Grand Committee
(13 years, 9 months ago)
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The Deputy Chairman of Committees (Lord Faulkner of Worcester)
My Lords, before the Minister moves that the first statutory instrument be considered, could I remind noble Lords that, in the case of each statutory instrument, the Motion before the Committee will be that the Committee do consider the statutory instrument in question. I should perhaps make it clear that the Motions to approve the statutory instruments will be moved in the Chamber in the usual way. If there is a Division in the House, the Committee will adjourn for 10 minutes.
Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011
(13 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I start with the formalities. It is a requirement that I confirm to the Committee that these provisions are compatible with the European Convention on Human Rights. I am happy to so confirm.
I am pleased to introduce two sets of regulations, increasing by 3.1 per cent the lump sum amounts paid under the Pneumoconiosis etc (Workers’ Compensation) Act 1979 and the mesothelioma scheme set up by the Child Maintenance and Other Payments Act 2008. These new amounts will be paid to those who first satisfy all the conditions of entitlement on or after 1 April 2011.
The increases in the amounts paid under these two schemes are not part of the process that increases the benefit rates across the whole range of social security benefits. As a result, there is no statutory obligation to increase the rates paid under these schemes. However, previous Ministers have made a commitment to annually increase the rate of payment benefit alongside the general increases applying to all social security benefits. I am very pleased to make the same commitment.
At this point I must briefly refer back to the increases made to the payments under these two schemes in 2010. As a result of the economic downturn, the retail prices index in September 2009—the date at which the rates for the following year are fixed—was negative for the first time in 50 years. Notwithstanding that negative figure, the rates were increased in 2010 by 1.5 per cent. It was planned that this increase would then be set against the amount of the increase in 2011—in other words, the planned increase for this year would be reduced from 3.1 per cent to 1.6 per cent. I am pleased to report that this reduction in the increase for this year will not be made. It is proposed instead to increase the rates under these two schemes by the full 3.1 per cent. I am sure that noble Lords will endorse this approach. I would also add that, as the retail prices index at September 2010 was 4.6 per cent, not seeking to offset the 1.5 per cent interim payment now means that people will not lose out from the change to using the 3.1 per cent CPI figure as the measure of inflation to increase the rates of payment in 2011-12. The figures happen to be the same.
Noble Lords will be aware of the background to these Acts but it might help if I briefly recap. A person who is injured or contracts an industrial disease as a result of their work may sue the employer for damages. However, some diseases can take a long time to develop and may not be diagnosed until many years after the exposure to the agent that caused the illness. This is particularly so for asbestos-related diseases such as mesothelioma.
The understanding of diseases linked to exposure to asbestos continues to expand. It is now recognised that it may be up to 40 years between the original exposure and the linked disease, which is longer than first thought. Because of that long latency period, the employer responsible may no longer exist and it may be very difficult for that person to obtain compensation. The Pneumoconiosis etc. (Workers’ Compensation) Act 1979 was introduced to help such people by paying lump sum compensation to sufferers of certain dust-related diseases, or their dependants, if they are unable to pursue civil action. The 1979 Act covers a number of respiratory diseases, many of which are directly related to asbestos exposure. The scheme also covers a number of non-asbestos-related diseases such as coal-workers’ pneumoconiosis.
Noble Lords will need no reminding that all of the terrible diseases covered by this scheme are a heavy legacy of our industrial past. Although people who develop mesothelioma through their employment have had access to lump sum payments through the 1979 Act for some time, there was previously no provision for people who developed mesothelioma outside the workplace. This weakness in the provision of compensation was remedied by the introduction of the mesothelioma scheme in 2008. This scheme provides, for the first time, lump sum payments for mesothelioma sufferers who have been exposed to asbestos outside the workplace.
As a result of these regulations, from April 2011 the amount payable to a person under both the 1979 Act and the 2008 mesothelioma scheme will, for a person suffering from mesothelioma, increase to £59,896 for a 50 year-old and £36,422 for one aged 60 at the date of diagnosis. As these two figures show, the amount of money paid as a lump sum varies depending on the age at which they are diagnosed. The highest amounts are paid for those diagnosed at an early age and for those with higher levels of disability.
All payments made in respect of mesothelioma are paid at the full 100 per cent rate appropriate to the age at diagnosis. Your Lordships will not be surprised to learn that about three-quarters of payments made under the 1979 Act are in respect of mesothelioma—a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos. Those diagnosed with mesothelioma usually have a short life expectancy, generally of between 12 and 18 months. It is common that the sufferer is severely disabled soon after diagnosis.
I am saddened to report that the number of deaths from mesothelioma in Great Britain continues to rise. In 1968, 153 people died from it; by contrast, more than 2,000 people a year are currently dying from the disease. I have a further great regret in stating that we will not reach the peak in the number of deaths from mesothelioma until around 2015. The latest estimates are that between 2006 and 2020, 30,000 people in the UK will die of the disease. Put another way, one out of every 100 men born between 1940 and 1950 will die from mesothelioma. These are chilling figures.
The rise in the number of deaths is reflected in the continued rise in the number of payments made under these schemes. In the year 2008-09, a total of 2,351 payments were made under the 1979 Act; the following year, there were 2,625 payments; and for the full year from April 2010 to March 2011, we expect to make about 2,900 payments.
It may also help if I briefly give you some figures to illustrate the important role fulfilled by the two schemes in providing financial support. In the three years from April 2008 to December 2010, 7,088 payments were made under the 1979 Act, amounting to over £95 million. In the time since the 2008 scheme was introduced in October 2008, about 1,200 payments have been made at a cost of just under £20 million.
These regulations increase the levels of support through the government compensation schemes; and noble Lords will, I am sure, agree that while no amount of money will ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation, and it is essential that sufferers receive compensation before it is too late. I commend the uprating of the payment scales to noble Lords and ask approval to implement them. I beg to move.
Lord McKenzie of Luton
My Lords, I thank the noble Lord, Lord Freud, for introducing these orders in a very sympathetic way. As we have heard, one of the orders increases the amount of compensation paid to sufferers of mesothelioma under the scheme legislated for in 2008, and the other uprates payments made under the Pneumoconiosis etc (Workers’ Compensation) Act 1979. My noble friend Lord Jones has spoken passionately about the scheme in the past and was involved in it from the start. I am sure that we will hear from him further this afternoon.
It is noted that in both cases the uprating is by reference to CPI, at 3.1 per cent. Given the Minister’s reference to what uprating by RPI—minus 1.5 per cent—would have done this year, we are in the same place on that issue. Nevertheless, had it been uprated by RPI at the top end of the scale, there would be something like an additional £1,000 of compensation. However, within the context of our overall position on the change to CPI, we can and do support both of these orders.
The scheme brings some relief to sufferers of certain industrial-related diseases. They are all terrible diseases. As the noble Lord said, they are a dire legacy of our industrial past. We have heard that the number of deaths from mesothelioma continues to rise and is still a few years away from its peak, which we were told will be in 2015. I was going to ask the Minister whether he could give us an update on the number of payments made to date in the current year under the 1979 and 2008 Act arrangements, with an estimate for both for next year. I think that he may have given us that, so I will look at the record. If it does not fully cover that query, perhaps he will drop me a line, unless he has the figures available today.
The resources for the 2008 Act payments were to be found from compensation recovery from civil claims related to the 1979 and 2008 Act schemes. Will the Minister give us an update on the current level of successful claims and the compensation recoverable? What amounts are estimated to be due to be received in the current year and next year? He will recall that last year we were able to announce an alignment of the 2008 Act scheme payments with those of the 1979 Act for sufferers of mesothelioma and their dependants. This was about a year earlier than we had originally expected. It would appear that this parity which has been obtained is to continue, and we welcome that.
However, we also took steps last year to reduce the gap between awards to sufferers and awards to dependants. Seemingly no further progress has been made in this regard with the current year's uprating. We should recognise the terrible effect that these diseases can have on families who have to cope with the effects of pain and suffering on their loved ones. Differential payments between sufferers and dependants can put pressure on the former at the most difficult time in their lives. What are the current Government's intentions in this matter? Is it still their intention to narrow or to close the gap, and when is further progress likely to be made?
Lord Jones
My Lords, I support the regulations, and I thank the Minister for his considerate and detailed exposition. I certainly welcome all that he said. However, it was daunting to hear of the number of deaths; those details are very sobering. We are all glad that there is compensation—that persons can receive payments of between £12,040 and £77,506. Surely we are all glad that lump sums of between £7,524 and £40,335 can be paid to dependants, and that the Secretary of State of the day can put his signature to these regulations.
This is a dreadful disease. When a diagnosis is made and the facts imparted to the patient, death is usually never far away. It is very good that British Governments can come forward with such compensatory schemes. The regulations are the printed details as referred to in the Explanatory Memorandum. However, they cannot describe adequately the humanity of these desperate cases, or the ignorance which existed then, or the bewilderment, the suffering or the familial anxieties. Surely the departmental staff teams can take some credit, at the very least, for presenting these regulations.
I very much appreciate that the 2008 scheme is wholly funded from compensation recovery, whereas the 1979 Act and 2008 scheme payments are recovered from any subsequent civil damages paid in respect of the same disease. I also understand that consultation is not necessary, because there is no change in policy and no scope to change the outcome, and that these increases are at the rate of inflation as measured by the consumer prices index, in line with other social security benefit rates which are increased under the existing statutory provisions. With regard to regulating small businesses, can the Minister say why the legislation does not apply? Can he, for the record, spell that out?
Finally, there is a history to these regulations. I recollect, first, Mr Harold Walker, the Member of Parliament for Doncaster. He and I served in the Wilson and Callaghan Administrations in the 1970s. Mr Walker was the Minister of State in the Ministry of Employment, as I think it was then called. In that decade the department was very busy and pressured—the old smokestacks fell; the Upper Clyde shipyard was occupied; Rolls-Royce was bankrupted, and then nationalised by the then Mr John Davies MP; the OPEC nations quadrupled the price of oil; and then there came forth a great inflation and many industrial and labour disputes. That was the context whence came the concept that led to these regulations. However, the plight of the workforce in the coal and quarrying fields made it necessary to address these diseases. The menace of asbestos was also demanding compensation.
Harold Walker MP subsequently became Chairman of Ways and Means, then Lord Walker in your Lordships’ House. In his Commons role, he assessed how our departments—the departments for employment and for Wales, in which I served—might jointly address the challenge of those diseases and the demands of families and of sufferers. What should be done in that context of high inflation, industrial labour disputes and all manner of impediments to statecraft, if I may put it like that? There were Ministers looking at these specific problems who wanted very much to address the challenge of these lung diseases.
Mr Walker told me of a tragedy. He had previously been a craftsman and a shop-floor union leader. At a location at Hebden Bridge, he had met workers who had innocently had constant contact with the deadliest of asbestos, which is the blue. Those poor men had literally waded in the blue stuff and kicked it about. They had played snowballs with blue asbestos, throwing the deadly stuff at each other. At that time in our industrial society, nobody had warned them, nobody had briefed them and nobody had considered them. That was taking place across the nation. Now, with the benefit of hindsight, those poor men at Hebden Bridge had frequently gone all the way.
There was no health and safety at work Act. At the time of those great confrontations in British society, as measured in the House of Commons and in disputes throughout the nation, there was a need for consideration about how to make work safer. It was the then Minister, Mr Michael Foot, who brought forward health and safety at work measures. He also brought forward an employment Act. I believe that those measures helped to protect men and women at work. I think that those Administrations who brought them forth and enabled the workforce of Britain to benefit deserve great credit. I would like to put on record that Ministers sought to address these problems brought about by asbestos. I welcome the Minister’s exposition and the team that backs him in enhancing and widening these regulations.
Lord German
My Lords, first, I welcome the Minister’s statement this afternoon in respect of these regulations. I thank him for the manner in which he delivered them, the understanding with which he delivered them and, more importantly, the way in which he has supported what has been for many people an almost lifelong campaign to ensure that we bring some retribution for the damage caused to so many members of our society by diseases at work. For me, pneumoconiosis is almost a household name. It became the natural word that would roll off your tongue, especially recently. Visiting constituents and seeing men sitting in the corner of their homes with an oxygen bottle alongside them, the last vestige of their survival as individuals, was a frightening and disgraceful comment upon the nature of our industrial landscape of many years ago. For many of us, it is ingrained within us to see the way those people have been dealt with in such a cruel way by these diseases.
As the Minister pointed out, we have not yet seen the peak of these diseases because, while the industrial heritage may have moved away, the diseases are still firmly implanted within the bodies of those people working within those industries. I welcome the fact that these regulations are being dealt with today and that the Minister has chosen—there is no obligation on the Government to bring forward these regulations—to follow the current practice of uprating on a yearly basis.
There are a number of short questions that I would like to place before the Minister. The first concerns dependants, who have been referred to earlier. Will my noble friend tell us the effect on the gap as a result of the changes we are seeing today? With more and more of these sufferers dying as we reach the peak, the dependants will be becoming more and more dependent upon the payments that are made to them. I wonder whether we have some feel for the direction of travel on that gap at this time. Is there any prospect in future of dealing much more with the dependants? For very tragic reasons, that is where we are going to be ending up with this disease.
My second question concerns the issue of tracking down the employment and the vestiges of the employers. Does the Minister have any knowledge of the split between those who have worked for public sector bodies—in the area where I reside the National Coal Board was probably the biggest problem—and the private sector employers around the country in both the coal and asbestos areas of industry?
No matter how often we come forward with compensation schemes and how much work is done on this matter, and although the changes that have been brought about bring comfort to people, nothing can alter the fact that many in our society have died, and are dying, as a result of industrially related diseases. It is pleasing to note that we have moved on so far in understanding such diseases and what happens in the workplace, and in protecting people. Let us hope that we do not have to introduce any other scheme of this nature in the future.
Lord Boswell of Aynho
My Lords, the whole Committee appreciates the tone and sensitivity of the Minister’s remarks, as well as the good message he has conveyed. In areas such as these, it is incumbent on any Government to err on the side of generosity and to show a certain breadth of spirit—and not, as it were, to retreat into the small print or the least that they can get away with—even in difficult times. That is easy to say because, obviously, the scale of the overall outlay, and the fact that some of it is potentially recoverable, is rather small in comparison with other matters we have debated in this place. Nevertheless, it is the right approach when these diseases are as unpleasant as they are unspellable and, other than by a Welshman—I say to my noble friend Lord German—unpronounceable. They are extremely unpleasant and should not be treated lightly.
I have had some experience as a Front-Bench spokesperson across the wider aspects of the Department for Work and Pensions, where we held an annual debate on the uprating. The issues have not substantially changed—although they are, perhaps, in clearer perspective than they were—and one should be at least aware of the possibility of relating them to either a constituency or personal experience. A late kinsman of my wife was a pneumoconiosis sufferer, not through coalmining but through his work in the flour-milling industry. His lungs filled up and he died prematurely. I am sure that many people, particularly those from heavy industrial constituencies, could say that. The person I knew who was a mesothelioma sufferer was a former Member of this House. I shall say no more about that, but it is interesting that these diseases can affect people who are beyond the heavy industrial profile.
As to the substance of the regulations, I think we are doing the right thing for the reasons I have given. However, in addition to the points to which the Minister is going to respond, can he give some indication of the emerging actuarial build-up? He has already told us that the peak, sadly, has not been reached, but obviously that is subject to re-evaluation in the light of the claims experience. There will be difficult judgments to be made as to whether it is accelerating and people are presenting claims earlier or whether there is a wider aetiology of claims than was previously thought—that is, whether it is going to be more expensive or, more importantly, more extensive in terms of the number of people who are suffering. I get the impression from the figures and the nature of the debate that the picture is one of broad stability, but it would be useful to have that assurance.
It would also be useful if the Minister could say whether the way in which the system is now set up—particularly under the Health and Safety Executive—will ensure that we do not make similar commitments in relation to other long-term diseases as a result of carelessness.
My second point has already been made by other noble Lords but it is worth a moment. We all feel very strongly that there is a need for good record-keeping and a clearing house method of allocating the liabilities to insurers and employers, as appropriate, to ensure that they do not escape. I should like to make two points about that. First, that should be equally in the interests of good employers and good insurers as otherwise, because if there is an elaborate game of pass the parcel and one is the only one left standing because all the others have cleared off or ceased to exist, that is a very unfortunate position and may be disproportionate. As the noble Lord, Lord McKenzie, indicated, there are some fraught issues about the moment of onset and who is liable.
I draw the Committee’s attention to my concern that this is a somewhat wider issue—we have seen it in relation to motor insurance and the Motor Insurers’ Bureau. However, in relation to the whole field, including the pensions field, I think that many people across the private sector feel—as we have also debated—that the record-keeping has perhaps not been as good as it might have been. People may have little entitlements of which they have no continuing knowledge. There might be others who should have obligations that have somehow been lost with the passage of industrial change. That is understandable over a 40-year period. One has only to look at Andrew Marr’s recent series, “Britain from the Air”, to see how everything is different from what it was two generations ago. Nevertheless, the people, their needs and their need for support remain. It is a serious issue and I am sure that the Minister will want to attend to it.
For the moment, I think that we are content, with a measure of real consensus on this, to reflect on the situation that people and their families find themselves in, and on the need to be as generous as we reasonably and possibly can in dealing with and meeting their immediate needs and their family problems.
Lord Freud
My Lords, this has been a debate in which I think we are all in exactly the same place. It is a very difficult area, as we all know. I shall try to deal with the issues that have arisen as well as I can.
With the consent of the noble Lord, Lord McKenzie, I think that we might just park CPI/RPI in this context. We will have another chance to look at it today, another on Monday and another on Tuesday. I shall say a few words on it later, but it is one of those things that, in this context, might feel slightly uncomfortable. I am very relieved that the figures are such that we do not need that debate.
The noble Lord, Lord McKenzie, asked for some figures on payments and so forth. I can give him some up-to-date figures. The payments made in 2009-10 amounted to £42.3 million. In 2008-09—I am sorry that I am going down the years—the payments amounted to £37 million. In the current year, up to January, in combination, they amounted to £38.8 million.
Lord McKenzie of Luton
Can the Minister clarify whether that was under both the 1979 Act and the 2008 Act?
Lord Freud
Yes; it is a combination of both Acts.
The recoveries picture is also improving. In 2008-09, it was £5.3 million; in the following year, 2009-10, it was £16.1 million—which, as a percentage, is 38 per cent; and in the year to January 2011, it was £12.4 million. We are estimating, next year, to get recoveries of £20.7 million. So recoveries are currently running at roughly one-third of the payments.
Both the noble Lords, Lord McKenzie and Lord German, were interested in the relationship between the sufferers’ and the dependants’ rate. As they both mentioned, historically, that has been lower. The gap was closed by £5,000 and because of the age factor in many cases, the dependants’ rate can be the same as the sufferers’ rate, and that might not be a particularly valid argument in people’s eyes. At the moment, all I am empowered to say is that raising those levels by CPI is what we have decided we can do. Currently, we are not looking at any acceleration of that gap.
I should perhaps emphasise that the department is currently engaging very actively with customer groups to try to ensure that claims are made before death. That maximises the rate at which payments are made at the sufferers’ rate rather than the dependants’ rate.
The noble Lord, Lord Jones, brought a historical perspective to the subject. One of the horrific things about mesothelioma is that a single fibre can trigger the disease; he talked about snowballs made with blue asbestos. That is almost overkill, but as we see, and as the noble Lord, Lord Boswell, pointed out, people can also get this disease without knowing where they have got it from. It could be contracted from air conditioning even when they had not been in work. I suspect it is the most dangerous thing that we have.
There were other questions on the regulations for small businesses. In practice, the regulations ensure that anyone suffering from mesothelioma can get compensation, so there is not a problem with employment.
On the matter of public versus private bodies, raised by my noble friend Lord German, I do not have the figures. We are trying to improve the tracing, but I shall write to interested Peers with that figure when I get it.
The noble Lord, Lord Boswell, asked about the profile of suffering. We expect it to peak in 2015 but, thereafter, we are expecting a gradual decline in the numbers. From earlier estimates, we might see a slight pushing back of the rates but the shape of the curve has not changed dramatically.
The most difficult questions, slightly wider than these regulations, concern what we do with the tracing and with the bureau. The ABI’s ELTO database will begin to operate from this April, which is a positive step.
The court case, as the noble Lord, Lord McKenzie, pointed out, is a real issue. The Court of Appeal handed down its judgment in October and said that insurance policies should be interpreted on actual policy wordings. That has thrown an important level of uncertainty into what we do about tracing and the bureau because if we do not know what the actual wording was, it creates an extra problem. The judgment has been appealed to the Supreme Court and for obvious reasons it is quite difficult to do anything absolute until we know where we are.
This area is part of my portfolio of responsibility; I am taking very seriously the idea of an insurance bureau or something to find out how we can get compensation for people for whom the records are no longer there. I know there has been a relatively long gap since the public consultation that closed in May 2010. I assure the Committee that I have been in very active talks with various interested parties. I am pursuing some strategies, and hope to be able to achieve an appropriate outcome and bring the proposals forward to the House in due course. Sometimes it is better to get a result than to do things in a hurry. That is what is happening here. I can only give a personal assurance that I am taking this very seriously.
I think I have dealt with virtually all the questions. There is just the public-private split to deal with. The Government recognise that these two schemes perform a very important role and that it is vital that the value of these payments is maintained. I am pleased to confirm the Government’s commitment to review the level of these payments on an annual basis and, where necessary, to increase the payment. I am sure that noble Lords are in full agreement with these sentiments. Indeed, they have expressed that. I therefore commend the uprating of the payment scales and ask for approval to implement them.
Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011
(13 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Occupational Pension Schemes (Levy Ceiling) Order 2011
(13 years, 9 months ago)
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Lord Freud
That the Grand Committee do report to the House that it has considered the Occupational Pension Schemes (Levy Ceiling) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I shall speak also to the Pension Protection Fund (Pension Compensation Cap) Order 2011 and the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011; and I shall first give a relatively short account of what the Occupational Pension Schemes (Levy Ceiling) Order 2011 and the Pension Protection Fund (Pension Compensation Cap) Order 2011 do. Many noble Lords will be familiar with these orders, which have appeared annually and been the subject of amicable debate in Grand Committee on a number of occasions.
I turn first to the Occupational Pension Schemes (Levy Ceiling) Order 2011. Your Lordships will be aware that the compensation provided by the Pension Protection Fund is in part funded by the pension protection levy, which is paid by those schemes eligible for the protection provided by that fund. The pension protection levy is the responsibility of the board of the Pension Protection Fund. However, the Pensions Act 2004 provides a levy ceiling that restricts the amount that the board may raise through the pension protection levy in any year.
The levy ceiling for the financial year beginning 1 April 2010 is £871,183,684. This order provides for an increase in the ceiling for the financial year beginning 1 April 2011. The Pensions Act 2004 requires that the increase must be in line with increases in the general level of earnings in Great Britain, in this case using the rate published by the Office for National Statistics for the 12-month period to 31 July 2010. The order therefore increases the levy ceiling by 2.4 per cent, bringing it to £892,092,092 for the financial year beginning 1 April 2011. This does not mean that the pension protection levy will increase to that figure. The board of the Pension Protection Fund has already determined that, for the period covered, it estimates it will collect a pension protection levy of £600 million.
I turn to the Pension Protection Fund (Pension Compensation Cap) Order 2011. The pension compensation paid to people who are below their normal pension age at the date their scheme is assessed for entry to the Pension Protection Fund is subject to a cap. The compensation cap for the financial year beginning 1 April 2010 is £33,054.09. However, people below their normal pension age are paid pension compensation at the 90 per cent rate. This means that the compensation payments for people below normal pension age shall not exceed £29,748.68, which is the 90 per cent figure.
The Pension Protection Fund order provides for an increase in the compensation cap for the financial year beginning next April. Again, the Pensions Act 2004 requires that the increase must be in line with increases in the general level of earnings in Great Britain, in this case using the rate published by the Office for National Statistics for the financial year ending March 2010. The order therefore increases the compensation cap by 0.5 per cent to £33,219.36 for the next financial year, which means that, with the cap in operation, the compensation payment for people below normal pension age shall not exceed £29,897.42. The new cap will apply to people who first become entitled to pension compensation on or before the coming 1 April.
I should point out that when the more sharp-eyed or sharp-eared of your Lordships spot the difference between the 2.4 per cent and the 0.5 per cent, that simply reflects what happened to the relevant earnings index in those three months. It just so happened, but clearly, over the period, there will be catch-ups and so on.
Lord Boswell of Aynho
On that specific point, perhaps it might be convenient to ask my noble friend whether he can confirm what I thought I heard him say—that both those figures, although they differ from each other, are derived from calculations made by the Office for National Statistics?
Lord Freud
Yes, they are Office for National Statistics figures. I think that it is the average weekly earnings figure, which is the new figure that is updated from the annual earnings index—no, it is the general level of earnings.
I turn now to the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011. Many noble Lords will be familiar with FAS; indeed, the noble Lord, Lord McKenzie of Luton, has in the past brought a number of sets of regulations on the scheme to this House and presented them most eloquently, despite the material. I hope that noble Lords will listen to me with the same patience that they extended to the noble Lord, Lord McKenzie.
The scheme provides financial help to members of qualified pension schemes who face significant losses because their schemes wind up underfunded. It is mainly funded by the taxpayer. It has never been intended that FAS should replicate what might have been provided to members had their schemes wound up fully funded. Payments made by FAS have their value protected against price inflation through revaluation before payment begins and indexation after payment begins on rights accrued after 1997. This reflects the broader legislative position. The changes being made to the FAS revaluation and indexation rules by these draft regulations are a consequence of a wider decision. Noble Lords will know that the Government intend to use the consumer prices index—the CPI—as their general measure of inflation for a range of payments. These include state pensions, statutory minimum increases for private sector occupational pensions and increases to pension compensation payments made by the Pension Protection Fund.
Much has been said about the move to the CPI since we announced our intentions. We are moving to using the CPI as we believe it is a more appropriate index, although we acknowledge that no index is perfect. Without going into the kind of elaborate detail that I think we may be going into in the next few days, let me summarise why it is the most appropriate index.
The key difference between the RPI and the CPI is what is known as the “formula effect”. Put simply, the CPI is calculated in such a way that it takes account effectively of consumers switching to substitute goods when prices rise. That consumers behave in this way is a cornerstone of economic theory, and it has been borne out by empirical research. Let me be clear that we are not talking about switching from rump steak to lamb shoulder, for example, but from rump steak that has seen a sharp increase in price to rump steak that has seen a lower one. The substitution effect is nothing more than that.
This methodology is uncontroversial, and once we accept it as preferable to the RPI’s, which the Institute for Fiscal Studies and the Royal Statistical Society do, we have accounted for 60 per cent—two-thirds—of the historical gap between the CPI and the RPI and already the CPI becomes the more suitable index. We will have the opportunity to talk about this in great detail, although I will do so now if noble Lords want.
Lord McKenzie of Luton
My Lords, I thank the Minister for his eloquence in introducing these orders. If I am not mistaken, the first two will no longer be subject to the affirmative procedure as a result of provisions in the Pensions Bill, so perhaps we must make the most of this occasion. Together with the levy ceiling earning percentage increase order, they set the compensation cap, as we have heard, limiting the amount of compensation payable by the PPF and the levy ceiling which controls the maximum amount of levy the PPF can charge pension schemes. As we heard, the levy ceiling for the year commencing 1 April 2011 is £892 million, which is comfortably above the proposed levy for that year, which the Minister told us is £600 million. In respect of that levy, I do not know whether the Minister is able to give us a split between the risk-based and scheme-based components. Could he take the opportunity to say something about collection rates and how we are doing in terms of collecting what we think is due?
The increase in the general level of earnings for the period 1 August 2009 to 31 July 2010 is 2.4 per cent. On the current compensation cap, the maximum level of compensation which is payable before applying the 90 per cent requirement is increased by 0.5 per cent to £33,219. In this case, the uprating is still by earnings but by reference to a different period.
We have no problem with these two orders, although, not surprisingly, they prompt wider questions. First, it is right to reflect on the importance of the PPF and how, alongside the Pensions Regulator, it has played an important role in ensuring some stability in a turbulent period for defined benefit schemes. It has ensured that something like 55,000 individuals already receive, or can expect to receive, a decent income in retirement which, because of the insolvency of their employers, they might otherwise not have achieved. From my experience, it is a highly professional organisation. According to the website, some 212 schemes are in the PPF at the moment and, as at January 2011, almost £236 million has been paid in compensation, with the oldest recipient being 105 and the youngest four.
Things seem to be in a far from steady state, with 10 schemes just transferred into the PPF and 409 schemes and 200,000 members in the assessment stage. Perhaps I can ask the Minister about the time taken for assessment. Clearly in some cases the assessment has not been completed within two years, although in the Pensions Bill we are considering removing the requirement for the assessment period to last for a minimum of 12 months. I accept that there is no inherent inconsistency between those two positions—we support that—but what are the barriers to speeding up the assessment process?
Given the levy ceiling we are discussing, perhaps we could get an update on the PPF’s exposure to the universe of eligible schemes. It would appear that before taking account of the RPI/CPI changes, the number of schemes in deficit and the aggregate deficit has declined over the past year. It is presumed, therefore, that the headway created by the levy ceiling is something with which the Minister is wholly content. In the past, the ability of the PPF to fund the consequences of a big influx of schemes was often called into question. I think that we responded robustly then and I imagine that the Minister is in a position to do at least that this afternoon, given the change in the background to those schemes. Can he say how many compensation payments are currently limited by the cap? I tried to get my mind round this issue—I am not sure that I have completely—but, going forward, what will be the relationship between the level of the cap and what would have been provided for by underlying schemes and the PPF arrangement? If the cap gets uprated by earnings, but compensation amounts going forward are uprated generally by earnings, because that is the nature of defined benefit schemes, and partly by reference to the CPI, is there potentially a divergence of the cap from underlying compensation which thereby would weaken its purpose?
The order concerning the financial assistance scheme puts into effect, as we have heard, the RPI/CPI switch for revaluation, indexation and annual increases in the maximum cap. The Minister will be aware that we have concerns about the switch to CPI, certainly as currently constructed, as an appropriate measure of inflation. Doubtless we will have a substantive debate on that in Committee next week and on subsequent occasions.
I share the Minister’s view that no index is perfect and I was interested in his example about the formula effect and switching. When he referred to it in the Chamber he spoke about moving from one kind of biscuit to another. I am comforted to know that we can go from one jammy dodger to another and we will be okay. It was good to hear about the work going on in the ONS.
As we have heard, FAS, unlike PPF, is funded by government—net of assets taken in, of course—and a reduction in costs can make a contribution to deficit reduction. We could, in principle, support this for a period, but there is a dearth of information about how much is involved and no impact assessment has been provided. Perhaps the Minister can help on that
I am aware that the final settlement for FAS arose from a tortuous process involving, among other things, legal action in the UK and in Europe. I presume that there is nothing in the CPI/RPI switch which could be said to negate that settlement. Perhaps the Minister can confirm that. I welcome the proposals dealt with in the Explanatory Notes to consolidate the FAS regulations.
For both FAS and PPF, before entry into the appropriate scheme there would have been a judgment of what an individual could have obtained in the market and whether FAS and PPF would provide a better outcome. This judgment, presumably, would have been made on the basis that FAS and PPF payments would be uprated by RPI. If this is not the case, is there the prospect that individuals will be worse off in retrospect because of the decisions made? What analysis have the Government made of this situation? If it is not to hand, perhaps the Minister will write to me.
Let me make one further point on the PPF levy. It appears that there is to be a new levy framework introduced in 2013. What can the Minister tell the Committee about this and what are the ramifications, if any, for the levy ceiling? I look forward to his responses in due course.
Lord Stoneham of Droxford
I support these regulations and I have only limited points to make on them. The role of the Pension Protection Fund is very important—all credit to the previous Government for introducing it—and we want to make sure that it is maintained and sustained. Obviously in the current environment the investment levels on the stock market have helped some of these schemes, but can the Minister give the Committee his view on how the economic situation is impinging on companies, particularly those on the borders of insolvency, and the pressures that that is likely to place on the fund over the next couple of years as we move, we hope, towards economic recovery?
I accept that we will be discussing the CPI issue in the coming week but I make the point that none of these indices is perfect; they measure inflation for all consumers on different bases. The Minister will perhaps answer this point more fully next week, but is any further research being done on the CPI to ensure that, as we are now moving towards using it more fully across a number of measures which affect pensioners particularly, we can make the index more representative of pensioners’ expenditure and fairer in the long term? I support the regulations.
Lord Boswell of Aynho
My Lords, I, too, am very pleased to support these regulations. The purpose of my intervention on my noble friend, for whose reply I was grateful, was to confirm that there was a principled basis for the slightly different, heterogeneous nature of the figures set, in that they all have their root in the ONS and are related to the principles of the particular component parts of these three orders or, to put it the other way round, that Ministers were not setting the rules in order to suit themselves or with the intention of saving money. Of course I accept that assurance.
I should make it clear to the Minister, if it is not already self-evident, that partly because it came in the lacuna between my Front Bench service and today, I would not claim to be very ready to sit an exam on the pension protection scheme and am less familiar with it. In relation to the cap, which if it is raised is relieving as a measure, is there an impact on a significant number of individuals or on just a handful? I would be interested in that. The Minister knows that I am now, for the first time, a pension trustee.
There is another point that he might like to say a bit about. There is concern, certainly debate, across the sector about the balance between the scheme levy and the risk-based levy and how that is to be conceived. That forms two categories. First, will he report to us on where we are on it? Secondly, given that he is, in a sense, setting limits under which the levy should be set rather than the level of the levy itself, which he said is the responsibility of the scheme, is it the case that he will stand back and allow that balance to be struck by the professionals? Does he have a view and what is the state of play on that?
Lord Freud
My Lords, again I thank noble Lords for taking such an active part in the debate and, as ever, looking at these issues in real detail. I will aim to answer as many of the questions as I can before I resort to the expedient of the letter.
The noble Lord, Lord McKenzie, is completely right about this being our last opportunity—last unforced opportunity, if you like—to do this under the affirmative procedure, so we should—and we are—taking advantage of that opportunity. He asked about the spilt between risk-based and scheme-based. Eighty per cent of the quantum is designed to be risk-based. That varies slightly, but the figures have held pretty firm over the years so, without going through endless figures, if we look at the £600 million for 2011-12, which I referred to at the outset, the risk-based element is estimated to be £480 million and the scheme-based element is £120 million.
