful in this case. I accept what the noble Lord says about expressions of support and encouragement for a due process in the discussion that is taking place in the Committee, but to put it into the Bill itself seems to me to be a retrograde step.
Lord Howarth of Newport
Before my noble and learned friend answers the noble Lord, Lord Tyler, perhaps I could clarify that while I have asked the Minister to express on behalf of the Government their expectation of a high standard of publicity and consultation, it would certainly not be my view that we should resort to exhortation in the language of the Bill but rather that we should state a requirement in the language of the Bill.
Lord Tyler
The noble Lord actually said, and I listened with great care, that it should be in the new clause that my noble and learned friend should bring forward—that is, in the Bill.
Lord Howarth of Newport
It was a word used by the Minister, I think the noble Lord will find.
Lord Falconer of Thoroton
If I might interrupt this momentary and rather fascinating debate about statutory drafting, my experience of Bills passed before 1997, and post-1997, is that legislators sometimes resorted to exhortatory language in Bills when they thought it was appropriate. I do not feel able to give the noble Lord, Lord Tyler, the comfort that he seeks because, for reasons that I cannot adequately explain to the Committee, that was often the way that deals were done on legislation, so one cannot be quite categoric about that.
My point, if I might revert to it, was: without in any way interfering with the discretion of the Boundary Commissions, if we were able to get some indication about how it would be done that would be helpful to show that it can be done and, just as importantly, it would help the other groups—in particular, the political parties—to prepare their resources for what everybody agrees to be a quite testing process. Secondly and separately, resources provided by the state for this are important to get the requisite high standards and to ensure that consultation will be proper. When we return to this on Report, it would also be of value if there were some indication of how the resources have been worked out and how we are to be satisfied that those resources are adequate. However, I will not stand in the way of Clause 12 standing part at this stage.
Lord Baker of Dorking
That last point is a very fair point. If there are to be public inquiries as well, I am sure that the resources of the Boundary Commissions will have to be increased because that would extend the timescale and, indeed, the work of the activities. On the general questions raised on the nature of the boundary inquiries by noble Lords opposite who had previously served in the House of Commons, very little advice needs to be given to the Boundary Commissions, quite frankly, because in the past—I have been involved in two boundary inquiries myself because my seats were affected—they worked completely honourably, openly and fairly.
The commissions first published a great deal of advice and ask for comments from everybody and then they considered those comments. Overwhelmingly, the comments made at that stage were made by the local political parties. It is quite rare for communities to form a view at that stage. I know that noble Lords opposite have made great play about this provision—that it is disrupting the natures of old communities. When it came to the actual inquiries which I went to there was, first, lots of advertising: it was on the radio and in the local newspapers. I suppose they could now use e-mail and all the rest of it. When the two inquiries which I attended actually took place, no representatives from the local communities turned up at all although there were substantial changes.
The people who turned up at those inquiries were the local Conservative representatives, the local Labour representatives and the local Liberal representatives. It became an absolute haggle: “We’ll move that ward out but have that village back, please”. In that haggling the Labour representatives usually won, in my experience. They are very good at haggling on that basis. However, do not believe for a moment that an outraged community is going to turn up in droves at these inquiries.
Lord Baker of Dorking
No, I will not give way to the noble Lord: I think we have heard enough from him and that he should contain himself.
I feel that that is in fact the reality of the situation which we will be faced with, but the argument that I have seen on the Boundary Commission is, in practical terms, that it works very well indeed. It publishes all its findings and the way in which is going to work. It has a procedure for inquiries which has stood the test of time. We should leave the commissioners to it.
Lord Lipsey
“Assistant Commissioners’ report
(1) The Commission shall appoint Assistant Commissioners to report on and make recommendations emerging from the written representations submitted for each separate area that provisional recommendations have been published for.
(2) The report of each Assistant Commissioner shall be published by the Commission along with copies of all the representations received, before the Commission either publishes its revised recommendation for the area or confirms its provisional recommendations.”
Lord Lipsey
My Lords, first, I apologise for the fact that I arrived back in the Chamber seconds too late to move Amendment 99ZA. I do not think that anything catastrophic has been lost thereby, because Amendments 99ZA and 99A were in effect accepted by the Minister. We will see the drafting on Report. If I might be permitted to say it, Amendments 99B and 99C are purely technical and if the Minister or his officials would correspond with me about their substance, we might avoid having to return to the subject on Report.
Amendment 100, however, has fine breeding because it is another from the stable of the British Academy, whose thoroughbreds have been praised throughout these debates. It relates to the discussion that we have just had because it is perfectly clear that the commissions have a big task on their hands to complete the work before them by 2013. In particular, the English commission faces a tough task. It would be very regrettable if there was any slippage in the timetable, because it leaves only 18 months for parties to choose their candidates and for those candidates to bed themselves in. That is even without the possibility, which must still exist even under the Government’s fixed-term Parliament legislation, of an earlier general election. It really is crucial that the Boundary Commissions do not get behind with the task.
The Government have been comforting throughout on the question of the resources that will be made available to the Boundary Commissions. That is important, but the British Academy study argues that an additional weapon in the commissions’ armoury would be the appointment of assistant commissioners. This amendment, as I understand it, in effect repeats the provision of the 1986 Act in that regard by providing for the appointment of assistant commissioners. That may, it occurs to me, also have a part to play when the Government bring forward their detailed proposals for implementing the spirit of the amendment spoken to earlier today by the noble Baroness, Lady D’Souza, in providing for oral hearings in some form or another. I hope that this modest, technical proposal—it is of course not saying that the commissions have to appoint assistant commissioners—sourced as it is from the true experts of the British Academy study, will find favour with the Minister. I beg to move.
Lord Howarth of Newport
In light of the Government’s agreement that provision shall after all be made for public inquiries with oral hearings, would my noble friend wish to modify the terms of his amendment when we return on Report?
Lord Lipsey
I am so sorry if I was unclear. I explained that I thought that that new provision might increase the necessity for assistant commissioners and therefore be incorporated into the Government’s proposals.
Lord Wills
My Lords, I want to make a couple of brief points in support of this proposed new clause. I think there is general agreement in the Committee that the engagement of the public in this process is desirable. There has been a great deal of discussion about what format that could take, but that principle is generally accepted by everybody and this proposed new clause goes to the heart of that agreement.
When the previous Government looked at a whole range of methods of engaging the public in policy formation—of which this would be a part—we came to the very clear view that fundamental to all forms of consultation was the need for the public to know what had happened to their contributions to the debate. That was crucial for the credibility of the process and it avoided cynicism creeping in about what had happened. I think that this new clause is entirely consistent with that principle. I understand that it might be thought unnecessary to put such a provision into the Bill, but it might also be thought to be a sound principle that could be relied upon and about which the Boundary Commission could be relied upon to make a judgment. Putting it into the Bill in the way that my noble friend proposes with this new clause would signify the importance of such feedback, and I very much hope that the Minister will look favourably on it. I do not think that it fundamentally compromises the Government’s objectives in the Bill and it could play an important part in building public support for the process.
Finally, I notice that my noble friend has used the generic term “published”. I do not think that any amendment to the clause is needed but, if the Minister is prepared to look at the proposal favourably, as I hope he will, I should be grateful if he could make it clear that all forms of publication should be used. Obviously, the web should be deployed but we should also bear it in mind that, even today and despite the best efforts of the previous Government, large sections of the population are excluded from the web. Therefore, I should be grateful if the Minister could make it clear that he would expect the Boundary Commission to use all forms of publication.
Lord Howarth of Newport
It seems to me that what is proposed in this amendment is the more important if one takes the view, as I do—but contrary, I think, to the view of the noble Lord, Lord Baker—that there will be extensive public interest in, at any rate, certain proposals for boundary changes. In recent days and weeks, the people of Cornwall and the Isle of Wight have given us to understand in no uncertain terms that they have very strong views about how constituencies should be drawn in their parts of the world. Given the radical and wholesale changes that the provisions of the legislation will entail, I think that we should be prepared for considerable strength of feeling and for vigorously expressed representations not just on the part of the political parties but, certainly in controversial cases, on the part of many members of the public. It is, as my noble friend Lord Wills suggested, important that people have feedback and that they should know that their representations have been listened to, gathered up and presented for careful consideration by the boundary commissioners through the activity of assistant commissioners, as my noble friend Lord Lipsey has proposed.
Lord Falconer of Thoroton
My Lords, this is quite an important amendment because it relates to what happened earlier this afternoon. My noble friend Lord Lipsey is proposing that an assistant commissioner should look at all the written representations relating to a particular provisional recommendation and publish the effect of those written representations. That is important because it means that the representations are being considered and the public as a whole can see them all in context. It also seems to be of relevance in determining whether a public inquiry is appropriate. If a proper analysis is carried out, which is what an assistant commissioner will do if the proposal of my noble friend Lord Lipsey is adopted, it will be easier to see whether a public inquiry is appropriate or helpful. The effect of the amendment in the names of the noble Baroness, Lady D’Souza, the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Pannick, is that, even if the technical requirements are satisfied, there will be a public inquiry only where it is helpful—that is, the Boundary Commission will have the discretion to say no if a public inquiry will not help in any way.
Therefore, I respectfully suggest that the proposal of my noble friend Lord Lipsey will be of value, first, in ensuring that written representations are properly considered and that that is apparent; secondly, in properly analysing what issues there may be in relation to a particular provisional recommendation; and, thirdly, in deciding whether, in exercising its discretion to have a public inquiry, there are sufficient issues for the Boundary Commission to bite on to be sure that such an inquiry will be useful. I respectfully suggest that the noble and learned Lord considers this amendment in the context of the public inquiry amendment and comes back on Report to tell us what conclusions he has reached.
Lord Wallace of Tankerness
My Lords, perhaps I may preface my remarks by taking up the point that the noble Lord, Lord Lipsey, made about the earlier amendments. I shall certainly try to ensure that he has a response on that. I think that they are very much tied up with the amendment which we debated last Wednesday and to which we have already indicated there will be a government response with an appropriate amendment on Report.
The new clause proposed in Amendment 100 requires two things from the Boundary Commission as it consults the public on any proposed changes to constituency boundaries: it must publish all the representations that it receives on provisional recommendations relating to an area, as well as publish a formal response written by assistant commissioners which is very much focused on those written representations.
It has usually been the commissioners’ practice to appoint assistant commissioners to manage the process of local inquiries, and the noble Lord seeks to apply this practice to the consultations under the provisions of the Bill. As I indicated earlier in the Committee’s deliberations, and as I think has been touched upon by a number of contributors to this debate, the Government propose a public hearing process enabling an opportunity for the public and parties to express their views. We need to consider how best to achieve that so as to ensure that the timetable for completion of the Boundary Commission’s reviews by October 2013 is met. It is fair to say that in order to do so we will need to consider all the existing provisions concerning consultation in the round, and I hope that that gives some reassurance. The Government have committed to further action on how consultation is undertaken by the commissions not only in terms of public hearings but in terms of counter-proposal provisions as well. On that basis, I urge the noble Lord to withdraw the amendment.
Lord Lipsey
Coming so soon after the progress that we have made this afternoon, I obviously entirely accept what the Minister has said. Not all the “t”s can be crossed and the “i”s dotted but I am sure that they will be by the time we get to Report. With that, I am happy to beg leave to withdraw the amendment.
Lord Bach
My noble and learned friend Lord Falconer of Thoroton and my noble friends Lady McDonagh and Lord Kennedy of Southwark and I have given notice of our intention to oppose the Question that Clause 13 stand part of the Bill. We have done so not because we oppose Clause 13 standing part but just in order that we might hear the Minister respond to some questions.
Last week we heard from noble Lords concerning Cornwall and the Isle of Wight, as my noble friend Lord Howarth of Newport reminded us. However, we also had a long and interesting—and, I think, worthwhile—debate on Wales, to which Clause 13 relates. The clause amends Section 2 of the Government of Wales Act 2006 so that the Assembly constituencies are those specified in the Parliamentary Constituencies and Assembly Electoral Regions (Wales) Order 2006, as amended. The effect of this change is that any future alterations to parliamentary constituencies made under the new rules introduced by the Bill will not affect Assembly constituencies.
We appreciate that without the first part of Clause 13 the reduction in the number of Westminster seats in Wales made necessary by Clause 11 of this Bill would see a comparative reduction in the number of Welsh Assembly seats. It is not this part of Clause 13 that we object to; we do not wish to see the representation provided for the people of Wales by its devolved institutions affected by legislation which will cut that representation at Westminster. However, the remaining parts of Clause 13 are included to deal with interim reviews of constituencies in Wales which might happen to be undertaken under the terms of the Government of Wales Act 2006 which are ongoing or have not been implemented when Part 2 of the Bill comes into force.