The noble Lord, Lord McKenzie, and my noble friend Lord Boswell asked about the impact of raising the cap and about how many people are affected by it. As at January 2011, 92 scheme members receiving compensation were affected by the cap. The noble Lord, Lord McKenzie, asked about time in assessment. The real driver in that is legal action, which can take many years. As he saw, that is connected to the change in the Pension Bill. The problem we have is that resolving some of these issues can take a lot of time. On top of that, assessment is often delayed by poor scheme data and uncertainty about what the scheme rules are. It is not people being dilatory; there are genuine problems.
My team has just informed me that, in opening, I made a mistake. I said that the newer cap applies to people entitled to compensation before 2011 and I should have said after 2011. I am sure noble Lords knew what I meant. I apologise to the Committee.
The noble Lord, Lord McKenzie, asked whether the cap was overrated if it was linked to earnings. That is not the case because, to take an example, the comparator is the position of a 50 year-old at the insolvency of the employer. We want someone whose employer goes bust this year to be capped at the same relative level as someone whose employer went bust, for example, in 2005.
The calculation of the levy formula is something for the board of the Pension Protection Fund. The proposals concern the distribution of the levy between schemes and not the overall quantum. Will individuals be worse off due to the switch from RPI to CPI? The current market conditions mean that the cost of providing RPI or CPI are equal, but we have to recognise that there may be a divergence in future and we shall review that over the summer in the light of emerging evidence.
The noble Lord, Lord Stoneham, asked about indices. Without going into a full-blown techie analysis, the question was about whether we can make CPI a better fit with pensioner inflation. The ONS is working to include owner-occupied housing costs in its statistical programme. It is a very active programme. Rather than using mortgage costs, according to its research, the likely outcome—I may be jumping the odd hurdle to reach that conclusion, but bear with me—would be to take the cost of an average house and see how that moves up and down. I cannot see that happening much before two years, but an active process is taking place and the ONS will work very closely with European statistical organisations because it would need to be a general move.
One of the most interesting things is that the CPI has been adopted as the main measure, certainly for comparative purposes in Europe. The Americans took the decision to go down this route because of the geometric approach, which basically gets elasticities closer to one, which reflects substitution, as opposed to any elasticities closer to nought, which do not show much substitution, and that is seen in the arithmetic mean used mainly in the RPI. In the CPI, interestingly, about 70 per cent is done geometrically. The other 30 per cent of goods, which are hard to substitute—oil, for instance—are left at that low-elasticity arithmetic mean. We will have more of that next week.
The noble Lord, Lord McKenzie, asked whether the implications of this switch to CPI mean that some FAS members would find that the total value of their protection from the UK Government is reduced to a level that the European Court of Justice indicated would be below the minimum lawful percentage for protection. Perhaps I slightly overinterpret the question, but we have looked at that closely and we believe that the Government continue to meet their obligations under Article 8 of the European insolvency directive.
Lord McKenzie of Luton
My question was slightly broader. It was not just on the EU judgments but on whether, given any of the negotiations—there were quite complex and tortuous discussions with various lobby groups—the switch is true to that position as well.
Lord Freud
I think that I hesitate to answer that on the Floor. Is that sensible? Yes, my team is nodding, not vigorously, but gently. We should write the noble Lord a letter on that matter.
The last real question was on the impact assessment on FAS costs. The overall change to CPI for FAS purposes is estimated to deliver around a 10 per cent reduction in assistance costs over the lifetime of the FAS, which has been projected at about 90 years. Clearly, the impact on individuals will depend on the characteristics of the member, such as age and period of service.
On the economic situation, I think I have some data on what has been happening to the overall level of surplus in the PPF. I was asked about that and I know that I have those figures. It would be easier for me to tell the Committee than to write, but if I do not have them in a microsecond I will write. I cannot put my hand on them but the question raised was: where is the overall level of surplus, by schemes, and how many of them are in deficit and how many in surplus? I wanted to look at the overall risk levels but I cannot put my hand straight on that. If we could deal with that issue of economic conditions and the place that the market got to, that would also address the question from the noble Lord, Lord Stoneham. I am irritated with myself for not having it absolutely to hand.
As your Lordships know, the Government recognise the difficulties experienced by those who lost their pensions through no fault of their own.
Lord McKenzie of Luton
I am grateful for the full reply that the Minister has given us on a range of questions but I wanted to make sure that we had covered this point or that he was going to respond to it. Looking at the PPF before a judgment is made, for example, as I understand it before somebody enters the PPF you look and see what the market would have produced. If the market would have produced something which was at or above the PPF levels, that is what would happen. Presumably when those judgments were made, they were made on the assumption that PPF levels would be uprated by RPI—obviously, that is not going to happen, at least for a period—with the expectation that indexation would be lower than RPI. Is there the prospect that that means—at least with the benefit of hindsight, and it may not matter that it is hindsight—that judgments were made that might have been made differently? In some instances, the market would have been able to do better than the PPF on a CPI basis.
Lord Freud
The answer is that currently CPI is the same as RPI in terms of current annuity pricing. Clearly that may or may not be the case in the future. At the current time, that does not make a difference. The Pension Protection Fund and the Financial Assistance Scheme will continue to provide help to people whose pension schemes fail them. These regulations will enable the continued delivery of that help in a manner that is fair and equitable to both scheme members and the taxpayer. I commend these draft regulations to the Committee.
Pension Protection Fund (Pension Compensation Cap) Order 2011
(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Pension Protection Fund (Pension Compensation Cap) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011
(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Financial Assistance Scheme (Revaluation and Indexation Amendments) Regulations 2011.
Relevant document: 15th Report from the Joint Committee on Statutory Instruments.
Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2011
(13 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
That the Grand Committee do report to the House that it has considered the Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order 2011.
Relevant document: 16th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the draft order sets out the proposed contracted-out rebate rates that will apply from April 2012. Before I go into the detail of what those rates will be and why we have decided on our particular approach, I think it would assist the House if I were to explain what the rebates are and how the process to review them works.
Under the contracting-out arrangements, individuals may contract out through membership of a contracted-out salary related or money purchase occupational pension scheme or through an appropriate personal pension. Employees forego all or part of their state second pension entitlement and in return pay reduced rate national insurance contributions and/or receive an age-related rebate paid to their scheme after the end of the tax year. Employers with contracted-out occupational schemes also pay reduced national insurance. These reductions and payments are known as the contracting-out rebate.
The Pensions Act 1993 requires the Secretary of State to review the level of the contracted-out rebates at least every five years after giving due consideration to a report by the Government Actuary recommending what the level of the rebate rates should be. The legislation requires that there should be a full tax year between parliamentary approval of the rebate order and its coming into force. The last full review of the level of rebates was in 2006 for rebates from April 2007.
The present review began last year. The Government Actuary issued a consultation paper in August 2010 on the actuarial assumptions that he proposed to adopt for his report to the Secretary of State. The Government Actuary gave the responses to that consultation careful consideration before drawing up his final report. His advice to the Secretary of State has been taken into account in the proposals before the Committee. The proposals in the Government Actuary’s report reflect his view of the factors affecting the cost of providing benefits of equivalent actuarial value to the state pension foregone as a result of contracting out. These include, for example, increasing longevity; rates of investment returns; increases in earnings and prices; the future change in the indexation of the state additional pension by the consumer prices index; and future changes to state pension age.
The Government Actuary’s report and the report by the Secretary of State were laid before the House, together with the order, on 3 February. In this order, rebate percentages have been provided for members of both salary-related and defined contribution schemes. This is in spite of the Government’s plans to abolish contracting out on a defined contribution basis on 6 April 2012. This is because the requirement to review defined contribution rebate rates under Sections 42B and 45A of the Pension Schemes Act 1993 will not be repealed until the enabling legislation for abolition—primarily Section 15(1) of the Pensions Act 2007—comes into force. So, rebate rates for members of defined contribution schemes have been provided but, because these figures are not expected to be used, they have been provided for only one tax year.
Therefore the focus of today’s speech will be on the reduction in national insurance contributions which should apply to those contracted out on a defined benefit or salary-related basis. Unlike his previous reports, the Government Actuary has, with this report, provided three alternative approaches for valuing the costs of the benefits foregone by contracted-out workers in salary-related schemes: a best estimate basis; a typical funding basis; and a gilts basis. In deciding which of these alternative approaches should be adopted, we have considered that the reduction in national insurance contributions is provided at considerable cost to the taxpayer and that, therefore, the Government have a duty to ensure that the rebate is set at a level which is fair to all. Taking this into account, we believe that adopting the Government Actuary’s best estimate basis is the correct approach.
Furthermore, we believe that the assumptions upon which the Government Actuary has based his best estimate basis are justifiable. That basis provides for two different rates which may be adopted by the Secretary of State: one which takes into account the existing arrangements for state pension age; and one which takes into account the proposed changes the Government will legislate for, which will see the state pension age rise to 66 from April 2020. We have decided that the proposed rise in state pension age to 66 needs to be reflected in the revised rebate rate. This will mean a reduction in the rate of national insurance contributions from April 2012 from 5.3 per cent to 4.8 per cent of relevant earnings. If, however, it becomes apparent that the proposed state pension age changes will not take place, we will consider conducting a further review of rebate rates before the end of a further five-year period, the time by which we must review rebate rates again.
We propose broadly to maintain the division of the reduction in the level of employee and employer contributions. This will mean that the level in the reduction of employee contributions will be reduced from 1.6 percentage points to 1.4 percentage points, and the reduction in employer contributions will be reduced from 3.6 percentage points to 3.4 percentage points. For personal pensions and money purchase occupational schemes, we have again accepted the Government Actuary’s proposed rates of reduction in national insurance contributions and age-related payments which should apply but for the plans to abolish contracting out for defined contribution schemes in April 2012. This will mean that the flat rate element for contracted-out money purchase schemes will decrease to 2.4 per cent of relevant earnings for members of contracted-out money purchase schemes. This will be split between employees at 1.4 per cent and employers at 1 per cent. We have also decided to maintain the level of the age-related rebate cap. This will stay at 7.4 per cent.
As I mentioned earlier, these rates have been provided simply to meet an ongoing statutory requirement that will not lapse until contracting out for defined contribution schemes is abolished. I am satisfied that the order is compatible with the European Convention on Human Rights. I commend it to the Committee. I beg to move.
Lord McKenzie of Luton
My Lords, I again thank the Minister for his full explanation of this order, which sets out the revised national insurance rebates for contracted-out pension schemes. As we have heard, the figures are provided for contracted-out money purchase schemes and appropriate personal pensions, although the planned abolition of contracting out on a defined contribution basis from 6 April 2012 means that these will never come into effect.
Again, as we have heard, these changes are based on a report by the Government Actuary which, in contrast to previous reports, sets out three alternative valuation approaches. The Government, of course, have adopted the basis which provides the lowest level of rebate—4.8 per cent—and taken account of the changes in state pension age provided for in the Pensions Bill. I noted that the Minister hinted that should those changes not proceed, there would be a review of the 4.8 per cent figure. The rate is below the 5.3 per cent rate adopted for the five-year period to 2012.
The Explanatory Notes make it clear that the annual savings to the Exchequer from reducing the rebate is about £600 million. I am trying to understand what the other side of that saving is. Is it that the cost is greater on employers and employees; and/or is it that the cost of providing the relevant benefits is reduced? What is the other side of the saving that the Government make?
The note also states that a full impact assessment has not been published because it will have no new impact on the private sector. How does this differ from public sector employees and employers, where it is confirmed that there will be a small increase in national insurance contributions by each? I do not fully understand how it can have an impact on the public sector but not on the private sector.
More fundamentally, can the Minister expand on the rationale for adopting the best estimate approach? Paragraph 6.4 of the actuary’s report states that this basis of valuation means that the rebate,
“is expected to be sufficient, half the time, to cover the cost of providing benefits equivalent to the state second pension forgone”.
What about the other half? On what basis were the other valuation approaches rejected? To the extent that the best estimate falls short, where are the costs and risks being borne? It will be interesting to have data on what the difference will be for someone on median earnings and at or above the UAP.
The Government Actuary’s report is a complicated document and I am not sure that I have absorbed all of it. I hope the Minister and his team will be able to help us out on those particular inquiries.
Lord Stoneham of Droxford
I have very little to say on this. This is a shadow document in many respects because it is provisional on what we are doing on the current legislation. I think we are broadly supportive of it.
Lord Freud
My Lords, I thank, in particular, the noble Lord, Lord McKenzie, for his interest in this and the noble Lord, Lord Stoneham, for making that point. To summarise, this sets out the level of contracted-out rebate rates that will apply to employers and employees within defined benefit contracted-out occupational pension schemes from April 2012. As I said earlier, while we have provided rates for defined contribution schemes, that is purely to meet the statutory requirement. As I said before, we are looking at a reduction for contracted-out defined benefit schemes from 5.3 per cent to 4.8 per cent.
As I understand it, the central question that the noble Lord, Lord McKenzie, put was about why we have picked that one rather than the funding basis or the gilts basis. I shall go a little into the concepts behind the three different approaches. Each approach is designed to provide the employer with a different level of guarantee about it being sufficient to cover the cost of the additional state pension foregone. Taking into account the considerable cost to the taxpayer of providing the reduction in national insurance contributions, the Secretary of State decided that adopting the best estimate approach was the most reasonable. When you think about it, the point about it working half the time is really saying that we have reached the point of indifference between whether you provide a pension scheme or do not do so and rely on the state. There is a rationale there. The other approaches in practice provide a much more powerful bias towards contracting out.
The noble Lord’s supplementary question was about defined benefit schemes. The risk is now essentially being run by the schemes. Different schemes will, of course, have different contributions rates for employers and employees, so there is no simple answer. The core answer is that moving to the point where, on balance, there is a point of indifference between whether you go in or out means that it is a neutral decision.
On the question about public versus private, for public sector schemes there is no extra cost to the employer as the Government are the employer so there is a degree of funds being recycled. Both public and private sector employees will see a slight reduction in take-home pay as a result.
Lord McKenzie of Luton
Perhaps I can clarify that. The note to the order, which I cannot now put my hands on, refers just to the public sector in that regard. It puzzled me because I understand that these rebates operate between the LEL and the upper accrual point, which is fixed in cash terms, in order to move towards a flat-rating of the state second pension, so I would have thought that there would potentially be a loss to all contracted-out employees. Therefore, I do not understand the distinction that is made in the Explanatory Memorandum between public and private sector.
Lord Freud
I think the noble Lord is right in saying that the loss is shared by the public and private sectors. Clearly, there is something slightly confusing in that note that has led him in a different direction. There should be an equalised effect.
Lord McKenzie of Luton
I am looking at the Explanatory Memorandum to the Social Security (Reduced Rates of Class 1 Contributions, Rebates and Minimum Contributions) Order that we are discussing. The impact paragraph states:
“There is no new impact of the changes to the contracted-out rebate rate. However, the reduction in the rebate rate will lead to a small increase in the National Insurance contributions of public sector employers and employees. The value of the increase will depend on individual employee earnings”.
Lord McKenzie of Luton
That is paragraph 10.1. Paragraph 10.2 states:
“A full impact assessment has not been published for this instrument as it has no new impact on the private sector and civil society organisations”.
Lord Freud
The impact is common across both the public and private sectors. The noble Lord asks about the impact assessment. I imagine that that is a reference to where the obligation to have an impact assessment is, rather than to the differential impact. By definition, we are saying that it does not have a new impact on the private sector and civil society organisations. By reference, that would also apply to the public sector.
Lord McKenzie of Luton
I am happy for the noble Lord to write to me on that. It is confusing. It specifically identifies public sector employees and employers as taking a hit. Paragraph 10.2 suggests no new impact on the private sector. That did not make sense to me.
Lord Freud
It is easy to see that confusion. I shall write to the noble Lord, but I am comfortable in stating that it is a reference to where the obligation to have an impact assessment is, not to who is getting the impact. That is the reason for the difference. However, I shall write to the noble Lord to lay that out very clearly. I am very impressed that anyone has got to note 10.2. I think I have dealt with all the outstanding issues.
Lord McKenzie of Luton
I am sorry to press the noble Lord but this may be part of the discussion we have just had. Is the £600 million saving by government just replicated as an extra £600 million of costs on employers and employees?
Lord Freud
Yes, I can confirm that, obviously. There is an argument there: it is a rather complicated sum, not just the sum of what has gone in and out in terms of all of the factors. To the extent that there is an extra cost, it is partly because it has become more expensive to get pensions for one reason or another. Some of that reflects the marketplace and what it costs to purchase annuities outside the Government’s scheme. Rather like me, the noble Lord will, I suspect, have gone through this understanding some, but not all, of the bits in it. However, that is the process, so the saving becomes a cost for employers and employees, given how we have split it.
I have one main item on which to write formally to noble Lords but, with that, I hope that I have dealt satisfactorily with the issues. As everyone in this Room will realise, they are highly technical. I commend the draft order to the Committee.
House of Lords
Big Society: Britain in Bloom
Baroness Gardner of Parkes
My Lords, in asking the Question, I declare an interest as I have a daughter who is a council member of the Royal Horticultural Society.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham): My Lords, I commend the Royal Horticultural Society for its Britain-in-bloom campaign. I know that the campaign inspires an enormous number of people to act as volunteers and to get involved in caring for and improving their neighbourhoods for the enjoyment of everyone who lives in them. It brings communities under the horticultural banner and brings local people into a new sphere.
Baroness Gardner of Parkes
My Lords, I thank the Minister for that. This is a long-standing scheme. At the present time, when lots of people face major difficulties, it is particularly important for people to feel a sense of achievement in what they are doing and a sense of community. Local authorities should be asked or encouraged to help this to continue. As I understand it, they are not asked to contribute financially. Can the Minister comment on that?
Baroness Hanham
My Lords, as I understand it, the Royal Horticultural Society is very generous in supporting local authorities and people within them who want to take part in the competition. I have absolutely no doubt that all noble Lords would agree that the work that is done and what is produced as a result of the competition makes London and local authorities look much better. I have no difficulty at all in agreeing with the noble Baroness or in again congratulating the Royal Horticultural Society on what it does in this initiative.
Lord Hunt of Kings Heath
My Lords, I am sure it is right to congratulate the Royal Horticultural Society, but is there not a wider point about local authorities and support for voluntary organisations? What does the Minister say to Birmingham City Council—a Lib Dem-Tory council—which is withdrawing all funds from the citizens advice bureaux? How on earth can that support the big society?
Baroness Hanham
My Lords, that is a bit off the Question, which is about flowers and gardens. I thought that such matters might come up under the next Question, so I do not know whether the noble Lord will want to ask it again. The straight answer is that Birmingham City Council, like other councils, has to make its own decisions on its expenditure. There has been and will continue to be considerable pressure on councils to ensure that the voluntary sector is protected from such reductions. If I may bring the noble Lord back to the Question, there is no doubt that people will make a plea to ensure that they can plant their gardens and have them competitively looked at.
Lord Palmer of Childs Hill
My Lords, may I bring the Minister back to the original Question by asking whether she believes that colourful flower displays have a good-feel factor for people and they should be encouraged? Will she deprecate the fact that in so many areas of public life flower-beds are being replaced by shrubs? I am not against shrubs, but colourful flowers do produce a good-feel factor. Would the Minister like to comment?
Baroness Hanham
Well, my Lords, we all like flowers and we like to see them in public places. It gives life to areas if there are planted flowers rather than bushes, which can be rather drab. I agree very much with that and with any other schemes that are taking place. Indeed, as I am sure noble Lords know, local authorities run their own schemes. The Royal Borough of Kensington and Chelsea, which is my borough, runs Kensington and Chelsea in bloom and has its own competitions, there is the wider London in Bloom competition, and there is the green flag award, which is run for public open spaces and provides an incentive for people to beautify the areas.
Lord Brooke of Alverthorpe
What will the Government do about those councils that are slashing their budgets and their expenditure on plants and flower displays?
Baroness Hanham
My Lords, as I said in response to a previous question, that issue perhaps moves us on to the next Question. It is entirely up to each local authority to make its own decisions. If a council decides that it wants its borough or council area not to look very prepossessing and very nicely flowered and bushed, that is up to that council.
Baroness O'Cathain
My Lords, has my noble friend the Minister heard of the seed exchange scheme? This is happening in very small communities throughout as part of the big society on a small society level. People do not have to spend money on plants and flowers because those who have seeds left over from the previous year give them to others. The results are amazing and competitive and look fantastic.
Baroness Hanham
Yes, my Lords, you can do that with plants as well, if you are clever enough and can work out how to make them grow. Anything that improves and makes places look beautiful is to be greatly encouraged. A seed takes a little longer to grow than a plant, so perhaps a plant is more effective.
Viscount Montgomery of Alamein
Although this Question is about flowers, will the noble Baroness not agree that there are beautiful trees, and their foliage is equally beautiful and changes with the seasons as well? Therefore, they should be encouraged as well as flowers.
Baroness McIntosh of Hudnall
My Lords, I am sure that the Minister is aware of the excellent work done by the Royal Horticultural Society and others in education and schools. Does she agree that, for example, the value of learning about the connection between what we eat and how it is produced is extremely important in the way in which children are educated? Will she pass on to her colleagues in the Department for Education my hope—which I hope is shared by other Members of this House—that any reorganisation and cuts in education will not fail to take account of the importance of that work?
Baroness Hanham
My Lords, I am willing for messages to be heard and I am sure that my colleagues in the Department for Education will hear what has been said. However, I do agree that the training schemes that help people into jobs around horticulture are to be encouraged.
Baroness Farrington of Ribbleton
My Lords, would the Minister care to comment on the fact that, given the differential depth of the cuts for the north of England, many local authorities will not be able to take on trainee young people in their parks departments? Would the Minister, who has a fine record in local government, please resist the pressure that is put on Ministers opposite to say on every question that it is purely a matter for local authorities? The Government have stolen the flexibility with the differential cuts.
Baroness Hanham
My Lords, this Question has really strayed very far from where it started. If I may, I shall leave that to be asked, if necessary, under the next Question.
Pensions: Britons Living Abroad
(13 years, 9 months ago)
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Lord Shipley
To ask Her Majesty’s Government what help they will give to British pensioners living abroad whose United Kingdom state pensions are not uprated annually.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we have no plans to make any changes to the current arrangements that allow for the exportability and uprating of UK state pensions. The UK state pension is payable worldwide but is uprated outside the UK only when there is a legal requirement or reciprocal agreement to do so.
Lord Shipley
My Lords, is the Minister aware that there are some 500,000 UK pensioners in the USA and the European Union whose pensions are uprated, and a further 500,000 in the rest of the world, notably in Commonwealth countries such as Australia, New Zealand and Canada, where their pensions are not uprated? Many people in those latter countries now receive only £10 a week. Given that we are the only country in the OECD that discriminates in that way, does the Minister think that this situation is just?
Lord Freud
My Lords, the figures for non-frozen pensioners are 610,000 and for frozen pensioners 550,000. The difference in payment is currently between £57 for the non-frozen and £32.70 for the frozen. I am satisfied, as are the courts, that what we have is objective and justifiable in this area.
Lord Clinton-Davis
Would the Minister apologise for yesterday’s tantrum? I am very concerned about his mental health.
Lord Freud
My Lords, the expert in thumping Palace woodwork, who is Black Rod of course, suggested that I did not make a habit of maltreating the furniture. I am happy to take that advice to heart.
Lord Hamilton of Epsom
Would my noble friend accept my condolences that he was provoked to such an extent yesterday? I thought that he showed remarkable restraint.
Baroness Golding
My Lords, I have had a letter from a friend of mine who lives in Spain and has lived there for 20 years, and who is in his eighties. The letter from the Department for Work and Pensions says: “I am writing to tell you that we cannot pay a UK state pension at the moment. This is because we cannot be sure that the amount of money that we pay you is correct. Payment of state pension has been stopped from 24 January”. There is no right of appeal against this decision. Is this how we are going to treat our pensioners?
Lord Freud
My Lords, clearly I will not be familiar with the facts of this particular case, but if the noble Baroness would like to write to me with those details, I shall make sure that they are looked into thoroughly.
Baroness Gardner of Parkes
I have asked about Commonwealth pensions both in writing and verbally over many years because, as noble Lords will appreciate, I get lots of letters. No Government have at any time ever considered it feasible to try to upgrade the pension, because so many people are involved. However, it is important to appreciate that in some countries it is different. In Australia, the national Government see that pensioners have the means to survive.
Lord Freud
My Lords, this is a much more complicated issue than it seems on the surface, because it is not a question of making a payment to a pensioner the entirety of which they then put into their pocket. The country where they are living will often supplement their pension, so it can often be a case, for instance, of us making a higher pension payment and the equivalent of pension credit being reduced. It is money out of the UK taxpayer’s pocket into the pocket of the taxpayers of another country. It is a far more complicated issue than it seems on the surface.
Lord McKenzie of Luton
My Lords, I agree with the Minister that now is not the time to change the uprating of pensions paid abroad. The priority should be to push back against the aggressive acceleration of the state pension age for women. However, does he agree that British pensioners overseas have the benefit of the reduced number of years of contributions to receive a full basic state pension, which came in under our legislation in April 2010, and still have the ability to top up entitlements by class 3 buy-backs on a basis whereby for £655 you can buy extra pension of about £170 a year for life? That seems a pretty generous deal.
Lord Freud
My Lords, I am happy to congratulate the noble Lord opposite on those changes, which I know that he was involved with. I think they have been valuable. The point about costs in the current environment is that this change to uprating in the frozen areas would cost us £620 million a year, and in the context of the austerity position that we are in—all noble Lords will be very familiar with the terrible dilemmas that we face as we look to get the budget under control—we should consider how much that £620 million represents.
Lord Skelmersdale
My Lords, would my noble friend accept that what matters when paying British pensions to pensioners in places such as Canada is reciprocity? In other words, if the Britons in Canada are paid the Canadian pension and the Canadian pensioners in this country are paid British pensions, that would be regarded as a fair deal. What discussions on reciprocity are going on at the moment between his department and overseas Governments?
Lord Freud
My Lords, there are currently no discussions on reciprocity. That is not a strategy that we have. The reciprocity agreements are, if you like, a little like a double tax treaty network of agreements. We are not going into that at the moment. There are 30 countries with which we have reciprocal agreements, and currently we are not planning to expand that. However, this is a policy that we keep under review.
Local Authorities: Redundancies
Lord Beecham
To ask Her Majesty’s Government what is their estimate of the redundancy costs to be met by local authorities in the current and next financial years; and what they forecast to be the impact on local authority budgets of the proposed restriction to £200 million of permission to capitalise those costs.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)
My Lords, the Government do not make any estimates of redundancies in local government. Decisions about managing workforce reductions in local government are now rightfully for individual councils to make as employers. Following representations, £300 million of capitalisation will now be available, which will provide important support in 2011-12. That cannot meet all restructuring costs: it will be for authorities themselves to assess how they best manage costs from their own resources, including from reserves.
Lord Beecham
I thank the Minister for her reply. However, in the light of the guidance note on capitalisation published by the ODPM in 2004 that capitalisation,
“does not in itself increase public expenditure”,
and the DCLG’s press release of 3 March stating that,
“The Government is not providing authorities with extra funding for this purpose, but simply allowing a managed and affordable extension of existing flexibilities”,
will the Minister invite her honourable friend the Parliamentary Under-Secretary of State Mr Stunell to correct his letter to council leaders in January stating that,
“Whether it is through borrowing or the use of capital receipts … capitalisation scores as public spending, and has national implications for the wider economy and deficit reduction programme”?
Will she also confirm that the Government will reconsider the position if, as anticipated, the cost of job losses in local government exceeds the £300 million thus far announced?
Baroness Hanham
My Lords, capitalisation impacts directly on deficit reduction plans. Capitalisation is capital being used for revenue so there is no doubt, I think, that what my noble friend said in his letter was correct. The permission for capitalisation—which has now been increased from £200 million to £300 million, largely because of representations being made—is not intended to be the full way of meeting redundancy costs. Councils are meant to look to their own resources to make up most of what they need when there is a reduction of staff through either voluntary or compulsory redundancies.
Lord Vinson
My Lords, will the Minister agree that no Government can enjoy making cuts? It must be difficult to watch when some cuts are made inappropriately by local authorities, but the fact remains that, without these cuts, council tax would rise exponentially as it has done in the past. Would the Minister make it clear that the alternative to cuts is a rise in council tax? I wonder how popular that would be with the British public.
Baroness Hanham
My Lords, I point out immediately that the Government have made it possible for a council tax freeze for the next two years. Indeed you cannot have numbers of personnel rising exponentially every year, which happened under the previous Government, under which there was a widening out in the number of people employed in local government. There have to be, and there will be, rationalisations of services and new ways of doing things. Not all councils are lost in the depths of despair about what is happening, because this is opening up opportunities for them. However, I do not deny that it is a great hardship for people who are losing their jobs without the benefit of having anywhere to go, and none of us would reject that.
Lord Tope
My Lords, the Minister said in answer to the Question that it was for local authorities to make their own decisions on spending. Given that there is no additional public expenditure involved in this, will she say why the Government will not allow local authorities to decide for themselves how they will meet these redundancy costs?
Baroness Hanham
My Lords, they can make their own decisions about it. All that the Government are doing at the moment is providing some flexible resources with the £300 million capitalisation for those that are finding it particularly difficult. They will have to implement that capitalisation against criteria, and if they do not meet those criteria they will not be given permission to do so.
Lord McKenzie of Luton
My Lords, is the Minister aware that the tired mantra that she keeps trotting out that it is all down to local authorities is growing very thin? People are well aware that it is the Government that are responsible for making these cuts and that they are simply hiding behind local authorities and local councils.
Baroness Hanham
My Lords, I suppose I could also produce the statement that I have made frequently in this House that if it were not for the previous Government’s mess we would not have to make these reductions. I point out that the previous Government had also seen the ill of the way in which they were going about this, as they were also making provision for substantial reductions in the budgets for local government in this financial year. The fact that this Government have had to make slightly more reductions than expected should not have been totally unexpected by local authorities—they knew perfectly well that they were going to have to make reductions.
The “tired mantra” that the noble Lord refers to is not a tired mantra; it is just a truth. The truth is that all the money for local government has now been given to local government by this Government. It is no longer ring-fenced—there are now only two areas that are—so local government can use every bit of money that the Government get, except in the areas of education and health, and can decide how to use it. Local government can decide how to provide its services and how to provide the most value to its own communities with all the resources that it has.
Lord Hamilton of Epsom
My Lords, does my noble friend have any figures for natural wastage in local government? Does not natural wastage contribute to the reduction that there will be in the number of jobs—although obviously it will not contribute all of them?
Baroness Hanham
My Lords, I do not have the figures, but the noble Lord is correct. There is always natural wastage—amazingly, people do leave jobs voluntarily—and there are ways of leaving jobs other than through redundancy.
Lord Liddle
My Lords, does the Minister accept that because of the Government’s refusal to be more flexible on the capitalisation of redundancy costs, cuts in current spending are going to be deeper than they would otherwise have been? This will have a particular impact on grants to the voluntary sector and the prospects for the big society.
Baroness Hanham
My Lords, we have made it clear that we expect the voluntary sector to be part and parcel of the future of local government. If local authorities do not wish to do that—although they will be put under great pressure to do so—they will cut voluntary sector grants, but in doing so they will be cutting off their nose to spite their face. Much good work is done by voluntary organisations. Under the Localism Bill, there will be a greater expectation that they will be able to take part in running and managing services.
Arms Trade: Libya and North Africa
(13 years, 9 months ago)
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Lord Alton of Liverpool
Lord Alton of Liverpool to ask Her Majesty’s Government whether they will review their policy on the sale of arms and military equipment in the light of events in Libya and north Africa.
The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Green of Hurstpierpoint)
My Lords, we continue to believe that the assessment of all export licence applications on a case-by-case basis against the consolidated EU and national arms export licensing criteria is the right approach. In the light of the rapidly changing events in Libya and north Africa, we acted to revoke licences where there was a clear risk that the equipment might be used for internal repression or human rights abuses.
Lord Alton of Liverpool
My Lords, I welcome the Minister to his first appearance at Question Time. What are the Government doing to prioritise a legally binding arms trade treaty, and will they now support the enactment of my Re-Export Controls Bill, the provisions of which have been endorsed by three separate Select Committees in another place and supported throughout proceedings in your Lordships’ House? It has also been reintroduced as a Bill in another place by Mr Tony Baldry MP. Have not recent events in north Africa and the Gulf demonstrated that we have a clear duty to do all we can to prevent British weapons and munitions being used to crush dissent, to attack unarmed civilians, to destabilise whole regions, and to kill and maim those who are trying to give birth to democratic institutions?
Lord Green of Hurstpierpoint
My Lords, I think the whole House shares the instinct that lies behind the noble Lord’s questions. It is absolutely imperative that we conduct our defence and security sales business on the basis of high standards and under strict controls. Those controls are in place, but we always need to make sure that we take account of new experience. As for the proposal on the re-export of arms and control of that, the difficulty is that it is always the case that once arms have passed from this country to the buying country, there is no jurisdiction for any law passed in this country. We therefore remain concerned that any such Act would remain effectively null and void. We should continue to base our approach on careful pre-licensing scrutiny of export sales.
An arms trade treaty is a priority of the Government. We are committed to agreeing a strong and comprehensive arms trade treaty. We have a unit in the Foreign and Commonwealth Office that provides official support. We are working with key partners, such as the European Union, the United States and the co-authors of the treaty proposal—Argentina, Australia, Costa Rica, Finland, Japan and Kenya.
Lord Judd
Does the Minister agree that the real issue of concern is the underlying drive in policy? Armaments should never be another useful export unless there is some specific reason for not exporting them. Surely the culture in the unstable world in which we are living, with all the recent experience, should be that arms are an extremely dangerous export to promote, and should be exported only when there is a specific strategic purpose that can be monitored and held to account in the context of our relationship with the people who are receiving those arms. At the moment, we need to bring the emphasis in that direction, instead of the one that has prevailed.
Lord Green of Hurstpierpoint
I thank the noble Lord, Lord Judd, for that question. It is important to keep a balance. Every country has a right to self-defence. We live in an imperfect world; if it were a perfect world we would have no need of defence industries, needless to say. It is clearly extremely important that sales of defence and security equipment are conducted to the highest possible standards, and that we work with recipient Governments to ensure the proper use of such equipment and services. We must also make sure that we learn from experience. We would all acknowledge that we have some things to learn from the terrible events in Libya.
Lord Razzall
My Lords, does the Minister agree that the question goes slightly beyond the sale of military equipment and arms referred to in the Question asked by the noble Lord, Lord Alton? Will he confirm that the sale of such items as Taser guns, tear gas and other material, which are clearly being used in north Africa and the Middle East to suppress legitimate democratic uprisings, will be banned by this Government?
Lord Green of Hurstpierpoint
I thank my noble friend but, as I said earlier, we believe that the right approach to defence goods is a case-by-case one. There are legitimate uses of many defence products and services. Some we do not market or manufacture in compliance with international restrictions, but in general the right thing to do is to follow a case-by-case approach.
Lord Mackay of Clashfern
My Lords, is there any harm in the Bill to which the noble Lord, Lord Alton, referred? It seems to me that it could do good. When the Bill was being debated here, I could not understand on what basis it was suggested that it could do any harm, if enacted.
Lord Green of Hurstpierpoint
I thank my noble and learned friend for the question. The point is not whether it could do any harm but the fact that there is real concern about whether it could do any good as it is effectively unenforceable. We do not want any distraction from the important focus on thorough pre-licensing scrutiny.
Lord Elton
My Lords, a question at the back of many minds, which we do not much like to ask, is this: if we are going to be engaged in a no-fly zone and in enforcing it, is there any prospect that British pilots will face air defences supplied by British companies?
Lord Green of Hurstpierpoint
I thank my noble friend. This is clearly a very difficult position. The situation is evolving from day to day. It is tragic; civilians are being killed and the outcome is unclear. The right thing for Her Majesty’s Government to do is to work with the international community to try to find a way forward that protects the citizenry of Libya.
European Union Bill
Joint Committee on Human Rights
The Chairman of Committees
That Baroness Stowell of Beeston be appointed a member of the Joint Committee on Human Rights in place of Baroness Morris of Bolton.
Information Committee
The Chairman of Committees
That Lord Black of Brentwood be appointed a member of the Information Committee in place of Lord Taylor of Warwick.
Consolidated Fund (Appropriation) (No. 2) Bill
Public Bodies Bill [HL]
(13 years, 9 months ago)
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Lord Roberts of Llandudno
Lord Roberts of Llandudno
My Lords, I remind the House of the great struggle to establish a Welsh-language television channel. A Member of the other place who was highly respected in Wales, Mr Gwynfor Evans, even fasted in order to ensure that we would have a Welsh-language channel. We owe a tremendous debt to my noble friend Lord Roberts of Conwy, who overcame many obstacles in order to make sure that S4C—S Pedwar C—went on to the statute book and became a reality. We say to my noble friend, “Thank you, again”.
There are many English-language channels. You can switch from one to another and spend most of your evening doing it, but if you want a Welsh-language channel, there is only one, S Pedwar C. It serves the 600,000 or so viewers who speak Welsh, for many of whom Welsh is their first language. In an age of high technology and digital advances, it is a poor nation indeed that does not have its own television channel in its own language. We owe so much to this channel. The previous census recorded an increase from 18 per cent to 21.5 per cent in the number of folk in Wales who spoke Welsh; 28 per cent said that that they might not speak the language but had an understanding of it. We should look at what has happened for the past generation or two—the establishment of Welsh-language schools, major cultural advances in the Welsh language and S4C, the Welsh-language television channel. As a result, there has been a larger increase in the number of people who speak Welsh than there has been for many generations.
S4C, with its full range of programmes, is the natural channel for all who cherish living much of their lives with their own language. S4C starts with children’s programmes in the morning and continues until 11 or 11.30 pm. If you are Welsh and live in a Welsh area, you can receive all your entertainment, information and news programmes on this Welsh-language channel. S4C is not so much the icing on the cake for us in Wales; it is very much the cake itself.
S4C is not a static but a developing entity. It has changed and needs continually to change. Including it in the Bill would very much undermine that change and would be a backward step. We do not dispute the fact that S4C has had a turbulent past couple of years, with resignations and oustings. It needs time and the breathing space to get itself in order again to create different and more modern structures to perform its task. It needs different people with different directions. If the Bill included the Welsh-language channel, immense harm could be done. The channel needs time to develop in its own natural way.
I question whether the issue of the channel really belongs with the Department for Culture, Media and Sport. Surely its proper place today would be with the Wales Office. It is the Welsh channel and it serves the people whom the Wales Office also seeks to serve. Many others may also be uncertain and consider that this is the wrong time to give the last word on S4C’s character and funding to a Minister here in Westminster. Before long, there will be a full consultation about the media in the United Kingdom. Surely that would be the time for us to determine the future of S4C, not today. The day before yesterday, I read a letter in which the leaders of the four parties in the Assembly in Cardiff all said that they needed breathing space and time before there was any change in the status of S4C. I am sure that they are right. If Plaid Cymru, the Conservatives, Labour and the Liberal Democrats all agree, surely this is the wrong place to say that Wales cannot take the avenue that it wants.
Lord Morris of Aberavon
My Lords, I support the amendment moved so ably by the noble Lord, Lord Roberts of Llandudno. I hope that the House will forgive me if I elaborate a little on the matters that he raised. I never thought when I became a Member of your Lordships’ House that I would take part in two debates on matters crucial to the nation of Wales and its nationality within weeks of each other. The result of the debate on the appropriate parliamentary representation for Wales was disappointing. Wales has every reason to believe that it was let down by the Benches opposite. I hope that when this Bill completes its journey through the House—and I take the hint of the noble Lord, Lord Roberts—Wales will not again feel let down and we shall see the withdrawal at some stage of S4C from the Bill.
The setting up of the fourth channel to meet the needs of the Welsh language is the jewel in the crown of the Conservative Party in Wales. After a ghastly and monstrous U-turn and universal national protests, including that of Gwynfor Evans, the Tory Government were persuaded to provide for Wales’s needs. I was glad that the noble Lord, Lord Crickhowell, made the point a few weeks ago that the visit of the three wise men—Lord Cledwyn, the Archbishop of Wales and Sir Goronwy Daniel—came at a crucial moment. The resulting Act of Parliament, setting up an independent, properly financed body, S4C, is now to be thrown on one side. The Government protest that they wish to maintain the independence of S4C. If the BBC is to be its main financier, it will be the ultimate accounting officer and all S4C’s expenditure will have the stamp of BBC accountability. If I am wrong, perhaps the accounting provisions can be explained.
Having paid tribute to the Tory Government’s decision, perhaps I can reveal that for six years as Welsh Secretary I battled for the Labour Government to meet their commitments, despite the difficulties of the IMF crisis. Ultimately, on 6 March 1979, weeks before the election, Lord Merlyn-Rees was able to move the Second Reading of the Independent Broadcasting Bill permitting the setting up of transmitters generally, and particularly for Wales, so that broadcasting could commence by the autumn of 1982. This was the vital building brick that the new Government seized upon and operated.
All this work, of which we can all be proud, is now in real jeopardy because the Government, without any consultation, decided to offer this piece of saving to the Treasury. There was no consultation with the Welsh Assembly, and the plea of all the party leaders in the Welsh Assembly for an independent review, referred to by the noble Lord, was ignored.
S4C has not been without its faults. I happen to listen to some of its programmes most evenings, even in London. I have complained as far back as 2002 that the mix of programmes on any particular evening, the overdependence on cheap football matches in remote parts of Europe and the overreliance on some performers, good though they may be, are not enough. S4C has failed to realise that Wales is no longer an agricultural country. It was no surprise to me to discover that the viewing figures had dropped substantially, although they do not include people such as me in London, or those in Liverpool or elsewhere across the border. I do not think that the board of S4C has served Wales well in recent years. There are individual talents on the board but they obviously failed to work with the chief executive and agreed to an organisational structure much criticised in Sir Jon Shortridge’s report on governance.
In 50 years in politics, I have had only one dispute with a broadcaster, which was regarding a major programme celebrating the 10th anniversary of the setting up of the Welsh Assembly. I fear that the whole programme had to be withdrawn. The conduct of S4C was pathetic. However, there is much to be done within S4C and I hope that, with the vision of a new chairman of standing in Wales and a new chief executive, we can see better things.
None of this exonerates the Government from the process employed in riding roughshod, and in the face of an Act of Parliament, by demanding and getting back £20 million from S4C, denying long-term financing to S4C in the future and transferring most of its responsibilities for finance to the BBC.
I was grateful to Mr Vaizey for seeing me twice last year, whatever his relations with the Welsh Assembly. He listened very carefully to what I had to say and seemed seized of the importance of the points that I had made. Reading his evidence to the Welsh Affairs Select Committee, I was a little disappointed. The Government’s conduct in refusing a meeting with the Welsh Assembly and ignoring a plea of all the party leaders in the Assembly for an independent review is beyond the pale. The Welsh Assembly has the statutory duty under Matter 20 of Schedule 5 to its own Act of,
“promoting or facilitating the use of the Welsh language”.
What of the future? How is the relationship to work? There is only a short-term guarantee of finance. How is the independence of S4C, as promised by the Government, to be fulfilled? The accounts that I get, though disputed, of a lack of input at present by S4C into the 10 hours a week of broadcasting provided by the BBC do not augur well.
The first requirement in the new relationship between the BBC and S4C is for firm guidelines as to who does what. Perhaps an independent person—someone such as Sir Jon Shortridge, who is much respected—should be asked to draw up the guidelines on the relationship between the two parties; otherwise, a much larger BBC will overwhelm the tiddler that is S4C.
Secondly, there should be proper and adequate financing over a longer period of time than is envisaged at present. After all, careers are at stake and individuals are entitled to know, with as much certainty as possible, what sort of S4C there will be and whether there will be jobs for them.
Thirdly, money for S4C must come direct from the licence fee and not through the BBC. The licence fee is not the property of the BBC; it is our money. The BBC in the past has strenuously fought against top-slicing and it might well do so again. Should it succeed, we are back to the accounting officer problems that I posed earlier. In any event, a question has been raised as to the legality of the BBC paying money to a body that is not a subsidiary company of the BBC. Can the Minister assure us that the arrangements proposed have been legally approved?
Lastly, in the absence of an effective Act of Parliament continuing to guarantee S4C’s existence, I would seek to ensure that part of the BBC’s new charter, coming about in a few years’ time, should set out the terms and duties of whatever body operates Welsh-language television. The alternative is a separate charter for S4C. After all, it had a special Act of Parliament promising and guaranteeing it revenues each year, but all that has been brushed aside—so much for the rule of law. It would have been wiser and more prudent to have had a proper and more independent review first. If there was a case for change, it should have been evidence-based.
I close by saying that it is a matter of regret to me that the Welsh Assembly, when economic conditions were so much better, did not propose that Welsh-language TV should become part of its responsibilities. I fear that there were two reasons why it did not do so. First, it feared taking over financial responsibility, although at that stage, when we were in better economic climes, that could have been negotiated. Secondly, I think that S4C preferred to be answerable to a distant Whitehall, with very few Welsh speakers overseeing it, than to neighbouring Cardiff, which would see exactly what was going on. This may be part of the reason why so much has gone wrong in recent years. It was a missed opportunity. I advocated this as long ago as 2002, when I was installed as chancellor of the University of Glamorgan. Welsh-language broadcasting is intrinsically essential to the well-being of the nation of Wales. The time is ripe—if one understands what devolution is—for Welsh TV broadcasting to be devolved.
Lord Wigley
My Lords, perhaps I may first declare an interest. Between 2003 and 2006, I was a member of the S4C authority, and my son, daughter, son-in-law, daughter-in-law and my wife—and I occasionally—receive some benefit from participating in their programmes. My great interest by far, however, is as a Welsh speaker and a television viewer in Wales.
I support Amendment 83 standing in the name of the noble Lord, Lord Roberts of Llandudno. I also speak to Amendment 113D, standing in my name.
As has been said, this is a very sensitive subject in Wales. When I entered the Commons in 1974 the structure of television in Wales caused immense frustration to both language camps. Welsh language television programmes were carried by both BBC and ITV main channels in Wales, a small proportion of which were at peak viewing hours. Non-Welsh-speaking viewers were frustrated at having programmes they could not understand thrust upon them. Equally, Welsh speakers were frustrated that at best they received a fragmented service, with BBC and HTV duplicating news and current affairs programmes. The sum of the parts just did not add up to a comprehensive service. Most of the programmes were away from peak hours. There were protests; many language activists refused to pay their television licence fee; and some went to prison.
Before the 1979 general election, the Conservative Party promised a dedicated channel for the Welsh language. A few weeks after the election, the then Home Secretary, in a speech in Cambridge, announced that the Conservative Government had done their first U-turn, abandoned their election promise and were not going to provide a single-channel solution. This led to massive protests, which culminated in Plaid Cymru’s former leader, Gwynfor Evans, announcing that, unless the Government kept their word and provided a Welsh channel, he would starve himself, if necessary, to death. Thousands protested, including many senior people in Wales. Hundreds of us refused to pay our television licence; I myself went to court for so doing, as did many colleagues.
Cutting a long story short, the Government realised that they had badly misjudged the situation. People from all parties intervened. The noble Lords, Lord Crickhowell and Lord Roberts of Conwy, both Welsh Office Ministers at the time, pressed colleagues with the strength of representations they were receiving from figures such as the Archbishop of Wales, the former chief civil servant in the Welsh Office, Sir Goronwy Daniel, and the former Secretary of State for Wales, Cledwyn Hughes, later Lord Cledwyn of Penrhos.
It matters not for the purpose of this debate whose representations carried most weight or for what reason. Suffice it to say that the Thatcher Government recanted. Discretion was quite rightly the better part of valour. A further U-turn took place and the channel was given the go-ahead. The rest is history.
However, understanding the significance of that history is essential to understanding the situation which faces us today, which seems almost like a rerun of history. For the first time since 1979, last May we had a new incoming Conservative Government. The Conservatives had during the preceding election campaign made no reference whatever to their intention to restructure S4C. As in 1979, with no consultation in Wales, policy was reversed after the election. Need I say more?
As has been said, the Welsh language is spoken by 20 per cent of the 3 million people living in Wales, amounting to about 600,000 people. There are probably a further 100,000 Welsh speakers living in the rest of the UK. It has been estimated that 57 per cent of homes in Wales have at least one person who understands Welsh. S4C is watched by more than 600,000 people in the course of an average week.
That figure is less than the reach of almost 1 million people which existed six years ago, which has been mentioned. There are two reasons for the change, both associated with the changeover to digital television. First, while it undertook analogue transmissions, S4C broadcast English-language Channel 4 programmes during off-peak hours when it was not transmitting Welsh programmes. Clearly, when those were no longer available, many English monoglots no longer tuned in to S4C. Secondly, digital switchover led many viewers of all four old analogue terrestrial channels to migrate to explore the offering available elsewhere. S4C was not immune to that trend. The drop in viewers was predicted by the DCMS as far back as 2005. Having suffered those setbacks, I am glad to say that the graph has turned over the past 12 months, with an increase of 10 per cent in the channel’s reach across the UK to an average level of 616,000 in 2010. In the week ending 23 January, almost 1 million people tuned in across Britain—no doubt aided by the fact that the Cardiff City against Stoke City FA Cup match was being broadcast live.
It is also worth emphasising that the average programme viewing figures have been affected by the setting up of the brilliant toddlers’ space called Cyw, which provides programmes for the under-fives on weekday mornings between 7 am and 1 pm. Those programmes can never aspire to more than the few thousand viewers: the available cohort is probably no more than 15,000 and the likely viewership under 5,000.
Some people have poured contempt on figures as low as that, yet as a service it is critical for language transmission, particularly in households in English-speaking parts of Wales. I am glad that Cyw was awarded international recognition in New York earlier this year. The facile use of statistics by DCMS Ministers to denigrate S4C has been unworthy and reflects a failure to understand the reality of the Welsh language, the channel and its role.
I make one thing quite clear. There is no question of saying that everything has to stay exactly as it has been over recent years. Indeed, S4C has in recent years already cut back its central staff from 210 to 154 at present, and is committed to further reductions down to 114. Surely that is an adequate indication of its intent.
Everyone in Wales realises that, in the current financial constraints, all services funded by the public purse are likely to face cutbacks and S4C cannot be immune from these. To that extent, the funding formula of RPI, which has looked after S4C for two decades, cannot be regarded as sacrosanct. We did, however, note last weekend the emphasis of the Prime Minister, David Cameron, in Cardiff when he stated that Wales was being protected from the worst level of the cuts hitting other parts of the UK because of our difficult economic position, and that the average cuts would be 2 per cent per annum over the next four years. I am sure that S4C, however reluctantly, could live with cuts of that order, but not with the 24 per cent cuts in real terms that have been predicted—or more likely some 40 per cent in cash terms over that period.
The importance of securing guaranteed funding for the channel, removed from the annual political dogfight, was the reason it was safeguarded in legislation by the RPI formula. Unpicking that legislation, however inevitable in today’s climate, is not something to be undertaken lightly. There is, however, a feeling that any cash cutbacks to be faced by S4C should be no greater than those faced by other public services.
The worst aspect of this saga is probably the way in which it has been handled by DCMS Ministers. Decisions were taken without any meaningful discussion with those in Wales who have a legitimate interest in these matters, and without any engagement with S4C itself, its audience, or its stakeholders in Wales. We should also remember that some 40 private companies are dependent to a greater or lesser extent on S4C and will be affected by the changes which were unilaterally announced by the DCMS last year. S4C, in fact, paid over £88 million into the Welsh economy in 2010—money that has been vital in building up the private sector television and film industry in Wales so that it can compete in world markets.
The initial discussions with the BBC were overwhelmingly at a UK level, with even BBC Wales out on a limb. Involvement with S4C itself has been less than open, with the channel finding out at second hand what DCMS Ministers had in mind. The DCMS seems to have studiously avoided engaging directly with the Government of Wales, despite the fact that both the Welsh language and education are fully devolved functions and that S4C has a significant contribution to make to both those portfolios. Furthermore, when the junior DCMS Minister in another place, Mr Vaizey, appeared before the Select Committee on Welsh Affairs on 18 January, he admitted—he almost boasted—that no, he had not ever watched a single S4C programme. This was despite the fact that he had ministerial responsibility for the channel and that 80 per cent of S4C’s output could be watched with subtitles.
Your Lordships will hardly be surprised that over recent weeks there has been growing demand for responsibility for S4C to be transferred from the DCMS to the National Assembly. This has been augmented following last Thursday’s referendum. To my mind, there appear to be three elements which are essential for a solution to gain support in Wales. First, there has to be an acceptance that S4C is currently an independent public body, set up by statute. It is not acceptable for such a body to be abolished at the whim of a Minister using Henry VIII-type powers to do so. That is why I included in my Amendment 113D a provision that the powers given to the Minister at Westminster can only be used with the consent of Ministers of the Government of Wales.
It should be noted that those in the Assembly recognise that there must be change. Reference has already been made to the letter sent to David Cameron dated 29 October 2010 and signed by all party leaders in the Assembly, which proposed,
“a comprehensive examination of all aspects related to the governance and regulatory oversight of S4C, including where political responsibility should lie, on the basis of ensuring a secure and sustainable funding stream for the Channel”.
That was a very positive proposal, but it does not seem to have led to anything. Whatever new structure might eventually transpire, I would urge that the corporate and commercial independence of S4C should be guaranteed. I am not persuaded that this can be done by bolting S4C on to the structure of the BBC. If it was, the campaigning target in Wales will inevitably switch to securing that what is currently BBC Wales becomes more independent from the BBC in London. I know that there is sympathy for such restructuring in Scotland and in some quarters in Northern Ireland. However, such fundamental changes should be part of a comprehensive new communication Act, not matters that arise from the ill thought-out schedules to a rushed Public Bodies Bill.
Secondly, whatever the model of the constitutional governance of S4C, there is also the question of the editorial independence of the channel. If the corporate independence of S4C is guaranteed, then of course its editorial freedom should per se be implicit in such a solution. If anything less than full independence is provided, the editorial freedom of S4C becomes a pressing issue, and it would have to guarantee the right of S4C to reject the editorial line taken by the BBC or, indeed, by politicians.
Thirdly, and crucially, there is the issue of the guarantee of finance. I have no objection whatever to S4C being funded from the licence fee because the proposal has much logic. However, if it is to be funded from the licence fee, that must—it really must—be done through a route that is independent of the BBC, as has already been mentioned. Once S4C becomes a supplicant of the BBC, it is finished. He who pays the piper calls the tune. It is my belief that S4C should have a proportion of the licence fee safeguarded by statute, perhaps around 2 per cent of the total licence fee take for the UK. The present formula gives S4C £90 million a year from the DCMS budget. The department sees its contribution dropping from £90 million down to £6.7 million by 2013, a 90 per cent cut in its contribution. Perhaps the Government of Wales might be able to contribute a sum similar to that £6.7 million and thereby secure an equal voice in terms of the channel’s future. Securing an acceptable financial deal is basic to S4C and to retaining any meaningful independence for the channel.
Whatever way things move forward, there is a pressing need for the Government to clarify how they see the channel being funded post 2015. At present, there is a vacuum and great uncertainty, and frankly that is unacceptable to the small private companies in the sector which may be reluctant to invest if they feel that there is no ongoing financial certainty. But it is not enough to guarantee funding for the independent producers, important though that is. S4C itself needs some £20 million a year to maintain essential services such as transmission costs of over £7 million a year, subtitling costs, programme and viewer research, promotion of the channel and its legal and administrative responsibilities.
Securing a stable, practical and sustainable model for the future of S4C is immensely complicated and not something to be decided on the margins by unamendable orders in Parliament. It is therefore my preferred option for your Lordships’ House to cut S4C entirely from this Bill and, if necessary, for the Government to bring forward new proposals after proper consultation in Wales and elsewhere as part of the development of a communications Bill in a few years’ time. I hope that the Minister will accept at least the spirit of Amendment 113D on such a basis, but if she is not prepared to give a commitment to explore these possibilities and to come back with the necessary amendments on Report, I hope very much that the noble Lord, Lord Roberts of Llandudno, will press Amendment 83 to a vote and that it is supported by noble Lords on all sides as an indication made by this Chamber that the Government really must give further thought to this matter. Whichever way, I urge the Government to think again long and carefully on such a sensitive issue.
Lord Roberts of Conwy
My Lords, first, I thank those previous speakers who have referred to my part in the birth of S4C when I was a Minister in the Welsh Office. Since we began our proceedings on this Bill, my noble friend Lord Taylor of Holbeach has tabled some very welcome amendments, in particular the new clause in Amendment 114 requiring consultation on any draft order proposed under Sections 1 to 6. The new clause set out in Amendment 118 specifies the detailed procedure to be followed. That differs, of course, from the normal procedure with orders, but is not quite the super-affirmative procedure in full. These new clauses and the amendments tabled to them are yet to be discussed, so they are not in their final form. But whatever the final outcome, these clauses allow ample opportunities for consultation on a proposed order by Welsh Ministers, interested parties and parliamentarians. The many organisations and individuals who have written to us about S4C will, I hope, have the chance to have their say on the future of the channel in the consultation on whatever orders may eventually emerge.
The inclusion of a body in Schedule 4, in this case Sianel Pedwar Cymru or S4C, means that the Government have the power to modify its funding arrangements by order. Its removal from the schedule would mean that the power was removed from government. I am not quite convinced at this stage that removal is in the best interests of the channel or its viewers. The reason for my hesitation is that I am not sure what the financial position of S4C will be if there is no order. Does the channel continue to be financed as prescribed in the Broadcasting Act 1990 as amended? I should be grateful if the noble Lord who is to reply would clarify the position.
It is well known to most of us that the Government have advanced quite far in their plans for the future financing of S4C. We know this from a letter, which has been made public, from the Secretary of State at DCMS, the right honourable Jeremy Hunt, to Sir Michael Lyons, chairman of the BBC Trust, dated 21 October last year. A subsection of the letter, headed “New partnership and funding model for S4C”, states:
“The government remains committed to a strong and independent Welsh-language TV service”.
This statement of principle is repeated later in the subsection in the context of future funding of the service after 2015 when the comprehensive spending review period has ended and the funding situation of S4C is again under review.
Quite frankly, the critics have not given the Government the credit due for this very clear affirmation of their commitment to sustaining the Welsh language service. It has been reiterated by Ministers on a number of occasions, but it goes unheeded by those who do not wish to hear. A reduction in funding for S4C is not an attack on the Welsh language, as some have alleged, any more than a cut in defence spending is an attack on our forces.
The letter makes it clear that the DCMS will continue to fund S4C in 2011-12 and 2012-13 at agreed levels. The current level is not sustainable because, under the Broadcasting Act 1990, the channel’s annual grant increase is tied to the retail prices index. It is clear that that link must be broken to effect the deficit reduction programme which is fundamental to the coalition Government.
I understand that S4C will receive some £90 million from DCMS next year, plus £20 million of cost-free programmes from BBC Wales as well as some £3 million of revenue from advertising and commercial activities. It also has some £27 million in reserves. Therefore, S4C is not facing an imminent financial crisis. Indeed, it appears to have financial security for four years ahead, which is not to be deprecated. After this two-year period of DCMS funding, the BBC will contribute £76.3 million in 2013-14 and £76 million the following year, 2014-15, from licence-fee money collected from the public by the BBC. One must stress, as has already been done, that those moneys do not belong exclusively and as of right to the BBC, although it is responsible for them. DCMS will give a further £6.7 million and £7 million in those two years respectively. S4C will also have funding again from the sale of advertising and other commercial operations.
Why is all that spelt out in a letter to the BBC? It is because S4C is part of the new funding package negotiated between DCMS and the BBC whereby the BBC World Service, some local TV services and BBC Monitoring will be funded from the licence fee as well as S4C from 2013 on. It is worth noting that only DCMS with its extensive responsibility for broadcasting matters could have made this arrangement for S4C to be funded from the licence fee, which is collected by and so jealously guarded by the BBC. The National Assembly for Wales and their Government could not have done it. Besides, broadcasting is not a devolved matter anywhere in the United Kingdom.
All this provision for S4C funding—I stress that funding is all I am referring to—makes reasonable sense to me in our current, straitened national circumstances. Some have said that there is no provision beyond 2015, but four years of certainty as regards funding is not to be despised. Furthermore, we are promised a review in good time before that period comes to an end. There is also a thinly veiled threat to the BBC that if the new partnership with S4C does not work for any reason, the Government will not take the licence fee money themselves but nor will the BBC have it either, except to reduce the licence fee.
There is strong pressure on all sides to make the funding system work and it probably will. I cannot see any other satisfactory alternative being produced in time. Of course, if the final order to implement the new funding scheme is grossly unsatisfactory, both Houses have the power to reject it—rarely used though that power may be in your Lordships’ House. Where the problems will arise is in the inter-relationships between the organisations involved, but these cannot properly be resolved in the context of a Schedule 4 order and belong more properly to another schedule, possibly Schedule 3, which relates to the power to modify constitutionally in the sense of internal arrangements of public bodies. Clearly, the Government have not yet decided the detailed arrangements for the governance of S4C, which has come in, as the noble Lord, Lord Wigley, said, for some hefty criticism recently from Sir Jon Shortridge, formerly Permanent Secretary of the National Assembly and the Wales Government. It is understandable therefore that the UK Government placed S4C in the pending tray of the purgatorial Schedule 7, now to be abolished with certain exceptions.
S4C may well need to adapt its internal organisation, not only because of the new situation that will result from its new funding arrangements, but also because of recent events and public concern about its governance, which is the subject of Sir Jon Shortridge’s very thorough report. The present position, as it has developed, is that there is a supervisory authority and an executive team which manages and provides the day-to-day service. To put it mildly, this system has not worked satisfactorily in recent years, possibly because of the curious, and I believe wrong headed, separatist policy pursued since 2006 of keeping the authority and the management of the service as far from each other as possible. I shall not go into the painful consequences, which have become all too public, but I shall quote from the Shortridge report:
“Too many decisions were taken by management which should have gone to the Authority; there was too little transparency; when members of the Authority were invited to take decisions they too often felt that they were not given sufficient time and that they were denied the information they needed to enable them to make the necessary judgements; and they also lacked the information they needed to assess the decision taking and performance of management”.
Clearly, that was an unhappy state of affairs and it is surprising that it was allowed to continue as long as it did. A new authority will, I hope, have learnt lessons from the past and will be constituted differently, with a fresh mandate, mission statement and declaration of duties and responsibilities. The foundations are clearly laid down in Sir Jon’s excellent report. I am glad to say that some of his recommendations have already been acted upon by the existing authority.
I turn to the new partnerships scenario implied by the new funding arrangements agreed between the DCMS and the BBC Trust, incorporated in the same letter from the Secretary of State to the chairman of the BBC Trust, dated 21 October last. The key principles are clearly stated:
“The S4C service must retain its brand identity and editorial distinctiveness, as well as its special relationship with the independent production sector in Wales”.
The Secretary of State goes on:
“HMG holds that a new partnership model with the BBC is the best way of securing the long-term future of the service”,
and adds that the partnership would be,
“along similar principles to BBC Alba”.
That similar partnership would not be acceptable in Wales. It is difficult to see how that could be reconciled with the independence of S4C. It is not that the BBC’s extensive contribution to Welsh language programming on radio and television is not recognised and highly valued, but pluralism is all important in Wales as elsewhere, especially in news and current affairs. We do not like to see all our eggs in one basket.
The Secretary of State’s letter describes a fairly complex bipartisan series of negotiations, beginning with the BBC Trust and the authority setting out the strategic goals and broad editorial requirements of the service. Then, a combined board of the authority and the trust would oversee delivery of the same and, finally, there would be a joint management board to operate the service with its own commissioning structure and composed with a majority of independent directors appointed by the trust and the authority. It is no wonder that the Secretary of State’s next sentence is that,
“further discussion will be required about the exact form of the partnership, and the Government will play its part in those discussions”.
It is a curious set-up which requires a lot of tidying up.
What is the alternative? If possible, the licence money which is to provide the bulk of S4C’s money from 2013-14 should be allocated alongside the DCMS grant and be subject to the same accounting procedures. Could the Minister say whether this is possible now or in the context of the BBC licence renewal negotiations? It is crucial to split the BBC from the dispersal of the licence fee moneys that it gathers. At present, as Sir Michael Lyons, chairman of the BBC Trust, pointed out in a letter dated 10 November to the then-chairman of the S4C Authority, John Walter Jones, the trust is accountable to Government for the use of the licence money and that would extend to such moneys as were received from the licence fee by S4C in future years. This puts the BBC in a very dominant position vis-à-vis the S4C Authority.
Lord Rowlands
I support this amendment. The noble Lord, Lord Wigley, was right to remind us of the situation before S4C was first created. The bitter, divisive nature of the arguments that surrounded Welsh language broadcasting in my days as a Member in the other place were some of the most violent and angry ones that I had ever heard from constituents. They were split right down the middle. It ended up with people taking extreme positions. There were those who did not want to see a single Welsh language programme on either BBC or what was then HTV, and those who wanted to see a lot more and realised that these channels were not going to provide it. The creation of S4C has been an extremely important aspect in developing a consensus around broadcasting in Wales. Even with the best of intentions, we would be very foolish to break that consensus unnecessarily by one means or another. First of all, the consensus was built in establishing S4C, as has been described by my noble and learned friend Lord Morris and by others, and gained enormous cross-party support.
Despite all the problems that S4C has had since, I believe that one of its successes has been to maintain or sustain a degree of consensus around broadcasting and that we have not had the divisiveness that accompanied some of the broadcasting of earlier times. The Government ought to be very careful, in the way that they handle all these issues, that they do not break the consensus and reopen some of the old divisive arguments that were injurious to Welsh broadcasting as a whole. That is the first point that we have to get across to Ministers: that they cannot take a blunderbuss approach to this issue because it is too important that it be maintained. The consensus was created and developed as a result of careful consultation and bringing everybody along together. This has not happened so far in relation to the proposals now being floated.
I hope noble Lords do not mind if I mention, in a personal sense, that I had an opportunity for quite a period to watch closely the affairs of the S4C Authority because my wife was a member for a number of years. I realise what my noble and learned friend Lord Morris has said and what the noble Lord, Lord Roberts of Conwy, has said about the more recent problems of the S4C Authority. However, I remember, over the whole period of S4C’s establishment, that independent members of the S4C Authority played a crucial role in developing the new provisions and making sure that the channel was trying to reach out to audiences and was not going to be an enclave just for Welsh-speaking communities. My wife and others spent a great deal of time promoting what the authority was about, what the channel was about and what the service was about in communities that were not Welsh-speaking, such as the constituents of Merthyr Tydfil, whom I represented. The consequence of that and, I believe, a factor that was promoted by the independent members of the authority was that people in Merthyr felt that it was just as much their channel as it was in Caernarvon or Ceredigion. That was the success of it. Members of the authority itself played a very important role in achieving that aim and purpose. It had amazing spin-offs, such as the growth of Welsh medium education in communities such as Merthyr. Ysgol Santes Tudful started out with 22 children. My eldest son was a founder member of the school, which now has more than 400 students. S4C’s role in promoting and linking up through its children’s programmes has been a vital part of that development. It is one of the most exciting things that has happened in the Welsh language scene—that in Merthyr we have such vibrant and thriving Welsh medium education arrangements.
All this is part and parcel of a very important situation. My fear is that, in an effort to try this or that solution, if the S4C Authority loses its measure of independence and is seen to be subsumed within the BBC empire in one form or another, that will do harm, not good, to the future of Welsh language broadcasting. I ask the Committee and Ministers to ponder on this: we created a consensus to establish the authority, and a consensus is needed now on essential changes that need to be made, but that consensus has to be worked at. A blunderbuss approach of this kind, trying to promote an order of this kind as a solution, is not the way forward. It is the most inappropriate process by which to develop the change necessary in Welsh language broadcasting. The Minister will not lose any face. He has already made amazing changes to this Bill, and I suggest that this could be one more change that the Government could accept.
Lord Elystan-Morgan
Everybody who has spoken in this debate already and very probably everybody present in the House would probably agree with the proposition that if the Government make a mistake in how they deal with this matter, a death blow could be struck at the very existence of the Welsh language. S4C is a unique body charged with a unique commission to safeguard the very existence of the Welsh language. Well, you may say, that is nothing very much—but I doubt whether many Members of this House would take that view. A living language with a living literature is a jewel in the treasury of human culture, and the Welsh language no more and no less than any other living language is such a jewel. It is 1,500 years old and was in existence at least 500 years before the French language came into being. The French language came into being only at the end of the first millennium; up till then it was a patois of Latin. That shows something of the pedigree of the language that we are talking about.