We want to raise again the particular impact that the Bill’s proposals will have on Wales. We wish to ask the Minister whether there might be a phased reduction in the number of Westminster constituencies due to be lost in Wales under the terms of the Bill. If there is not to be a phased reduction, perhaps there is a case to be made that the amount of the reduction be delayed until after the result of the March referendum on powers to the Welsh Assembly and any attendant transfer of power.
The Minister will recall—he is, after all, an expert on this point—that last week he made the comparison with the cut in Scottish Westminster representation following devolution. We would argue that that cut in seats happened only after law-making powers had been transferred to Holyrood. In holding a referendum to extend primary law-making powers in the light of the Government of Wales Act 2006 and the Calman Commission, Wales will, in a way, be catching up with Scotland in this respect. Perhaps it is appropriate that, once this has happened, its Westminster representation be reduced and a better judgment can be made as to how much it should be reduced by. I look forward to hearing the noble and learned Lord’s response in due course.
Lord Howarth of Newport
My Lords, if the number of parliamentary constituencies in Wales is to be reduced, it must inevitably follow that the boundaries of constituencies for the Welsh Assembly and the boundaries of constituencies in Wales for this Parliament will no longer be aligned. I do not think that it would be right for us to seek to reduce the number of constituencies that return Members to the Welsh Assembly, but I think we should appreciate that, if we are going to legislate to cause these boundaries to cease to be coterminous and to diverge, problems will arise and damage will be done politically.
My noble friend reminded us that last week we considered two amendments on this issue. One proposed a phased reduction in the number of parliamentary constituencies in Wales and the other proposed that the reduction should be delayed until such time as the people of Wales had voted to have primary law-making powers transferred to the Welsh Assembly. Both would be helpful mitigating amendments, but let us recall, in the mean time, that the Welsh Assembly, unlike the Scottish Parliament, does not have primary law-making powers and that policy for Wales is made, on a very large scale, in the Westminster Parliament. There is a block grant which transfers resources from London to Cardiff. Home affairs, criminal justice, social security, pensions and, of course, defence, foreign policy and very major areas of policy are determined still for Wales by the Parliament of the United Kingdom.
It follows from that that it is a responsibility of Members of Parliament representing Welsh constituencies at Westminster to work in close relationship with their colleagues who are Assembly Members in Cardiff. They need to be able to talk to each other about the interests of the constituents that they jointly serve. The needs of Wales need to be represented by Welsh Members of Parliament at Westminster and as things are, they are well represented by Members of Parliament of all parties at Westminster. It is easier for them to do that job because the constituencies of Welsh MPs are the same as the constituencies of Welsh Assembly Members. When that ceases to be the case, it will be far more difficult for Welsh MPs and Welsh Assembly Members to work closely and effectively together in the interests of their shared constituents. There will overlapping of boundaries. There will be cases in which Welsh Members of Parliament will have to try to represent, at one and the same time, the interests of two Welsh Assembly constituencies which may not be in agreement about what it is that they would like their champion in the House of Commons to be arguing for. There will be a muddying and a blurring of responsibility. It will be more difficult for people to do their job.
Of course, the noble and learned Lord, like others in the Chamber, is very well aware of the experience in Scotland. I see that my noble friend Lord Foulkes is not here, but my noble friends Lord McAvoy and Lady Liddell are well able to testify that, whatever the merits may have been of the redrawing of constituency boundaries in Scotland, it cannot have been made easier for an appropriate collaboration to take place between Members of the Scottish Parliament and Members of the Westminster Parliament. This is one reason—there are other powerful reasons—why I believe that it is undesirable to reduce the number of constituencies in Wales, or, if the number of constituencies in Wales is to be reduced, we should do it at a gradual pace. The service that their elected representatives are able to give to their constituents will be impaired if we lose the existing alignment of boundaries.
Lord Wallace of Tankerness
My Lords, as has been indicated by the noble Lord, Lord Bach, one of the purposes of this clause is to ensure that the number of seats in the Welsh Assembly is not reduced as a result of the proposed reduction in the number of United Kingdom Parliamentary seats at Westminster. Indeed, a similar end was procured in relation to Scotland through primary legislation in 2004. I am not sure whether it was when the noble Baroness, Lady Liddell, was Secretary of State, but if it was not, she probably instigated it, and it was to secure the size of the Scottish Parliament, notwithstanding the significant reduction in the number of Scottish seats at Westminster. I am pleased to have heard the noble Lord confirm that he has no objection to that part of this clause.
The noble Lord did inquire, however, about the transitional provisions and took the opportunity to raise again the issues which were pretty thoroughly debated one day last week—I cannot remember which day it was; possibly Wednesday night. We had a thorough debate and I do not propose to go into all the arguments again. Suffice to say that it is the case that, even now, the Welsh Assembly has powers given to it under framework powers in primary legislation, or under legislative competence orders, to promote measures in the Welsh Assembly. As I indicated on that occasion, the underlying principle of the Bill is to ensure equality of constituencies throughout the United Kingdom and I have still not been given any answer as to why a seat in Cardiff should be smaller than a seat in Belfast, Edinburgh or Birmingham. I do not think that we can pursue that matter much further this evening.
The transitional provisions are intended to deal with interim boundary reviews which have already been begun by the Boundary Commission for Wales and have not been completed or have not yet been implemented at the time when Part 2 of the Bill comes into force. The commission will be able to decide whether to continue with any reviews which it has in hand but the consequence of continuing with any reviews would be that, in practice, they would apply only to the boundaries of Assembly constituencies.
The transitional provisions also provide that, where the commission has already delivered a report recommending alterations to constituencies before Part 2 of the Bill comes into force, but there has not yet been any order giving effect to the recommendations, an order must be laid in Parliament in accordance with the previous requirements. Such an order would therefore affect the Assembly constituencies and, where appropriate, Assembly electoral regions, but would not have any effect on parliamentary constituencies, which, of course, would be the subject of the boundary review, which is the substance of Part 2 of the Bill. I hope that that explanation will satisfy the noble Lord. I beg to move that Clause 13 stand part of the Bill.
The Deputy Chairman of Committees (The Countess of Mar)
Before I call Amendment 100A, I have to tell noble Lords that if this amendment is agreed to, I cannot call Amendment 101.
Amendment 100A
Lord Lipsey
Lord Lipsey
My Lords, it is traditional with all Bills for both Houses of Parliament to seem to ascribe still higher levels to the degree of parliamentary affirmation that must be given to orders under them. In this case, I have been trumped in advance by my noble friend Lady McDonagh, with her desire for the super-affirmative procedure. In this case, though, my amendment might turn out to be of more significance than immediately meets the eye.
I do not want to go over old ground too much, but this Bill was introduced very quickly. It passed through another place before many Members there had fully digested its implications, particularly the fact that it is the starting point for what I call “permanent revolution” in the electoral geography of our country—converting them all into carpetbaggers traipsing around the country looking for a new seat. That penny might have been slow to drop, but I am told by Members of another place—they have many great uses to this House—who have kept in close contact with people down the other end that it has. I think that if the Bill were introduced into the House of Commons today, it would have a much rougher ride than it did. Indeed, if we all had a few pounds for every time an MP—dare I say it, a Conservative MP—had clapped us on the back and said, “Keep up what you’re doing in the Lords”, we should be very much richer.
Who can say whether by 2013 the House of Commons in its wisdom—there should be no question of this House questioning orders under the Bill; that would be quite unconstitutional—will have moved to a very different position? Rather disgracefully, the House of Commons in 1969, on the instructions of the Government, voted down an order to introduce boundary changes proposed by the Boundary Commission, so this would not be unprecedented. It is perfectly conceivable, at any rate, that in 2013, when the Commons sees the damage that the Boundary Commission will inevitably have to wreak in redrawing the maps within the limit of 5 per cent and 600 constituencies, it might not fancy it. Although to vote down an order in those circumstances would be an act that required the most careful consideration, the Commons might want to do that.
When you think that a matter of that magnitude might again come up as a matter of serious public debate, you can see that you really cannot dispose of this other than under the affirmative procedure. It would look, rightly or wrongly, as though the Government were trying to sneak something through, and in the wake of that they would look very bad. It is crucial that the House at the other end is given a full opportunity to debate the orders before it in those circumstances.
As I say, all this might be a mistake. The Boundary Commission might miraculously square the circle, and no doubt that would be a wonderful thing. I am not holding my breath for that, though. More importantly, nor are 650 people not very far removed from this House holding their breath and expecting the circle to be squared before the 2015 general election. In that case, the House would be well advised to pass this amendment and ensure that the affirmative procedure is used for all the orders under the Bill.
Lord Falconer of Thoroton
My Lords, all three amendments in this group seek to place a higher threshold on passing any order contained in the Bill. My noble friend Lord Lipsey’s first amendment does that quite generally by amending Clause 14, on orders, to ensure that orders are exercisable by an affirmative statutory instrument.
Amendment 102A, also in the name of my noble friend Lord Lipsey, refers to the commencement order bringing into effect the alternative vote provisions in the event that more votes are cast in the referendum in favour of the answer yes than in favour of the answer no. The amendment specifies that any such order must be made under the affirmative procedure.
The affirmative procedure would require an order to be laid in draft for a period of 40 days, after which it would need to be agreed by both Houses. The Companion informs us that if a scrutiny committee of either House recommends between the end of the 30-day period and the end of the 40-day period that the order should not proceed, it might not proceed unless the House concerned rejects the recommendation by resolution in the same Session.
Amendment 101 is in the name of my noble friends Lady McDonagh and Lord Snape, who I look for anxiously.
Lord Falconer of Thoroton
The noble Lords are not moving their amendments, so I will not comment on them.
My noble friend Lord Lipsey’s amendments give the House the opportunity to think again. They give Parliament an additional check on the changes that the Minister can bring forward by order. In the context of the lack of pre-legislative scrutiny and consultation that the Bill received, such checks are unarguably a good thing.
There is an issue of whether recourse to the super-affirmative procedure might be appropriate in all cases of orders being moved under the terms of the Bill. This affirmative procedure has significance in the context of a later amendment, Amendment 102AB, in the name of the noble Lord, Lord Williamson. That amendment says that Clauses 10(2) and 11, which are in effect the operative clauses for changing the rules and for changing the number of Members of Parliament from 650 to 600,
“shall come into force on a date to be appointed under subsection (1B) following reports from the Boundary Commissions, made as if section 11 of this Act were in force, being laid before Parliament by the Secretary of State”.
As I understand the noble Lord’s amendment, the Boundary Commissions would do their work, Clause 11 would not formally be in force and it would then be for Parliament—that is, both Houses—to vote on whether Parliament wanted to bring Clause 11 into force. Parliament would then be deciding before implementation whether it was the appropriate thing to do.
If Parliament were taking such an important decision, then, in my respectful submission, that decision should be taken in accordance with the super-affirmative procedure proposed by my noble friend Lord Lipsey. There is real merit, although we will debate this more fully later, in what the noble Lord, Lord Williamson, is saying, because it would give the House the opportunity to consider not only the effect of what is being done but what an independent body—for example, a commission set up to look at the size of the House of Commons—had said about whether it was appropriate to reduce the size of the House from 650 to 600 and, if that was not appropriate, what the appropriate figure, if any, was to reduce the House to.
Those of us who have been enjoying the provisions of Committee have come to know well the views expressed by the cross-party committees in both Houses on the lack of proper constitutional process on the Bill. I know that noble Lords enjoy hearing me repeat old favourites, so I say again that the Political and Constitutional Reform Committee in the House of Commons and our Constitution Committee have said that there should have been a public consultative process before the Bill came to the House and pre-legislative scrutiny to enable it to be properly considered. Those points are added to by the fact that it has been very difficult for the Government to justify precisely how they get to the figure of 600. The Leader of the House saying that it is a nice round figure perhaps lacks the intellectual and constitutional justification that one looks for in this significant change in the House of Commons. The lack of intellectual justification and of proper process goes to an important constitutional point. The House genuinely feels uneasy about a majority in the House of Commons and a political majority in the House of Lords—that is, a political majority of the Liberal Democrats and the Tories over the other parties in the House—being able to push through a change in the size of the House of Commons, which reputable independent experts think has been chosen as a means of favouring the governing party.
It is worth quoting a statement that Mr Mark Field, the Conservative MP for Cities of London and Westminster, endorsed on Second Reading in the other place. Mr Straw quoted from the statement put on the Conservative website by Mr Field. Referring to Mr Field, Mr Straw said:
“He says that ‘the current proposals for AV and the reduction in number of parliamentary constituencies are being promoted by Party managers as an expedient way to prevent our principal political opponents from recapturing office’”.—[Official Report, Commons, 6/9/10; col. 47.]
Therefore, there is a legitimate argument that this is being done for party-political advantage. The importance, therefore, of my noble friend proposing the super-affirmative procedure is that if, as I hope, we adopt the amendment of the noble Lord, Lord Williamson, a process will be in place that will ensure that the Government can undertake proper arrangements to look at whether the figure is right, and that when we pass that amendment—I hope that we do so—and debate whether we bring Clause 11 into force, we will be informed by a report of a body that is beyond reproach. I hope that the noble and learned Lord will consider my noble friend’s amendment in that context.
Lord Howarth of Newport
My Lords, the amendment of my noble friend Lord Lipsey is self-evidently proper. The legislation provides for seismic constitutional and political change but has been all too little considered hitherto. There was not only the lack of public consultation and pre-legislative scrutiny to which my noble and learned friend Lord Falconer has referred but the reality of the way in which the Bill was transacted in the House of Commons is that the Committee stage was entirely perfunctory.
At Second Reading in another place some Members of the other place expressed considerable anxiety about the way in which things were being done. For example, Mr Simon Hart, a Conservative Member of Parliament, said:
“I wish to address the issue of honesty. Let us not try to fool people about this Bill. Let us not pretend that it is a response to some kind of great public desire or thirst”.
He did not necessarily want the Bill to fail because he accepts the foundations on which it was constructed, but he continued:
“It is the process, not the principle to which I object”.
He went on to say that,
“there is a fine line between political reform and political vandalism”.—[Official Report, Commons, 6/9/10; col. 120.]
If the House of Commons passed this legislation in the pretty shallow and perfunctory way in which it did—with a very brief Committee stage and very important sections of the Bill, including Clause 11, not being thoroughly examined in Committee—it follows that the other place must have the opportunity in due course to consider again whether it has done the right thing. If the orders made under the Bill were in effect to go through simply on the nod under the negative resolution procedure, that would not be good enough and the House of Commons would not be performing its proper constitutional role. Therefore, the simple affirmative procedure is probably the right procedure to be adopted for decisions on orders made under this legislation.
I have some reservations that the super-affirmative procedure would create too much scope for obstruction and too much scope for the intervention of party- political interest in the eventual decision-making.
However, it is imperative that, when the other place comes to make decisions on orders under the Bill, it should do so consciously and deliberately, which the affirmative resolution procedure would enable it to do. In that way, the other place might slightly make up for the pretty neglectful and haphazard way in which it considered the primary legislation.
Lord Wallace of Tankerness
My Lords, the noble Lord, Lord Lipsey, has moved an amendment that seeks to apply additional parliamentary procedures to the delegated powers in this Bill. The amendment would subject all delegated powers conferred by the Bill to the affirmative resolution procedure. As I understand it, the noble Baroness, Lady McDonagh, will not move her amendment proposing the super-affirmative resolution procedure, so I shall confine my remarks to the amendment of the noble Lord, Lord Lipsey.
There is no doubt that the Government recognise the value of parliamentary scrutiny. Indeed, that is why, in both Houses, we have sought to ensure that Members have had adequate time to debate the provisions of this Bill in detail. I cannot accept the allegation made by the noble Lord, Lord Howarth of Newport, that somehow or other the proceedings in the other place were perfunctory. I cannot remember offhand how many days were spent in Committee of the Whole House or on Report, but I know that every effort was made by the Government to ensure that those provisions in the Bill that were not subject to more detailed consideration in Committee were the ones with which the Report stage started. I think that I am right in saying that the only substantive clause that was not debated in the other place was that on which we have just had a brief clause stand part debate on the breaking of the link between the parliamentary constituencies in Wales and the constituencies of the National Assembly for Wales. That is not an unimportant matter, but I do not think that it is the most controversial part of the Bill.
None the less, we do not believe that it is necessary to apply additional parliamentary procedures, as suggested in the amendment, to those powers in the Bill that are not already subject to the affirmative resolution procedure. Moreover, it is worth noting that the Delegated Powers and Regulatory Reform Committee has not recommended that any such procedure should apply to these order-making powers. Like our predecessors, we attach considerable importance to what that committee says and, indeed, to what it does not say.
One exception to that was that the DPRR committee recommended that the power to make a transitional or saving provision in Clause 8(4) should be subject to the negative procedure. However, as we indicated when the noble Lord, Lord Lipsey, raised an amendment on that matter, the Government have made it clear that they intend to deal with this point by removing the power and instead making explicit provision to deal with the only scenario in which we would anticipate the power being necessary: namely, to ensure that, where a parliamentary by-election is called after the AV provisions are implemented—were they to be implemented—but before the first general election, that by-election would be held under first past the post.
There are a number of reasons why the amendment is not appropriate. Noble Lords may find it helpful if I briefly set out why I think that the increased scrutiny that the amendment seeks is unnecessary in relation to the delegated powers contained in the Bill that are not already subject to the affirmative resolution procedure.
First, it is not appropriate to make the order implementing or repealing the alternative vote provisions following the referendum subject to additional parliamentary debate. I think that we had some debate around this when we considered Clause 8, which was probably before Christmas. The relevant provisions in Clause 8 do not give Ministers wide-ranging powers about when the provisions can be brought into force or repealed; quite the opposite, they impose a number of clear, binding duties. The effect is that Ministers must bring certain provisions into force—or, indeed, repeal those provisions—depending on the outcome of the referendum. Furthermore, if there is a yes vote, the provisions will already have been debated in full during the passage of this Bill and the order would simply implement the will of the public as expressed in the referendum.
Fundamentally, subjecting the order-making powers in Clauses 8(1) and 8(2) to the affirmative procedure would change the nature of the referendum. As we also debated when we considered Clause 8, the referendum would become indicative rather than binding, since the order giving effect to the referendum result could subsequently be prevented from taking effect if the order was voted down. The Government believe that voting reform is a significant constitutional reform on which the people should have their say. Once they have had their say, this should not be thwarted by further procedural process.
Another key power on which the amendment seeks to impose an additional parliamentary procedure is that in paragraph 20 of Schedule 1, which provides for an order to be made to determine the maximum expenses recoverable by regional counting officers. That power replicates an existing power in the Representation of the People Act 1983 for parliamentary elections, which is similarly not subject to any parliamentary procedure because it is purely of an administrative nature.
By contrast, I think that it is sensible for the Bill to provide—as it already does in Clause 9—that the power to amend legislation in order to make purely consequential further changes to implement AV should be subject to the affirmative procedure.
On those grounds, I hope that your Lordships will agree that an additional parliamentary procedure for orders that are not already subject to the affirmative procedure in the Bill is neither necessary nor appropriate. No doubt we will return to the important points that the noble and learned Lord, Lord Falconer, made about the amendment in the name of the noble Lord, Lord Williamson, and I would propose to deal with these points then. In the mean time, I urge the noble Lord, Lord Lipsey, to withdraw his amendment.
Lord Lipsey
My Lords, I cannot claim to be absolutely convinced by every word that the Minister has just said. In particular, my antennae started twitching when he started talking about an indicative referendum on AV. Many of my friends believe that the AV referendum should have been indicative in the first place. I would not necessarily go that far, but I accept that if, on the day, the only two people who turn up at the polling station are the noble and learned Lord, Lord Wallace, and myself, both of us voting yes, there might be a small problem with the legitimacy of proceeding in those circumstances, to which a political solution will have to be found.
However, the Minister gave a reasonably comprehensible reply. I will study it and, if necessary, return to the matter at Report. In the mean time, I beg leave to withdraw my amendment.
Lord Bach
102: Clause 18, page 15, line 12, at end insert—
“( ) Part 1 of this Act shall not come into force until the Electoral Commission has certified that every local authority has taken all reasonable steps to ensure that the electoral register is as complete and accurate as possible.”
Lord Bach
My Lords, the Deputy Prime Minister has frequently tried to place the Bill in the proud lineage of great reforms that led to the introduction of universal suffrage in Britain. I quote from his “new politics” speech, delivered in May last year:
“I’m talking about the most significant programme of empowerment by a British government since the great reforms of the 19th Century. The biggest shake up of our democracy since 1832”.
In the same speech, recalling the “anger and disappointment” felt by thousands of people who were turned away from the polling stations on general election night, he declared:
“You must be confident that, come polling day, your voice will be heard … Under this government’s plans, you will”
However, we know, as the Committee has heard before, that as a result of gaps in our electoral register, many millions of people are going to be denied a voice—indeed, any acknowledgement of their existence—in the two central proposals contained in the Bill.
The Government are fond of saying that this Bill is underpinned by the principle of equality, but you cannot get equality on the electoral playing field on the basis of a grossly unfair or unequal register. This is particularly so in respect of the proposed boundary changes, which are to be drawn on the basis of the December 2010 register, from which it is agreed that upwards of 3.5 million eligible voters are missing.
Putting that problem on one side, I think that the problem of underregistration also has a significant bearing on the referendum on the alternative vote, which is the subject of Part 1 of the Bill. As we are well aware, the Government intend that the referendum will be held on 5 May next, which, in our view, would be an unsuitable date. Even if the referendum goes ahead on that day, the referendum will at least be contested on a marginally more up-to-date electoral roll than that to be used for the boundary changes, if for no other reason than that there is still time to put missing people on the register. If the referendum was not going to be held so soon, this would allow even more time.
Happily, the Bill provides for that eventuality. Following the Committee’s acceptance of the amendment moved by my noble friend Lord Rooker, the Bill will not actually require a referendum to take place until October of this year. We believe that that extended deadline provides an important opportunity for the registration problem to be properly addressed and sufficient leeway for the acceptance of Amendment 102.
Amendment 102 is concerned with the commencement of Part 1 of the Bill. If accepted, the amendment would require the Electoral Commission to certify,
“that every local authority has taken all reasonable steps to ensure that the electoral register is as complete and accurate as possible”,
before the AV referendum is held. The amendment would not require a certain percentage of eligible voters or resident adults to be registered. In previous debates, that was felt to be an unreasonable target. Indeed, there was some disagreement about what the right percentage target would be. The amendment would simply impose on the Electoral Commission a requirement to judge whether local authorities are doing all that they reasonably should to ensure that as many people as possible are registered to vote.
Lord Lawson of Blaby
I have noted what the noble Lord has said. Does he consider that there may be some people—perhaps a lot of people—who do not register simply because they are not interested in voting at all? That may be deplorable, but that may be the case. Therefore, many of those who are not on the register may not be so due to any failure on the part of the responsible authorities in getting them on the register.
Lord Bach
Of course the noble Lord is right. There are some people who decide, as a matter of choice, not to vote in any election of any kind or may, in the past, have had some reason for not putting their names on the register. However, my amendment seeks to ensure only that local authorities have taken all reasonable steps to ensure that the electoral register is as complete and accurate as possible.
Baroness McDonagh
Is my noble friend aware that there is a legal duty to register? It is the choice of the citizen whether to vote, but it is a legal responsibility and requirement to register.
Lord Bach
I am extremely grateful to my noble friend for reminding the Committee of that. During the course of this Committee, I asked the Government Front Bench whether it is a legal requirement to register—of course it is not a legal requirement to vote, although I must say that I was brought up to believe, and still believe, that it is a duty. As my noble friend has reminded me—I cannot remember which Minister replied—the noble Lord, Lord McNally, in an Oral Question some months ago maintained that it is not a legal requirement to register. That is a very important matter that needs to be determined. It may be that registration is a legal requirement that is observed more in the breach than in fact. That would still make it a requirement, albeit one that is somehow put on one side.
Baroness Golding
I think that what was said was that it was a legal requirement but that, as far as the Minister knew, nobody had ever been prosecuted.
Lord Tyler
Will the noble Lord revert to the question of timing? I expect that the noble Lord and I both recall a very powerful speech by one of his noble friends earlier in the Committee's proceedings, in which it was pointed out that, because of the general election last year, quite a lot of people registered even in the last few days when they were permitted to do so. Therefore, the register of December 2010 is probably more comprehensive than one that we might imagine in future. Delaying the referendum, perhaps until October, might mean that people would drop off the register rather than be fully and comprehensively covered by the one that will currently be the basis of the referendum. The noble Lord's point about timing could be taken either way.
Lord Tyler
My Lords, it was not I. The point was presented much more powerfully on his side of the House, and I simply endorsed it.
Lord Bach
In that case, congratulations are in order all round. The point is interesting, but we could improve the register if the referendum was delayed by a number of months, as seems to be the will expressed by the Committee.