If anybody thinks that those of us who are Welsh-speaking or committed in some way or another to a loyalty to the Welsh language are overdoing the case, I ask humbly of each and every Member of this House whether, if the English language were in such jeopardy, they would not take up honourably and gallantly exactly the same position. If you thought that the language of Milton, Shakespeare and Chaucer was in jeopardy and that its very life was in doubt, I know exactly what you would do. We are prepared to say exactly the same of the Welsh language.
The next question is about how unique the circumstances were in which S4C was set up. They have already been dealt with in some detail. There was a very ugly situation in Wales; there had been massive civil disobedience, and I have no doubt that Gwynfor Evans would have given up his life. A very wise, statesmanlike Englishman who had great experience of conflicts not dissimilar to these, William Whitelaw, made an agreement with the Welsh people. He said that if they called off their protests he was prepared to give them this channel. That is exactly what happened, to his eternal credit. I think that we should be very careful with this legislation that we do not go back upon the word of that splendid statesman and gentleman.
Indeed it was an agreement. A very great jurist, many centuries ago, spelt out in Latin the principle of agreements: pacta sunt servanda—agreements are binding. This agreement is binding and I would have thought that is the strongest possible case that one could have for not including it in Schedule 4. There are two jeopardies that S4C faces: it could be starved of a sufficiency of funds so as not to allow it to be able to carry out its true purpose; and it could be so boxed in with any form of association with a greater, more powerful body, the BBC, that it would render its independence something utterly unreal.
We have heard regarding finance how a 24 per cent cut might very well reduce S4C to the point when its very existence is placed in jeopardy. I am sure I am not exaggerating the situation. The other side of it is what would happen if it was brought under the aegis of the BBC. I am not entirely sure under what authority the Government have in fact suggested that there should be such a merger—Clause 4 deals entirely with funding; nothing else. Clause 7(1)—I will not go into the detail of it—might touch upon that but I doubt it. Are there any other statutory authorities that allow the Government to do this? I doubt it. Maybe the Government are relying only on the financial pressures brought about—not in relation to S4C alone—by the general economic situation to box S4C into a corner that it would not wish to be in.
Lord Elystan-Morgan
I am sorry; I have not yet resumed my seat. I was only collecting my notes. I shall not delay that event very long.
Lord St John of Fawsley
My Lords, I have been entirely convinced by the noble Lord’s eloquence in support of Welsh as a living language which it would be a tragedy to have lost. However, I think I detected, in the middle of his eulogy to the Welsh language, a Latin phrase. Would he add his zest and enthusiasm to reviving Latin as a spoken language?
Lord Elystan-Morgan
It is very late in this debate but I wholeheartedly agree. A survey carried out about 100 years ago showed that of words in general common parlance in the English language, 75 per cent were of Latin derivation. In Wales, it was well over 85 per cent. I believe that Latin should be revived, not as a dead language and not as a part of history, but as part of the building blocks of the languages that we use from day to day. I am very grateful to the noble Lord for that intervention.
I wish to raise a very narrow lawyer’s point. It would be ideal if the licence fee or an appropriate and guaranteed part of it could be diverted across to S4C straightaway without passing through the hands of the BBC at all, but I doubt very much whether that would be possible under the 2006 charter. I will not go into great detail about that now. If you try to deal with the licence fee then a price has to be paid. The Government, not cynically, but I think quite deliberately, are acting in a mercenary way. They are saying that they would be saving 94 per cent of the DCMS’s expenditure on S4C by transferring it to the licence payer. That is exactly it. In so far as the effect of that is concerned I will refer only very briefly to Article 47 of the 2006 charter, which sets out, almost like the main clause in the memorandum of a company, the main purposes. Article 47(4) says:
“However, the BBC may use these general powers only for the purposes set out in articles 3 to 5”.
Articles 3 to 5, of course, govern the situation completely in this connection. Article 3 says:
“The BBC exists to serve the public interest … The BBC’s main object is the promotion of its Public Purposes”.
Then it says this:
“In addition, the BBC may maintain, establish or acquire subsidiaries through which commercial activities may be undertaken to any extent permitted by a Framework Agreement”.
In other words, is the price of diverting part of the licence fee to S4C the fact of making S4C a subsidiary and slave of the BBC? As a lawyer, or an ex-lawyer, I have grave doubts that that is exactly the case; if so, it is a price that simply should not be paid.
Baroness Morgan of Ely
I support the amendment put down by the noble Lords, Lord Roberts, Lord Elystan-Morgan, Lord Rowlands and Lord Morris, on taking out any reference to S4C, the Welsh-language broadcast channel, from the Public Bodies Bill. I declare a slight interest, as the channel was the first organisation brave enough to employ me following my graduation from university, although its trust in me extended only as far as allowing me to photocopy the “SuperTed” scripts, which I am proud to say I did very well.
We are discussing a serious situation that, let us face it, has arisen due to some last-minute haggling before the comprehensive spending review was announced last year. That is why we are in this position. To place in question the future of a channel that had such a traumatic birth is naive in the extreme. We have heard how that came about; it was traumatic and divisive. The Welsh language in particular has been a divisive issue, but it has been put behind us with the establishment of S4C. I do not want to see that awful box reopened, but the danger of this action is that it could do exactly that.
We have to understand the historical context. The current proposal to include S4C in the Public Bodies Bill places a serious question mark over the channel’s future. There are lots of reasons for that, not least the 24 per cent cut. That is a dramatic cut, more extensive than many of the other already extensive cuts that we have seen from the Government. People should be reminded that the number of speakers of the Welsh language had been on a substantial downward spiral over the past century. The stabilisation of the language has been due in part to S4C, not just in allowing the language to be perceived in a modern context through new media but in helping to keep young, talented Welsh speakers in Wales who have contributed to the economy and might otherwise have left, denuding the language of Welsh-speaking young families of the future.
The economic aspects of the channel should not be underestimated. This investment, which until now has amounted to about £100 million a year, has helped to establish Wales as a key cornerstone of the media industry in the UK. The knock-on impact on the economy has been immense.
Is it going too far to suggest that including S4C in the Public Bodies Bill will place a serious question mark over the future of the channel? I do not think so, largely because now there is no legal certainty for the channel, which there was prior to the spending review. There is the principle of the matter to consider. It is an extremely serious matter to decide via secondary legislation on the structure, budget and very existence of a channel that was established by statute. There is now no guarantee for the channel beyond 2015. I know that the noble Lord, Lord Roberts, suggested that four years gives an amount of certainty. That is typical of the short-sightedness of the view that the Government are taking on the economy. We must look to the long term; that is where our future is. If we do not invest now, we will be in serious trouble in the future. It is a serious situation for the autonomy and political independence of a TV broadcaster.
You have to remember that in Wales there is already very limited media plurality. The European Charter for Regional or Minority Languages, to which the Government are a signatory, notes under Article 11 that media provision should be made available in regional languages and that the independence and autonomy of the media should be respected. It is difficult to envisage how this can be respected within the proposed new structure.
Finally, it is worth noting that S4C has been poorly run of late. Comprehensive political oversight of the channel has been lacking over the past two decades of its existence. It is now clearly an anomaly that S4C’s political oversight is based in London when Wales has its own political Chamber. The Welsh Assembly has clearly been concerned about being passed the responsibility without the budget in the past; that is why it has not asked for it. There needs to be a serious, comprehensive and detailed discussion about the channel and its future, particularly if the proposed new structure—whereby S4C’s budget comes from the BBC licence fee—is to continue. It was wrong to rush this through because of a comprehensive spending review deadline.
I would like the Minister to assure the House that the channel’s long-term financing, economic impact, editorial autonomy and independence, and political accountability mechanism were considered prior to the proposal that it should be included in the Public Bodies Bill, or is the treatment of the channel simply part of a slashing strategy which we saw as part of the comprehensive spending review and which was undertaken without any reference to these issues or the historical background of the channel? I would like the Minister to comment on that.
Lord Nickson
I apologise for speaking in this debate. I did not come into the Chamber expecting to speak today. My sympathies are very much with the Minister for having to reply to a debate that has inspired such eloquence and passion and will inspire great feeling. When I listened to the first three speeches, I found myself persuaded by the noble Lords, Lord Roberts of Llandudno and Lord Wigley, and by the noble and learned Lord, Lord Morris. Had this amendment been put to a vote, which it may yet be, I was minded—with an open mind—to vote in favour of it. I then listened to the noble Lord, Lord Roberts of Conwy, and began to change my mind.
Now, why on earth should I wish to contribute to this debate? My contribution is emotional, rather than rational or economic. I live in Scotland and have been there all my life. I know more about the Gaelic language than I do about the Welsh language. However, I was brought up as a boy in the Conwy valley. My father taught himself to speak Welsh as a schoolmaster in middle age. He thought that, living in the Conwy valley, he should speak Welsh. The noble Lord, Lord Roberts of Conwy, may remember him. I should also say that my middle name is Wigley. For those reasons, I am deeply moved by this debate and feel strongly that the emotion inspired should—I hope—bring the Minister to dwell in her reply on the words “consideration” and “consensus”, and to give careful thought to what is happening here.
I still have not made up my mind which way to vote, should the amendment be put to a vote, and will not do so until I hear what the Minister has to say. It is only one vote but I will listen with great care to what the Minister has to say.
Lord Howe of Aberavon
My Lords, despite my Welsh ancestry and, indeed, my part-Welsh title, the House will have noticed that I do not frequently take part in debates on this subject. That perhaps uncharacteristic diffidence is because I do not speak Welsh. It does not mean to say that I have failed to take account of the language. I can add to the satisfaction of my noble friend Lord St John by saying that in my last year at Winchester College—I will come back to that later—one of the tasks that I undertook was to write a thesis on the influence of Rome on Wales and the Welsh language. That inspires me to enter this debate.
I am, indeed, Welsh. My father was Welsh and Welsh speaking. He had the wisdom to marry a Scottish/Cornish bride, so I am a completely Celtic creature. I speak in support of the amendment with that in mind. I understand, and have sympathy with, the arguments on both sides but my clear view is that—as the noble Baroness, Lady Morgan, said—S4C does not require, and should not have, a place in this legislation. I do not begin to understand the complexities of the discussions that have taken place with the authority in recent years, but to put it in a Bill of this kind, which is designed to sweep away organisations of broadly this kind by ministerial signature, is not the right approach.
Familiarity of Latin by the Welsh is demonstrated by the choice of the Welsh word for the Welsh Assembly. The Scots have been left with the Scottish Assembly but the Welsh word for the Welsh Assembly is “Senedd”. If you look that up in a Welsh-English dictionary, you will find that it means a law-making body. That is a pretty firm undertaking on behalf of the independence of Wales, the Welsh language and, indeed, the Assembly.
Lord Elystan-Morgan
“Senedd” indeed means senate; it is one and the same. However, the origin of senate is “senex”, meaning an old man.
Lord Howe of Aberavon
I am not sure whether that learned classical intervention is designed to undermine the case that I am making or to demoralise me as I am an old man.
Considering my Welsh origin, I have not contributed a great deal to the structure and politics of the Principality. Tom Hooson was the cousin of the noble Lord, Lord Hooson, who, alas, is not with us and is unwell—we send him our best wishes. Tom Hooson was for some time—not long enough—the Member for Brecon and Radnor. In 1959, we together wrote what I think was the first booklet on the Welsh economy to be written by a political party, entitled Gwaith i Gymru, or Work for Wales. One of the propositions that we rather tentatively put forward in that booklet was one that I was able to advance, together with Tom Hooson, at the Welsh area conference at Llandrindod Wells, when Mr Henry Brooke was the Secretary of State for Wales. It was that we should have referenda—we did not call them that—in Wales on a county basis to vote yes or no for the continued closure of Welsh public houses on Sunday. We had those referenda every seven years for 35 years until my noble friend Lord Howard—Michael Howard—was able to repeal that legislation because Wales had been completely liberated. That is the way in which to achieve an objective in this case.
Lord Richard
My Lords, I detect that the atmosphere in the House is that we are anxious to get on, listen to the Minister and hear what the Government have to say. I therefore wish to give her two or three sentences of advice and then sit down.
First, I say to the Government: do not underestimate the importance of this issue in Wales. Do not do that, because the whole idea behind Lord Whitelaw establishing S4C was to take the sting out of the argument about the position and the future of the Welsh language. Like the noble and learned Lord, Lord Howe, I was not brought up to speak Welsh but I was brought up in a very Welsh-speaking part of Wales. My father spoke fluent Welsh; his father was a Methodist preacher, as was his father. I come from a long line of non-conformist divines. However, the fact of the matter is that my mother came from Cardiff and we therefore did not speak Welsh at home, although we spoke Welsh in the village.
All that I can say to the Government is that this matters in Wales. It is not a question of pounds, shillings and pence or the cash. It matters to Wales that there is now a television channel that broadcasts in the natural language of the Principality and our nation and it needs to be preserved. The idea that in a Bill dealing with quangos the Government can come along and suddenly thrust in this proposal regarding S4C is frankly ludicrous. The Government should be ashamed of doing it in this way. If they have views about S4C, they should produce a Green Paper or a White Paper, or whatever, and consult the people in Wales who are interested—in particular, the National Assembly. To strike a potential blow at the Welsh language and its future in Wales in this way is absolutely disgraceful.
Lord Sanderson of Bowden
My Lords, I had not intended to take part in this debate because I come from Scotland. However, I was encouraged by the noble Lord, Lord Nickson, putting his foot in the water. I appeal to the Minister, whom I know from times past has had a very successful time in party politics, to think very carefully before he jumps into this deep water. I remember only too well the times when Lord Whitelaw was dealing with this very tricky issue. Something about Lord Whitelaw that we all appreciated was that he would say: “Hold on a minute, let us see what the outcome is going to be. If there is a real case to be answered, let us hear it”. He heard it and took his decision thereafter—and persuaded the Prime Minister, Mrs Thatcher, to take the same view. I urge the Minister, in the words of the Scottish anthem, “tae think again”.
Baroness Finlay of Llandaff
My Lords, I will speak briefly. The history and complexities of the issue have been eloquently outlined by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Morris, and by others. As a non-Welsh-speaking person who adores living in Wales, I impress on the Minister that this goes beyond language. It concerns the cohesiveness of the people living in Wales. I watch S4C. I do not understand all the language but I love some of the programmes. They provide a unique opportunity for people to start and develop their careers. They provide a sense of community and society that you do not get in any other television broadcast in the UK. There is something quite special in the depth of the culture that comes through, which is far beyond language. My concern is that if we look only at the language, we will miss some of the essence of the feelings expressed in this debate.
Baroness Gale
My Lords, it gives me great pleasure to speak in the debate. I say to all noble Lords who have taken part a great big diolch yn fawr. I am not a Welsh speaker, unfortunately, and can only say little things like that. However, I am sure that the Minister will appreciate the strength of feeling in the passionate speeches that we heard from so many experienced noble Lords from Wales and elsewhere. It has been good to hear them.
S4C is a unique example of public service broadcasting devoted to representing Wales through the medium of the Welsh language. The status of the language and culture of Wales is of great importance to Welsh speakers and non-Welsh speakers alike. My noble friend Lady Morgan of Ely spoke of the importance of the Welsh language channel for young people.
Lord Richard
My noble friend is making a speech from the Front Bench. With great respect, the Minister ought to have the courtesy to listen to it.
Baroness Gale
I was commenting on what my noble friend Lady Morgan of Ely said about the importance of the Welsh language channel in respect of young people who speak Welsh, and children in particular. It is the only channel that caters for Welsh-speaking children. My noble friend Lord Rowlands spoke about the development of the medium schools in Wales. They have been a great success in Merthyr and in all the valley constituencies. I speak from experience as I sent my children there and I am proud to say that they are fluent Welsh speakers. Their children are, too. My children, grandchildren and great-grandchildren all speak Welsh, so, although I cannot speak it myself, I can say that I have done my bit for the language. S4C has also helped to develop their language skills. Many of the pre-school children’s programmes are absolutely great, and children do not have to be Welsh speakers to listen to them. Therefore, S4C plays a very important role at all stages of a Welsh person’s life.
From the views that have been expressed this afternoon, I think that the Public Bodies Bill is perceived as a threat to the very existence of S4C. That view can also be seen in the many letters that I, and I am sure many other noble Lords, have received from individuals and organisations in Wales. Of course, they have all been bilingual letters. Understandably, small businesses in Wales, particularly those in the creative industries, are very anxious about what this decision means for them. Therefore, there is much concern about the future of S4C in Wales.
In his evidence on S4C to the Welsh Affairs Committee on 18 January, the Culture Minister, Ed Vaizey, admitted that he had no specific Welsh-based adviser giving him a Welsh overview, although he said that he had had informal discussions with former Secretaries of State for Wales. He also admitted that he had not spoken on this matter to Nick Bourne, the leader of the Welsh Conservatives in the Welsh Assembly. When asked whether he had ever watched S4C, he said that he had watched “Fireman Sam”. As this is a children’s programme in English, I do not think he would have gained much knowledge from it if that was his only viewing of S4C. With the Culture Minister having so little knowledge about Wales and the importance of S4C to the culture and language of Wales, is it any wonder that we are having such a debate today, showing, as it does, the strength of feeling on this matter?
Does the Minister agree that there has been no consultation with the Welsh Assembly Government or with S4C itself? It has been mentioned that the four party leaders in Wales wrote to the Prime Minister in October calling for an independent review commissioned jointly by the UK Government and the Welsh Assembly Government. The four leaders were seeking a review into the future of S4C because, as we have heard this afternoon, there seems to have been a problem with the Government’s approach. Such a review would examine all aspects relating to the governance and regulatory oversight of S4C, including the question of where political responsibility should lie, and it would seek to ensure that the channel remained independent. The review would also seek to secure a substantial funding stream for the channel. I do not know what has become of this letter or whether there has been any discussion with the Minister on it. Perhaps he will be able to tell us.
Surely there must be a much better way of going forward than the way in which the Government are dealing with S4C in this Bill. I think that there is general consensus around the Committee that S4C should not be included in the Bill. Can the Minister allay fears that these measures, if implemented, could mean the end of S4C as an independent broadcaster? Many have mentioned the funding issues. They will of course need to be looked at and some solution will need to be found.
I hope that the Minister has listened carefully to the grave concerns that have been expressed all around the Committee. I am sure that by now he will understand the strength of feeling that Welsh people have regarding S4C. It is seen as one of the national assets of Wales. Therefore, I hope that, as others have mentioned, the Minister will be able to have discussions with all of us between now and Report with a view to finding a solution to this matter.
Baroness Rawlings
My Lords, I should like to make it clear that I am answering as the Minister from the DCMS, as this is the DCMS part of the Bill.
This has been an impassioned and eloquent debate. We all agree on the importance of Welsh-language television broadcasting. It is not in doubt, as we have heard from a very full debate this afternoon.
This Government remain committed to making certain that Welsh programming is a key part of the UK broadcasting landscape and that a dedicated channel for Welsh language broadcasting is maintained. The amendment of my noble friend Lord Roberts, Amendment 83, would remove S4C from Schedule 4. This would prevent us amending the funding formula. Following the point made by the noble Lord, Lord Wigley, that in the current economic climate it is not possible to have funding linked to the RPI, I say that the Secretary of State needs the flexibility to allow the funding settlements appropriate to the prevailing fiscal climate, so that all relevant factors are taken into account. The Government have had to make some difficult decisions about the organisations they fund directly, and S4C is no exception. The comprehensive spending review made a firm commitment to funding S4C. Subject to this piece of legislation, the funding levels are secure for the next four years, as I said to my noble friend Lord Roberts on 28 October 2010 in answer to his Question on funding for S4C, and to the noble and learned lord, Lord Morris. I give reassurance that there will be a review before the end of the four years.
Lord Rowlands
The noble Baroness mentioned the need for the particular order-making power to change the financial arrangements. Does that mean there is nothing in the original Act which would allow that?
Baroness Rawlings
I do not think there is. That is why it is in this Bill.
In relation to Amendment 113D in the name of the noble Lord, Lord Wigley, it is right that S4C should remain a responsibility of the Department for Culture, Media and Sport.
My noble friend Lord Roberts of Conwy is absolutely right in his well argued speech. As he started S4C, he rightly said that no order can be laid without consultation. Broadcasting is reserved as part of the Welsh devolution settlement and is, therefore, not devolved. This Bill does not represent an opportunity to reopen what was agreed as part of the devolution settlement—
Lord Howe of Aberavon
I wonder if my noble friend would allow me to intervene for a second? I understand that she may be making a very good point about the need for financial readjustment, but I should have thought that any sensitive Chancellor of the Exchequer or Treasury Minister, without needing to be Welsh, would recognise that relying on legislation of this nuclear kind to address the issues that she is rightly focusing on would be politically unwise and disastrous. I am quite certain that it would be possible to find a method of adjusting the financing without continually mentioning it.
Baroness Rawlings
I understand the concern of my noble and learned friend Lord Howe, but we go back to the current economic climate. It is not possible to have funding linked to the RPI. The reason for doing this is to secure the funding through the DCMS and the BBC. If we do it in that way it will be secured; otherwise it will not.
Lord Thomas of Gresford
Is the Minister ready to listen? Her Majesty’s Opposition have suggested that there could be discussions between this stage and Report; indeed, some very important points have been made with great force and with great vigour, from all sides of the House. Is the Minister saying she is not prepared to move from this position? That would help my noble friend decide what to do.
Baroness Rawlings
I appreciate what my noble friend Lord Thomas said, and I am getting there, but if I am interrupted all the way through, I will not be able to get there. I will come to that point.
The reservation of broadcasting is for sensible reasons. We have both European and international broadcasting obligations, and it is appropriate for those obligations to be secured on a UK basis, largely because of the nature of broadcasting itself. It is clear that spectrum does not respect boundaries, and we know that S4C can be and is viewed in parts of England. We are committed to ensuring that all the nations in the UK are properly served with broadcasts which suit their individual needs, but it is right that it should continue to be a UK function to do so.
The Secretary of State for Culture, Media and Sport works closely with the Secretary of State for Wales on S4C matters to make certain that a Welsh perspective is fully taken into account. The interests of S4C will be protected by the coalition Government and the new arrangements. In addition, to make certain that the Welsh aspects are fully taken into account, the Secretary of State for Culture, Media and Sport and the Secretary of State for Wales have agreed new arrangements whereby Wales Office Ministers will be involved in all ministerial meetings relating to S4C. Wales Office officials will be involved in the drafting of all submissions on S4C matters. I hope that that satisfies the noble Lord, Lord Rowlands.
In recognition of the importance of Welsh language programming and in the light of the changing financial situation, the Government believe that the best way for the audience to have a high-quality service is through a partnership with the BBC. My officials are currently in talks with the BBC and S4C about the arrangements for such a partnership. A review of the service, which should cover both its funding and output, will be conducted towards the end of the current spending review period. It is important that we give the partnership some time to grow and to deliver the efficiencies and increases in quality that we fully believe can be achieved.
I assure the noble Lord, Lord Wigley, and the noble Baroness, Lady Morgan, that DCMS is in discussion with the BBC and S4C to develop the new partnership arrangements. DCMS officials have engaged with Welsh independent producers as part of that process, and we continue to do so.
Lord Wigley
I am grateful to the Minister. Can she confirm that the discussions that she mentioned—DCMS officials discussing with the BBC, S4C and the independents—took place before the decision was made?
Baroness Rawlings
These discussions have been ongoing throughout. The noble Lord also asked whether there was prior consultation with the Welsh Assembly Government. Given the scale and pace of the spending review and the licence fee settlement discussions, it was not practical to have in-depth discussions with all the interested parties ahead of the announcement. The timeframe reflected the Government's desire to put the UK finances in order.
Lord Morris of Aberavon
If the sole or main problem for the inclusion of S4C in the schedule is the problem of the RPI formula, will the noble Baroness go back to consider by Report whether S4C should be withdrawn from the schedule and the Government table in its place a particular amendment dealing with the problem of the RPI formula?
Baroness Rawlings
I am coming to that a bit later, but it is taking longer every time somebody interrupts. I will get to that point.
The noble Lord, Lord Roberts of Conwy, asked whether the licence fee money could go directly to S4C from DCMS. Discussions between S4C and the BBC are ongoing. However, the BBC Trust is the established guardian of the licence fee, as set out in the royal charter and the agreement, and we do not see this position changing.
Following the Government’s decision to table an amendment to remove Clause 11 and Schedule 7 from the Bill, S4C will not appear in Schedule 7 as previously tabled and referenced in Amendment 164. Consequently, we are now exploring further options for how S4C’s proposed constitutional arrangements can be given legal effect. I can reassure the noble Lord, Lord Elystan-Morgan, that it is the clear view of the Government that we have no intention of abolishing S4C.
In a letter to the Prime Minister on 29 October 2010 the leaders of all four major parties in the Welsh Assembly stated that they,
“recognise the difficult financial climate and … no body that is in receipt of public money can be exempt from funding cuts”.
These reforms simply reflect this reality in a way that will protect S4C’s future and not undermine it, as my noble friend Lord Roberts said.
Lord Elystan-Morgan
My Lords, I hope I make this point sincerely and in an attempt to assist the situation. At the moment, the funding of S4C is tied to RPI under Section 61A of the Broadcasting Act 1990. That can be changed without putting S4C into Schedule 4. That is the short point. Speaking for myself and, I suspect, many others, I will be delighted to support such an amendment on Report. It can be done quite simply and effectively.
Baroness Rawlings
I will come to the point made by the noble Lord. I appreciate the way in which the noble Lord, Lord Nickson has approached this debate; it is to be commended. He has arrived open-minded and will be persuaded by the strength of the argument. It is an example of your Lordships’ House at its best and I hope that he has been persuaded. This has been an impassioned debate, but not on party lines, as the noble Baroness, Lady Finlay, said. It has been on the actual subject. We fully recognise, as the noble Lord, Lord Richard, rightly said, the iconic status of the channel and the contribution it makes to the cultural and economic life of Wales and to the Welsh language.
We have had a really good and interesting debate today. We are all united here in the Chamber in wanting a secure future for S4C. We have had lengthy dialogues with Cardiff to secure the future of S4C within the BBC partnership with DCMS funding. The problem lies, as had been mentioned by many noble Lords, with the index-linked funding, which is not viable anymore. Public service broadcasting is for all parts of the United Kingdom and it is not devolved. S4C’s editorial independence and its distinct entity, as the noble Baroness, Lady Morgan, said, are of paramount importance. I share the passion of my noble friend Lord Roberts and all noble Lords who have supported the amendment. I understand it and of course I, along with my noble friend Lord Taylor, am fully prepared and willing to have a discussion next week to go through many of the points that have been brought up today. I therefore ask my noble friend to withdraw the amendment.
Lord Roberts of Llandudno
My Lords, I thank the Minister for replying to these points. I am in a dilemma. We could go to a vote today and we might win it for the amendment, but we might not. I understand that the Minister in the other place, Mr Vaizey, is in the United States and that he would have to consult Ministers in the upper House before giving authority to drop S4C from the Public Bodies Bill. Of the many speakers, we have had one and a quarter who were uncertain about the amendment, which means that something like 14 speakers have all spoken in favour of it.
If we wait until the Report stage, that will give Ministers time to consult Ministers in the other House and they themselves can then come forward and, I hope, remove S4C from the Bill. I would rather do that than press the issue to a vote today because it might be very close. We could also have discussions not only with Peers and those in the other House but also with the Welsh Assembly Government in Cardiff. We have two or three weeks in which to do that. We can all see that those who have spoken today would vote very strongly to drop S4C from the Bill. I am sure that if nothing has been done by the Report stage then we will be doing just that. I beg leave to withdraw the amendment.
Lord Hunt of Kings Heath
The Earl of Sandwich
“( ) An order under this section may modify the functions of the Office of Fair Trading (“OFT”) by—
(a) conferring the function of Groceries Code Adjudicator upon the OFT; and(b) transferring that function to another person.( ) In this section, the function of “Groceries Code Adjudicator” is to enforce the Groceries Supply Code of Practice as specified in the Groceries (Supply Chain Practices) Market Investigation Order 2009.”
The Earl of Sandwich
My Lords, I can promise the Minister that we will move more swiftly on this amendment, which obviously has a much lower standing in the House. In moving Amendment 85A, I shall speak also to Amendments 174A and 174B in the names of the noble Lord, Lord Borrie, and the right reverend Prelate the Bishop of Wakefield, although I welcome the right reverend Prelate the Bishop of Exeter to this debate. I look forward very much to their contributions.
This is intended to be a helpful amendment, which is the first concerning the Office of Fair Trading in Clause 5 and Schedules 5 and 7, which I will come to later. It could be said to be a Cross-Bench amendment, since the proposal already has the approva1 of all political parties. It is simply a question of when and how the Government intend to act on this matter.
The background is as follows—I will be as brief as I can. A decade ago, in 2001, following a report by the Competition Commission, the four largest supermarkets signed up to a voluntary supermarket code of practice designed to encourage smaller suppliers and growers to enter the groceries market and to remove some of the obstacles in their way. However, those suppliers were unwilling to make formal complaints because of their effect on their relationship with the supermarkets and there was no means of enforcing the code. The Competition Commission was therefore asked to investigate further and, as a result of its report published in April 2008, the code of practice was updated last year as the groceries supply code of practice. All three political parties agreed to appoint an ombudsman, the groceries code adjudicator, as he is known, to monitor and enforce the revised code.
The new body, although independent of the Office of Fair Trading, is due to be housed within the OFT. Some confusion as to how this can be achieved if the Office of Fair Trading is to be abolished has already been expressed. I understand that functions of the Competition Commission and the OFT are to be merged. This has been confirmed to me by the Consumer Minister, Edward Davey, in a letter of reassurance. When he announced the Government’s decision to go ahead with the legislation last August, he said:
“We want to make sure that large retailers can’t abuse their power by transferring excessive risks or unexpected costs onto their suppliers. These sorts of pressures are bad for producers and bad for consumers—ultimately they can lead to lower quality goods, less choice and less innovation”.
So it is clear that the Minister’s heart is in the right place.
This is precisely why so many people would like the Government to go ahead immediately with the legislation. It has the backing of many organisations, which I shall not name today. It is also in line with the Conservatives’ new philosophy of stronger trading links with other countries. The reason for my interest in this is that I have for more than 30 years supported the efforts of charities and others concerned with fair trade, whether with developing countries or with smaller producers and farmers in this country. I also speak as someone who was involved in a small business in a rural community.
Why cannot the Government move a little faster on this? Is there some hesitation because of the power of supermarkets, which of course will have to provide the funding for the new office? The British Retail Consortium has consistently opposed the idea, but I remind the Minister that three major supermarkets, Marks & Spencer, Aldi and Waitrose, have now accepted that there will have to be a degree of monitoring and enforcement. Another cause for delay, as I have mentioned, may be the siting of the new office within an organisation that is being dismantled.
It is more than a year since the new code of practice came into force; it did so on Thursday 4 February 2010. I realise that this amendment is not the appropriate vehicle for this important proposal, but it carries a message from a wide section of the business and farming community. I therefore suggest that today would be the right time for the Government to give an early indication of the timing of this legislation and, better still, to accept these amendments, which would establish a groceries code adjudicator. I beg to move.
The Lord Bishop of Exeter
My Lords, I am pleased to speak to this group of amendments. I do so in the absence of the right reverend Prelate the Bishop of Wakefield, who regrets being unable to be in his place today. Five years ago, after a debate in the General Synod of the Church of England in which wide-ranging concerns were raised about the problems being experienced by farmers as a result of the buying practices of supermarkets, the church’s Ethical Investment Advisory Group agreed to investigate. In 2007, it produced the report Fairtrade Begins at Home: Supermarkets and the Effect on British Farming Livelihoods. I declare an interest because I wrote the foreword.
The report identified damaging practices around labelling, promotions, payments and contracts as well as other areas of dysfunctionality within the market. It carefully documented the harm inflicted on farmers and agricultural businesses by supermarkets’ buying practices. Pressure on price was identified as a particular problem in the UK dairy industry, an issue that is still of primary importance today, with the cost of production of a wide range of agricultural and horticultural products remaining significantly above the price received.
The report was submitted as evidence to the Competition Commission inquiry on the operation of the groceries market and the EIAG called on the Competition Commission to mandate the creation of an ombudsman—the case for that appointment has continued to be made—while at the same time pressing the Government, the Opposition and supermarkets to address the wide range of issues raised in our report.
Since 2007, there has been continued and systematic engagement with the major supermarkets in an attempt to encourage better practice and a more imaginative response to proposed regulation. There have been some improvements, such as supermarkets paying a premium for milk, working collaboratively to improve the efficiency of farmers in the supply chain and developing local sourcing initiatives for small suppliers. However, there is much evidence that serious problems remain, with examples of barriers to new products coming to market, or to scaling up supply, such as prohibitive payments for listing. Squeezes on the profitability and viability of primary producers, who find it hard to get fair prices, remain a recurrent complaint. This is particularly relevant for the dairy sector, beef production and pigs—both pork and bacon—where the price paid is often below the cost of production.
When the Government announced in August 2010 that it would establish a new groceries complaints adjudicator, an ombudsman, in the Office of Fair Trading, to adjudicate complaints from suppliers of breaches by supermarkets of the new groceries supply code of practice, many in agriculture and the food supply industry were encouraged to hope. That hope was further strengthened when we were further told by the Department for Business, Innovation and Skills that a draft Bill would be published later in 2010; that the Bill would be introduced in the second Session of Parliament; and that it would have teeth, including allowing for the possibility of introducing financial penalties if the naming and shaming of supermarkets was not working.
As the noble Earl, Lord Sandwich, has said, we are still waiting for action. The groceries supply code of practice has been in force since February 2010 and there is still no enforcement mechanism for it. Contrary to the intentions announced last August, no Bill has yet been published to establish the GCA nor has parliamentary time this Session been allocated. The issue is slipping. The noble Lord, Lord Henley, will recall that when I asked a question about this on 7 February, he replied that,
“there is a good chance that it”—
a Bill to establish the GCA—
“will start in another place first some time this Session, but I cannot give any precise timing at this stage”.—[Official Report, 7/2/11; col. 4.]
I am aware that the Consumer Minister has since announced plans to release a draft Bill on the groceries complaints adjudicator before the Easter Recess begins on 6 April, yet it remains a fact that difficulties in the groceries supply chain, which were identified more than a decade ago, are still waiting to be addressed as a matter of urgency. These amendments offer an opportunity for the Government to commit themselves to action and to put real flesh on the bones of their promises and to do so now.
I fully expect the Minister to resist these amendments but, should he do so, I hope that at the same time he will be able to give very clearly to this House further details of the nature and scope of the legislation that the Government have in mind and a clear statement of the timescale to bring such legislation into practice.