As far as voter registration is concerned, noble Lords will recall an Electoral Commission study published this year—it has been quoted before, but I make no apology for repeating it—which states that,
“under-registration is concentrated among specific social groups, with registration rates being especially low among young people, private renters and those who have recently moved home ... The highest concentrations of under-registration are most likely to be found in metropolitan areas, smaller towns and cities with large student populations, and coastal areas with significant population turnover and high levels of social deprivation”.
I do not need to go through the figures again. We have heard before about the percentages of certain groups of our population who are unregistered. It is a sad story that should not be allowed to continue. The point has been made many times that we did not do enough about that issue until late on in our Government; we are asking this Government to do something about it now, particularly as we are moving towards a plebiscite in the form of a referendum, which is very rare in our country, and we want as many people as possible who are entitled to vote to be on the register. In the context of a potentially low turnout, which the House will perhaps want to debate again on Report, the differences likely to result from the unequal participation of social groups such as young people and others could have a major bearing on the outcome of the referendum.
It is very rare that we resort to a referendum in Britain. When we do, we should ensure that it takes place on an even basis. In the interest of fairness, I urge the Minister to consider our amendment with some care. I beg to move.
Lord Soley
My Lords, I support the amendment. It touches on two things. The first is the general principle that we need to improve registration. I have argued before that we have something of a postcode lottery in how good registration is from one local authority to another. That general point relates to this debate because the amendment would require that we deal with that before the referendum. I suspect that the Government are concerned only about whether they could do so in time. However, we must start the process.
As an adviser to the Electoral Commission, I have felt for a long time that we need to improve the registration process. I do not think that anybody on either side of the House disagrees with that. My experience is that until we get an agreement on a body that will raise the standard by saying what that standard should be across the country, some local authorities will carry out registration extremely well, others will do so very poorly and others will be in between. We know which local authorities perform well and we know which perform very badly. The in-between group is more difficult to identify. The Electoral Commission must have a duty placed on it to come up with a standard in electoral registration that local authorities must achieve.
Having just filled in my registration form again, I know that the form suggests very heavily that not to fill it in accurately is illegal and that one would risk prosecution. It implies that registration is a legal requirement in exactly the way that was described in the earlier intervention. I would like the Electoral Commission to have a duty to say that all local authorities have to make every effort to get people on to the register. I recognise that there is a time problem in relation to this amendment and the referendum, but I do not see why we should not make a start. We could do that now. It would be possible to say that, given the variable standards at the moment, the small number of local authorities that we know do not make the effort have got to do so. Perhaps we could then build on that for future occasions, when we would expect the Electoral Commission to say that all local authorities have reached a minimum standard.
The issue of underrepresentation in key areas is crucial. We all know that some areas have much greater underrepresentation than others, and we all know that some local authorities in those areas do not make anywhere near enough effort to get people registered. Those are the authorities that we should focus on. It would be very good news if the Government said to the Electoral Commission, “We expect you to send out to those local authorities a note warning them that if they do not raise the standards in their area and do more to make sure that people are on the electoral register—and do that at least as well as the best local authorities—you will continue to breathe heavily down their neck until they deliver the standards that you expect”.
Underrepresentation is a major problem. It has distorted so many issues that we have debated in the Bill that we should not allow it to continue. What troubles me is that the Minister and the Government have made no effort to find a way of addressing the problem. I ask that in due course they take up this amendment and extend it beyond the referendum to a general expectation of local authorities and the Electoral Commission that they apply that standard.
Lord Newton of Braintree
My Lords, perhaps I may briefly intervene. I am too often tempted in these debates, but this will, on the McNally score, put him 4-2 ahead of me.
The noble Lord's speech was very interesting. In effect, he distinguished between whether efforts should be made to improve the registration system and the way in which that might be tied to a particular part of the Bill. That is exactly my position. I have no problem with trying to improve the registration system. However, there could be big questions of cost, not least arising from any prosecutions that may take place, for example of large numbers of 16 to 18 year-olds. That prospect appeared to lurk in what the noble Lord, Lord Bach, said. Those issues can be considered on their own merits. What would not be sensible—this is where, for once, I am on the side of my Front Bench—would be to tie those to a provision of a particular Bill as a condition before something comes into effect.
Lord Howarth of Newport
My Lords, we all accept that it is desirable in any case to improve electoral registration, but I take issue with the noble Lord, Lord Newton, in what he said in relation to the Bill. Happily and conveniently, the Committee accepted the amendment in the name of my noble friend Lord Rooker, and there is therefore flexibility on the date of the referendum on electoral change, and there is no technical problem standing in the way of acceptance of the amendment of my noble friend.
Whatever view we take about the desirability of the forthcoming referendum—I favour a referendum on the question of electoral change—or whatever view we take on whether or not it is desirable to switch from first past the post to the alternative vote, although I prefer to keep first past the post, we can all agree that we want full participation by the people of this country in the referendum. We want its result not only to be legally binding but to have moral force. It will not have moral force if it is mired by a low turnout among those who are already registered. It will have less moral force if, unfortunately, it is conducted on a register which is demonstrably incomplete and inaccurate.
If there is to be an important moment in the national life in consideration of a major constitutional change, we should expect the Electoral Commission to take every reasonable step to ensure that there is a high level of registration. It is then for the campaigning groups to do all they can to ensure that there is a high turnout. This can be done and it should be done. The decision taken by the people at the referendum will have a greater validity. It will be more convincing if it takes place on the basis of fuller registration.
It is timely to have a drive for improved registration because we know that local authorities will have fewer resources in years to come, and that in the next few months they will perhaps still have the resources to mount the drive to improve electoral registration. We also know that given the housing benefit changes that are due to come in, more people may be obliged to move home. We will see more people coming off existing electoral registers and perhaps not getting on to new electoral registers. Before we see the full unfortunate consequences of those benefit changes, we should have a drive to improve electoral registration. It would be particularly timely and appropriate for that to take place in the next few months, certainly to ensure that we have the most complete and accurate electoral register possible when the referendum takes place, and as an investment in the electoral register for future elections.
For all those reasons, I support the amendment of my noble friend Lord Bach.
Lord Wallace of Tankerness
My Lords, this amendment, as has been made clear, concerns the commencement of the provisions relating to the referendum in the Bill. Part 1 provides among other things for the referendum on the alternative vote, for the entitlement to vote in the referendum and for conduct of the referendum. The proposal in the amendment is that the provisions should,
“not come into force until the Electoral Commission has certified that every local authority has taken all reasonable steps to ensure that the electoral register is as complete and accurate as possible”.
It will come as no surprise that the Government wish to resist the amendment. To be fair, it is a variation on a number of the amendments debated earlier in Committee, when debating Part 2, on whether the Boundary Commission’s review should commence until the Electoral Commission had certified that every local authority had taken all reasonable steps. We believe that the amendment would cause a serious risk of delaying the referendum.
Reference has been made to the successful amendment in the name of the noble Lord, Lord Rooker. Before that debate, I was detained by severe weather and was unable to get to the House, but I have noted what was said and I heard the noble Lord, Lord Rooker, say on other occasions that his intention was not to rule out 5 May, but to provide a lifeboat, whereas this amendment would, to all intents and purposes, rule out 5 May. In fact, the delay could be so substantial, perhaps even indefinite, if the relevant certification could not be provided, that the lifeboat might even be sunk before it was launched. I cannot understand why we should put ourselves in a position whereby perhaps one local authority electoral registration officer was somehow holding back and the Electoral Commission could not provide the required certification.
Lord Soley
The Minister has said that that will encourage improvement and I understand that. We all have to look for a way in which the Electoral Commission can set a basic standard below which people should not fall. I recognise that this point is wider than the amendment; it is not just a matter of improving it but trying to find a way of setting a basic standard.
Lord Wallace of Tankerness
I indicated that the commission's report on performance standards for electoral registration officers in Great Britain showed that just under 96 per cent of electoral registration officers met the completeness and accuracy of the electoral registration records standard this year. So they are already measuring and, against that, they found that just under 96 per cent had made it. I do not think there is any dispute in this Committee about the importance of electoral registration. We wish to pursue pilot studies to compare the electoral register against other public databases so that we can identify people who are not currently on the register. If the trials are successful, we will roll this out nationally to ensure that registration officers are aware of what has been shown up by the trials so that they can better target people to get them on the register. There is a commitment to improve the rate of electoral registration but we cannot accept that the referendum should be postponed, possibly indefinitely, awaiting the kind of certification which this amendment proposes. Therefore, I beg the noble Lord to withdraw the amendment.
Lord Bach
I am very grateful to all noble Lords who have spoken in this short debate and particularly to the Minister for what he has said. I am not so sure about the noble Lord, Lord Newton, who made me sound like a kind of modern Herod who wants to lock up 16 to 18 year-olds who do not register. Both sides recognise that this is a serious issue and it has to be dealt with. Of course, I shall withdraw the amendment tonight but we may well bring this up again in some form on Report. I beg leave to withdraw the amendment.
Lord Williamson of Horton
“(1A) Sections 10(2) and 11 shall come into force on a date to be appointed under subsection (1B) following reports from the Boundary Commissions, made as if section 11 of this Act were in force, being laid before Parliament by the Secretary of State.
(1B) The appointed date for the purposes of subsection (1A) shall be appointed in an order made by statutory instrument, subject to affirmative resolution of both Houses of Parliament.”
Lord Williamson of Horton
This amendment relates to the date of the coming into force of Clause 11, which will be Section 11 if and when the Bill is passed. Noble Lords will know only too well from our very long discussions so far that Clause 11 is the important clause which deals with the reviews by the Boundary Commissions, the number of parliamentary constituencies and the equalisation subject to a small margin of the size of constituencies. I tabled this amendment in the hope that it would contribute towards an agreement on the Bill, in particular so that the referendum on the alternative vote could be held on 5 May this year. I even had hope last week and, of course, after today's proceedings I have even more hope.
The thinking which underlies the amendment is that, although there is a clear and close deadline set by the Government for the referendum, the timing for the completion of Part 2 of the Bill on the Boundary Commissions’ reviews and changes to constituencies is not so tight. The Government’s timing on Part 2 is that it will be completed in good time—perhaps by October 2013—for use in the general election of 2015. From the almost 100 hours that I have spent listening to discussions during the passage of the Bill so far, I am well aware of the political imperative for the Government that the Bill should not be split and that there is a link between Parts 1 and 2. Because my amendment still permits and requires the work on the constituencies to keep going forward, I do not consider that the link is broken.
I shall briefly explain my amendment. If Parliament agrees that the Bill be passed, the work of the Boundary Commissions would go ahead because they are required by this amendment to make their reports as if Section 11 of the Act were in force. These reports would therefore be subject to the provisions of Section 11 because they have to carry out their work as if Section 11 were in force. When these reports are complete they will be laid before Parliament by the Secretary of State who will set by statutory instrument the appointed date for the coming into force of Section 11. As the date for the coming into force of this section would be set by statutory instrument it would require affirmative resolutions of both Houses.
What is the advantage of deferring the coming into force of Section 11 until it is needed, while the actual operation of the section continues in the mean time? In my view, there are at least two advantages. First, it will strengthen in practice the hands of citizens who wish to make representations about the Boundary Commission’s proposals because Section 11 will not actually yet be in force. Secondly, and more importantly, it will give time for further examination, in particular independent examination, of the practical consequences of the smaller House.
During the course of the debates in this House, there has been a recurring theme that 600 was a rather arbitrary figure—I choose my words carefully—and that the consequences may not have been fully worked through. So I think that it would provide time for an independent examination of the practical consequences of the proposals on constituencies that are in the Bill. This point has been made in the debates and it was made this afternoon, in a short trailer—I think that is the word—by the noble and learned Lord, Lord Falconer, when he rather approved this idea. It is always very pleasant to have a trailer that is favourable so perhaps the drama itself may actually be favourably received.
What I have suggested may be relatively small advantages but I think they are worth having, particularly because my amendment does not slow up the work required by Section 11 in the period before it enters into force. Will the Minister think carefully about the independent examination of the practical consequences of the decisions on the constituencies? In my view it could be done under my amendment—I think it would be right to do that. However, at some stage there is a strong feeling in the Committee that we should not just let it happen without any independent examination.
To summarise my amendment: the Bill passes, the work goes on including the work on Section 11 but, just as in the well known showbusiness phrase that the show is not over until the fat lady sings, in this case the show is not over until the Secretary of State lays a statutory instrument setting the date for it to come into force and affirmative resolutions of both Houses are agreed. That is what I might call the political equivalent of the fat lady singing.
Lord Falconer of Thoroton
My Lords, this is an important amendment. It is designed to try to promote the settlement of an impasse in the House. We support the principle of this amendment. I understand that the noble Lord, Lord Williamson of Horton, promotes it on two bases. First, it strengthens the hand of the citizen in making representations in relation to individual Boundary Commission issues. Secondly, and more importantly, it will give time for further examination, particularly independent examination, of the practical consequences of the reduction in the number of constituencies.
We thoroughly endorse that approach. It is implicit in the amendment of the noble Lord, Lord Williamson of Horton, that that examination should take place before the implementation of the reduction of the number of constituencies. It is also explicit in the approach of the noble Lord, Lord Williamson of Horton, that Parliament should have another opportunity to consider this before the implementation. At the heart of the case in favour of that is the widespread concern around the House that the production of this Bill and its passage through Parliament have not been attended by the normal processes that one would expect to precede a constitutional Bill of this enormity and importance.
Noble Lords know the quotes well; the Political and Constitutional Reform Committee in the other place stated:
“The Government has declared that the Parliamentary Systems and Constituencies Bill is intended as a ‘major step’ towards restoring people's faith in Parliament. The Government’s failure to consult on the provisions in this Bill risks undermining that laudable intention”.
Our own Constitution Committee stated:
“We conclude that the Government have not calculated the proposed reduction in the size of the House of Commons on the basis of any considered assessment of the role and functions of MPs”.
Lord Rennard
Will the noble and learned Lord tell the Committee whether it is his view and, perhaps, that of his party, that on the completion of a boundary review by the independent boundary commissioners, he thinks it wise to go back to Members in the other place to ask them to vote on whether they should accept the recommendations of the independent Boundary Commissions on the new boundaries or simply to have the old boundaries—which, by then, will be even more out of date—from the previous general election? Is that not merely postponing an argument which will be even more fierce in another place in a couple of years’ time, or whenever it is, as we are invited to debate whether to accept the boundary recommendations of the independent commissioners or to keep the old ones? Is that not merely creating more of a problem?
Lord Falconer of Thoroton
I am very disappointed that the noble Lord, Lord Rennard, has responded in an incredibly unconstructive way. The noble Lord, Lord Williamson of Horton, has made it absolutely clear that what he envisages is a vote on the principle in relation to the issue and that is what we should be focusing on.
Lord Newton of Braintree
It is clear that a significant effort is being made, and I would like to pay my own tribute to the leading figures on the Cross Benches, to resolve the impasse or to bring us back from the precipice, to use the phrase that was used by the noble and learned Lord, Lord Falconer. I share the hope that there will be a positive and constructive response to this.
The noble and learned Lord indicated that he recognised this was not necessarily perfect and that there was some more thought to be given to the issues, which I thought was a very helpful way for him to have put his remarks. So I say to my noble friend, who I suspect is in a constructive frame of mind—I share the hope that he is—that there is at least one person behind him who would strongly support such a constructive approach.
Lord Howarth of Newport
Those words spoken by the noble Lord, Lord Newton, himself a former Leader of the House of Commons, who always sought to calm troubled waters in that capacity and did so very successfully, should certainly be heeded. I add my appreciation for the noble Lord, Lord Williamson of Horton, and the Cross Benchers who, in tabling this amendment, as the noble Baroness, Lady D’Souza, did earlier in the day, have sought to steer our proceedings into calmer waters, recognising that in Part 2 there are some intensely controversial and very major constitutional issues that are not best resolved in a spirit of hot and angry political contest.
In any case, even if the mood of the Committee had been as placid and as genial in the previous 14 days as it has been today, it would still have taken time to consider properly and for us to be able to reach agreed conclusions that are in the interests of all our people and in the interest of sensible, constructive reform of the constitution, not animated by party political considerations but by real concern to reform and advance the constitution so that it better serves our people.
I very much welcome, therefore, what the noble Lord, Lord Williamson, has suggested. He offers a way in which we can resolve some of these very difficult and important issues in a calmer fashion and on a sensible timescale. I hope that the noble Lord the Leader of the House will respond in a similar spirit.
Lord Lipsey
My Lords, just to make the bait on the hook of the noble Lord, Lord Williamson, even more appetising, there is a point to be made. Earlier on the point was made that the problem with the reduction to 600 is that it increases the size of the Executive relative to the Back Bench. That point was taken on board by the noble and learned Lord, Lord Wallace. He said he did not think the legislation should be altered but he wanted to think about it. The amendment of the noble Lord, Lord Williamson, provides an excellent opportunity for a structured way in which we could look at that very important question and come up with a solution without amending the Bill. That should also commend it to the Government who have already endorsed the point that lies behind it.
Lord Strathclyde
My Lords, I thank the noble Lord, Lord Williamson, for having introduced this amendment, which he did with characteristic modesty as this was his idea. As he was speaking, I could tell that he had struck a chord in the House and it was no surprise that my noble friend Lord Newton rose to support him. I was going to say that within this amendment there is a germ of an idea, but that belittles it too much. I thought maybe a seed, but really it is a sapling of an idea that we would like to work on.
I must refute the suggestion made by the noble and learned Lord that this part of the Bill is fundamentally partisan. It is not designed to be and I know that he accepts that. I can understand why some Members of another place might think that it is, but it is not. The amendment provides that the new rules for drawing up constituency boundaries would not come into force upon Royal Assent, as the Bill provides, but that a boundary review would still be conducted on the basis of the new rules. The new boundary provisions would be commenced only once the Boundary Commissions had reported and following a debate in both Houses. The intention could be that Parliament could consider how the commissions had applied the new rules in drawing up constituencies and then consider whether the boundary reforms should be made. The existing legislation, the Parliamentary Constituencies Act 1986, would remain in force in the mean time, and Parliament would then effectively have the choice of commencing the new rules or retaining the 1986 Act rules.
While I understand that the amendment has been brought forward in a creative and helpful spirit, I am going to explain in a moment why the Government cannot accept it as it is, not as a knee-jerk reaction, but for two principal reasons. The first reason is that it would break the linkage in the Bill between the entry into force of the new boundaries following the review and the commencement of the provisions on the alternative vote in the event that there is a yes vote in the referendum. We have debated that linkage at length, and I understand that there are different views across the House. However, the Government have set out their stall on the matter, and we believe that the current position in the Bill is the right one.
The second reason is arguably even more important as we are concerned at the implications of the Boundary Commission conducting a review with the rules for doing so as if it were on probation. This is the point that my noble friend Lord Rennard made. It is one thing to ask this House and the other place to consider objectively the rules to which the commission should work when setting new boundaries; it is quite another for Members of Parliament, many of whom have a party-political interest in the outcome of such changes, to be shown the practical results of the application of a set of rules which would potentially be applied at a forthcoming election and then be asked to evaluate the merits of the proposals and to consider which set of rules they prefer.
The effect of the amendment would be that shortly after October 2013, when we expect the commissioners to report, Parliament and, in particular, the other place would be asked to vote on two alternative maps: one with 650 constituencies and one with 600. For me, that is a serious change in the nature of the scrutiny role that the House as a whole undertakes when the recommendations of the independent Boundary Commissions are put before it, and I have strong reservations about taking such a step. In addition, if the recommendations were rejected, constituencies would remain as they currently are until the next review, by which time, in England at least, they would be 20 years out of date. There is also the question of whether we should provide for considerable time and resource, not least that of the general public who contribute to these reviews, to be expended on a review that would have no guarantee of ever being implemented.
Having said that, I understand the issues that have been raised in debates about whether the size of the House of Commons set by this Bill at 600 MPs is the right one. I can see that this amendment, perhaps in part, is a response to that since it would ask Parliament to let the review proceed and put off the decision on whether to accept the new rules until after it has had a chance to see the resulting constituency map.
I have set out why the Government consider that approach goes too far. The Government have also been clear that the proposed size for the House of Commons set in the Bill is the right one. However, we would be open to bringing forward a provision on Report for a review under independent supervision after implementation of the new constituencies of the impact of 600 seats and requiring that that begins in a timescale determined in the Bill.
I hope that the noble Lord, Lord Williamson, finds that a helpful suggestion on going forward, and I am sure that he will reflect on it. Moreover, we would be extremely happy to discuss it with him further. However, for the reasons I have outlined, I would ask him to withdraw his amendment.
Lord Williamson of Horton
My Lords, I would like to comment briefly on the point which the Leader of the House made about the link. I said when I spoke first that I did not actually believe that it broke the link because all the work is going to go forward; and, of course, Parliament controls the result at the end because only the affirmative procedure brings it into effect. The noble Lord’s reply implies considerable pessimism about the coalition’s success in achieving an affirmative resolution in both Houses. I would say that the Government are highly likely to achieve an affirmative resolution in both Houses since the material that we are dealing with is material that they have put into their own Bill. I am therefore not convinced by that argument, but I am convinced of the strength of the Government’s position on it. That is my first point.
Secondly, on the more important question of the independent review, I note that the Government have gone some way towards accepting that there should be an independent review. That is something, but it is not exactly what would result from my amendment, which would make the independent review available before the coming into force of Section 11, so there is a significant difference. I therefore conclude that, in the words of the noble Lord, Lord Foulkes, the Government have not actually clinched anything on this amendment—I think that is the phrase. I am, however, interested in the extent of the commitment to an independent review, what it would be and when it might come into force.
I remain of the view that my amendment has value, and I reserve the right to come back to it on Report, when I hope we will be clearer about an independent review, which a large number of people in the House obviously want. Indeed, I thank all those who have supported my amendment, and this part of the amendment in particular. In the mean time, I beg leave to withdraw it.
Baroness McDonagh
“( ) Section 11 shall not come into force until legislation has been passed introducing household voter registration throughout the United Kingdom.”
Baroness McDonagh
This amendment is not a criticism of the Government but an opportunity to right a wrong created by my own party. I suppose that successive Governments who did so much good would also occasionally get things wrong, and this is one of them. I shall just explain the current situation for registration both now and historically. We have household registration, which means that a form goes to each household, be it a flat, a house or a bungalow, and one person in the household fills out the form on behalf of all others living there. That person is normally mum, who fills out the form for her children who are aged over 16, and her husband or partner. If we think of our own situations, whatever type of family relationships we have or the people we have shared our homes with in the past, there is always one person in the household who takes responsibility for things such as voter registration, paying bills and so on. The result is that we have a fairly accurate register that is one of the cheapest in the world to administer.
As part of the Political Parties and Elections Act 2009, the previous Government included a section that will change that system so that each individual will be responsible for registering themselves. We need to look no further than Northern Ireland to know what will happen if this change is implemented. In 2002, when the Electoral Fraud (Northern Ireland) Act was passed, under which individual registration was introduced and each person had to register themselves, 10 per cent of the public were lost overnight from the register, which went from 96 per cent to 85 per cent of the population.
When an investigation was held into the loss from the register, it was found that it consisted mainly of three groups of people. The first group consisted of young people, first-time voters and 18-25 year olds, the second group consisted of people in areas of high social deprivation, and the third group consisted of people with mental health disabilities. Mencap has produced a useful report in Northern Ireland should anyone wish to look at it.
Before implementing such provisions across the rest of the United Kingdom, we should consider the fact that there are sections of the population here that are not similar to that in Northern Ireland. For example, Northern Ireland does not have a very mobile population. There is no high provision of privately rented, insecure tenancies of a year or under; there is very little multiple occupancy; and it has a stable population—people do not move far from their parents and grandparents. The rest of the United Kingdom has a large population of ethnic minorities; a recently arrived, large population of inward migrants; a huge private rented sector of tenancies of a year and under; and many multi-occupancy properties. Many people also move for jobs. We know that something like 20 per cent of the population of Great Britain moves every year.
At the last general election, just over 45 million people were registered. If what happened in Northern Ireland were to happen in the rest of the UK, we would lose 4.5 million people from the register in addition to the 3.5 million that are already missing. This would amount to 8 million. Academics suggest that we would lose another 10 per cent because of the reasons that I have outlined, which would remove another 4 million people from the register. This would mean that almost 12 million people in this country would not have a stake in the democratic election of our Government.
In Northern Ireland in 2005, some 160,000 voters who did not complete registration forms were reinstated on the register. I therefore do not understand why the Government, when looking at their databases to increase registration in this country, could not do something similar to what has been done in Northern Ireland. As I said, there were 160,000 more voters at the 2005 elections.
We have an opportunity to change this situation now because we have not yet moved to individual registration, which was initially envisaged to happen post the 2015 election. I am now confused because I believe the Government might soon introduce these provisions. Perhaps the Leader of the House will come back to me on that if it is envisaged that the new system will be in place by the 2015 elections.
If we retain this as it currently is, it will allow us to have a very cheap form of registration, and it will avoid the dip in registration that was seen in Northern Ireland. Household registration is also a recognition of the big society; it represents the understanding, responsibility and role of adults in the household, and also the importance of the family as a unit.