Lord Borrie
My Lords, I have been very happy to put my name to all the amendments standing in the names of the noble Earl, Lord Sandwich, and the right reverend Prelate. I should declare that I was the director-general of the Office of Fair Trading for 16 years, but that was some time ago. There is a certain shadow over the Office of Fair Trading at the moment through other parts of the Bill.
Leaving that aside, for some years there has been concern about the growing power of major retailers, especially supermarkets, in relation to their suppliers. It is worth providing a bit of balance. Supermarkets have done a great deal for consumers over the lifetime of noble Lords in the Chamber. They have made available to consumers a wide range of groceries and other goods with the emphasis on good value, quality and a pleasant shopping experience. Yet this has often been at the expense of small retailers who cannot match the lower price of supermarkets. As these small retailers have gone out of business, other businesses in the high street suffer the erosion and reduction of the number of visits paid by shoppers. People have gone instead to the supermarkets, usually on the outskirts of town, with their substantial car-parking space.
The rise of supermarket power has also been, as the right reverend Prelate emphasised, at the expense of suppliers, particularly farmers, who lack the clout to ensure that they can secure a fair price for their products. Supermarkets can play off one supplier against another. The Office of Fair Trading and the Competition Commission have wrestled with this problem in a number of references and studies in recent years. In 2009, the Competition Commission first proposed the appointment of a groceries ombudsman to assist fair dealing between farmers, suppliers and supermarkets.
Both the Labour Government and the present coalition Government have broadly accepted the need for such an appointment. Consultation concluded on 30 April last year; Members of the Committee will appreciate the significance of that date, because the matter was clearly left for the coalition Government coming into office in May to determine. They determined—it is in the coalition agreement—that there should be a groceries ombudsman within the Office of Fair Trading to enforce the groceries code of practice, of which the earlier speakers have spoken, and to curb the abuses of power that undermine farmers and are against the long-term interests of consumers.
In response to the right reverend Prelate the Bishop of Wakefield, on 7 February, the noble Lord, Lord Henley, whom I am delighted to see in his place on the government Front Bench and who has already been quoted in part, said:
“It is important that large retailers cannot abuse power by transferring excessive risks or unexpected costs onto their suppliers. We therefore propose to establish a groceries code adjudicator to monitor and enforce the groceries supply code of practice”.—[Official Report, 7/2/11; col. 1.]
That was the noble Lord a month ago. These amendments seek to put the Government’s own propositions into legislative form. The Government may of course have plans that have not yet borne fruit for some other legislative vehicle to carry forward these proposals. The suggestion of those putting forward the amendment is that the Government might find it convenient to use the Bill before us now as a convenient vehicle already available to them. The amendments are here for the Government to run with as they wish.
Lord Cameron of Dillington
My Lords, I support this series of amendments. It is a pleasure to be speaking on this Bill in the early hours of the evening rather than in the early hours of the morning.
All three political parties have committed themselves to putting in place a groceries code adjudicator, and this seems to be a golden opportunity to do so. It would make the Government popular with farmers, consumers and at least three of the supermarkets, which have agreed the appointment of such a person or body if it was to apply across the board. Some of the free marketeers among you might question why an ombudsman figure is necessary in an open and free marketplace. You might say: surely in a free market where there is more than one buyer, the seller can go elsewhere. However, that equal balance of interest implied in the phrase “willing buyer, willing seller” simply does not exist where the buyers are so big and the sellers are so small.
More importantly, that balance of interest does not exist when the seller and supplier has to plan his cropping as much as 18 months in advance, within probably a five-year rotation, and organise the acreage, and buy the seed, the fertiliser and the spray, often with the seed variety and the treatment being specified in detail by the particular buyer. The farmer has to have his whole farm often audited and inspected by the particular buyer. Without this audited inspection he cannot sell his crop, or the buyer will not buy it. Furthermore, each buyer or supermarket has a different auditing system in place, so the farmer cannot easily change the buyer; certainly not without a long notice period. The farmer also may have to invest in specified capital and machinery. All this takes place 18 months to a year before the crop is sold and before a price is agreed.
Unfortunately there is ample room for the big boy to manipulate the sale to his advantage when the little man has nowhere else to go when the buyer’s terms or the buyer’s price turn against him. If the farming venture has involved borrowing the large sums of capital for irrigation, cold stores processing and the like, the smallholder farmer probably has nowhere else to go for the next year either.
The supermarkets may claim that an adjudicator is not necessary. In that case, there is no danger to them or to the consumer if one is put in place. In my view, it will be a great insurance policy for the farmer—and for the consumer—if one is put in place. Therefore, I urge all three parties to use this opportunity to fulfil their election promises. It is crucial for the future of UK agriculture and the fair balance that we need to achieve.
Baroness Quin
My Lords, I, too, welcome these amendments and am glad that they have been tabled. I welcome the comments that were made by the noble Earl, Lord Sandwich, in introducing the amendments and the helpful background that he gave us. I also welcome the comments made by my noble friend Lord Borrie and by the right reverend Prelate, who I know has taken a great interest in this issue. Like the noble Lord, Lord Cameron, I welcome the fact that on this occasion we are dealing with this important issue at a civilised hour rather than in the early hours of the morning.
I believe that the amendments are necessary to try to clear up the confusion surrounding where in government machinery the adjudicator, formerly the ombudsman, will reside. In answer to a question by the noble Earl, Lord Sandwich, on 7 February, the Minister said that he did not know where the adjudicator was going to be situated. That might have been a commendably honest reply, but now that we have had the chance to return to this subject today, I hope that we will be able to get more information about the Government’s exact intentions.
My noble friend Lord Sewel on that same day asked if the adjudicator could be part of this Bill. That is another reason why I welcome the amendments. Given all the controversial inclusions in this jumbo Bill, it would have been good to have something in it on which there is such clear, cross-party support.
When the Government announced in August last year that they were going to establish the adjudicator, the original expectation was of a draft Bill coming forward this past autumn. Given the strong cross-party support for this measure, the delay is regrettable. However, the Minister has said that the intention is to bring in a Bill this Session. In the other place, in Answer to a Written Parliamentary Question, mention was made of a draft Bill coming forward before Easter. Will there be a draft Bill first, and what will be the timing of the draft Bill and the full legislation to get the adjudicator’s role and work up and running?
The establishment of a supermarket ombudsman was favoured and initiated by the previous Government following a recommendation from the Competition Commission. From these Benches, I reiterate our strong commitment to that, as the Minister will be aware. One issue that has surfaced in recent debates in this House has been the scope of the adjudicator's remit. I notice that the adjudicator is called the groceries adjudicator, and I assume that his main function concerns food. But I was interested that in a debate that we had a week or so ago in this House on the ethical clothing industry, the Minister said that consideration could be given to widening the adjudicator’s remit. I welcome the fact that the Government are prepared to look at that, because supermarkets sell a great deal these days and have a strong position on their suppliers, whoever those suppliers happen to be. At the same time, while I welcome the Government’s openness on this matter, I would not want to see that as the cause of any further delay in the establishment of the adjudicator, because a very clear message has come from this debate that speed is extremely important and uppermost in people’s minds. Obviously, if there is a draft Bill, the scope and remit could be looked at—and perhaps the Minister could comment on that point.
The powers of the adjudicator, including naming and shaming and what further sanctions might be possible as a result, were mentioned by the right reverend Prelate. Again, any clarification from the Minister about that would be welcome.
This Bill must seem like a Christmas tree Bill to the many departments, with various items of business that they wanted to lumber on a jumbo Bill of this kind. However, while it might be a Christmas tree Bill for departments, it is a nightmare Bill for parliamentarians. I was very much taken with the phrase used by the noble and learned Lord, Lord Howe of Aberavon, who described it as a nuclear Bill. It abolishes and changes so many bodies, some big and some small, and rides roughshod over parliamentary procedures. However, this matter is one on which there is agreement between Parliament and Government and for which there is cross-party support, so I hope that the Minister will respond positively to the points that have been made.
Lord Henley
My Lords, like other speakers, I am grateful that we are having this debate early in the afternoon. Sadly, I will also be doing the penultimate amendment that we are dealing with today, which might happen in the early hours of tomorrow morning—just as I did the penultimate amendment late on Monday, or early on Tuesday, a couple of days ago.
I should also say how grateful I was to hear quite such a large number of quotations from myself, from that relatively brief Question that we had on this matter on 7 February. It is gratifying to hear that so many noble Lords listened to what I had to say. I hope that I can add a bit to that in dealing with these amendments.
I start by repeating something that the noble Lord, Lord Borrie, said when he paid tribute to what the supermarkets have done for the consumer. That is very important to remember whenever we debate these matters; we forget it at our peril. They have given us greater choice, cheaper prices and, as the noble Lord, Lord Borrie, put it, possibly “improved the shopping experience”, whatever that means, but I think I have quoted him correctly.
The Lord Bishop of Exeter
I hope that I might just make the point that this year Easter falls as late as it possibly can do in the ecclesiastical calendar, and I hope that we will not have to wait very much longer after Easter for this particular Easter egg.
Lord Henley
Some of us who have been here for some time remember the late Lord Airedale, who annually moved a Bill—my noble friend Lord Carrington will remember this—trying to fix the time of Easter. I accept what the right reverend Prelate has said about it being very late this year, but that will mean it will be even easier for my colleagues in the Department for Business, Innovation and Skills to get that draft right and get it on time. It will then be published, as I said, around Easter—the latest possible Easter. It will be introduced and debated in Parliament—again, this is all I can say—as soon as parliamentary time allows. There are certain things that Ministers discuss with some trepidation and one is the timing of parliamentary business without discussing it with the usual channels. Certainly, I would not want to make any commitment as to when that will be but as soon as time allows we will bring that forward. We will also be able to then consider a point that the right reverend Prelate made about what sort of teeth the groceries code adjudicator should have—whether it is just naming and shaming or whether naming and shaming might not be enough and whether one should move on to greater powers. I think that is something for Parliament to consider in due course.
I want briefly to comment on where the groceries code adjudicator will live on his creation. Again I cannot take the Committee much further than that, but we are considering all the options. We will set out our intentions on where he or she should be and that will be available when we publish the draft Bill for pre-legislative scrutiny around Easter.
I appreciate that the assurances—particularly in terms of time—have moved on somewhat from earlier occasions, but I hope that with those assurances the noble Earl will feel able to withdraw his amendment. I am certainly very grateful for having had the opportunity to offer those assurances to him on this occasion.
The Earl of Sandwich
My Lords, I detect that the House will not want to dwell long on this amendment but I will just take a minute or two to respond. It has already been said several times that there is some confusion about the location of the adjudicator. Although I am grateful to the Minister for his clarification, it does sound a little like musical chairs, so we shall see who sits where.
I am also grateful for the contributions of other speakers: the noble Baroness, Lady Quin, referred to the political consensus and that is important. My noble friend Lord Cameron reminded us of the precarious relationship between farmers and supermarkets at this time. The NFU, the CLA, the CPRE and others are all behind this idea because it is urgent. The fundamental point is that the legislation is needed now. A 2009 survey by Traidcraft showed that eight in 10 shoppers want a watchdog to monitor and penalise supermarkets which treat suppliers unfairly. They believe that an adjudicator would mark a step change in helping reassure consumers that all the goods they buy do not come at the expense of bullying tactics by retailers towards suppliers and provide a proper context where the working conditions for farmers and workers can improve.
I thank the Government for their commitment, or their recommitment, to the adjudicator and for the noble Lord’s promise of a draft Bill around Easter. I beg leave to withdraw this amendment.
Lord Hunt of Kings Heath
My Lords, we come to an important group of amendments, which are in part probing but in part really urge the Government to take a rather more transparent approach when an order under this Bill is used.
Clause 5 gives power to modify or transfer functions and on the face of it appears to give huge discretion to Ministers. I would really like to hear from the noble Lord, Lord Taylor, the circumstances in which he envisages the power being used. In our earlier debates on Monday in relation to Clauses 3 and 4, Ministers gave a great deal of comfort when they described the circumstances in which orders in relation to governance and financial arrangements would be used and it would be helpful if the noble Lord were able to give similar comfort in relation to Clause 5. If this clause is used, will the Minister describe how that use of it will then be made transparent? When the order is used, what will happen to the functions; who will be performing them in future; why are the changes necessary; what about the future performance of the transferred and modified functions; and what do the Government intend to do to track the performance of those transformed or modified functions to ensure that the decisions made by passing the order were and remain appropriate? What assurance can the Minister give about the information that will be given to Parliament at the time of the order, if it is used? What further work will be done subsequent to the order in relation to performance scrutiny?
It is fair to say that some of these concerns were raised by my noble friends during the UK Film Council/BFI debate on Monday. My noble friend Lord Stevenson noted in that debate that while some functions of the UK Film Council were clearly marked as transferred to the BFI and Film London, there were other central functions, such as working film exports, upon which the Government remained rather silent until prompted. I would like to get some reassurance that if this order is used in future, there will be a way of providing Parliament with as much detail as possible about what has happened to those functions.
On Clause 7, I am looking for some comfort. We have been approached by the Royal Society for the Protection of Birds, which is concerned about the legal effect of Clause 7. While bearing the innocuous title, “Consequential provision etc”, this clause appears to give Ministers the power to modify the functions of the transfer or transferee organisations. What appears to be missing is a qualifying element of consent. Where, for instance, the Government would like a body such as Citizens Advice, in the case of Consumer Focus, to assume functions, surely it would be a requirement of the Government first to obtain the organisation’s consent to the changes. It would also be nice to know that the CAB was in a condition to accept those responsibilities. I point out to the Minister the dire situation in the great city of Birmingham, with the potential closure of all the CAB centres. As currently drafted, the clause essentially makes it permissible for the Government to change the constitution or funding arrangements of a body that is to assume those functions without consent or even bothering to consult that body. I have looked for comfort there.
The Minister will know of the quality of the briefing provided by the RSPB, since he used it extensively during the wonderful days when we debated the Marine and Coastal Access Bill. It is quite extraordinary that officials have found a defect in that Bill, given the extensive briefing that we received from bodies like the RSPB.
The other two amendments in this group deal with the related subjects of data protection, freedom of information and privacy. We have tabled Amendment 102 to ensure that where public functions of bodies listed in Schedule 5 are transferred to another body, the public will continue to have assurances that the performance of these functions is transparent. They will be audited, the responsible body will report to Parliament on the exercise and expenditure of these functions and the freedom of information and data protection provisions will still apply to the organisation to which the function is transferred.
Then we come on to Amendments 175A and 175B. They are in the name of my noble friend Lord Knight of Weymouth but unfortunately he is unable to be here. His amendments effectively prevent a Minister making an order to share personal data. He was using these amendments to emphasise the complexity of these subjects and his doubt whether it is wise simply to include them in a statutory instrument. If he were here, he would speak of his own experience with data protection in the context of the Education and Skills Bill, which required further amendment through the Apprenticeships, Skills, Children and Learning Bill. The point that he wanted to make is that these are complex and sensitive issues and that, in relation to parliamentary scrutiny, it may be that secondary legislation is not really the most suitable vehicle. As we have learnt in the past, if you get this wrong you have to come back and try to put it right at a later date. I beg to move.
Baroness Thomas of Winchester
My Lords, I speak at this point wearing my hat as chair of the Delegated Powers and Regulatory Reform Committee. As the noble Lord, Lord Hunt, has said, Clause 5 contains perhaps the widest power in the Bill now that we no longer have Clause 11 and Schedule 7. Schedule 5 includes bodies exercising a very wide range of statutory functions. The abolition or transfer of some of those functions could completely alter the character of the primary legislation that set up the bodies in the first place—added to which, any Minister in future could add new functions or alter existing ones considerably. Nothing in any amendments that the Government have so far proposed changes that fact.
That is why the committee of which I am chair has reiterated, in each of its three reports on the Bill so far, the inescapable fact that the powers in Clauses 1 to 5 and 13 are inappropriate delegations of powers. What we are looking for—and I hope that it may still not be too late—is that the Minister should consider amending the Bill to say briefly how these delegated powers should be exercised in relation to each body. The detail could then safely be left to delegated legislation.
Baroness Andrews
My Lords, it is a pleasure to follow the chair of the Delegated Powers and Regulatory Reform Committee, and I reinforce what she said. I declare an interest as the chair of English Heritage and as a member of that committee.
I will address the stand part debate regarding Clause 5, but it is difficult to do that without referring to Clause 11, Schedule 7 and indeed to Clause 8, which we will come on to later. I think that I am the first Member of this House—in this debate anyway—to congratulate the noble Lord on his success in getting rid of Clause 11 and Schedule 7. I know that as we proceed through the Bill today, he will be inundated with congratulations on what he has achieved regarding those clauses; it will be like his birthday. My thanks are very much a foretaste of joy to come.
I have always seen this Bill as more the product of William McGonagall than of Machiavelli in terms of how it had been put together and what it represented. Even for a Government who are fast establishing a reputation for recklessness, the Bill was a step too far. As I recall, the kindest thing that was said in our earlier debates about Schedule 7 was that it was “Kafkaesque”; it certainly created a feeling of victimisation without any sense of the crime that had been committed or indeed the sentence and the punishment that might follow.
I could end there, with unqualified praise, but I must pick up on the points that the noble Baroness, Lady Thomas, made. We are not yet done with this Bill—there are more changes that we have to press the Government to deliver. The problem that was widely recognised in this House, certainly at Second Reading and earlier in Committee, is that the whole Bill, frankly, is misconceived. It is an object lesson in making policy by prejudice. It demonstrates a failure to understand the nature, the role and the effectiveness of public bodies. It is an object lesson in how not to make legislation that will provide the substance of many a PhD thesis in future.
In recent days, the Committee has done its work very well by taking individual bodies and holding the implications of the Bill up to the light, defending their future and fate. The stand part debate allows us to say again to the Minister that it is not too late to recognise the fundamental problem that has been established in Clauses 1 to 5: that the powers in these clauses are far too wide. I echo what the noble Baroness, Lady Thomas, has said: Clause 5 is the widest power of all. We know where we are with Clauses 1 to 4; we know what “abolition” and “merger” mean. However, we do not know what Clause 5 implies and those bodies listed in the schedule certainly do not. It is very different in scope. It modifies or transfers functions, purposes and objectives, and could change the rationale for an entire organisation at a stroke—all by ministerial edict. Given the importance of the bodies that are listed in Schedule 5, this is a very serious predicament in which to put them.
It is no wonder, therefore, that the Delegated Powers and Regulatory Reform Committee reiterated in its 11th report on Monday that our original concerns were unmet. In our original report we were concerned about the inappropriate delegation of powers in Clauses 1 to 5. “Inappropriate” is a word that we have returned to time and again on this Bill. We are still concerned about those powers, which are still inappropriate. We said that the delegation of powers in Clauses 1 to 5 was “inappropriately broad in scope” and that there should be appropriate parliamentary scrutiny. That is still the view of the committee. We suggested in our earlier report that if Clause 11 were to be removed, it might make it easier for the powers in Clauses 1 to 5 to be better calibrated to matters that are appropriately left to delegated powers.
Clause 11 will, I am pleased to say, be removed. However, the powers in Clauses 1 to 5 are as yet unchanged. I say “as yet” because the Minister has said that he is considering these concerns. I certainly welcome that. I hope he will be as successful in dealing with that as he was in dealing with Clause 11 and Schedule 7. A crucial concern that we want him to consider before Report stage is spelling out more specifically the purposes for which the powers may be exercised. In Clause 8, the existing references are to matters to which the Minister may simply have regard. That is not strong enough. They do not deal with the fundamental problem of the Bill’s silence on the general purposes for which Parliament expects the powers to be used. They need to be so specified. It is extremely important that the Minister should address that point, at the end of either this debate or the debate on Clause 8.
Lord Mayhew of Twysden
My Lords, I, too, am a member of the Delegated Powers and Regulatory Reform Committee. I support everything that my noble friend Lady Thomas has said and much of what the noble Baroness, Lady Andrews, has said. She will not expect me, as a loyal supporter of the coalition Government, to endorse every epithet that she used— certainly not the word “reckless”, for which I might substitute the word “courageous”— but I warmly endorse the grateful compliment that she paid to my noble friend Lord Taylor for the changes that he has been more than instrumental in securing. As somebody who contributed to a rather torrid debate at Second Reading, when tremendous dissatisfaction with the Bill was expressed, I am extremely grateful that the answers that my noble friend returned with have turned away wrath for the time being. However, as the noble Baroness, Lady Andrews, has just said, that wrath has not gone away. It may have been turned away but it has not gone away entirely. I am afraid there is still more to come, particularly on expressing in the Bill the purposes for which these powers are to be used.
I take it to be a principle of the rule of law that an executive power may be exercised only for one of the purposes for which it was conferred. A ground that appears frequently in court judgments on judicial review proceedings is that a power has been purported to have been used in a way that was not authorised by the legislation giving rise to it. There is a good way to go yet, but I am heartened by the letter that my noble friend Lord Taylor sent to the committee—in appendix 2 to the report—in which he says that he is grateful to the committee for its report and goes on to say that the Government,
“continue to consider, in particular, the committee’s concern that the Bill should give greater clarity in clause 8 to the purpose for which the powers may be exercised”.
I hope that his efforts in that regard will be just as successful as they have been in relation to the appalling Schedule 7 and the equally alarming provisions affecting forestry. I hope he will be able to tell us that there is work still to be done and that he is looking forward to doing it.
Lord Walton of Detchant
My Lords, I feel just a little guilty in speaking to this amendment. On several occasions over the past few years, in debates in your Lordships’ House on the health service, I have said openly that I was deeply concerned about the National Health Service and health bodies being subject to control by “an intolerable quangocracy”. Hence, when I learnt that the Government were planning a bonfire of the quangos, I felt a minor sense of relief. However, having seen the detail, particularly the provision in Clause 5 that the Minister may modify by order the functions of a body or the holder of an office specified in Schedule 5, I am afraid I still have considerable concerns.
I was greatly relieved when the Minister agreed to remove Schedule 7 a few days ago. Looking at two organisations with which I have a special concern and interest—namely, the Human Fertilisation and Embryology Authority and the Human Tissue Authority—I am deeply concerned. I know full well that these bodies will be the subject of individual amendments, which will be discussed a little later in our debates. However, the principle embodied in Clause 5 is one that causes me considerable anxiety. The Government’s proposal that these two bodies should be merged with the Care Quality Commission, for example, carries all kinds of serious concerns and hazards. We may come to that later.
Lord Taylor of Holbeach
Perhaps I can start by reassuring the noble Lord that we will be able to debate both the Human Fertilisation and Embryology Authority and the Human Tissue Authority later this evening. I thank noble Lords for their contributions to the debate, and the noble Lord, Lord Hunt, for probing several issues through the procedure of whether the clause should stand part. It gives me an opportunity to address those issues, for which I am very grateful. This group of amendments deals with powers in the Bill to transfer functions and the question of public accountability, particularly in relation to data and freedom of information. I accept that it is important to provide reassurance on these issues and thank noble Lords for the opportunity to do so through these amendments.
Clause 5 gives Ministers the power to make provision, by order, to transfer or modify the functions of any body or office listed in Schedule 5. This includes the conferral of new functions, the abolition of functions or changes to the conditions or purpose under which functions are exercised. When we talked about Clauses 3 and 4, I gave examples of such changes, so perhaps I could give the example of the body that we will debate next. The Government intend to use the Bill to transfer the functions of the British Waterways Board to a new mutual body, removing powers from Ministers and giving the users of waterways a far stronger voice in the management and development of the system.
Baroness Andrews
My Lords, perhaps I may press the noble Lord on one point. I am very appreciative of what he said in his response about Clause 8, but the example he gave of what the powers would be used for was interesting. The example related to the British Waterways Board’s transfer from the public sector to the charitable sector. The list of 14 bodies in Schedule 5 involves very specific uses of powers. Given the mystery—and, frankly, slightly sinister nature—of Clause 5, which we have addressed in different ways, can the Minister publish some sort of schedule that identifies the powers to be used in relation to those bodies? I do not think that that would be onerous, although it would certainly have been onerous if Clause 11 and Schedule 7 had survived. That would go a long way to meeting our concerns. I do not speak on the committee’s behalf, but I suspect that such a schedule would help the committee and those who will read and use the legislation—as well as the public bodies listed in the Bill.
Lord Taylor of Holbeach
I thank the noble Baroness for her intervention, because it reflects outside conversations and my discussions with the chairman of the Delegated Powers Committee on this matter. I should emphasise that we have found it possible—and I hope noble Lords will agree that it has been helpful—to produce the A4 briefing sheets that more or less provide a background for the changes we have been discussing. Those briefings have been explicit in describing the framework of the changes—not the detail, only the framework. To include such details in the legislation, given the large number of bodies involved, would lead to an extremely large Bill and would not necessarily be the way to deal with this matter.
We are discussing these bodies in principle in primary legislation because of the way that the debates and this Committee have taken the Bill. We know, because of the exclusion of Schedule 7, that there can no longer be the “stroke of the pen” that the noble Baroness, Lady Andrews, eloquently described when she expressed her anxiety about these issues. We know that that cannot happen and we know what the nature of the changes that will occur under the Bill will be. It is important to emphasise that no Minister can act under the Bill without a period of consultation or without explaining in detail the reasons for the change, its nature and consequences, in the explanatory document that will be provided alongside the statutory instrument that will effect change under any of these schedules. That is an effective way to ensure that Ministers do not act precipitately. If we are to try to meet the concerns of the Delegated Powers and Regulatory Reform Committee, we need to focus less on that than on the wording of Clause 8.
However, I make no promises—and I do not want to make promises—on this matter because it may be that I have stretched my run of good luck too far already. However, I believe that an explanatory document is a much more effective way of answering the Committee’s concerns and those of the noble Baroness.
Lord Goodhart
I should like to add a few words in my capacity as the previous chairman, and a member for several years before that, of the Delegated Powers Committee. A strong case has been presented for further action on this matter. The final sentences in paragraph 20 of the committee’s latest report state:
“Especially in the absence of a convincing explanation, it is not appropriate for an existing power to make subordinate legislation to be transferable to another, unidentified, body. This renders the powers in clause 5 in relation to these bodies especially inappropriate. The Committee draws the attention of the House to amendment 99A”.
Schedule 5 lists a group of bodies that are among the most important to be covered by the Bill. They include the British Waterways Board, the Equality and Human Rights Commission, the Competition Commission, the Human Fertilisation and Embryology Authority, the Human Tissue Authority, the national parks authorities, Ofcom and the Office of Fair Trading. All are organisations of considerable importance. There is a very strong case for the arguments presented by my noble friend Lady Thomas of Winchester, the noble and learned Lord, Lord Mayhew, and the noble Baroness, Lady Andrews. This matter needs further consideration and I hope that my noble friend the Minister will use the period before Report to have a serious look at it.
Lord Hunt of Kings Heath
My Lords, first, I echo my noble friend Lady Andrews in paying tribute to the stewardship of the noble Lord, Lord Taylor. Clearly, he has listened to the House and we have made a great advance. We very much appreciate the briefing sheets from his hard-working officials.
It is good that the noble Lord, Lord Goodhart, has joined in our debates. I do not know whether the Government think the same, but the point that he raised underpins the remarks of his noble friend Lady Thomas, the noble and learned Lord, Lord Mayhew, and my noble friend Lady Andrews. They made pertinent remarks about how the powers in the Bill should be exercised. The noble Lord, Lord Taylor, and his noble friend Lord Henley have given us eminently reasonable explanations as to how Ministers intend to use the powers. The problem is that future Ministers may take a different approach. The noble Lord, Lord Walton, put forward the good example of the HFEA and the HTA.
We are looking for ways to build further reassurances into the Bill. We will have a later debate on what the noble Lord calls the enhanced scrutiny of orders and on my amendment proposing a super-affirmative procedure. That is one approach, but we should also pursue the suggestion of both the noble Baroness, Lady Thomas, and the noble and learned Lord, Lord Mayhew. I am glad to hear that work is in progress on Clause 8. The noble Lord said that he could not give any guarantees, but I encourage him in that direction.
I am glad that the noble Lord also said that reviews of these bodies will take place in future. We on the opposition Benches support that. It is right that these bodies and their functions should be kept under regular review. I was also glad to hear that accountability, reporting and FOI responsibilities will continue if the functions are transferred. However, does that apply only if they are transferred to a public body? What would happen in the case of Consumer Focus, whose functions will be transferred to Citizens Advice? What about the British Waterways Board when it transforms itself into a charity? What will happen to the accountability, reporting and FOI requirements?
I take the noble Lord’s point about the sparing use of data sharing that is likely to occur under any order arising from the Bill. However, I issue a caution that past experience suggests that this issue is very complex and will demand the careful use of orders. The noble Lord may want to write to me on the issue of non-public bodies in relation to FOI and accountability functions. In the mean time, I am glad that work is in progress.
Lord Bradshaw
Lord Bradshaw
My Lords, I move the amendment on behalf of my noble friend Lord Greaves, who is ill. We will wait for the Government’s proposals on the British Waterways Board. However, we are particularly concerned about whether a trust such as the National Trust would be able to shoulder the many burdens that will fall on it. Noble Lords who are members of the National Trust will know of the increasing number of appeals that it makes for extra funds to keep its portfolio of properties in good repair. They will also know that the National Trust is being offered more properties that owners cannot maintain. One of our major concerns about the British Waterways Board is that it carries a large burden of maintenance—maintenance of waterways not just as a recreation facility but as a facility for drainage and the conduct of water across parts of the country. There are also a number of public duties that the British Waterways Board undertakes and for which it gets government money. It is difficult to see how a charitable trust will carry out those duties.
I am particularly concerned to bring to your Lordships’ notice the fact that a number of waterways administered by the board carry considerable quantities of freight. Obviously, the board does not administer tidal waters, but it looks after the Aire and Calder Navigation, the South Yorkshire Navigation, the River Ouse to Selby and York, the Trent to Newark and Nottingham, the Severn, the Weaver in Chester and the Union Canal and River Lea in London. It has a big portfolio of interests in the freight business. I am not sure whether the charitable trust that the Government have in mind will take over these freight interests. If the trust is concerned mainly with amenity waterways, it will have only a passing and diminished interest in freight. That is important because these waterways convey very heavy freight which, if transferred to the roads, would add greatly to congestion and road damage, visiting more expense on the Government.
When the proposals come forward for the board, we will expect plenty of attention to be given to the financial burdens that it will take over and a reasonable estimate of the amount of money that it will be able to raise as a charity from walkers, fishermen, boat users, birdwatchers and whoever else uses the canals. We will also want to know in particular how the Government intend to shoulder the huge burden, which has been underfunded in recent years, of keeping the waterways in good repair. I beg to move.
Baroness Quin
My Lords, I am glad that the noble Lord, Lord Bradshaw, was able to move the amendment in the absence of the noble Lord, Lord Greaves, who takes a great interest in these issues. I welcome the fact that the amendment allows us to ascertain in more detail the Government’s intentions on this issue.
The future of British Waterways is very important. In many ways, the idea of a national trust for the waterways is exciting. The previous Government’s plans for the future of the waterways were not dissimilar. However, the noble Lord, Lord Bradshaw, was right to raise a number of detailed issues and to seek necessary reassurances about how the system will operate in future and how the wide and varied responsibilities of British Waterways can be assured to a high and satisfactory standard in the interests of us all.
I note that the provisions in the Bill deal with England and Wales. Will there be any alteration, given the recent transfers of responsibility and strengthening of responsibility within the devolution system in Wales? Have there been any discussions with the Welsh Assembly Government on that? I note also that Scotland has opted not to go down the same route as the Government have proposed for England and Wales. Again, given the fact that waterways are an asset to all of us in the UK, I would like to know what discussions there have been with the Scottish Government on this and whether any practical problems were identified in those discussions. The co-operation arrangements between a new English and Welsh organisation and the devolved Administrations are an important aspect, which must be given proper consideration.
A consultation on these arrangements is about to take place, although the Government have already made quite clear their preference for the future of British Waterways. Therefore, what is the main purpose of the consultation? Will it be simply about how the new arrangements will work? If the consultation came up with different proposals for the future of British Waterways, would they be taken into consideration? Our waterways are obviously very important to many of our citizens and to a variety of users, whether they are people involved in boating or whether they are anglers, walkers and cyclists or those who simply enjoy the peace and quiet of many areas administered by British Waterways. I agree with the Government when they talk about the need for local involvement in the way in which the waterways are operated. However, the waterways are also an important national asset and it may be necessary to strike a balance there in the future.
Lord Greenway
My Lords, I very much echo what the noble Lord, Lord Bradshaw, said in relation to freight carried on some of these inland waterways, as I do the concerns that he mentioned. How exactly will freight fit into a charitable organisation? I am sure that the Government have given this some thought, but we would be grateful if the Minister could give us an indication of how they intend to deal with that.
The Minister will be pleased to hear that the British Marine Federation, which is the representative body of the leisure marine industry, is broadly supportive of the Government’s move to transfer the British Waterways Board into the charitable sector. It sees it as a great opportunity to place the running of canals and certain parts of navigable rivers on to a sustainable footing for years to come and to create the right conditions for the continuation of what is a thriving inland marine economy.
The federation’s own members—boat operators and marinas—generate some £144 million a year and employ 2,500 people. However, many other businesses, such as pubs, hotels and boatyards, also depend on waterways for their livelihood. It is estimated that for every person directly employed in the inland marina sector an additional 10 jobs are generated from associated services. The overall related tourism spend on inland waterways is estimated to be in excess of the not inconsiderable sum of £1 billion a year. However, there are caveats, one of which is that the BMF thinks that the new body must be a completely new organisation, with a new board representative of those whose interests are concerned, and not simply a rebranding exercise. Navigation must be retained as its primary role.
We have heard concerns regarding funding, which I certainly share. Funding should not simply be sourced from boating and fishing licences. Other stakeholders who derive benefit from these national assets should also play their part, possibly even local authorities. I believe that the Government should provide some sort of contract or guarantee to ensure that the waterways are not prejudiced by commercial failure, which of course can happen to a charity. I hope that the Government are looking at that very seriously.
Lord Henley
My Lords, like the noble Lord, Lord Bradshaw, I regret that we have been deprived of the pleasure of having my noble friend Lord Greaves move this amendment this afternoon, but I am very grateful that his noble friend was able to step in and move it, because it is important that the Government set out their case in relation to the waterways.