My own party was misguided in introducing these provisions in the 2009 Act, and this is a fantastic opportunity for this Government to change these provisions.
Lord Campbell-Savours
Is the real danger of individual registration that when it comes to the second boundary review—in so far as there will be a reduction in the number of people who have registered under individual registration—there will be even more distorted constituencies?
Baroness McDonagh
That is absolutely right, and that is why I hope the Government will consider this. I also hope that the Government will consider bringing in an average number to each constituency, rather than a simple limit on 600. If this number of people falls off the register—and we all know the areas that will fall off the register—when you combine the current under-registration and the fall-off in the new register, in certain parts of the country some of these constituencies will have something like 150,000 eligible electors, not registered electors. That is not good for our society, in which we have so many people who do not have a stake in the democratic election of our Government. That creates weak communities and ends up creating bad government. I beg to move.
Lord Rennard
I am sure the noble Baroness will respond to the debate, but I just wanted to raise a couple of questions. It seems to me that since the boundary review will depend on electorates as of 1 December 2010, the only effective change brought about by this amendment would be to change the electoral registration system in Northern Ireland. Did she consult any of the parties in Northern Ireland, or indeed the Northern Ireland Assembly, in suggesting that the basis of electoral registration in Northern Ireland be changed in this amendment? Would it generally be accepted that the only effect of making that change in registration processes in Northern Ireland would be to delay the entire boundary review beyond the date of the next general election in 2015?
Lord Foulkes of Cumnock
At the risk of the noble Lord, Lord Rennard, giving his automatic counter another click so that he can update his blog tomorrow, I just want briefly to support the excellent amendment of my noble friend Lady McDonagh. As always, the noble Lord, Lord Rennard, finds the nit-picking objections and the noble Lord, Lord Tyler agrees. The noble Lord, Lord Tyler, of course, is the constitutional spokesman for the Liberal Democrats. I do not know what that makes the noble Lord, Lord McNally, or indeed Nick Clegg, but the Liberal Democrats obviously need lots and lots of constitutional spokespersons.
My noble friend Lady McDonagh is absolutely right; this is a mistake that the former Labour Government made. It is a pity that the noble Lord, Lord Wills, is not here today to hear this because he was the principal architect of it, but it worries me. My noble friend has great experience of running the Labour Party and understands these things intricately, and I give all credit to my noble friend Lord Campbell-Savours. He opposed this individual registration on every opportunity in this House—again and again—vigorously and consistently, and no one paid any attention to him.
This kind of legislation reminds me that a lot of the thinking in some of our legislation comes from middle-class, middle-aged people sitting in drawing rooms in the south-east of England. I do not know whether they have sectarian discussions around their dinner table, but they have certainly come up with some of the craziest legislation.
No account is taken of the fact that some elderly people are confused and find it difficult to deal with that kind of form. Many years ago, I was the chairman of the Scottish adult literacy agency. A large number of people cannot read and write and are unable to fill in this form; they need someone to fill it in. I can go through category after category of people who would need help as they would be reluctant and unable to fill in that form. It is very difficult for students away from home and for people overseas. My son is working out in Bolivia at the moment, but he is still going to come back and will be entitled to vote. We can think of all sorts of examples of how this will make it difficult to vote.
My noble friend Lady McDonagh is absolutely right; it is about time that people in both Houses started to think of ordinary people and of the lives that they live. They do not all sit round the dinner table every night discussing these kinds of things. They lead a hard, difficult life. They might have difficulties with poverty or literacy, or they might be confused, in many cases, and need that kind of help. I hope that more people will come and support this.
Lord Campbell-Savours
My Lords, I will intervene only briefly and do not really want to go down all the roads that I went down some years ago during the Labour Government’s two attempts—the second was successful, in my view quite mistakenly—to reintroduce individual registration. I have never been able to understand why the Liberal Democrats supported that. I understand that the Electoral Commission, in its various reports, kept on promoting the principle. However, the Liberal Democrats must have been aware of the dangers that would arise, even in some of their own seats such as the one that includes Bermondsey. Bermondsey is in a seat that could be gravely damaged through the introduction of individual registration, and I simply cannot understand why they seemingly allowed it all to happen.
My own view was very simple; there was a problem to be resolved, and that was fraud within the electoral system. That, I suspect, was the driving force behind those who argued for it. They chose an extremely expensive way of resolving the problem, whereby the whole of the United Kingdom would be subject to individual registration, against the parts of it in which there was a particular problem. Without going into detail, most Members of the Committee will understand precisely what I mean. There is a problem in certain parts of the United Kingdom, which had to be dealt with.
On two occasions under two separate Bills, I came up with a recommendation that would have sorted out that problem by giving local authorities the right to opt for a particular status whereby they would be given additional resources to sort out the problems in their areas, but the Labour Government unfortunately turned it down. Indeed, I lobbied almost every member of the Labour Cabinet about it to try to get them to understand the importance of avoiding individual registration, which will do immeasurable harm to our party in the longer term. Now we have it in place at a time when local authorities’ budgets in this area are not ring-fenced and when local authorities will not place the money that is necessary to ensure a high level of individual registration.
I welcome my noble friend’s amendment, and I hope only that the Government will accept it. They will not, of course, because they too have been convinced by this rubbish recommendation from the Electoral Commission, which should have known better.
Lord Falconer of Thoroton
I, too, stand convicted of being convinced by the rubbish recommendation of the Electoral Commission. I believe that the principle of moving to individual registration is right. Apart from anything else, the concept of modern citizenship is that the task of registering to vote should no longer be the preserve of the head of the household. However, if the principle of individual registration is correct, the practicality involved in the best way to get there is more complicated. As the experience of introducing individual registration in Northern Ireland has shown, the consequences can be catastrophic if you get the process wrong. The very swift introduction of individual registration in that part of the United Kingdom in 2002 led to a collapse in the number on the electoral register, with a fall of around 119,000.
Learning the lessons of that experience, the Labour Government legislated to introduce individual voter registration according to a clearly phased timetable based on the twin principles of ensuring the comprehensiveness and accuracy of the electoral register. That process gave the Electoral Commission a central role in determining whether the final move from household to individual registration was safe to proceed with, and the transition was based on a two-stage process—a voluntary phase and a compulsory phase. The legislation made it clear that the voluntary phase would not finish before 2014. In 2014, the Electoral Commission would then be required to assess, based on trends in voter registration, whether the collection of identifying information should be made obligatory. Assuming that a positive recommendation was agreed by Parliament, compulsory individual registration would follow in 2015.
The timetable received explicit backing from the Conservative and Liberal Democrat Front-Benchers in the other place. It is a matter of deep concern that the Government have now abandoned those pledges and that they intend to tear up our carefully formulated and agreed timetable and to accelerate the introduction of individual registration without the safeguards that we put in place.
As I have already noted, the rush to the production of individual registration in Northern Ireland produced a dramatic fall in registered numbers. The Electoral Commission subsequently reported that the new registration process disproportionately impacted on young people and students, people with learning disabilities, people with disabilities generally and those living in areas of high deprivation. We must not repeat that outcome when the system is introduced in Great Britain. That is especially important in view of the Electoral Commission’s report of March 2010, which identified who was least represented on the electoral register.
The phased implementation of full individual registration by autumn 2015 was intended to minimise as far as possible the risk of worsening under-registration. The Government already intend to cut seats and redraw boundaries on the basis of an electoral register from which 3.5 million eligible voters are missing. The premature rollout of individual registration would increase that number and, over time, would distort the planned boundary revisions even more. I do not support the policy of reversing the move to individual registration. However, I do support making sure that it is done properly.
Lord Strathclyde
My Lords, what an interesting debate this has been, with noble Lords changing their minds about what they had done under the previous Government.
Lord Strathclyde
The noble and learned Lord sounded as though he agreed to it in principle but thought that the implementation was wrong, whereas the noble Baroness and the noble Lords, Lord Foulkes and Lord Campbell-Savours, were never in favour of it. I must say that I very much allied myself with them in the past in that I was not convinced by the case for individual registration. However, I am now in government and we support it.
Noble Lords opposite know exactly what I am going to say; this is not the Bill on which to have this debate, so we are not going to accept the amendment, although there is an interesting debate to be had. I do not want to say “We are where we are”, although we sort of are where we are. Two or three years ago, I think that I would have allied myself with noble Lords on the Back Benches opposite, but the law was changed by the previous Government with cross-party support. Provision was made for an eventual move to individual registration in the rest of the United Kingdom under the Political Parties, Elections and Referendums Act. The Electoral Commission supports a move to individual registration, and Her Majesty’s Government are committed to speeding up the process of registration in Great Britain because, as is widely known, the current system of household registration is vulnerable to fraud. Although the number of cases of electoral fraud is low, the perception created by them undermines confidence in the electoral system as a whole.
The noble Baroness, Lady McDonagh, asked whether we are speeding up the process. The answer is yes. The Government are speeding up the introduction of individual voter registration by making it compulsory from 2014. Under the new plans, the voluntary phase of individual registration will be dropped and, instead, Great Britain will in 2014 move directly to compulsory individual registration. If this amendment were passed, it would delay the commencement of one of the central provisions of the Bill, and this would prevent a boundary review from being carried out in time for the next general election. I am not suggesting that that is the noble Baroness’s motive, but it would be the effect if it were to be agreed. As the Committee knows, we must proceed with a boundary review to ensure that when the next general election is held, boundaries in England are not 15 years out of date and do not continue to exacerbate the inequality that is present in the current system.
Returning household registration to Northern Ireland would, we feel in government, be a detrimental step that is likely to lead in time to the widespread perception of fraud that was so prevalent in Northern Ireland before 2002. We want to prevent that from returning, with the consequent undermining of confidence in the political process in Northern Ireland.
It has been an interesting and useful debate, and I urge noble Lords to run a campaign on it, but they should do it outwith the provisions of the Bill, and I hope that the noble Baroness will withdraw her amendment.
Baroness McDonagh
I thank the Committee for its contributions to the debate. I will quickly answer a few questions and come back to a couple of points. This amendment would make no difference whatever in Northern Ireland; the 2002 Act has been superseded by the Electoral Registration (Northern Ireland) Act and we are reinstating and registering people who had not even filled in forms. If the Government were to agree to continue with household registration, I would have no problem in removing Northern Ireland from the provisions of this amendment, but it would not make any difference, as I explained. They have reinstated some 160,000 voters already, and I remind the House that this has not resolved issues of fraud but has disenfranchised adult children, people in areas of social deprivation and people with mental health disabilities.
On the second question that was asked, yes, I do appreciate that it would have an impact on the second boundary and that the current boundaries would be the ones that were drawn up on the register at the end of last year. I am in no way seeking to delay the current Boundary Commission redrawing in my amendment. I particularly want to thank my noble friend Lord Foulkes. I have lived in households that have adults with literacy issues, and it is obvious that one person in the household takes responsibility for registration, bills, paperwork and so on. This is not an old-fashioned concept of the head of the household; it is about understanding families and understanding that everyone has a different responsibility and everyone helps everyone else.
I did see a sapling, a glint from the Leader of the House, on this issue. I thank him for his comments, and I beg leave to withdraw my amendment.
Lord Lipsey
“( ) The minimum period between the passing of this Act and the date of the referendum shall be three months.”
Lord Lipsey
My Lords, towards the end of a long speakers list in a debate in this House, someone stands up and says, “Everything there is to be said on this topic has been said, but not everyone has yet said it”. That usually raises a laugh, as it has today; good jokes, like wine, improve with age. Here I have invented a variant on the old saw for Committee stage: “Everything possible has been said on this amendment but it has not been said everywhere. The matter can be raised on the Bill”. That is what a harsh critic would say.
I want to say why my amendment is different from earlier amendments which laid down that the referendum should not take place on 5 May. In our earlier debates, the arguments that we concentrated on for not having it on 5 May were that it clashed with the Welsh Assembly elections, the Scottish Parliament elections and the local authority elections, that this would lead to a lot of political noise—particularly as Liberal Democrat and Labour candidates fought each other—and that that would not be an atmosphere in which there could be sensible consideration of this issue. Those arguments are all valid. My amendment is compatible, I admit, with 5 May as a referendum date. It is three months after Royal Assent. We have only to give the Bill Royal Assent on Thursday night. I am sure that the noble Lord, Lord Strathclyde, will be delighted if we achieve that timetable. Stranger things have happened in these Houses of Parliament, so it would be possible to have it on those days. All that the amendment lays down is that there must be three months between Royal Assent and the referendum to consider the matter. That is three months for information, persuasion and contemplation before decision.