As the Committee will be aware, the British Waterways Board was originally established under the Transport Act 1962 to operate and maintain much of Britain’s waterways network. In passing, I shall mention that we are dealing with England and Wales here; Scotland is another matter. I am not sure that any waterways go across the border, so there are not going to be any concerns there. However, I remember that with the passage of the Scotland Act we had problems with some of the rivers—
Lord Henley
Indeed, because the boundary moves. If the noble Lord remembers correctly, that legislation allowed the Scottish Government to have an interest in English matters relating to some rivers’ tributaries and vice versa. With England and Wales, the case is different. I do not know the answer to the noble Baroness’s question about the powers of the Welsh Assembly Government but I shall certainly write to her in due course.
In the intervening years since 1962, the British Waterways Board has done an excellent job in transforming what was a very run-down industrial transportation network, with its roots in the industrial revolution, into a hugely valuable environmental, heritage and leisure asset, but it is one which still—again, I am grateful to the noble Lords, Lord Bradshaw and Lord Greenway, for stressing this—also carries some freight, so it continues to have a commercial operation. Its network consists of some 2,200 miles of historic canals, rivers and docks, and it is visited by some 13 million people a year. Again, as I think noble Lords have made clear, it provides benefits that range from not just freight, which has been mentioned, but flood relief and sanctuary for wildlife, as well as its users, through to employment and recreational facilities for walkers and others.
The intention behind setting up a new waterways charity—and I am grateful to the noble Baroness, Lady Quin, for stressing that the previous Government were thinking of something along very similar lines—is to give waterways users and the communities alongside them greater involvement in how waterways are managed, thus contributing to their sustainability in the longer term. Moving the powers, functions and assets of British Waterways to civil society through the creation of what we would like to think of as a sort of national trust—a phrase used by the noble Lord, Lord Bradshaw—for the waterways will allow key stakeholders the opportunity to play a role in their governance and allow them to bring their expertise and passion to the organisation. Providing greater engagement by local communities will, we believe, lead to a range of enhanced public benefits, including green travel to work, health and well-being, support for inner cities and rural regeneration.
As I have mentioned governance, it is worth stressing that the consultation includes proposals for governance on the charitable company model. Subject to the passage of this Bill through Parliament, there will be further consultation on the draft order or orders—I cannot remember whether there is one or more than one—required to transfer the duties and functions of British Waterways to that organisation. However, in relation to the questions that the noble Baroness asked, following on from the speech of her noble friend Lord Hunt in relation to Clause 5, I hope she will await a response from my noble friend which, I am assured by him, will come before we get to Report stage.
There are obvious concerns over funding, particularly in the light of what has been, as we know, a very tight spending review settlement—and I will not say again why it has been so. British Waterways’ funding has seen a reduction in line with other bodies that are attached to Defra and to other parts of government. It is no greater because British Waterways is becoming a charity. We recognise, however, that the move to a charity will require a long-term contract for continued government support, and we have given a commitment to maintain levels in line with the spending review until 2022-23. That will obviously be subject to—
Lord Phillips of Sudbury
I am most grateful to my noble friend for giving way. Is the Minister quite sure that the ambition that the Government will have for this new charity can be assumed by it under charity law? Charity law is singularly unsympathetic to external control and direction.
Lord Henley
The noble Lord is somewhat more experienced in charity law than me, and I am going to be very careful when responding so as not to put my foot in it.
We believe that the charitable model—and this is, again, one of the reasons we will be consulting on governance—will be suitable and will operate in the right way. The Government are giving an assurance that they will continue to meet until 2022-23 the funding commitment I was stressing when my noble friend interrupted, and that is a commitment we can make. I very much hope that the charitable body that is created, after the appropriate decisions have been made and after the consultation, will meet the requirements that the noble Lord is addressing.
I hope I have given appropriate assurance to my noble friend. If I have not, I will write in greater detail in due course. I want to emphasise, however, that that spending review commitment is until 2022-23, which I understand is a pretty long time for any Government to commit to, but obviously it is subject to negotiation with the incoming trustees of the body when it is created.
In order to create a successful new waterways charity for the future, most of British Waterways’s existing statutory functions will need to be transferred to that new charity. For example, we would want British Waterways’ duty to keep the waterways in good repair to be transferred. That is why we had to list it in Schedule 5. It is a matter I imagine my noble friend will be able to deal with in the letter he has promised.
Having dealt with most of the concerns that have been put by noble Lords, may I just say a little about Amendment 99A that will be formally moved later on? This amendment disapplies the provision in Clause 21(2) to enable the transfer of the statutory functions of British Waterways and the Environment Agency to this new waterways charity.
Clause 21(2) provides an important legislative safeguard to prevent the transfer of functions to commercial companies or privatisation by the back door. This important safeguard, however, also prevents the transfer of the British Waterways and Environment Agency statutory functions and assets to civil society and, hence, the creation of a new waterways charity. This amendment will, therefore, enable the new waterways charity to receive important statutory regulatory functions, such as the power of entry on land to enable the carrying out of works on inland waterways for repair, maintenance, alteration, renewal or protection, that will be required for the safe and effective operation of the waterways. It will also enable the Government to deliver their vision for that national trust from 2015, with the transfer of the Environment Agency’s navigation functions into the new waterways charity after the next spending review.
The Government will fully consult on their proposals for the new waterways charity, as I have assured the Committee, over the next few weeks. That consultation will be supported by considerable stakeholder engagement. The Inland Waterways Advisory Council has indicated that it will respond to the consultation before it is wound down.
Finally, could I stress that it is a matter for the Scottish Government that they wish to maintain British Waterways across the border in its current form. One of the advantages of devolution is that different parts of the kingdom can behave differently; that is a matter for them. I reassure the noble Baroness that I will write to her about the Welsh Assembly Government and her concern whether they should or should not have these powers. I do not know whether they were a matter for the referendum that was completed some time ago.
I hope, with those assurances, the noble Lord, Lord Bradshaw, will feel able to withdraw his amendments.
Lord Bradshaw
My Lords, I thank my noble friend for that comment, and the other noble Lords who have contributed.
I would ask that in the forthcoming consultation paper there is a specific section on freight. The freight business is entirely industrial and heavy; the amount of freight carried on the rest of the waterways is infinitesimal by comparison. The big industrial interests using the freight facilities have reservations which they look forward to seeing answered in the consultation document.
Will the Minister also give his attention to the freight facilities grant, applicable both to waterways and railways, which has been discontinued by the Government due to spending constraints but reinstated by the Scottish Government, and give some indication of when this facilities grant may be reinstated?
With that, I have pleasure in withdrawing the amendment.
Lord Dubs
My Lords, the amendments in this group are to do with the Competition Commission and the Office of Fair Trading. These are among the most significant bodies covered in this particular Bill. They are fundamental to both competition policy and to consumer protection.
In passing, perhaps I may say that I regret that the BSkyB matter was not referred to the Competition Commission, but I appreciate that the topic is not one covered directly by this Bill.
I understand the Government want to merge most of the functions of the Competition Commission and the OFT, leaving some to go elsewhere. Clearly, these are matters of enormous concern but I am quite sympathetic to the idea of merging the two bodies. I have always felt there was surplus capacity in the two bodies, and they were not as sharply focused as they might have been in that one referred issues to the other.
It would be interesting to know, however, which of the functions of the two bodies will not be part of the new body. In other words, some of them are going elsewhere. I understand Trading Standards will have to take on some of the responsibilities. It would be useful to know what is in the Government’s mind as regards what the new Competition Commission will consist of, and what functions will go elsewhere and why.
This not an occasion on which to go into the details of how the Competition Commission—or, indeed, the OFT—operates, but it is complicated, because the Competition Commission takes references from other bodies, such as the OFT and sectoral regulators. It takes appeals against decisions by sectoral regulators, and matters of public concern may be referred to it by the Minister. So it is a complicated issue and I would like to know what will be the basis for references to the new Competition Commission. Will they be similar to the old ones? They cannot all be the same because the OFT itself refers issues to the Competition Commission. Can the Minister throw more light on that?
Even if we are to go down the path of merging the two bodies, surely significant lessons must have been learnt from how they operate. We can do things better, a bit differently and more economically, and we should take experience to heart. I think that the Government are going to consult on this, and I would very much like to know the nature of the consultation, how full it will be, how long it will take and what opportunity there will be to make full representations to the Government on what they have in mind.
Having said that, the Competition Commission and the OFT were, I understand, both set up by primary legislation and subject to extensive debate in both Houses. They are significant bodies. I wonder what it is about them that makes them susceptible to the rather truncated procedure under the Bill. I know that that argument has been used about other bodies in the various schedules, but surely it applies with enormous force in the case of the Competition Commission and the OFT. Parliament—I am sure, most Members of this House—would like an opportunity to debate that in full and to be able to move amendments on the proposed new body: to consider the implications, for example, of transferring some functions to local authority trading standards authorities, when they are under severe financial pressure because of the cuts. What will be left of trading standards authorities after the cuts have taken place in local authorities? Will there be sufficient to take on the functions that have come from these two bodies into a local area?
This is an unhappy way to proceed. Even if everybody agrees that the two bodies should be merged—and I would guess that a lot of people would—there is still a need to consider how it will work out in detail. I am unhappy that we are doing something so significant on what is, more or less, the back of an envelope. I beg to move.
Baroness Hayter of Kentish Town
I will raise a couple of issues on the consumer aspects—although there may be no other issues, as that is the purpose of these two bodies. I have three questions on which I seek information from the Minister. First, in transferring enforcement of consumer law to local trading standards bodies, how can trading standards enforce significant breaches of consumer law at national level, such as bank charges or airline practices? My second question regards supercomplaints. Is the Minister satisfied that taking supercomplaints about competition direct to the new merged body—without, therefore, the two-stage process of checking on a case—has been carefully considered before the merger was proposed?
My third question is in respect of those supercomplaints which deal with consumer detriment which arises from particular features of a market. I have in mind for example, the current supercomplaint by Which? on payment method surcharging. It is not clear to me where those sorts of supercomplaints, which come under general consumer protection regulations rather than breaches of law on competition, would be taken under the new architecture.
Lord Young of Norwood Green
I have sympathy with the amendment; I think that it is a probing amendment. I certainly welcome the framework document, because I think that it is an attempt to explain what is going on, even if it does not deal with every detail.
The Government state in that document that the challenge in creating a single competition authority will be to help create a framework which is genuinely greater than the sum of its parts—for example, by streamlining procedures and processes to the benefit of those who use or are affected by them. There is doubt about whether that can be achieved. My noble friend Lord Dubs was right when he said that both authorities when they were initiated were the subject of large debate and primary legislation. Is this the right way to deal with them in future? That is a major decision.
I certainly concur with some of the concerns expressed by my noble friend Lady Hayter. Indeed, I was going to ask about the consumer functions that are being transferred. The Government state that the focus is to create a single strong point of information on education and advocacy and that citizens advice services will also take on responsibility for the Consumer Direct helpline. Strong concern has been expressed in the Chamber about the idea that Consumer Focus will be merged with the citizens advice bureaux—mainly because there have been examples around the country of local authorities cutting those services. There is genuine concern about that aspect of the Office of Fair Trading’s activities being transferred to the citizens advice bureaux.
The document also mentions consumer credit functions being subject to a separate consultation as part of the HMT proposals for a new consumer protection and markets authority and that any subsequent transfer will be dealt with primarily through separate financial services legislation. It also talks about the possibility of the consumer functions being transferred in advance of the wider merger proposal. That only stresses our anxiety about whether there will be the ability at local authority level to deal with those aspects of consumer protection.
Those are our concerns about the proposals. I hope that the Minister will tackle the questions raised in his response.
Lord Newton of Braintree
My Lords, before my noble friend replies with his characteristic clarity, perhaps I may be a seeker after truth. There has been reference to consultation. I am now left totally confused. I read the briefing note that I took off the e-mail only yesterday in respect of today's proceedings, which contains the following line:
“The Government will consult on its detailed proposals in the new year”.
I am aware of the elasticity of seasons in respect of Her Majesty's Government, whoever forms it, but this seems to be getting ridiculous. Are we consulting or are we waiting?
Lord Myners
Will the Minister assure the House that nothing in the proposals made by the Government in respect of these bodies will in any way inhibit the freedom of recommendation of the Independent Commission on Banking? It is widely recognised that one of the key issues in banking is inadequate competition. That is evident in returns on capital and operating margins which most business sectors would die for. Banking is characterised by poor customer service, low standards of innovation and very little customer movement from one bank to another—although, on the whole, customers express themselves to be very dissatisfied with the service they receive from their current bank. To put it simply, they do not particularly like their own bank, but they have no confidence that any other bank is any better.
I fully commend the Government’s proposals to establish the independent commissioner on banking. Together with the establishment of the Office of Budget Responsibility, they represent novel and important proposals from the Government which should enjoy the full support of the whole House. However, we cannot see the freedom of recommendation in some way enfeebled by the Government denuding the effectiveness of some of the responses which Sir John Vickers and the commissioners might recommend in terms of the process, should they also be seized by the inadequacies of competition in banking for individuals and small businesses in the United Kingdom.
Lord Taylor of Holbeach
My Lords, the noble Lord, Lord Young of Norwood Green, described the amendment as a probing amendment. In fact, I am in a position to accept one of the amendments so it is rather different from how the noble Lord might have perceived it. This is a concession on the hoof, so to speak. I am grateful to the noble Lord, Lord Myners, for his intervention. I am not an expert on banking. My noble friend Lord De Mauley is and has apparently just written a letter on this very subject which he is going to bring to me so that I can give some authority to the answer. Otherwise I think I would be waffling when I came to tackle the answer—waffling more than usual.
As the Explanatory Notes state, the Government are proposing to merge the competition functions of the Office of Fair Trading and the Competition Commission and are minded to transfer most of the consumer enforcement functions and resources of the Office of Fair Trading to trading standards, and advice, information and education functions and resources to Citizens Advice. Merging the bodies will eliminate duplication of effort in the competition regime, while transferring the consumer functions will improve consumer empowerment and protection by simplifying the bewildering array of overlapping bodies faced by consumers when they have a problem. I can assure the House that our proposals would remove no substantive consumer protections.
A merger between the Office of Fair Trading and the Competition Commission would create a single, powerful competition and markets authority with a dynamic competition culture and more flexible use of competition tools. It would eliminate unnecessary duplication of effort for business, as well as for the authority. It would be able to attract the best competition skills and would create a powerful and unified advocate for competition in the UK and internationally.
Competition enforcement is an important element in the growth and productivity of the economy. While the UK’s competition regime already has many strengths, the Government believe that it is only right to consider where it can be further strengthened and rationalised in some way.
On the consumer proposals themselves, the transfer of most consumer enforcement functions will target resource where it is most needed—to support trading standards services, which the Government believe are best able to ensure robust enforcement against rogue traders, scams and businesses which abuse the law and their relationship with consumers. The resources that were available to the OFT would be transferred to trading standards. I assure the House that our proposals, on which we will consult, will include a range of options for keeping flexible powers for the new competition and markets authority to use consumer enforcement tools where they are the most appropriate remedy to cure a competition problem.
The transfer of the OFT’s advice, education and information functions, including the Consumer Direct helpline, to Citizens Advice and Citizens Advice Scotland, along with the functions of Consumer Focus, would place all these functions in a single organisation well-equipped to represent the consumer. The appropriate resources would accompany this transfer of functions.
The Government believe that trading standards and Citizens Advice provide a first-class service and operate much closer to the public. Transferring functions to them would be wholly consistent with this Government’s support for action and decision-making at local level. In particular, devolving key elements of consumer enforcement to a local level would target resource where it is most needed. It would reduce the potential for gaps and empower local authorities to find ways to address all threats which have a combined local and national dimension. Trading standards services already have experience of handling complex cross-authority cases successfully. We need to build on that and develop a body with the right capabilities, resources and prioritisation mechanisms.
Perhaps I may address this whole business of consultation. I think my noble friend Lord Newton of Braintree might have had an outdated briefing because the information on the local briefing makes clear that we are commencing a consultation process fairly soon. In fact, the consultation document may be available shortly, in the next 10 days or so, which means it will probably be available by the time we reach Report. The idea is that the consultation period should be completed within this year. The whole point of consultation is to address the detail of these proposals because it is in the mechanics of making this work that it happens.
We will consult on a model that ensures that money is targeted onwards towards national enforcement priorities, set and co-ordinated by a trading standards policy board made up of chief trading standards officers for England and Wales, with similar arrangements for Scotland. National threats could be addressed on the ground through one or more dedicated expert teams, either following the existing Scambusters model or through lead individual local authorities. The Government’s consultation will also address the most economically complex consumer enforcement cases and will consider the case for the newly merged competition authority to retain some consumer law powers to supplement its competition work.
Given that the Government’s proposal is to merge these bodies, noble Lords may query why they are listed in Schedule 5 to the Bill. I am happy to clarify the matter. At the time of the Bill’s introduction, there was a proposal to use Schedule 5 to transfer some functions from these bodies and consequently to use Schedule 7 to move the bodies into Schedule 2, facilitating the proposed merger. Given the removal of Schedule 7, this is no longer possible. I therefore confirm that the Government intend to bring forward an amendment at a later stage of the Bill’s passage to move these bodies into Schedule 2 to facilitate the merger.
The Office of Fair Trading will need to remain in Schedule 5, in order to facilitate the transfer of its consumer functions prior to the expected order to merge. Therefore, I cannot accept Amendment 97. However, the Government have concluded that it is no longer necessary to list the Competition Commission in Schedule 5, and on that basis, I am pleased accept Amendment 89 moved by the noble Lord, Lord Dubs.
I have received quite a lot of briefing on a number of issues raised by noble Lords and I will try to go through them. As we approach the dinner hour, I hope that the House will forgive me for doing so, but this is an opportunity to clear up some of these questions. The noble Lord, Lord Dubs, asked about consumer credit. It is subject to a separate consultation. In December, the Treasury and BIS issued a joint consultation on transferring the regulation of consumer credit from the OFT to the new Financial Conduct Authority. He also asked about trading standards resources, which of course will be addressed at the local authority level. But we are aware of the pressures on all services, including local authority trading standards. How local authorities allocate resources according to local priorities is a matter for them, but it is essential that any new money must be targeted on broader projects that respond to a national threat. It must complement work that is already being done rather than be seen as new funding for current projects. Nevertheless, there may be some positive benefits in the form of greater co-ordination and capacity building that would arise from these changes. Specifically as regards the future of the Local Government Group, it is our view that a board of chief trading standards officers, either as a successor to Local Government Regulation’s Trading Standards Policy Forum or the Association of Chief Trading Standards Officers, would in practice lead on the co-ordination work.
The noble Baroness, Lady Hayter, asked about economically complex cases. As I mentioned in my main text, trading standards departments have demonstrated their ability and professionalism over many years, and I hope that I have indicated, by the construction of national co-ordination within the trading standards world, that we are looking to build them up in order to be able to tackle the more complex activities that not only have local impacts but are of national significance. It is important that any changes can be addressed. In the same way, the noble Baroness asked about super-complaints. Competition elements would be part of the new Competition and Markets Authority, but the consumer, being sure of the issue, would go to the new authority for mixed market analysis. Where it is solely a matter of consumer interests, it would need to be part and parcel of the new co-ordination body within trading standards, as has been suggested.
The Government intend to consult and the proposed consultation will begin soon. No date has been set for the consultation to be concluded, but it is expected to be finished during the course of the year. In reply to the noble Lord, Lord Myners, I am pleased to be able to say that as a result of the question that my noble friend had to answer, the Government’s wider financial services agenda, the Independent Commission on Banking, chaired by Sir John Vickers, has been asked to look at the structure of banking in the UK and will consider how to promote financial stability and competition in the industry. This will include examining the complex question of separating investments from other matters. As regards the ICB, the Chancellor of the Exchequer said in the House of Commons on 9 February and my noble friend Lord Sassoon said in this House that the Government will not interfere with its independent remit.
I hope that I have managed to tackle the questions raised in the debate. I am grateful to noble Lords for bringing these issues to the attention of the Committee and I am happy to support Amendment 89, moved by the noble Lord, Lord Dubs.
Lord Dubs
My Lords, I am grateful to the Minister and I am delighted that he has accepted one of the amendments, although I am not sure that it is because he has accepted the full thrust of the argument. I think that he has done so for a slightly more technical reason, but nevertheless one should take one’s victories where one can get them. I am also grateful to my noble friends for the contributions they have made to this debate.
The Minister said that at a later stage the Government would be coming forward with further amendments. I hope that they will be tabled in this House. It would mean that I could say much less now than I would otherwise say if the amendments were not going to be introduced here. Does he know whether they will be brought forward in this House or in the other place?
Lord Taylor of Holbeach
There have been early discussions on this matter and I should like to be able to bring the amendments forward at the Report stage in this House.
Lord Dubs
I am most grateful for that helpful response. There is only one issue that I am not clear about. The present process for referrals to the Competition Commission is quite complicated, and as I indicated, referrals can come from a variety of sources. Will the new Competition and Markets Authority be able to investigate issues on its own initiative or will it depend upon referrals? Will those referrals come from the existing arrangements or will they come from elsewhere? I am not totally clear about this.
Lord Taylor of Holbeach
I think that I can reassure the noble Lord. The authority will not be entirely dependent on referrals. It will have the capacity, as does the current Competition Commission, to initiate investigations. This will be part and parcel of the consultation, which I hope will make the position clear for the noble Lord.
Lord Dubs
In which case, all I would say is that I still think it is too complicated an issue to be dealt with in this way. I understand that it is not of the Minister’s own choosing, but if we had been having a Second Reading debate today on a proposal to merge the two bodies and deal with other consumer protection and competition matters, it would have been much easier for us to handle it. It is not for us to change the Government’s approach, but I do regret it. However, I am grateful to the Minister for his response and I commend Amendment 89 to the Committee.
Drug Use and Possession: Royal Commission
(13 years, 9 months ago)
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Lord Norton of Louth
To ask Her Majesty’s Government what consideration they have given to establishing a royal commission on the law governing drug use and possession.
Lord Norton of Louth
My Lords, this is an especially appropriate time, or at least an appropriate year, in which to ask this Question. It is 40 years since the UN Single Convention on Narcotic Drugs was promulgated and the Misuse of Drugs Act was passed. Whether I am the most appropriate person to raise the issue is another matter. Other noble Lords taking part in this short debate are far more qualified than I am to speak; I approach as someone totally detached from the subject. I am conscious that, as an academic, this is not my subject, and hence I tread with some trepidation.
However, my background is relevant in two respects. First, as I have said in the House before, I believe strongly that we should have evidence-based policy. I am often appalled at how much legislation is brought forward more on the basis of hope than of evidence. Secondly, I recognise that the best way to affect attitudes and behaviour is through education—I do not just mean formal education—and persuasion. The law alone cannot achieve change, and indeed it can be dangerous to rest on the law in place of education. As a Conservative, I do not believe that the purpose of the law is to send signals. Perhaps it is because I come from a detached position that I am struck by the problems and the contradictions that we now find in our attempts to address the problems generated by drug use. We prohibit certain drugs, but we allow people to purchase and consume substances that may be far more dangerous and account for far more deaths each year.
There are two dimensions to the issue: drug use and drug prohibition. There are clearly appalling costs associated with drug use, not only to those who become addicted and their families but to the community. However, there are clear problems with prohibition. If drugs are illegal, the supply is therefore driven underground and supply becomes in the grip of organised and violent crime. What happened with prohibition in the United States, we see now repeated in respect of drugs and on a massive global scale. This has appalling consequences in some countries in terms of loss of life. The Government’s Drug Strategy 2010 concedes:
“The UK demand for illicit drugs is contributing directly to bloodshed, corruption and instability in source and transit countries, which we have a shared international responsibility to tackle”.
In this country, the problem manifests itself in the crime figures and the sheer amount of police time occupied by combating drug use and supply. The exercise is highly inefficient in that only between 1 per cent and 10 per cent of drugs are believed to be stopped from reaching their target market. Nearly half of all crime is related in some way to drug use and abuse. Heroin and cocaine users are responsible for most burglaries, shoplifting and street prostitution. The economic and social costs are staggering. In the UK, as the Government concede, these costs in respect of class A drugs alone are estimated at more than £15 billion a year. More than half of prison inmates are believed to have serious drugs problems. I am all for incarcerating those who engage in serious crime, but locking up drug addicts generates a vicious, and costly, cycle. To feed their habits, drug users steal, rob and then get locked up, costing the public even more, with recidivism a marked feature once they are released.
My starting point is that there is a demonstrable problem. What, then, do we do about it? A great deal has been written on the subject, though at times we appear to get much more heat than light and a tendency on the part of politicians to wish the problem away. That in itself then becomes part of the problem.
When I knew that I had secured this debate, I invited comments from readers of Lords of the Blog, a collaborative exercise by several Members of your Lordships' House. I received a good number of informed, and sometimes anguished, responses. One comment came from a father who had lost his son to a heroin overdose. He wrote in support of maintaining the present law. His son had been cautioned for cannabis possession, but he and his wife were unaware of this and felt that if their son had been charged then they would have known about it and may have been able to do something to save him. That is a tragic case, but it is clear that the law did not prevent the son taking drugs in the first place.
That is the problem with which we have to wrestle. The law as it stands is not having the intended effect. It may deter some, but it is clearly not preventing a great many people taking drugs, with all the attendant and consequent costs that I have mentioned. The Science and Technology Committee in the other place, in its 2006 report, Drug Classification: Making a Hash of It?, found no solid evidence to support the existence of a deterrent effect. I gather also that there is no evidence that the level of classification within the 1971 Act has any effect on consumption.
One solution may be to move towards decriminalisation. The chairman of the Bar Council, Nicholas Green QC, has said that there is a growing body of comparative evidence that decriminalising personal use can have positive consequences. He said:
“It can free up huge amounts of police resources, reduce crime and recidivism and improve public health. All of this can be achieved without any overall increase in drug use”.
This year is also the 10th anniversary of the passage of the law in Portugal to depenalise drugs. Drug deaths there decreased as did the prison population, and seizures of large quantities of drugs have increased. Even if we do not go down the road of decriminalisation generally, there may be a case for at least permitting the use of cannabis where there are medical grounds.
That may be the way to go; it may not be. It may be that we should strengthen the existing law or devote more resources to enforcement and to education. Police resources are stretched. Drugs education can and does have an impact but most schools, I understand, choose to provide drugs education once a year or less and all too often develop their own curricula rather than using evidence-based programmes.
My case is that we need to explore whether the present law is necessary and sufficient, whether it is necessary but not sufficient, or whether it is neither necessary nor sufficient. The Government's Drugs Strategy 2010 is silent on the issue. Implicitly, it takes the first of these three positions. There is no critical reflection. Can we improve on the existing law? What are the alternatives? If we are to stick with the existing law, we need to know why and not simply take it as given.
It is these points which motivate this Question. I have put it in terms of a royal commission. Royal commissions have somewhat gone out of fashion, in part because they are seen as time-consuming, cumbersome bodies. They need not be, as the royal commission under my noble friend Lord Wakeham demonstrated. They can enable salient evidence to be placed before an authoritative public tribunal on a transparent basis and the evidence to be weighed.
However, I am not wedded to a royal commission. Another form of inquiry may be equally appropriate or possibly even more so. At the very least, we need to undertake an impact assessment of the 1971 Act. We need a structured means for weighing evidence, not proceeding on the basis of prejudice, with people simply speaking past one another. I would not be averse to a broad-ranging inquiry; drug use, as the Government recognise, can encompass alcohol consumption. There is a case for a holistic examination.
I am delighted that my noble friend Lady Neville-Jones is to reply. She is too intelligent to fall back on crass or knee-jerk responses that we cannot change because it would send out the wrong signals, or that it is an international problem which means that we cannot do much on our own. Such responses would not in any case be relevant, because I am not making the case for change. I am making the case for a proper, thorough and detached review of the evidence.
Baroness Walmsley
My Lords, I support the call of the noble Lord, Lord Norton of Louth, for a royal commission on the laws relating to drugs. I would like its remit to be as wide as possible. I agree with him that policy should be evidence-based, as existing drugs policy is an expensive failure and based on ignorance and prejudice. All evidence points to drugs being a health issue. Only bad policy has turned it into a criminal justice issue, a public safety issue and an economic issue.
As a Liberal, I believe that what an intelligent adult chooses to put into his own body should be up to him. However, I cannot imagine why people use drugs when they know the harm that they cause and, of course, we have a duty of care to the young and vulnerable. The matter is therefore no business of government unless, first, users commit crimes in order to feed their habit; secondly, they do harm to other people; thirdly, the market that they create leads to organised crime and violence; and, fourthly, their habit costs the taxpayer money. All those four things are clearly the Government’s business. We should address the matter by way of vigorous fact-finding and taking of independent professional advice.
I shall take the above four points in turn. First, I do not believe that possession for personal use should be a crime. However, stealing is, and should remain, a crime. Addicts steal to buy drugs because illegal drugs are expensive. It is a seller’s market because many drugs are illegal. If addicts could get legal, safe supplies, their habit would be cheaper and safer for them. Most drug deaths occur because the drugs are cut with other substances or their strength is unknown. There is an incentive for dealers to cut the drugs and make more profit. This is the wrong incentive to have in the system.
Secondly, addicts harm other people as well as themselves. Many of those who abuse alcohol get violent. They get into fights on the street and, when they get home, they abuse their wives and children. Their children are not properly cared for because of the money that the addict spends on alcohol. The same applies to the children of drug addicts. I can also imagine the money spent on cigarettes being better spent on food and clothes for children. Perhaps I may ask the Minister whether the remit for the royal commission could include a section on the effect of drugs of all kinds on the lives of the children of addicts. It always amazes me that when drunks and addicts come into contact with medical services no one thinks to ask whether they have children at home so as to get the social services to look into the effects on them.
Thirdly, the market for drugs is primarily responsible for the gun and knife crime on our streets and the enormous amounts of money that attract organised crime. That is very big business but it filters right down into the heart of our communities, including our schools. Children know where to get drugs, guns and knives. Many of those who carry knives say that they do it to protect themselves. They do not realise that carrying a knife makes them even more likely to suffer injury from one. In order to stop our children wasting their lives, we must set up a study to look dispassionately at the facts and international experience and to act on recommendations.
Finally, the cost to the taxpayer of the current bad policy is enormous. At a time when we are trying to pay down the deficit, we must look seriously at this cost and consider how we could get better outcomes for less money. There are wide implications for public policy suitable for consideration by a royal commission. My Government, who were elected with 60 per cent of the vote, should have the confidence to defy the tabloid newspapers. They should get the facts and act on them. We should not be afraid of ignorant, misleading and downright evil tabloid headlines. It is the right thing to do. Please let us do it.
Baroness Finlay of Llandaff
My Lords, I am grateful to the noble Lord, Lord Norton of Louth, for introducing this important debate. There are two areas of real concern about our current drug laws: first, their enforceability; and, secondly, whether they are capable of achieving the desired goal.
The Misuse of Drugs Act, 40 years old in May, controls more than 600 substances, with more being added at an alarming frequency. Enforcement is becoming increasingly difficult as the remit of this Act expands. Officers are expected to identify controlled substances from a vast and expanding list. Tests are expensive and time-consuming. As the law becomes harder to enforce in full, it risks being brought into disrepute. Control of different psychoactive substances appears increasingly inconsistent. There is increasing public awareness of the harms associated with alcohol and tobacco, resulting in some action now in law, yet the law currently suggests that they are of less concern than the 600-plus substances already controlled under the Misuse of Drugs Act—a list to which about 40 substances a year will probably be added. The law is sometimes said to give a message but, unfortunately, in this area, even if it does give a message, it does not get to those who are at risk and can have the opposite effect to that intended.
The temporary one-year banning powers proposed in the Police Reform and Social Responsibility Bill will come under pressure in response to all newly emerging substances which are seen to have, or are just believed to have, potential harm. With about 40 new psychoactive substances a year, this will not be cost-free. Police time costs money.
Illicit substances have a perverse appeal to young people and fuel criminal trafficking of active and contaminated substances. When a substance becomes illegal, it is cut and diluted and the concentration of the contents is unknown. For example, despite the ban, mephedrone users are still obtaining the drug but with greater risk of overdose and poisoning from contaminants, adding to the NHS costs. Newer, more harmful substances may be replacing mephedrone, so the impact of bans such as that applied to mephedrone needs evaluating. The evidence has to be looked at.
Annually, more than 41,000 people are sentenced for drug possession, of whom 1,200 enter immediate custody, so alternative civil powers, such as trading standards or medicines regulation, warrant consideration. These may be just as effective at protecting young people, while avoiding some of the harms associated with a ban under the Misuse of Drugs Act, including stigmatisation impeding recovery programmes.
The UK Drug Policy Commission, of which I declare an interest as a commissioner, will shortly publish a report looking at the issues around the control of new substances. This will highlight the need for a more open debate about drug control and a complete review of our approach towards all psychoactive substances. The debate today is a welcome start to such a process.
The Earl of Onslow
My Lords, about 10 and a half years ago, two rather interesting things happened to me. First, I was elected a Member of this House. Secondly, on the same day, I went on “Have I Got News for You”. The first question that Angus Deayton asked me was, “Oh, Lord Onslow, are you in favour of the legalisation of drugs?”. I said, “Yes I am and I will answer this question seriously and not flippantly”. I said that drugs seem to me to be the greatest threat to social cohesion that there is. They produce crime and getting out of the vicious circle is impossible. Therefore, we must have a much more sensible policy than the one that we have. All the evidence shows that the present policy fails.
I was delighted when my noble friend Lord Norton stressed the importance of evidence. I continued on the programme by saying that, if the evidence shows that we are failing, why do we go on and on? I continued in that vein for some time. The interesting thing was that the audience—they were not way-out hippies but a respectable cross-section of society who had gone to listen to a flippant and funny programme—all clapped at the end. I think that we overestimate the attitude of what could be classed as the red-top newspapers.
The late Lord Colville, who was such a distinguished Member of this House, said that he reckoned that 75 per cent of the people whom he sentenced to get a slight suntan were involved one way or another with drugs as well as crime, including robbery or whatever. It is easier to get drugs in prison than out of prison. I wonder why.
It is not so much the respectable people who suffer from drugs, even though there are to my certain knowledge Members of your Lordships’ House with children who have had drug problems. We have even had—I am not breaking a secret—a distinguished Member of your Lordships’ House who was a mainline heroin addict and has admitted to it; he has gone on to make a major contribution to the proceedings of this House. It is obviously possible to get out of the problem into which we are looking. It could be made more difficult: the supplier has an incentive if drugs are illegal, whereas if they are not illegal there is no incentive to push.
I am obviously privileged beyond anything to live in a civilised and pleasant place. I do not live in a tower block where needles are lying about the place. For those people the policy of criminalisation makes their lives so much worse. It is for that that I support the noble Lord, Lord Norton.
Before I stop speaking, I should like to say one further thing. I have not been well recently and I should like to thank every single Member of your Lordships’ House who has come to me with really nice things to say. It has moved me beyond peradventure and I should like to put that on the record.
Lord Rea
My Lords, the noble Lord, Lord Norton, has chosen a relevant and important topic. We should thank him for securing this short debate. He and all other noble Lords who have spoken are right to point out that the current legal framework controlling drug abuse has been remarkably ineffective and very expensive. Recently, there has been a slight reduction in drug use by young people, but there has been a parallel increase in binge-drinking, with an alarming increase in death from liver disease.
Fashions change in the popularity of mood-altering substances but it has always been a characteristic of human societies to use one or other of them for enjoyment or relaxation. Prohibition merely drives trade in these substances underground and into the hands of criminals. The main problem with current drug legislation has been what was described recently by Antonio Costa, former chief executive of the UN Office on Drugs and Crime, as a raft of “unintended negative consequences”. These include a huge criminal market, policy displacement from healthcare to enforcement and geographical displacement—the “balloon effect” of enforcement activity in one area displacing the problem to another. We have a serious drug problem in the UK, but its extent stretches far wider. Illicit drug profits are fuelling crime, corruption and conflict across the globe. The recent spate of violence in Mexico is but one example.
I have been interested in the problem of drug abuse since my days in an inner-city general practice. The social and physical problems caused by excessive consumption of alcohol—a legal substance—were greater than those caused by drugs that are illegal. My strong impression was, as the noble Baroness, Lady Walmsley, has pointed out, that the health problems stemmed more from the fact that the street drugs that were used were adulterated rather than from the effect of the drugs themselves. The four deaths that occurred among my patients were all due to overdose from batches of street drugs that were unexpectedly potent. At the other end of the scale, I had several heroin-dependent patients who received pure pharmaceutical heroin from one of the few doctors still permitted to prescribe it. They were able to carry on responsible jobs and maintain normal households. They were eventually able to end their drug use while receiving careful counselling and medical supervision, but only when they felt ready to do so—a similar approach to that used in the most successful treatment units today.
The purpose of these remarks is to emphasise that most of the substances now listed in Schedule 2 to the 1971 Act, if used in moderate amounts in pure form, while not totally harmless are no more harmful than alcohol and tobacco. Tobacco actually raises mortality even when smoked as intended. The relative harm caused by different agents has of course been the subject of recent controversy and a bad-tempered spat between the Home Secretary and Professor David Nutt, the former chairman of the ACMD, resulting in his dismissal. He made the mistake of using a light touch in comparing the dangers of ecstasy with those of horse riding, for which he coined the term “equasy”.
To conclude, is a royal commission the right body to review our health policy? It would certainly bring clarity to a controversial area, but the Government would not necessarily be bound to follow its recommendations, resulting in the issue being in effect kicked into touch. I recommend the use, as the noble Lord mentioned, of impact assessments, as recommended by the committee of the noble Baroness, Lady Finlay, the UK Drug Policy Commission. The advantage of this method is not only that the Government are more likely to follow and take seriously the recommendations, being part of the process, but that it has flexibility, enabling it to be applied internationally as well as nationally.
Baroness Meacher
My Lords, I applaud the noble Lord, Lord Norton, for initiating this debate. The case for a review of the Misuse of Drugs Act 1971 is of course overwhelming. No one today would seriously argue that the possession of cannabis should be punished with a maximum penalty of two years or an unlimited fine, as in the Act. Likewise, surely no one would argue that seven years in prison should be on the statute book at all as a possible response to the possession of a few ecstasy tablets.
It is important for us to be clear about the meaning of success in the drugs field these days. The big change in the last 40 years has been the universal recognition that the call for a drug-free world was nothing but a pipe dream. The key question is what policies will minimise the level of drug addiction and of personal and societal harm. I applaud the Government’s emphasis on recovery, but that policy would be vastly more effective if it were introduced alongside the decriminalisation of drug users.
Many countries have introduced health-oriented approaches alongside decriminalisation, with positive results. The Portuguese policy, as already mentioned, of decriminalising the possession of up to 10 days’ supply of all drugs, linked to active treatment, has astonished the faint-hearted. Far from leading to a drugs tourist industry—which was well predicted—and soaring levels of drug addiction, the policy is recognised internationally to have been a resounding success. In many ways, the most important finding is that for young people—13 to 15 year-olds and 16 to 18 year-olds—the prevalence rates have declined in Portugal for virtually every substance since decriminalisation. This is the more remarkable because it goes against the trend of the surrounding countries that still have tough criminalising drug laws.
Of course, Portugal is not the only country that has moved away from criminalisation. Spain, Switzerland, the Netherlands, the Czech Republic, 13 states in the US and many other countries have liberalised drug policies in a range of ways. In no case have these liberal policies led to a general increase in drug use, more crime or more harm to individuals—quite the opposite. As the noble Lord, Lord Norton, said, we need evidence. Actually, we have it and lots of it. The Czech Republic is particularly interesting. It introduced criminalisation in 1999, undertook a detailed scientific study which showed that criminalisation had been a disaster, and in 2010 reversed the policy and decriminalised drug use. Even the United Nations Office on Drugs and Crime concluded in a recent document that,
“punishment is not the appropriate response to persons who are dependent on drugs”.
Surely our Government needs to take account of the UNODC.
We do not impose criminal penalties on patients suffering with cancer or heart disease. Of course, it is self-evident that such a response would be not only unethical but also counterproductive. Exactly the same arguments apply to drug addiction—punishment is unethical and counterproductive. The new All-Party Parliamentary Group on Drug Policy Reform, which I chair, together with the Beckley Foundation, supports further research on drug policies and the drafting of a new UN convention permitting—not asking—countries to introduce more liberal drug policies.
We are now 50 years on from the single convention of 1961, when it was hoped that drugs could be eliminated through tough, criminalising policies. These policies have failed. A royal commission lasting I hope no more than 12 months would be sufficient to pull together the evidence. If this were followed by sensible drug policy reform, it would do more to generate a safer world, reduce conflict and weaken al-Qaeda and criminal gangs across the world than any other initiative I can think of. The case for change has been made. I hope the Minister will be able to respond positively.
Lord Taverne
My Lords, all the speeches so far have made an overwhelming case for a really authoritative, weighty inquiry into the whole question of drug use. The first question is: should possession of drugs be a crime? When I was a Minister in the Home Office in that glorious period between 1966 and 1968, when Roy Jenkins was Home Secretary, possession of drugs was not actually a crime. Heroin addicts could get a GP’s prescription for uncontaminated heroin and they were much more likely to go for treatment. Of course, circumstances were very different, but it is notable that at that stage drug addiction was much less of a problem than it is now.
Is the criminal law the right instrument for dealing with drug abuse? The experience of Portugal, the Netherlands and a number of other places shows that education and rehabilitation are a far more profitable route. Why do the Government not recognise the reality that the war on drugs is not being won and never will be won? If you are losing a war—or certainly not winning it—at enormous cost, is it not time to look at the whole question again?
There is the further question of the reclassification of drugs. As the noble Baroness, Lady Meacher, has just said, it is absurd to have ecstasy put in the same category as hard drugs of other kinds, and the reclassification of cannabis has no scientific evidence behind it.
When it comes to alcohol, it is high time for us to consider what could be a much more effective approach. The recent inquiry by the independent committee on drug use showed, in a very systematic analysis, that alcohol was by miles the most harmful drug being sold at present. At the moment it is less directly harmful to the individual, but even that may change. On present trends, many people forecast that liver disease will soon be a bigger killer than heart disease.
The present policy is not based on scientific evidence. It is true that scientific evidence is not necessarily conclusive. However, if the policy is not based on scientific evidence, reasons should be given why it is not and it should be based on some other evidence. All these are eminently matters for a royal commission. The Government should recognise, if they make any pretence of having policy based on evidence, that the present way in which they approach drugs is not.
Lord Cobbold
My Lords, I rise to support the question proposed by the noble Lord, Lord Norton. It is high time that the drugs problem was subjected to an unbiased investigation. Prohibition has manifestly failed, a fact that even the United Nations ODC has recently acknowledged. To me it seems illogical to treat drugs differently from alcohol. It amazes me that democratic Governments can tolerate the global drugs market being totally in the hands of criminals.
Drug usage should be a health issue, not a criminal justice issue. Our prisons are overcrowded. Drug prisoners are frequent reoffenders because many of them have nowhere else to go and they are well looked after in prison. The drugs trade costs our country an enormous amount of money—unlike alcohol, which is licensed and taxed. The savings could finance further treatment and rehabilitation centres, as well as help to reduce the national deficit.
I strongly support the efforts being made by the noble Baroness, Lady Meacher, to bring together people from other countries that have taken a more sensible attitude towards drug laws to try to see whether a common process can be developed. This is a significant problem and it is extremely important that something should be done in the not-too-distant future.
Baroness Murphy
My Lords, I am tempted to say that I agree with everybody else and just sit down, but I have four minutes and I am going to make the best of them.
I add my thanks to the noble Lord, Lord Norton of Louth, for this opportunity to press for a serious review of drug misuse policy. I am not usually supportive of royal commissions because they tend to kick matters into the long grass. However, we are already in the long grass on this matter. We are saddled with a policy that we all agree has largely failed. Small bits of it may have been successful, but it has largely failed. We are rather frightened to focus on the alternative harm reduction policies for reasons that we have amply aired.
On the question of evidence-based policy and the research to support it, although we have plenty of evidence about the failure of current policies, I fear that we have surprisingly little evidence on which a royal commission could base its positive recommendations for future policies. As an academic, I am always pressing people to say, “Stop calling for more research and just get on with what we know”. However, there is an extraordinary lack of social research. After all, drug use is a social activity with social impacts.
To my mind, it is strange what large and fundamental gaps remain in our understanding. For example, we have not tackled the dramatic changes in cannabis use that have occurred over the past 20 years and we know very little about enforcement of the drug laws. Following the second reclassification of cannabis back to a class B drug, there is a pressing need to evaluate how this change is impacting on policing, for example. We lack a good understanding of the routes both into and out of problematic drug use and the long-term impact of drug use on families. For example, social workers are making difficult decisions every day about the placement of children and are placing them back with families in which there is profound drug addiction, yet the evidence that they have on which to make those decisions is very poor indeed. I could mention many other pressing topics. This is merely a short list of examples of the gaps in research.
Until recently, neither the Economic and Social Research Council nor the Medical Research Council had funded major programmes of work in this area, although in the charitable sector the Joseph Rowntree Foundation has published some admirable research with modest funding. The majority of government money devoted to drug research has been spent on usage surveys, monitoring and evaluation—quite properly, since that is the Government’s job—rather than on exploratory research designed to fill the gaps.
There have been positive developments. Early in 2009, the MRC launched its addiction and substance misuse research strategy and it has now launched a new programme. However, the ESRC seems to have spent a total of just £3,000 in the last year and has given no grants either in programme grants or responsive mode funding. I think that that is extraordinary for one of the major problems that society has developed over the last 40 years.
The major research centres are mostly focused in clinical or epidemiological centres. Senior academics are from medical disciplines. I do not want to detract from the importance of this work, but I think that we have to get the balance of government research funding right. It is not heartening for researchers to know that, if they get good evidence, it will not be implemented. We have already had some evidence of that.
Finally, drugs are a highly emotive topic, which generates hyperbole, controversy and political vacillation, but it is crucial that we invest in proper social research to advise any independent inquiry on the way forward. Will the Minister say what plans the Government have to invest in the social scientific research that we need to take forward evidence-based policies?
Lord Stevenson of Balmacara
My Lords, I congratulate the noble Lord, Lord Norton of Louth, on securing this excellent debate. When he introduced it, he said that he was not an expert. I am left with the feeling that I would hate to hear him on his own topics, but of course we hear him on them regularly and we are all the better for that. It was also interesting to hear his blog responses, which informed what he said. I think that they added a touch of absolute certainty about what is happening out there in the real world, which was very useful to hear.
I am sure that I speak for the whole House when I say how pleased we are to see the noble Earl, Lord Onslow, in his place. I thank him for his interesting anecdote about “Have I Got News For You”. I must watch that. I had not realised that the noble Earl had been a star of the small screen. It also shows, from what he said, that the public are well ahead of us in some of the things that we think about in this debate.
As the noble Baroness, Lady Finlay, reminded us, the Misuse of Drugs Act 1971 now controls over 600 or so so-called psychoactive substances, of which there seem to be about 40 discovered each year. We have too many regimes and approaches. Alcohol and tobacco are regulated separately, largely through trading standards legislation, while solvents and solvent abuse are regulated through the Intoxicating Substances (Supply) Act 1985. As a number of noble Lords have said, there is no evidence that the level of classification within the Act has any effect on consumption. When cannabis was reclassified downward to class C and then back up again to class B, there was no discernible change in the already downward trend in use.
Penalties for drug possession have a considerable impact on the criminal justice system. Two years ago, over 41,000 people were sentenced for drug possession offences, including over 1,200 people sentenced to immediate custody. Drug use and its associated problems have real and considerable implications for the justice, prison, education, health and mental health systems and, of course, for victims and families and generally for society.
As the noble Lord, Lord Cobbold, said, there is a good case for drugs policy being transferred to health and taken away from the Home Office. The Misuse of Drugs Act is now 40 years old and, arguably, ripe for review. The noble Lord, Lord Taverne, gave us an interesting insight into policy as it must have been around the time when the Act was passed. That gives us a chance to argue that a review is required. If the Act is going to be reviewed, there is a list of issues that need to be addressed, including enforceability, which is becoming more and more difficult and bringing the law into disrepute; inconsistency in our approach to controlling illicit and licit psychoactive substances; technology and the fact that new drugs are being developed all the time; criminality, with the huge and growing criminal black market and the associated violence that it brings; and collateral damage, in the sense that drugs and drug use have a significant and growing impact on our education, health and prison systems.
As the noble Baroness, Lady Finlay, said—and it was a good phrase—we have also to think about the perverse appeal that drugs have for young people. All our evidence is that the educational process at the moment is not effective. As the noble Lord, Lord Norton, said, we have a problem. The issue of decriminalisation has been raised. There is good evidence from other parts of the world that it can have an effect. As my noble friend Lord Rea said when he spoke about his experiences of general practice, there is in some sense a form of decriminalisation effected when people are able to prescribe directly and get around the laws. We obviously need to tackle that, as well.
As the noble Baroness, Lady Meacher, said, a balanced debate is needed—one that considers the impact of prohibition and the potential benefits as well as harms from use and abuse of psychoactive substances. We have to think about the costs involved in this process. This debate could then feed into a complete review of our approach to drug control, with the aim of producing a single, coherent, overarching framework for regulating all psychoactive substances.
If there is a case for a complete review, should it be done by a royal commission? There are those who feel that a royal commission just means a whole lot of people with letters after their names taking several years and spending a lot of public money just to tell us what we already know—so maybe not a royal commission. Should it be done by Parliament? One problem is that our political and legislative systems contain what has been described as a fundamental bias in favour of the prohibition of drugs. It has been persuasively argued that politicians find it very hard to deal with these social issues in any case. Even so, there is a case for this matter to be referred to Parliament, possibly through a Joint Committee of the two Houses and subsequent pre-legislative scrutiny. The Government are presumably nearing the end of their drug strategy consultation. Perhaps the Minister can shed some light on progress with this and, in so doing, indicate which of these options—royal commission or Parliament—she favours. As the noble Baroness, Lady Murphy, said, we are already in the long grass, so let us not leave ourselves there for much longer. Judging from the evidence that we have heard tonight, something clearly has to happen soon.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, I thank my noble friend Lord Norton for the thoughtful way in which he introduced this debate on a subject of very considerable public import that, precisely because of the harms associated with it, excites very considerable strength of feeling and, I have to say, disagreement. There is a broad consensus on some of the damage that it does; where those who are informed as well as those who are uninformed part company with each other is on what we do about it.
I would like to respond to the points raised and set out the Government’s thinking as it has developed on the drug strategy. Between us and those advocating decriminalisation, which I have to tell noble Lords the Government are not going to engage in, there is common ground on some of the things that we consider need to accompany a policy that continues to classify drugs and criminalise the taking of them. Do we believe in an evidence-based policy? Most certainly. Do we think that the law can do it all by itself? Certainly not. We certainly think that both education and treatment need to be integral parts of policy. Do drugs contribute to global crime at all levels, violent as well as organised? Yes, absolutely they do. Do we need therefore to take action? Clearly, we do.
The example of Portugal has been mentioned, and I shall come to that in a moment, because the conclusions that you draw from the evidence in front of you is going to influence what you say about what should happen next. The picture that emerges from Portugal is somewhat more complex than some noble Lords have allowed.
Let me say something about how the Government’s thinking is developing and then I shall return in the light of that to some of the comments that have been made. As the House will be aware, in December last year the Government launched their new drugs strategy, whose component parts include: reducing demand; restricting supply; building recovery; and supporting people to live a drug-free life. The supporting part is very important.
The strategy has two high-level ambitions, one of which is to reduce illicit and other harmful drug use. I might say that we do take a dim view of alcohol abuse, which we also believe needs to be tackled. Some of the treatments that accompany that are much like those for the abuse of drugs. It is for the reason that alcohol abuse is certainly going up that we are clamping down on below-cost sales of alcohol and restricting their sale to young people, and so on. We do think that that needs tackling—so there is nothing between us on the subject of the evils of alcohol abuse. However, we do not believe that because alcohol abuse is going up, that is somehow reason for not being tough about drugs as well.
Our second ambition is to increase the number of individuals who are able to recover from their dependency on drugs or alcohol. In delivering these ambitions for the next four years, we are committed to an evidence-based approach, and we will undertake evaluation of the policy as we go along. We are not suggesting that we will pursue this policy irrespective of what the evidence shows that its results might be. I assure and promise noble Lords that constant evaluation will be an integral part of the approach that we pursue, and we will take into account the wider evidence available. I have to say to the noble Baroness, Lady Murphy, that I have asked whether we have any social research on the stocks at the moment. I fear that the answer is no, and I think that is something that we should take away.
High-quality advice on this complex field is obviously of the utmost importance. We value greatly the work of the Advisory Council on the Misuse of Drugs, and the proper consideration of its advice is at the heart of enabling us to deliver this strategy. We are developing with it an evaluation framework to assess the effectiveness and value for money of the drugs strategy. We will redo that on annual basis and from that annual review we will then develop further initiatives and actions as the programme develops. That I hope will give us the necessary flexibility to respond to changes in the drugs scene and the nature of the trade and based on the outcomes that we are managing to achieve.
The Government are also ensuring that our policies complement each other and build the necessary links between the strategy itself and sentencing, welfare and public health reforms so that we optimise the outcomes and the cost-effectiveness of individual policies.
A number of noble Lords have mentioned the whole question of impact assessment. I have some sympathy with this notion. It is very hard, however, to know what you are measuring. One reason is that it is extremely difficult to disaggregate the interaction of various phenomena. Two honest people can measure an impact and come out with a different answer. I hope the House would agree that we have to tackle the complexity of the interaction of various factors. I hope if we are able to do that it will give us a better clue as to how to proceed.
I suppose I need to say at this point that, although we are going to go through evaluation, we do not intend to go for a thoroughgoing review. We do not consider that that is warranted. What we want to do is to give the strategy that we are outlining, which contains new components of policy, a good try to see what it delivers. We are not a Government who will take no notice of the results of policy, but we certainly think that the case at the moment is made for proceeding with the policy on the basis of constant review.
As I said, we have decided that we are not going to decriminalise, but we are going to deal with a lot of the features of the scene. The four decades of the Misuse of Drugs Act have provided the UK with a coherent legislative framework. Although some noble Lords seemed to think that we could somehow duck our international obligations, we do not believe that is actually the case. We have to engage in policies which restrict the availability of drugs and their misuse and which protect public health and welfare. We will continue to try to do that.
We will engage in a number of positive features in our policy—I think it is important to do that—but before I come to that issue I want to say something about the relationship between the level of crime and drug use. The findings from the British Crime Survey 2009-10 show that drug use among young people in the 16 to 24 age group has fallen to 20 per cent, from 29.7 per cent when the survey began. That is quite a significant drop. The latest figures from the NHS Information Centre’s annual survey of drug misuse in England, which was published earlier this year, confirmed the downward trend of the past few years. That is why I mentioned the complexity of interaction. That is an encouraging phenomenon and we would like to know exactly why that is happening.
We want to empower young people to steer clear from drugs rather than encourage their consumption. In due course we shall be debating the Government’s proposals in the Police Reform and Social Responsibility Bill for the introduction of temporary banning measures, which was mentioned by a number of noble Lords. We believe that it is right and proper to have measures in place to be able to ban such substances. The experience of methadrone convinces us it is the right thing to have done. The ban had an impact on attitudes—consumption went down. We are certainly not of the view that it is wise to give the impression that, because a drug is legal, it is therefore safe. Indeed, some of those drugs are extremely damaging.
As part of reducing the demand strand of the drug strategy, we want to help people resist the pressures to take drugs and the encouragement that may come in their lifestyles and we want to make it easier for those who have taken drugs to stop. This is key to reducing the huge cost to society. We will focus in our strategy on early years prevention, particularly for families who have complex needs, and we will provide high-quality drug and alcohol education and information to young families and parents through schools, colleges, universities and the Frank service. Education was stressed by a number of noble Lords. We certainly intend to lay a lot of emphasis on that. We will provide intensive support to vulnerable young people to stop them becoming involved in drug and alcohol misuse.
We also wish to give discretion to the police on whether to prosecute in given circumstances and to the judiciary to take into account all the circumstances of an offence. In practice, the law enforcement element is one that we wish to see used judiciously. It is fair to say that some of the results in Portugal, where it has been said that legalisation has taken place, do the opposite in that they put people into treatment, which is what we want to see happen here. However, some of the picture in Portugal is not so good. It is the country in Europe, I think, that has the second highest level of HIV. There are relationships between these various phenomena.
Very few custodial sentences are imposed for simple possession offences and a fine is the most commonly imposed conviction.
Baroness Meacher
Before the Minister sits down, will she explain why she will not have a review of the Misuse of Drugs Act 1971? It has obviously now been in place for 40 years. Whatever may be said about Portugal, the reality is it had a very high level of HIV before decriminalisation and now has a very good record. Most importantly, young people there are now less and less likely to go into drug addiction. In view of this evidence, will the Minister explain to the House why the Government will not even look at and evaluate, whether through an impact assessment or a royal commission, their own policies? We have very high levels of drug use in this country, and we are not doing well.
Baroness Neville-Jones
The noble Baroness is doing us a slight injustice. I did not say that we would not look at anything; I said that we were going to base our current policy on constant evaluation. We understand that we need to look at how successful our policy is being. We do not believe, on the basis of the strategy that we wish to pursue, which has new elements to it, that the moment has come for a thoroughgoing review, but we are going to continue to evaluate the effects of our policy. I hope that that will convince noble Lords that we are not going into this absolutely blindly.
I would like to say one or two other things, but I must conclude. The Government will put resources, energy and ambition into pursuing a policy that we are endeavouring to make broader in its scope and more effective in its outcomes.
Public Bodies Bill [HL]
(13 years, 9 months ago)
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Baroness Thornton
Baroness Thornton
My Lords, I shall speak also to Amendments 93, 150 and 151. On Second Reading, many noble Lords expressed their disquiet at the inclusion in the Bill of the HFEA and the HTA. At the time, I wondered if they were included because the Minister’s department insisted that the Department of Health had to offer something up to the Bill, so the poor old HFEA and HTA were the sacrificial lambs. Indeed, in its own review of the arm’s-length bodies, the Department of Health gives a much more measured suggestion of the deliberation and consultation before decisions were taken about the HFEA and HTA over a timescale that is the life of this Parliament. Unless something has changed about the expected length of this Parliament, it seems precipitate and unnecessary to include these bodies in the Bill.
In a meeting convened by the Minister—the noble Earl, Lord Howe—to discuss this important matter with interested parties, which I was pleased to attend, he was concerned to reassure us about the consultation and discussion to take place before decisions were reached. We can add to those reassurances the proposal, as I understand it, that in the next Session—in other words, after May 2012—primary legislation will be introduced to establish a new science regulator in the department. If that is the case, the passage of that legislation would allow proper consultation and scrutiny across the field including the work of the HFEA and the HTA, which is the way in which such reforms should be carried out. So I ask again: why is it necessary for these bodies to be included in the Bill?
The HFEA and the HTA almost symbolise the concerns that noble Lords have expressed in relation to the constitutional propriety of the Bill in giving Ministers powers to amend primary legislation. Both organisations would have their work and their regulation fragmented unnecessarily when they need to be left alone to get on with the jobs that they do very well—although there is always room for improvement—until a proper period of consultation and pre-legislative scrutiny, which I am sure the noble Earl would wish to have, can precede the introduction of the science regulator Bill or whatever it will be called. That is the way to proceed.
What do these bodies do? The HTA licenses and inspects organisations that store and use human tissue for purposes such as research, patient treatment and post-mortem examination, teaching and public exhibitions. It also gives approval for organ and bone marrow donations from living people, including anatomy and stem cells and cord blood; public display—that is, the public display of any human body parts in various forms—post mortems; coroners; and transplants.
The advances made by science throw up new and sometimes complex ethical issues for the HTA to address. The cavalier use of body parts for research without the knowledge or consent of patients and their families was a huge scandal, leading to public indignation. Many in your Lordships’ House will recall the time and the thought given to the creation of a regulatory framework that would command public confidence. I fail to see what has changed that can allow any slackening off of the responsibility that the HTA bears for the use of human tissue.
The HFEA is the UK’s independent regulator of treatment using eggs and sperm and of treatment and research involving human embryos. It sets standards for and issues licences to centres and provides authoritative information for the public, particularly for people seeking treatment, donor-conceived people and donors. Very importantly, it also determined a policy framework for fertility issues which are sometimes ethically and clinically complex. The HFEA Act 2008 includes provisions for research on different types of embryos and changes the definition of legal parenthood for cases involving assisted reproduction. Therefore, the work of both bodies is of enormous scientific importance apart from anything else.
The arm’s-length body review in July 2010 concluded that the HFEA carries out essential functions which satisfy,
“the criteria for being undertaken by an arm’s-length body”.
The review states that the HFEA,
“deals with issues that are judicially and ethically complex and contentious”.
The HFEA is a world-respected model which has been used by other jurisdictions to deal with extremely technical and legally complex areas of practice. We have to ask what will happen to the high level of expertise and experience in both organisations and whether it will be in the public interest to transfer regulatory functions to other organisations where this knowledge may be lost to the detriment of patient safety.
I know that some noble Lords, particularly some of our very respected medics, for sometimes differing reasons have expressed the view that time has moved on since the original reason was established for setting up these bodies, human fertilisation is not the novelty that it once was, these medical procedures no longer need the attention of their own regulator and therefore change is necessary. That is a powerful argument but I disagree with it, or at least I have yet to be convinced. It seems to me that the powerful reasons that brought these two bodies into existence, and the reason we in Parliament paid such close attention to establishing their duties, responsibilities and independence, are still as potent today as they were when they were founded. These are not primarily medical or scientific reasons but concern the need to maintain public confidence in the uses to which human tissue is put, and sometimes in the very controversial issues arising out of human fertility and procreation.
Time and consideration need to be given to the contribution to scientific research made by the HTA and the HFEA, and, of course, they should carry out their respective functions in a cost-effective and efficient manner with appropriate public accountability. We may wish to see change in the way that the HTA and the HFEA functions are carried out but I believe many of the changes needed could be achieved without their inclusion in the Bill. Change should be helpful in achieving the broader stated aims of reducing bureaucracy and saving money rather than simply focusing on a reduction in the number of arm’s-length bodies. By and large, by the way, I believe that both bodies have sought to make and have succeeded in making improvements in their work and functions in recent times. I believe that more now even than at Second Reading, given the Government’s proposals on research. As the proposals for the reorganisation of the NHS are discussed it seems to me that the future of the HTA and the HFEA need more time and much more consideration. Apart from anything else, the CQC, which it is proposed should become the healthcare regulator for the HTA and fertility treatment, will have neither the time nor the expertise to carry out this function until it has swallowed the regulation of the whole of the rest of medical and social care. One might imagine that if a scandal arises in four or five years’ time regarding either fertility regulation or the use of human tissues, the excuse will be given that the CQC was too preoccupied with the rest of its enormous brief to give these matters the important attention that they warrant. I beg to move.
Lord Warner
My Lords, I have added my name to Amendments 92 and 93 in part in a spirit of helpfulness—I hope that is the case—to the Minister as I have traversed the same ground as him on Department of Health arm’s-length bodies. In 2003-04, I was the Minister who reviewed DH arm’s-length bodies and halved their number. Therefore, I cannot claim to be against reducing the number of Department of Health arm’s-length bodies. Indeed, my sins are fully catalogued by this Government in annexe B of their document on the arm’s-length body review, which was published last year. Therefore, I own up fully to these past misdemeanours. However, as I have previously said about the Government’s own arm’s-length body review, although I do not necessarily agree with every aspect of it, it comprises a serious, comprehensive, clear and coherent set of proposals, unlike some of the things which emerged from other departments under this Bill. Therefore, I do not in any way wish to argue that it was not a thorough piece of work.
Lord Willis of Knaresborough
My Lords, I added my name to Amendments 92 and 93. I congratulate the noble Baroness, Lady Thornton, on presenting a reasoned case for both amendments. I also congratulate the noble Lord, Lord Warner, on being able as a Minister to say that we should get rid of the HFEA and the HTA and now arguing that we should retain them. That is quite a trick—I am sorry; I should not use “trick” in East Anglia references.
I support the amendments not because I believe that the Government have got it wrong, but because in presenting Schedules 5 and 7, and in the Explanatory Notes to the Bill, they have failed to present a convincing argument for changing from two well respected regulators to something that has not been explained well and clearly leaves a lot of questions to be answered. There is a need for an equivalent of the Human Tissue Authority. Sometimes we overplay the organ retention scandal. It happened in one hospital in one area. The practice was not rife through the whole research base; it is important to state that. Nevertheless, there is a need for a regulator. In the case of the Human Fertilisation and Embryology Authority, despite the fact that so much time has elapsed since the original regulator was put in place, science is changing dramatically and the research, particularly on cytoplasmic hybrid embryos—admixed embryos—was something that the HFEA rightly referred back to government to ask for a view, whereupon the legislation was updated.
I had the pleasure in 2007, when I was in the other place, of chairing a Joint Committee on the Human Tissue and Embryos Bill. When the noble Lord, Lord Warner, presented the idea of a regulatory authority for tissues and embryos, I was hugely in support. It made good sense to bring everything together; it was efficient; and the less unnecessary regulation we have, the better. However, while I was initially supportive, I was staggered by the response from a host of organisations that supported two regulatory bodies. I remember a consultative session one evening in Portcullis House when all the organisations that were opposed to any research on embryos, or any use of the embryo other than for its God-ordained purpose, came together and argued for the regulators to stay on the ground that this would protect the embryo. I left with a clear understanding that the principled, ethical and moral stance on the special relationship of the embryo taken by the noble Baroness, Lady Warnock, was something that the Human Fertilisation and Embryology Authority had taken to heart and incorporated into its regulatory function. To be fair, the Government listened to the Joint Committee and dropped their proposals, which is why we are where we are today. The Minister has made it clear in several forums that this is not a rerun of RATE, and I fully accept that. However, he must today make absolutely clear how tissue and embryos will be protected in the new regulatory and research environment. If you throw out the current organisations, it is clearly necessary for the Minister to clarify what will replace them.
The HFEA was far from perfect but it commands huge support from the research and clinical communities and, in particular, from the public. Ultimately, we regulate to protect the public and not simply to ensure efficient and effective clinical practice. However, the Government have now given us some clarification and we should at least examine the proposals that they are making.
In terms of research, I strongly support the report of the Academy of Medical Sciences. It makes good sense to establish a health research agency and to try to bring all medical research together under one body. Indeed, as the Health and Social Care Bill is almost totally devoid of any reference to medical research, at least there would be a regulatory body, run by clinicians and scientists, with some clear understanding about the way that medical research is carried out. Therefore, I believe that the proposal for bringing all medical research together is excellent. It certainly gives me confidence that, provided the Government accept the recommendation of the Academy of Medical Sciences for a new health research agency, their proposals will take us forward in a much more positive sense.
Will the Minister assure the Committee that regulation regarding research and research techniques will also reside with the health research agency? The idea of placing research under the new agency but putting the regulation of research techniques under a different agency is totally unacceptable. Will the Minister also confirm that the new health research agency does not require primary legislation and that it can be established relatively quickly without such legislation? If he is able to confirm that, can he assure the Committee that when the Bill goes to the other place there will be a clear timetable for setting up the agency? That will provide some clarity about the path ahead regarding research.
Where clinicians have a strong case is that there is a sense that techniques approved for clinical application should come within the regulatory framework of NICE or the CQC. I have some clear reservations about the CQC and I recognise that the Government will have to make the case. My qualification is that the CQC is untried, and there is a huge difference between inspecting care homes and inspecting clinics which use the most advanced techniques of assisted conception, PGD, the use of saviour siblings and so on.
In closing, will the Minister assure the Committee that the current team of specialists dealing with clinical application in the HFEA and the HTA will be transferred en bloc and kept together within the new organisation so that we do not lose impetus or, more worryingly, make mistakes? There is, I believe, a coming together in terms of what the Government want and preserving the best of what the HTA and the HFEA have to offer. I think that the Minister has to make the case but I believe that the Committee is listening.
Baroness Butler-Sloss
My Lords, I have been looking with interest at the very helpful parliamentary briefing, particularly on the HFEA and the statutory functions that fall into four main groups. I am very concerned about each area. If licensing is to go into the Care Quality Commission, as has already been mentioned, will that commission have the same level of expertise to deal with the really difficult cases that may come up? I speak as a former judge who had a case where semen was put into the wrong eggs. Two families found that the non-white semen had been put into white eggs, and the children born to the white family were not white. It was the most appalling story. It caused grief to two families and, of course, to the twin children. It became public knowledge. It was a case that I tried. What is needed is careful regulation of the clinics and expertise in what the clinics are doing.
Another matter I would like to raise in particular with the Minister, and one which has not yet been raised in this evening’s debate, is the collection of data, the division of information, and the maintenance of a register. What is happening, according to the Government, is that the licensing and regulating will go to the Care Quality Commission but the provision of the information, the data collection, will go somewhere else.