Let us consider the present state of public opinion. I am taking a large poll done by YouGov in September last year. It asked first whether people had heard of AV and knew what it was. Roughly one-third said yes, they had heard of it and knew a bit about what it was. Of that one-third, I bet that half were lying—they did not know what it was, though they may have heard of it. One-third said that they had heard of it but they did not have a clue what it meant, and one-third had neither heard of it nor had a clue what it meant. That is the information backlog that we face as we run up to the referendum on this issue. There is a huge job of basic education to be done before we even get to the arguments for and against. Those arguments, which anyone studying the House’s proceedings on Part 1 of the Bill will have heard quite often, are difficult and balanced and need the most careful consideration. The electorate must think very hard about what they are doing.
The suggestion that this can be done in less than three months is not right. Yes, in that time a referendum can be held—the Electoral Commission can do its work, the ballot papers can be printed and so on—but we will not get a properly valid answer. I say that whether it is the answer that I want, a yes, or the one that many noble Lords want, a no. It will not be properly valid because the people will not have had long enough to contemplate the proposition put before them.
If the verdict seems invalid, that will have consequences for legitimacy. The side that loses will be able to stand up almost immediately and say, “It was fixed. It was cooked. This referendum is not the considered view of the British people. It’s a referendum held at a time to suit a political timetable”. Why on earth the Liberal Democrats want the referendum on 5 May continues to escape me, but they clearly do. That would cast doubt on the legitimacy of the verdict.
It is also true, of course, that had the House made faster progress on the Bill—I do not attribute blame on all this; I am delighted that we are now belatedly making progress—the Bill might by now have been law and the campaigning able to be started, so there would have been time to inform the public. However, the passage of time has meant that the time available for contemplating the actual issue in the referendum has been squeezed. My amendment says that it must be squeezed no further. There should be a three-month period between Royal Assent and the referendum. I hope that this is a common-sense proposition in a common-sense amendment and that therefore it will become a consensual amendment around the House. That just shows that I am a very hopeful sort of a chap. However, it should be understood that the argument is as I have set it out. If the Government reject it, it will be for reasons quite other, and arguably less reputable, than the House and the country have reason to deserve.
Lord Campbell-Savours
My Lords, I intervene briefly and again address my remarks to the Liberal Democrats. They know from previous debates that I support the referendum and am in favour of electoral reform and a version of AV. Therefore, what happens in the polling booth is of great interest to me, as indeed it should be to them. The question is, in what circumstances is it more likely that the AV referendum will be won? I put to them two distinctly different scenarios: one where a person walks into a polling station, having heard a campaign, and votes for it deliberately, in circumstances where it is highly likely that those who are opposed to it will not bother going to the polls. The advantage of having a referendum day on its own is that it would concentrate the minds of those who were in favour of change to go and vote, whereas those who were against change would, more likely than not, simply stay away. The danger of holding a referendum on the same day as an election is that everybody will go to the polling booth and they will all vote. Those who are opposed, who otherwise would not turn up at the polling booth, will then go and vote against electoral reform. The Liberal Democrats will regret what they have done during the course of this Bill. The referendum will be lost for the reason I have given and they will bear the responsibility for that as they will have set the electoral reform agenda back decades.
Lord Rooker
My Lords, the only way in which the noble Lord, Lord Lipsey, could correctly say that his amendment is a common-sense proposition is if it suggested a six-month period. The provisions of the amendment are not compatible with a 5 May date: we do not need to look at our diaries to ascertain that. However, I agreed entirely with the rest of his speech. There is not enough time to do the job properly. There never was, in my view. As the noble Lord, Lord Campbell-Savours, said, this is a fundamental matter. The Liberal Democrats also know my position. They know that I support electoral reform and I want PR, but this is a dishonest form of AV. In my view, it is a corrupt form of voting. The coalition has chosen the date to match the election date. That is fine; that is the coalition’s responsibility. I am quite happy with that. I do not have a view whether it should be held on that or another day, but the Lib Dems will be severely punished for holding the referendum on 5 May for lots of other reasons. I think that it will be lost. However, it is sad to have a referendum on the major constitutional issue of our voting system—we have never had such a referendum—and to lose it due to insufficient time being given to the process.
I do not want to labour the point but one has only to look at what happened in New Zealand and read the information that was published by the New Zealand electoral commission that went out to individuals. I cannot envisage anything remotely like that being provided here in terms of quality and quantity, and then being taken on board by the electorate. Our Electoral Commission might push out a lot of leaflets but pamphlets and booklets are needed rather than leaflets. This matter goes well beyond two sides of A4. The information must be assimilated and debated if it is to be successful. The assessment was that 10 weeks were needed, which is how we have the date that we have, which was debated in this House back in December. We knew that the Bill needed to get Royal Assent before the recess in February. The assessment was that it could be done in 10 weeks. Mechanically, it can be done. Intellectually and educationally, I do not think that it can be done. That is what I think is wrong with my noble friend’s amendment. It should have been six months, but that is the Government’s responsibility. They have rushed this Bill. There was no need to rush it within a year of the general election. It could still have been done on the election date. I appreciate that the devolved elections come only once every four years, and if that is the key test that more people go out to vote, so be it. However, I just do not think that it can be done in the way that hearts and minds can be won. We will get a poor result. I think it will fail, but it will be for the wrong reasons. I wish it were for the right reasons. I will not support it; I will campaign against it, but I would rather that it failed for the right reasons. I would rather that there were a genuine debate about the real issues; but I do not think that it can be done in the time available.
Lord McAvoy
My Lords, three of my noble friends who support proportional representation have spoken, so it is only fair that the first past the post majority viewpoint of the Labour Party is heard. From my noble friends—who are friends as well as noble friends—what we have here is excuse-gathering. It is always “if only” this had happened or that had happened, people would flock to the banner of PR. People are not interested. In the main, people are quite happy with first past the post because of all its benefits, which have been discussed many times before and I do not intend to go into them. There is always an excuse from the people who support PR that people do not understand it and there is also the deception that people have not been educated about it. Pro-PR people really do not take any account of how they sound. They sound arrogant saying, “If only people were educated, they would learn the error of their ways and flock to the banner of proportional representation”. It is not true.
I will not spend more time speaking about this, but I intend to clear up something, although sometimes it is like a bingo hall in here when you get the clickety-click of the little clicker of the noble Lord, Lord Rennard, as he counts the number of times people have contributed. That is fair game. However, I would like to point out something to him. In the context of this, he is either completely unaware of or not interested in studying the way in which the other place operates, or he is quite content to spread misconceptions. I understand from my noble friend that a misconception has spread among the Liberal Democrats. The blog of the noble Lord, Lord Rennard, says that Tommy McAvoy—it is quite insulting, actually— “muttered just four words” in the House of Commons in so many years. I do not really mutter. I have never been accused of muttering before. Clearly, either through lack of knowledge or deception—he can tell me which it is—he implies that I could have spoken there; but any politician worth his salt in here who is not intending to deceive people knows full well that Whips do not speak in the other place. I will give way in a moment, once I finish my point, and I will give the point made by the noble Lord, Lord Tyler, all the merit it deserves, whatever it is. A side issue is that my good friend Alistair Carmichael—he is a good friend even though he is a Liberal Democrat—is now silent. Does that mean that he is reduced to muttering?
Lord Tyler
I was Chief Whip for my party in the other place. It never stopped me speaking.
Lord McAvoy
That is absolutely right, but that is the difference between a party that aspires to power and a party that aspires to nothing but opposition.
Lord Foulkes of Cumnock
My Lords, I am pleased to follow my noble friend Lord McAvoy and to confirm what he said, namely that it is the custom for government Whips in the House of Commons not to speak. That has been the case with both Conservative and Labour Governments. I also add that what he did not say in the Chamber, he made up for outwith the Chamber, to keep his friends and colleagues on the straight and narrow very effectively.
I will raise a completely new matter. I make no apology for that, except to the Minister for not alerting him, because I did not know that there would be an opportunity today to raise this. I doubt if officials have cottoned on to this, unless they are really top-notch. The matter was raised yesterday in Scotland on Sunday. The Minister may have picked it up, because he lives in Scotland, as I do, and may have seen the paper. The matter was picked up today by the dailies and I alerted my Front Bench to it earlier. It is a new and genuine worry about having the election and the referendum on the same day. It was raised not by me but by the association of returning officers in Scotland, which said that it would be impossible to do the count for the Scottish Parliament elections on Thursday evening and make the announcement on Friday morning—as was the case in the past—because of the complications arising from having two elections together and the possibility of making mistakes in the middle of the night. We know the difficulties that arise when one has to work through the night.
It is a genuine worry of all parties in Scotland—certainly of the Labour Party and of the SNP Government, and I understand that at least some Conservatives and Liberal Democrats have expressed concern—that this will mean that on Friday morning there will be total confusion about the outcome of the election, because it will take some time to go through the count on Thursday night and Friday, and probably the result of the Scottish election will not be known until Saturday or Sunday. That will create tremendous problems—with the additional member system that we have, when constituencies are counted before additional members—for parties to know which of them will be in power, for there to be discussions between them about possible arrangements or for the largest party to decide to go ahead. It will create tremendous problems.
I will not blame the Minister if he has no immediate response to this, because the matter has just come up recently and I only became aware of it on Sunday. It would be helpful for all of us if he would look at that, take it away and ask officials—particularly officials in Scotland and in the Scotland Office, in discussion with the Scottish Executive—what the problems are and whether there is any way that they might be ameliorated.
Lord Rooker
I have not seen any of the reports that my noble friend quotes. However, it seems that this is a scam by the first past the posters to attack a PR fair voting system. It is inevitable with a PR system that one will not get an instant result. That has never been the case and no one has ever claimed that it was. So what if it takes 48 or 72 hours to count the votes because they have been cast in a fairer system than first past the post? Is my noble friend sure that he is not part of a conspiracy to undermine the successful operation of the PR fairer voting systems of the devolved Administrations of the UK?
Lord Foulkes of Cumnock
I would love to think that I am part of a conspiracy to undermine the so-called fair voting systems that some people want. It is a genuine slur on the returning officers—I know my noble friend Lord Rooker does not mean it—to suggest that they are part of any kind of scam. They are raising genuine concerns as non-political civil servants who work for local authorities. However, I draw the attention of my noble friend to Belgium, which has this PR system. It is seven months since the Belgian election and the country still does not have a Government. That is probably a better example. In Scotland, we can manage it rather more quickly than that.
Aside from that diversion, I ask the Minister—who has been very helpful, as has the noble and learned Lord, Lord Wallace—to look into this and, if there is a problem, to see whether there is any way to resolve it.
Lord Bach
My Lords, my noble friend’s amendment is entirely sensible. Indeed, following on from the previous amendment, I suspect that the Leader of the House may secretly or quietly agree with it. He may not be able to say so, because, as he reminded us, he is now in government. However, the amendment is sensible and I ask the noble Lord at least to take it back and consider it carefully. Also, the point of my noble friend Lord Foulkes about what appeared in the Scottish press yesterday is well worth the Government considering, if not responding to tonight.
This amendment is not contrary to the will of this Committee, due to the second Rooker amendment that is now well known in political history—the one that this Committee passed on 30 November stating that the voting system referendum must be held at some point before 31 October next year, which is clearly within the three months that this amendment mentions. The amendment of my noble friend Lord Rooker was subtle but important. It was hastily dismissed by the Government at the time of its passing, but perhaps they now regret that. It would have eased the pressure under which the Government find themselves.
By recommending a gap of three months between Royal Assent and the holding of the referendum, this amendment facilitates a period of proper preparation, including, most importantly, a proper information and education campaign on the difficult issues that the public are being asked to vote on, which are not that simple. We were reminded about New Zealand, which, when it changed its voting system in the early 1990s, provided a year-long information campaign.
I remind the Committee that Amendment 6 to this Bill, moved a long time ago, advised that a gap of between six and 18 months be inserted into the timetable for the referendum to allow for preparation and an information campaign. This amendment falls far short of that, but is moved with the same motivation. It seeks to facilitate a state of affairs that is an improvement on the 10 weeks or less that the Government’s timetabling will provide the Electoral Commission with to disseminate information about the poll. It is less than 10 weeks in which to inform the public about an issue which Electoral Commission research informs us there is perilously little information or knowledge about.
This is not the proper context in which to be asking the public to make such an important decision, whether you are for this form of AV or for first past the post. Officials and interested participants should be given adequate time to provide this information.
Lord Tyler
As I recall, the noble Lord and his colleagues supported the amendment of the noble Lord, Lord Rooker, which the Committee then passed, on the basis that we could still hold the referendum on 5 May, but it was left open for the referendum to be held at any time thereafter, before October. Is the noble Lord, Lord Bach, now saying that he is precluding the referendum being held on 5 May? That is a change of position, is it not?
Lord Bach
My Lords, we now know that the Bill certainly cannot be passed three months before the referendum due on 5 May. Therefore, we think that my noble friend, in moving this amendment, is being realistic. That does not take away from the effect of the amendment of my noble friend Lord Rooker, which we were glad to support and still do in principle. However, if the Government wanted a kind of middle way, they might be very sensible to pick up what my noble friend Lord Lipsey has suggested. We hope that the Government treat the amendment with some sympathy.
Lord Strathclyde
One of the most interesting facts that I have learnt today is just how many noble Lords opposite read the blog of my noble friend Lord Rennard. He should be immensely pleased and impressed that he has elicited such a reaction from noble Lords. I hope that at some stage he will commercialise it in an appropriate manner.
The noble Lord, Lord Foulkes, asked questions about the Scottish association of returning officers. I will certainly look into the questions that he has raised. Earlier in Committee we discussed this and the information we had at that time was that there would be no problem in Scotland. It will be interesting to see whether that has changed.
The view of the noble Lord, Lord Rooker, was that people are not prepared. Interestingly, he said a number of things in support of the amendment. The amendment provides a three-month delay, as though they would not be prepared now but they would be prepared if there were a three-month delay. I am not sure that is right. I think people have a perception about AV and I am not sure that there will be an enormous difference between the 10-week limit that we have at the moment and three months. The Government see no compelling reason to fix the length of the period for this referendum to a minimum of three months.
It is worth reminding noble Lords opposite that the previous Government worked to swift timetables in organising the 1998 devolution referendums. This referendum was announced as far back as June or July. The Bill was introduced in July in the House of Commons. Of course, as has been recognised, I do not know when the noble Lord, Lord Lipsey, tabled the amendment but it would mean that a target date of 5 February would have to be set, and that is later this week. If that target were not met, the provision would need to be given retrospective effect so that the referendum period could still begin three months from the date of the poll; for example, on a date before the Bill receives Royal Assent, and neither is desirable or necessary.
Practical arrangements by the Electoral Commission have been well under way for months, ensuring that the referendum can take place on 5 May under the current referendum period timeframe. The Electoral Commission expanded on that in its briefing on 7 December and said:
“We have been working with local Counting Officers and Returning Officers to prepare plans on the basis of a referendum on 5 May 2011, alongside the other polls planned for that day, and in our most recent assessment we said that sufficient progress has been made for us to be confident they will be well run. Similarly, those intending to campaign at the referendum will have been developing their plans for the date specified in the Bill as introduced”.
So a good deal of work has already been done by the registration officers and those who wish to run the campaigns have been working on their material. For those reasons we do not think that there is a need to extend the referendum period, as everything points to those involved being well prepared.
Lord Davies of Stamford
Can the noble Lord remind the House of the rules governing the ability of the Electoral Commission or any other agency to spend public money on planning implementation of a Bill which has not yet passed through Parliament?
Lord Strathclyde
I think the bodies that will need to spend money as a result of the Bill can do so once Second Reading has taken place in the first House. I will check that for the noble Lord but, under these circumstances, I do not think that there is any problem with the Electoral Commission spending money. For those reasons, we think the campaigns are well prepared. A lot of organisation has continued and I urge the noble Lord to withdraw his amendment.
Lord Lipsey
This has been a trip down memory lane to the early days of the debate on the Bill. I thought we might still be here for some hours to come but that is not so. I am afraid that the Minister has not convinced me. First, he said that practical arrangements could be made by 5 May and I said precisely the same thing myself. That was never in question. The question is whether a legitimate debate can take place in so short a period. The only argument which I think I heard him use against that was the argument from Scottish and Welsh devolution. He did not say what the exact timetable on those Bills was but that the referendums were carried out quickly. That is true, but there is no analogy between the two. The issues of Scottish and Welsh devolution had been matters of the most intense debate in Scotland and Wales. There had been a failed attempt with a referendum about 10 years before the critical referendum took place. There was not a moment when this was not in the public eye in Scotland and Wales, with one political party having a change to the Government’s arrangements as its central and single objective.
Lord Low of Dalston
Lord Low of Dalston
My Lords, I have been preparing for this moment since well before Christmas and I thought it would never come but my hour has come and I shall also speak to other amendments in the group. They may seem a bit of a comedown from the heady constitutional stuff we have been discussing—I was going to say for the last six weeks but the noble Lord, Lord Bach, referring to 30 November in the last debate suggests to me that it must have been at least eight weeks. In any case, I hope your Lordships would agree that the amendments are of considerable importance none the less and I would hope less apt to be contentious in your Lordships’ House.
The purpose of these amendments is to disability-proof this legislation and to ensure that the referendum it establishes is fully inclusive and accessible to disabled people. Noble Lords will remember how the last general election was marred by scenes of voters queuing for hours, a shortage of ballot papers and the electorate being denied access to polling stations. Sadly, this is routinely the experience of millions of disabled voters at every election for every tier of government. There is also a worrying lack of accountability as there is currently no way for people to appeal when they are wrongly denied their right to vote, other than by mounting an expensive, onerous and bureaucratic legal challenge.
Following the report in 1999 of the Disability Rights Task Force—which the last Labour Government set up at the beginning of their administration and on which I had the honour to serve—some attempt has been made to give higher priority to the accessibility of elections for disabled people. Some provision has been made in the Representation of the People Act and the Electoral Commission has produced some helpful guidance. However, local authorities do not always implement it and more still needs to be done at local level to ensure that elections are fully inclusive.
Over the past decade and more the Polls Apart coalition of charities, led by Scope, has produced evidence of the continuing inaccessibility of polling stations and has been working to raise awareness of the need to make elections more accessible. The 2010 Polls Apart survey revealed that in the 2010 general election, 67 per cent of polling stations had poor access for people with mobility difficulties; 47 per cent of postal voters had problems with the accessibility of the ballot papers and nearly half of all polling stations failed to display a large-print ballot paper—31 per cent worse than in the 2005 survey. Local authorities knew that 14 per cent of the polling stations they intended to use would not be accessible to disabled voters, but very few authorities outside Northern Ireland made any effort to tell voters about the accessibility of their polling stations or to offer an alternative option to them.
The right to vote is laid down in statute, the European Convention on Human Rights, and, most recently, in Article 29 of the UN Convention on the Rights of Persons with Disabilities, but, in practice, voting is still a right denied to many disabled people. We need to bolster the legislation to guarantee that right. Of course, the Bill can do that only for the referendum, but I would hope that if we can get it right on this occasion, that could set the standard for all future elections.
Amendment 103 would give the chief counting officer a duty, rather than a power, to give regional counting officers and counting officers directions requiring them to take specified steps in preparation for the referendum. Amendment 104 would require that such steps should include ensuring that adequate provision is made for disabled voters. Amendments 105 and 106 lay an analogous duty on regional counting officers, for a region; and on counting officers, for voting areas within that region. Amendment 107 further adds to the matters on which regional counting officers should give direction to counting officers,
“directions about the discharge of their functions in relation to voters with disabilities”,
and,
“directions requiring them to address any complaints from voters arising from the administration of the referendum”.
Amendment 110 creates a robust duty for the Electoral Commission to ensure that voters are able to access information about the referendum, and strengthens its general duty to give specific guidance on achieving equality of access to the voting process. Amendment 114 and Amendments 116 to 119 would require counting officers to ensure that the polling places used for the referendum were accessible to disabled voters, to notify voters of any polling stations that may not be accessible, and to provide details of alternative voting options.
The Electoral Commission has stated—and I fear that the Government may say—that it does not believe that the amendments are necessary, given the duties and responsibilities already laid on counting officers and the Electoral Commission by existing legislation. Existing legislation is not working, as the Polls Apart surveys have demonstrated, so we clearly need something more.
I have brought forward a reasonable set of amendments designed to address the situation. If they can do it in Northern Ireland, they can do it in the rest of the United Kingdom. I very much hope that the Government will see their way to accepting the amendments, thus helping to expedite the passage of the Bill through your Lordships' House. I beg to move.
Lord Howarth of Newport
I pay tribute to the part played by the noble Lord, Lord Low of Dalston, on the Disability Rights Task Force and to his resourceful, imaginative and courageous campaigning in the interests of disabled people over a great many years. We are proud to have him as a Member of this House and greatly welcome his contribution not only to debates on the status and position of disabled people in our society but much more widely.
The situation that the noble Lord has described to us is a disgrace. It may be that, as the Electoral Commission has suggested, legislation is more or less sufficient, or ought to be, to ensure that the proper requirements of disabled people within our electoral system are accommodated, but evidently it is not working in practice. Whether that is a matter of lack of financial resources or, more likely, that it is a matter of attitudes and culture I do not know. But in all events, we need to take energetic and determined steps to greatly improve the state of affairs to which the noble Lord has alerted us.
It may be that the amendments he has proposed are the kind of practical amendments needed to rectify some of the deficiencies in existing legislation and regulations. Again, I do not know for sure, but it seems to me that the measures that the noble Lord has proposed are modest, practical and reasonable, and it is hard to imagine what objection could be made to them. But whether or not legislative change is the key to improving the state of affairs that he has described, ensuring that disabled people are included as they should be within our electoral and broader political systems, it is evident that there needs to be leadership and drive to ensure that the attitudes and the performance of professional staff in this field, and I daresay also of the political parties, are greatly improved.
I therefore look forward to the response from the Minister. We should all be grateful to the noble Lord, Lord Low of Dalston, for calling our attention to a matter of serious concern and on a purely bipartisan basis. There is no party politics in this. I am sure it is universally agreed around the House that the arrangements that govern elections and certainly the holding of this particular referendum will in practice ensure that disabled people are in no way inhibited or debarred from participating.
Lord Bach
My Lords, the Committee should be grateful to the noble Lord, Lord Low of Dalston, for moving his amendment and speaking to the other amendments in this group, and for informing the House about the results of the Polls Apart survey. The noble Lord said that this was a reasonable set of amendments and we on the opposition Front Bench agree. We think they are all sensible as well as reasonable and that they should be supported around the House in due course.
Our advice to the Government is that they should go away with these amendments and think very carefully indeed about how they can implement them. If they do not, I suspect the noble Lord will come back on Report and will have very wide support around the House from all sides so that these practical suggestions can be put into effect. As I say, the opposition Front Bench support these amendments.
Lord Strathclyde
My Lords, from these Benches we, too, are immensely grateful for the way the noble Lord, Lord Low, moved his amendments and I am sorry he had to spend so long waiting and listening to the rest of us before he got to them. Perhaps I may say at the outset that the Government enormously welcome the principles behind these amendments. I shall give him a very full reply and I hope that he will consider it before Report.
Similar amendments were debated in the other place and the Government stated their commitment to ensuring that everybody has an equal opportunity to cast their votes in this referendum. It is right and important that every effort is made to ensure that all individuals, with or without disabilities, are able to exercise their democratic rights. The Bill already contains significant provisions to ensure that voting is fair for all. This includes those voters with disabilities. Existing anti-discrimination legislation also already imposes duties on public authorities which are directly targeted at involvement in public life. Specifically, the Disability Discrimination Act 2005 was amended to include a duty on public authorities to promote the equality of individuals with disabilities.
Ensuring that ballot papers and polling stations are accessible to all is already a duty that counting officers will need to take forward. For the purposes of the referendum, the chief counting officer will also be able to give directions to counting officers on how they discharge these functions.
Lord Low of Dalston
My Lords, I thank the noble Lords who have spoken in this short debate, and particularly I thank the noble Lord, Lord Howarth of Newport. He spelled out the dynamics that underlie the difficulties faced by disabled people in accessing elections even more eloquently than I did in moving the amendment. I am extraordinarily grateful to him. I am also most grateful to the noble Lord, Lord Bach, for his support on behalf of the Opposition.
I thank the Leader of the House, the noble Lord, Lord Strathclyde, for the fullness of his response, which of course I will take away and consider very carefully. I am also grateful to him for the offer of dialogue which I am sure we will want to take up. I would not maintain that these amendments are necessarily and in every respect the best way of seeking to implement the principles that we all share, so if between now and the Report stage we can find a better way of doing it, I am certainly more than open to that. Indeed, I particularly welcome the noble Lord’s reference at the end of his remarks to his desire to see if we can a find a way in which not only this Bill on parliamentary constituencies and voting systems but electoral legislation more generally can be disability-proofed so that it is more user-friendly for disabled people. Indeed, that would be a much better outcome than simply getting these amendments into this Bill. In that spirit, and with the prospect of discussions with a view to trying to make a greater impact than has already been made on general electoral legislation, I am happy to withdraw the amendment.
Lord Strathclyde