What rather shocked me was the last paragraph of the helpful briefing saying that the arrangements for the transfer of the information-related functions will be based on assessments, and functions will be integrated into the most appropriate body. We do not know where the data functions will be going, which I find extremely disturbing. It leads me to the view that this plan to abolish both the HFEA and the HTA, whose functions are going to be divided, has not been given the sufficient thought or impact assessment one would have hoped for. We have not yet been given good reasons why these two functioning bodies should be got rid of.
I entirely support the wise words of the noble Lord, Lord Warner. It may very well be that each of these bodies could be streamlined, pared to the bone, have less back-up staff and cost less money. However, having asked in another debate on this Public Bodies Bill, “If something works, why break it?”, I say that these two organisations appear to work and so it is premature, at least, to be abolishing them now.
Lord Walton of Detchant
My Lords, when I came into this House almost 22 years ago, my baptism of fire was the consideration of the Human Fertilisation and Embryology Bill. I spent a great deal of time considering its provisions, based upon that splendid report produced by the noble Baroness, Lady Warnock.
The purpose of the Act, as it became, was to license experiments on the human embryo up to 14 days after fertilisation, first, for improvement of the management of infertility and, secondly, to help in the prevention of the birth of children with fatal and seriously damaging disease.
Those objectives were, very largely, fulfilled. We got to a stage of being able, through licences from the HFEA, to embark upon a programme of pre-implantation diagnosis of some of the severest diseases like cystic fibrosis and muscular dystrophy. It did a wonderful job.
It became quite clear, however, that, because of the developments in human embryology and the enormous advances in research, it was necessary that the Act should be further amended, not only in order to prevent the birth of people with severe diseases but also to be able to use human embryo material and the stem cells derived from it for the treatment of human disease. That resulted in a number of other amendments and regulations being introduced.
We then went even further with additional developments. As many in this House will know, one of the great developments recently under a licence from the HFEA has been the ability to prevent the birth of children—not yet feasible but on the verge of becoming so—with a devastating form of mitochondrial disease. I will not go into the scientific detail because it is extremely complex.
I mention the word complexity because I cannot conceive that the role and responsibility of the HFEA—I entirely agree that it is not perfect; it may be slimmed down, streamlined or modified—could possibly be carried out by the Care Quality Commission, which is, under its major new responsibilities, required to inspect hospitals, care homes, general practices and all bodies concerned with the supervision of health work of all kinds. To try to carry out those responsibilities under the Care Quality Commission is simply not feasible.
Last week, as the noble Earl will remember, we debated a Question on the role of the Academy of Medical Science’s report on the governance of medical research. I agree entirely with what the noble Lord, Lord Warner, said: this is a very exciting and important development, particularly in the conduct of clinical trials and the supervision of research in general. It certainly does not cover the responsibility which the HFEA is carrying out, and I therefore cannot accept the Government's proposals to put that body within the Care Quality Commission.
I move on to the HTA for a moment. When I was a medical student in the early 1940s, on the top floor of my medical school there was a museum which was full of organs held in formalin in plastic bottles. They were a wonderful teaching resource, because they were organs showing the signs of disease and, for the teaching of medical students, they fulfilled a major responsibility. No one had asked the patients involved before those organs were retained for teaching purposes.
The problem of the Alder Hey so-called scandal was that the permission of the individuals from whom the organs were removed had not been taken. What nobody recognised at the time was that if you were to carry out a post-mortem examination to try to determine the nature and causation of the disease from which the individual had died, there was no way in which the simple carrying out of the post mortem and visual inspection of the organs could give you the answer. The organs had to be removed; they had to be pickled in formalin; they had to be studied under the microscope, to give the answers which everyone wanted to know as the outcome of that post-mortem examination.
Where members of my profession were mistaken was that it became almost accepted by doctors, pathologists and clinicians that once permission for a post mortem had been given they could assume that permission had been granted to retain the organs for such an examination. They were wrong. Hence, the Human Tissue Authority was created to control that process. It has been very successful not only in that regard but also in issues related to the retention of tissues obtained for diagnostic purposes by biopsy. It has also been extremely successful in controlling the use of anatomical material for teaching purposes. It has fulfilled a whole series of other functions. My view is that it is so necessary that that function should be continued that I do not believe, for the same reasons, that the Care Quality Commission could feasibly absorb that task. It could do so only if it took on board the scientific experts on human fertilisation and embryology on the one hand, to deal with the responsibilities of the HFEA, and the scientific experts in pathology, anatomy, molecular biology and other branches of medicine, to look at the human tissue issues and also to be able to deal with issues relating to the donation of organs for transplantation. Those complex issues are so broad in their responsibility that I do not believe that the Care Quality Commission could conceivably handle them all. That is why I give warm support to the amendments.
Lord Newton of Braintree
My Lords, my reason for not pressing my case earlier was that I knew I was going to be out-gunned by the noble Lord, Lord Walton. He has demonstrated that conclusively, and I am certainly not going to try to compete with him. I ought in passing to declare an interest I had at the time of the passage of the Human Tissue Act: I was then chairman of the Royal Brompton and Harefield, a major transplant centre which clearly had an interest in this matter.
I ought to confess, in what is going to be a brief intervention, that I am getting to be rather worried about the number of occasions on which I find myself in some sympathy with the noble Lord, Lord Warner. He indicated earlier that he had hopes of enticing me to a different part of the Chamber, if I understood his remarks correctly—but his hopes will be frustrated. I want to make some simple remarks from what I call the coal face, as I am chair of another health trust in the mental health field, on the issue of the CQC. The CQC was asked to do a huge new task by the previous Government, and is doing it valiantly, not least in the mental health area that I know. However, it is struggling to fulfil in the originally intended timescale the jobs that were put upon it. I wonder whether the CQC actually wants yet more tasks, whatever the argument might be in an intellectual sense. Even if we agree in the end to go down this path, and that is some way ahead yet, I hope it will not be too quick and that the CQC will be in a position to digest the meals it is being asked to take in before being asked to consume them. As a specific question: does the CQC actually want this work?
Baroness Deech
I support this amendment, and I declare an interest as a former chair of the HFEA. In other words, I was a gamekeeper, and there were poachers on the other side, if I may use that term in respect of some very eminent clinicians and embryologists in this country. They may tell you that IVF reproductive work embryology is now routine. Yet at the same time, they will say—or at least not deny—that the work they are doing is ground-breaking. So it remains: every day brings something new.
I have spoken about this topic many times in this Chamber and elsewhere, and I will not repeat myself, save to say that my admiration for the Minister is such that I share his pain on each occasion when I feel that he is trying to defend the indefensible. He would be grateful, I think, if we could somehow get him off the hook. One of the ways of doing that is cost. The principle underlying the abolition and retention of various quangos in this Bill is, of course, streamlining, efficiency and cost. The HFEA currently costs £7 million, of which all but £2 million comes from the patients. No one who cares about the patients could possibly imagine that they will be charged any less—or not charged at all—if these functions are absorbed into an existing or new body. The poachers, who are very keen to get rid of the HFEA, seem to think, when you listen to them, that there will be no regulation, that there will be a free-for-all. They are under the misapprehension that if this amendment fails, which I hope very much it will not, a merger of the HFEA will mean no regulation; as I say, a free-for-all. But that is not so. Primary legislation remains and no one has suggested that we would cease to have regulation for which this country is world renowned, having followed the lead of the noble Baroness, Lady Warnock, in her esteemed report written more than 20 years ago, which remains to this day the very best report on the issue.
Those who really dislike the whole concept of embryology and in vitro fertilisation because of their religious beliefs have, as others have said, still shown respect for the HFEA because they regard it as something of a shield against the wholesale misuse of embryos, as has happened in some other countries. Before it had regulation, Italy was the place everyone went to if they could not get what they wanted elsewhere. It was where you would go if you were white and wanted a black baby or vice versa, or if you were 64 or 70 and wanted a baby. Italy now has regulation, albeit in my view too strict. America has a patchwork of regulation, but has seen more scandals than we have. As my noble and learned friend Lady Butler-Sloss said, things go wrong sometimes as a result of simple human error, which in the end is probably not preventable. But at least we do not have the birth of octuplets, as has happened in the United States. We do not have those websites which noble Lords may enjoy googling one evening. They can look up “California Cryobank” and see lists of apparently brilliant Californian PhD students, all of them six foot six and sporty with IQs to match, offering their sperm for sale, and indeed the female equivalents their eggs. This is not the route that we wish to go down. We wish to retain regulation.
If we are going to keep regulation, there is absolutely no reason for dismembering the HFEA and putting functions that are plainly closely linked together and of utmost importance to parents, babies and sick people into different bodies, some of which are untried. Again, I echo my noble and learned friend Lady Butler-Sloss in saying, “If it ain’t broke, don’t fix it”.
Lord Mackay of Clashfern
My Lords, I declare an interest as an honorary fellow of the Royal College of Obstetricians and Gynaecologists and as the person who had the privilege of introducing to this House the Bill that ultimately became the Act which has been referred to more than once. As a parent of such a body, it would be strange if I wanted to see it dissolved altogether. On the other hand, a parent who is interested in his child is glad to see him or her develop and possibly make unions with others who seem to be suitable for them. I had the honour of serving on the Joint Committee looking at the recent Bill in this area under the distinguished chairmanship of the noble Lord, Lord Willis of Knaresborough. I strongly supported the decision taken by that committee to recommend against the proposed union between the Human Fertilisation and Embryology Authority and the Human Tissue Authority. I think I am right in saying that the noble Lord, Lord Willis, may have done a slight injustice to the noble Lord, Lord Warner, because I think the noble Lord, Lord Warner, said that he had recommended against it to the Minister. I do not know whether the Minister accepted it immediately, but eventually it was accepted by the corresponding Minister.
The matters that were the subject of the Bill which I had the privilege of introducing are certainly among the most important areas of modern scientific and medical work. But science and medicine have moved on very fast and far since that Bill was introduced and the developments dealt with in the most recent Act show that. That Act moves out of pure human embryology to the transition towards hybrids and, at the extreme end, towards the animal end of embryology. It shows that science has developed in such a way that the distinct field carved out in the original Bill has been altered by progress, if you like to think of it in that way, and I hope that that is what it is. There is a great deal to be said for the view that modern scientific and medical research is very difficult to split up. The embryo is important, but there are other important aspects of that research. I can therefore see a very strong argument for having a research body which has overall responsibility in this area.
There are of course other functions in HFEA which are important, particularly the control of IVF. When the body was originally set up, the practice of IVF was exceptional and a complete novelty, but a lot of water has gone under the bridge since then and it has become much more of a standard clinical procedure. It is true that developments have taken place there, but they have taken place also in other branches of medicine. It is not only embryology or IVF that have moved forward; fortunately, a great number of developments have taken place in the practice and application of medicine and surgery. It strikes me as extremely logical to have a body that would have overall responsibility for that.
If that be right, there is a good deal to be said for the view that the time has come to review the position in regard to the two health bodies that we are discussing and see whether a more integrated approach to research on the one hand and clinical practice on the other could be furthered by having bodies responsible for the whole of the first and the whole of the second. I agree that a good deal of detail needs to be filled in, but I remind myself that we are not deciding today whether this should happen. We are talking about a power for a Minister to decide what to do in the light of the further consultation provided for in the amendments moved by the Government since the Bill has been in Committee. It is a valuable opportunity for these matters to be considered. I can understand a lot of what has been said on the other side of this argument, but I should like to see retained in the Bill the power to deal with these issues in a way that reflects the developments that have taken place in the research and practice of medicine since the original Act came into force.
Lord Winston
My Lords, my noble friend Lord Warner has declared support for the Minister sitting on the Front Bench; I suspect that I might in the next few minutes give him even greater support.
We have to understand that research in these areas has now gone way beyond embryology. There was a time when people were very concerned about the status of the embryo, when embryo research was relatively novel. I should like to correct a remark made by the noble Lord, Lord Walton, who very kindly referred to work on pre-implantation diagnosis. That work produced pregnancies before the establishment of the Human Fertilisation and Embryology Authority, and people like me were greatly exercised to establish regulation. In spite of what has been said in this Chamber, we were very much in favour of regulation. Since there was no government regulation, we started a voluntary licensing authority which became a model in time—obviously, a very imperfect model—for the body set up under the splendid Bill introduced by the noble and learned Lord, Lord Mackay of Clashfern.
Stem cell biology covers every aspect of human disease, from cancer to brain research, from human consciousness to the replacement of organs and transplantation, and a whole range of other areas. It is really—forgive the pun—inconceivable that this could be dealt with by the Human Fertilisation and Embryology Authority properly under its present form or any future form. I would argue that with the advent of epigenetics, the recognition that now the environment in which cells are placed in culture and elsewhere is such a universal issue in medicine there has to be a much more global look at this kind of research. I feel that there is a strong case for suggesting that we have to accept that research ethics are universal and that they tend to have the same sorts of problems, whether it is patient consent, the end or beginning of life, or a whole range of other issues. In fact, the end and beginning of life have some very similar moral issues which need to be debated by ethics committees. The noble and learned Lord was right to point out that trying to look at these issues in a new form would be absolutely apposite. I for one am certainly not in favour of a free-for-all. I am not quite certain who in the medical profession is. I do not think that that is true.
The regulation of clinical treatment has been in many examples woefully inadequate. The noble and learned Baroness, Lady Butler-Sloss, pointed out that while she was sitting on the Bench she had the most terrible case of a woman who had the wrong embryo transferred. That was done, of course, under the auspices of the Human Fertilisation and Embryology Authority. No regulatory authority, no matter how perfect or how good, can regulate against every human error. We should have a set of principles in laboratories which keep those mistakes to a minimum, and the regulation of medical practice must also enforce that.
I do not think that there is any evidence from what has happened that the HFEA has done a particularly good job or a particularly bad job. In some areas it has not been very powerful. For example, many things are forbidden under regulation in this country. Patients actively seek fertility tourism in other countries where they can get, for example, donor eggs and perhaps come back pregnant. Very often clinics in this country, although it may be against regulations, refer these patients outside. Of course the HFEA, not unreasonably, is powerless to deal with that sort of problem.
It is also true that the fees charged to patients are often extremely exploitative. I have no doubt that we will come back to this when we come to the pending health Bill, because this is a much bigger issue in terms of how we finance the health service. At the moment, IVF, whether it is done in the private sector or in my view in the National Health Service, is charged on the basis not of what it costs but rather of what the market will bear. That is a very big issue which we will need to discuss, because I suspect that that may apply to a lot of medical practice. It is an issue to which I am sure this House will want to return. Costing the procedure is very important.
Someone mentioned follow-up: one sad thing about the opportunity in 1990 was that we did not—even though we had records of IVF pregnancies, and IVF successes and failures—make any attempt to follow up babies after this procedure for the long term. There have been many reasons why that was difficult, such as data protection. But this lost opportunity means that some of the procedures often in routine use may have unforeseen consequences in children when they are adults. We now know from David Barker’s work, for example, that babies who are born underweight and premature are much more likely at the age of 50 or 60, as the Minister knows, to suffer from heart disease, stroke, hypertension and possibly osteoporosis as well as diabetes and one or two other diseases as well. Of course, we may see more diseases which are likely to be epigenetic due to those early influences.
I have to say that, although it is claimed that the HFEA gives out information to patients, six years after I retired from clinical practice running a very large IVF service, I am bombarded daily with e-mails—I have had several today—from patients who want information about IVF and do not feel that they are getting the information they should from the statutory authority. That remains a problem.
The clinical regulation of non-evidence-based practices has been poor. For example, there is no evidence that the preimplantation and genetic screening of embryos designed “to improve pregnancy rate” works. Yet several clinics charge large fees for doing this under regulation even though there is not a base for justifying its use. That also applies to costly immune therapy, which is highly controversial. Again, this is used in women who sometimes fail to get pregnant, under licence from the HFEA. This is an example of how in fact regulation is really quite limited in clinical practice.
Lord Patel
Briefly, I find myself in support of what was said by the noble and learned Lord, Lord Mackay of Clashfern, and also by my friend in the professional sense, the noble Lord, Lord Winston. I was involved as an officer when the Royal College of Obstetricians and Gynaecologists, together with the Medical Research Council, set up the voluntary licensing authority because it was felt that there was a need to reassure the public that the new science of in vitro fertilisation was not going to lead, as the newspapers then had it, to creating monsters in a Petri dish. Fortunately, two years after that, the noble and learned Lord, Lord Mackay of Clashfern, led the Bill that became the Act that established the Human Fertilisation and Embryology Authority. For the reason already rehearsed, it was necessary to make sure that the public could be reassured. More importantly, it was set up to make sure that clinical practice followed strict rules about what should be good practice and about people engaged in in vitro fertilisation and fertility.
I was not a specialist in in vitro fertilisation, but as an obstetrician I saw the results of the initial practices of multiple pregnancies, to which the noble Lord, Lord Winston, just referred. Every obstetrician in the land was crying out that there should be some kind of advice or regulation from the HFEA that would control the number of embryos that were inserted. The evidence existed that putting more and more embryos in might result in more pregnancies but also in multiple births that resulted in handicapped babies.
We have two issues here. First was the responsibility of the HFEA in making sure that clinical practices were improved to improve the outcome for both the parents and the babies. Second is the regulation related to research practices, especially in embryo research. I have no doubt whatever that the research regulation aspect of the HFEA needs to be maintained.
I go further in saying that there is a great need to bring some co-ordination in the whole area of the medical research regulatory framework; it is very fragmented. In my previous role as a National Patient Safety Agency chairman, while I was responsible for running the National Research Ethics Service for England and Wales, I found that there were issues relating to ethics for some of the medical research that, because it was fragmented, we had to address, as it was not being addressed by any of the existing regulatory authorities. The report from the Academy of Medical Sciences gives us an opportunity, which I hope the Government will grasp soon, to produce a national medical research regulatory authority that brings in all the regulation that is required. As the noble Lord, Lord Warner, said, the report did not say that it should include the HFEA and the Human Tissue Authority. In his consultation, he also said that they were not addressing the issue of the HFEA and the HTA because they were awaiting the results of the debate that we are now having, and the Bill that we will have relating to National Health Service reform and social care.
I accept that we need a research regulatory authority. Now the issue is whether we need, particularly with the HFEA, to regulate clinical practice related to in vitro fertilisation. If NICE is going to have the new role of setting standards in all areas of clinical practice that will deliver better outcomes, and if we have a regulatory authority—the CQC, which may need to improve its performance and may need resources to be able to do so—we have to ask why we would have a regulation confined to one area, sensitive though it might be. Given the performance of the authority hitherto, we have to ask whether we are going to throw out something so precious; I accept that some of the aspects that the HFEA has been awarded are very precious. I accept that we were the first country in the world to bring about regulation for in vitro fertilisation, which others followed, because it was then necessary. It laid down the template of how clinical practice in a sensitive area such as in vitro fertilisation should be handled. However, as the noble and learned Lord, Lord Mackay of Clashfern, said, we have moved on. I think we might be at a stage where we need a more overarching regulation that promotes good clinical practices and therefore good clinical outcomes.
Baroness Deech
My Lords, on a factual point, may I correct the impression—it may have been a mistake— that the previous speakers have given that any number of embryos can be implanted in a patient? The HFEA brought down the number of embryos from three to two and is working towards one. That was in the face of relentless resistance from patients, who wanted the best chance of becoming pregnant, and indeed many—but not all—of the clinicians and embryologists, who said, “We know what’s best for our patients”. The impression should not be given that an unlimited number of embryos are implanted. The number is two and they are working towards one.
Lord Winston
Forgive me for correcting that impression. Many units limited the number of embryos well before the HFEA did. At Hammersmith Hospital, we limited the number of embryos two years before the HFEA did. We were not alone; a number of units did that because we were very concerned. The idea that medical practitioners do not feel responsible for the pregnancy that is induced is, I think, a dangerous precedent. It is just not true. Of course there is a problem when patients put you under pressure, and it is a very difficult ethical issue that needs to be resolved.
Lord Patel
My Lords, I think I have lost my thread, but I have said what I wanted to say.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, I begin by expressing my thanks to all noble Lords for the opportunity to debate these amendments. As the noble Baroness, Lady Thornton, pointed out at the beginning of her remarks, following the Government’s concession in withdrawing Schedule 7 in its entirety, these amendments would have the effect of putting the Human Tissue Authority and Human Fertilisation and Embryology Authority out of scope of the Bill.
Our starting point in approaching these issues is a clear objective to streamline the process of regulation and, consequently, reduce costs and the administrative burden on establishments while continuing to offer the necessary protection for the public. The Bill presents us with an opportunity to achieve that. Our aim is to streamline healthcare and medical research regulation and so reduce bureaucracy. That approach is supported by leading assisted reproduction clinicians and their professional bodies and by the Academy of Medical Sciences.
The scope for streamlining is clear. We estimate that around 80 per cent of the centres currently licensed by the HFEA are also either regulated by the Care Quality Commission or are in premises that the commission regulates. Some 60 per cent of the centres licensed by the HTA are similarly covered by the CQC. It therefore seems unsustainable to continue to have these regulatory systems running in parallel. The question posed by my noble friend Lord Newton of Braintree as to whether the CQC wants to take on this work can best be answered by reference to the regulatory activity that it already performs. In any event, as regards the pace at which we take this, we intend to develop arrangements for the transfer of functions in consultation with the CQC over the next few years, and no transfer of functions will take place until that process is complete. However, the Government recognise that there are number of noble Lords with concerns about the proposal to transfer the functions of these two bodies, and not for a minute would I wish to minimise the nature of those concerns.
Let me be clear—both the HFEA and the HTA are models of regulatory authority that were right for the times in which they were created and which have done an admirable job in meeting the demands placed on them. However, as my noble and learned friend Lord Mackay of Clashfern pointed out, times change, and most pertinently so has the way in which we regulate the delivery of healthcare. With the establishment of the CQC along with the possibility—and I put it no stronger than that at the moment—of the creation of a new regulatory body for medical research, alternative structures are becoming available to ensure a more joined-up system. This provides, as I have said, the opportunity to streamline the process of regulation and reduce costs.
The powers in Clause 5 would allow us to achieve that without disturbing the underlying legislation, which captures the ethical safeguards that Parliament has so carefully set in place. Any future proposals to abolish these two bodies will be provided for in future primary legislation. I am happy to reiterate my assurance that there is no intention to revisit the provisions in either the Human Tissue Act or the Human Fertilisation and Embryology Act that provide the important ethical safeguards necessary to maintain public confidence in these sensitive areas. I would say to my noble friend Lord Willis and to the noble and learned Baroness, Lady Butler-Sloss, and the noble Baroness, Lady Deech, that means that future arrangements to regulate tissue and embryos must adhere strictly to the provisions of the two relevant Acts.
Noble Lords have raised particular concerns about the need to preserve the expertise these bodies have built up in the ethically sensitive subjects they deal with and the need to preserve the confidence of both professionals and the public in the way that these regulatory functions are carried out. The Government recognise the genuine nature of these concerns and we are determined that changes will not be at the expense of regulatory rigour or expertise.
I say to my noble friend Lord Willis that expertise will not be lost. It is envisaged that expertise will follow functions; for instance, through staff transfers and expert reference groups. Noble Lords have questioned the capacity of the CQC to assume these responsibilities. It will be given the capacity and the resources to carry out any widened functions. The CQC already has a proven track record of taking on the oversight of a specialist area. It took on the Mental Health Act Commission functions and I believe has successfully maintained oversight and focus on that area.
The noble Baroness, Lady Thornton, expressed concern that our whole approach in this area seemed unnecessarily complex. The powers that we are debating today will enable us to transfer some of the functions of the HFEA and HTA to other bodies but they do not enable us to do everything that we have set out in the ALB review. In order to abolish the HFEA and HTA or to transfer their research-related functions to any new research agency we will require powers under future primary legislation.
It may help if I try to provide a rough outline as to how and when we expect things to happen. We intend publically to consult on proposals to transfer all of the HFEA and HTA functions to other bodies in the late summer of 2011. Then during 2012-13 we would prepare draft orders for formal consultation under the provisions of this Bill dealing with the transfer of functions other than research functions. If appropriate we would then be able to lay the orders before Parliament. The process would enable noble Lords and other interested parties to see, comment on and debate the proposals as they progress. In order to avoid the piecemeal transfer of functions we would intend to ensure that the timetables for necessary future primary legislation and the commencement date of orders made under this Bill are aligned so that they come into force at the same time.
Without the inclusion of these bodies in Schedule 5 to the Public Bodies Bill we would have to provide for the transfer of their functions entirely within future primary legislation and this would significantly increase the risk that the underlying ethical provisions of the Human Fertilisation and Embryology Act and the Human Tissue Act could be reopened for debate and would afford less time for consideration and comment than the progressive approach which I have just outlined. I seek to impress upon noble Lords that that is a very powerful reason for wishing to grant the Government the powers we are seeking as regards these two bodies.
The noble Lord, Lord Warner, indicated that, in his view, the report by the Academy of Medical Sciences does not give sufficient backing to the idea that embryo research should be covered by the new research regulator. I would simply point him, if I may, towards paragraph 9.5.1 of the report which explicitly refers to the new body, if it is set up, having responsibility,
“for ‘specialist’ approvals and licences within the HRA around data, tissue and embryos, gene therapy and exposure to radiation”.
I think, as I read that, it was very much in the minds of the authors of the report that the research functions of the HFEA should be brought within the scope of a health research regulatory agency.
The noble and learned Baroness, Lady Butler-Sloss, expressed her worries about the information functions of the HFEA and the absence of a clear plan by the Government for what should happen to those functions. She is right, we have not fully made up our minds about where those functions should best sit, but that is one of the main reasons why we wish to consult on this. We need to ask the public and interested parties where these functions should sit, and there will be an impact assessment with the consultation.
My noble friend Lord Willis asked about the possibility of setting up a single research agency without primary legislation. He is technically right; we could do that. I should emphasise that we have not decided whether to accept the AMS recommendation to establish a single research agency—we think that there are merits in the proposal and we will be making an announcement shortly—but if we were to propose setting up such an agency we could do so initially by creating a special health authority. However, we could not legally transfer the research-related functions of either the HTA or the HFEA to that body. We could not make a transfer of functions to a special health authority without amending the 2006 Act.
The case was simply put by my noble and learned friend Lord Mackay of Clashfern. Essentially, we are asking the Committee to agree to grant the Government permission to consult on these matters. I hope that the noble Baroness will not seek to press her amendment today but instead will consider that a good purpose will be served by reflecting on the comments that I have made in response. In view of our concessions—
Lord Warner
I am sorry to interrupt the Minister. I have been listening intently to what he has said. I am extremely confused about the order in which things are going to be done. As I understood what he was saying, we are going to get a series of orders that transfer functions through a process of consultation, which I welcome, but we may or may not know at that point what the Government are going to do about setting up a health research agency, either by statute or otherwise. As I understood him, we could be in the position of being asked to agree those orders before we know what the final endgame is. It would be helpful if, before the next stage of the Bill, the Minister could set this out more clearly for us in writing so that we can understand the sequence. I found it rather difficult to understand.
Earl Howe
I must apologise to the Committee if I was not sufficiently clear and I will be happy to write to those who have participated in this debate to make the position clearer. I was seeking to say that we do not wish to take a disjointed, piecemeal approach. There is a natural flow of process that, if Parliament agrees, can lead us to a position where we are able in one move, so to speak, to transfer the various functions more or less simultaneously—although I would not wish to undertake that the whole thing would be done on the same day—so as to arrive at that point.
In our view it is desirable to consult during the late summer of this year. We will then set about the process of designing statutory instruments based on that consultation and go out to consultation on them. All being well, we will then introduce a second-Session health Bill that will have within it the provisions to establish a single research regulator, assuming that that is what we decide to do. Therefore, the whole process should work in a seamless way. However, I shall be very happy to write to noble Lords setting that out.
I return to the point at which I left off, which is to express the hope that the noble Baroness will not press her amendment this evening. I hope that she will accept our assurance that we have a clear intention to consult on the proposed transfers of functions and that she will be willing to withdraw the amendment.
Baroness Thornton
My Lords, I thank everybody who has contributed to this debate. I knew that it would be an interesting debate and a long one. I have been told by my noble friend that I have to be brief, as the Committee still has a lot of things to get through and the rest of us can go home when we have finished this. As I say, I thank all those who have taken part in this debate. The remarks of the noble and learned Baroness, Lady Butler-Sloss, were forensic and, as usual, very helpful. The noble Lord, Lord Walton of Detchant, spoke with great wisdom and knowledge about both the HFEA and the HTA. The noble Lord, Lord Newton, spoke wisely about the CQC. Having been one of the architects of the CQC in the previous Government, I wish to put on record that I very much admire the work that it does. However, it is being asked to do a great deal more, which worries me.
I am pleased that the noble Baroness, Lady Deech, continues to support us as we work towards resolving this matter. The noble and learned Lord, Lord Mackay of Clashfern, my noble friend Lord Winston and the noble Lord, Lord Patel—a trio of very distinguished professionals in their respective ways—said that, although progress has been made, the most important thing is to make more progress. I am not a scientist but in a way the scientists and the experts got us into trouble on both these issues and that led to the creation of the HFEA and the HTA, as imperfect as they might be. Those bodies were established to tackle the need to regulate and to restore public confidence. That is where we came in, as it were. It seems to me that challenges and problems still exist in terms of public confidence, to which I will return in a moment.
I accept that if we need to move to a more overarching medical research body, we need to go through a proper process. I am not convinced that the powers granted to the Government in this Bill are the way to do that or that what looks like a rather complex and very piecemeal process is the right way forward. However, I am grateful to the Minister for explaining this in great detail.
I am worried. A floating ethical framework sprang into my mind because I could not see where the ethical framework of what is being proposed will sit. If we cannot see where it will sit, what hope is there for the public? It seems to me that that is where the Government need to start. It is not a question of having a mechanical process and saying, “We will put this bit here and that bit somewhere else and have a regulation that will make sure that the research goes somewhere else”, because if we cannot understand where the ethics sit we are in very serious trouble.
The Minister has given us a great deal to think about and I am grateful to him for his detailed answer. I will read the record and I look forward to receiving his letter. We will need to think about what he had to say and discuss it further before Report. I will not press the amendment now, so I beg leave to withdraw it.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
Lord Hunt of Kings Heath
Lord Hunt of Kings Heath
My Lords, I will move the amendment in the name of my noble friend Lord Whitty. Passenger Focus plays an important role in protecting the interests of Britain’s rail passengers, England’s bus passengers outside London, coach passengers on scheduled domestic services and tram passengers. It is important that this function is not undermined and it is not appropriate that Passenger Focus is included in the Bill. I am very happy that the noble Lord, Lord Taylor, is joining me in support of this important amendment. I beg to move.
Lord Whitty
My Lords, my noble friend did not realise that I had arrived from the airport to move the amendment. I, too, am grateful to the Minister and I congratulate him. This is the first time that a Minister in this Government has added their name to an amendment of mine on any piece of legislation. What I am about to say should not undermine my gratitude. However, I have to ask two questions.
First, where does this leave Passenger Focus, because it achieved the distinction of appearing under three different schedules to the Bill and it remains in Schedule 3, which we agreed at an earlier stage? The piece of paper given to us for our debate on Monday, had we reached the amendment then, indicated that a much reduced role is envisaged for Passenger Focus. The document states that it would concentrate on its,
“core role of protecting consumers”,
that there was “scope for significant savings”, and that the body would be working under a “significantly reduced budget”. The reference to the core role is slightly sinister, because it implies that the organisation will focus on the complaints function and therefore act in processing and improving that function, but that it will not be allowed to be more critical of the train or bus companies and, more particularly, the department’s overall transport policy as regards the rail or bus network. If that is the intention, it will neuter Passenger Focus considerably. I should like the noble Earl, Lord Attlee, who I assume will reply, to provide reassurance on that front.
My second question is on a wider front. The various existing consumer bodies are being dealt with differentially under this legislation. Some are to be abolished, some are to be merged, some are to have their functions transferred and some, given the abolition of Schedule 7, will be retained—presumably in their present form. Passenger Focus will be retained in a modified form. The Government’s original intent, for which I had some regard, was to rationalise the whole structure of consumer representation. Instead of that, the danger is that they will leave a bigger hotchpotch than the aggregate of previous legislation on consumer matters and weaken the statutory base of a number of consumer bodies.
As the Committee knows, I have an interest as a past chair of Consumer Focus. On the one hand, it appears that that body will be abolished, while on the other hand the Government say that they will transfer the functions to Citizens Advice. It was BIS’s original view that other bodies, including Passenger Focus and the Consumer Council for Water, should also be transferred to Citizens Advice. Whether or not that was a good idea, at least it was coherent. It seems now that we will end up on the consumer front with greater incoherence than the Government inherited and were determined to do something about. Not only is regulation likely to be more incoherent, but it is also likely to be substantially weaker, with fewer resources. Therefore, although I very much appreciate the Government’s support for the amendment, I have serious misgivings about their specific and general intentions as regards consumer protection.
Lord Bradshaw
My Lords, I support what the noble Lord, Lord Whitty, said. There is certainly scope for economy. I did not agree with the previous Government’s decision to transfer protection of bus and coach passengers to the Rail Passengers’ Council. However, the work of the council is concentrated mainly on issues such as punctuality. It has produced extremely good reports on things that irritate users such as huge queues at booking offices and the way in which ticket machines baffle many users and often do not work. These issues are important to people and I cannot think who will regulate them for less money. Transferring the functions to the Office of Rail Regulation, which is full of lawyers, will raise the cost of doing this work.
I will say one further thing in defence of Passenger Focus. It has developed a system of statistical analysis by which it can take very little in the way of raw information and turn it into statistically robust results. I am all in favour of economy, but I am also in favour of having a body to look after the interests of passengers that is functional and that rests on a secure base. I and most passengers would regret anything that abolished this body.
Earl Attlee
My Lords, I was surprised when the noble Lord, Lord Whitty, did not move his amendment, so it is a great pleasure for me to respond to him. He and I have debated together over many years. He has accepted some of my amendments and taken others away. It is a great pleasure to continue our debate, albeit with our roles reversed.
The noble Lord’s amendment seeks to remove Passenger Focus from Schedule 5 to the Bill. The appearance in the Bill of Passenger Focus does not reflect the view that the interests of passengers are unimportant. We are clear that passengers are the only reason why we run a public transport system. This was reflected in the public bodies review, which concluded that Passenger Focus should be retained but substantially reformed to focus on the core role of protecting passengers, thereby allowing a reduction in the cost to the taxpayer.
Noble Lords may see this as a first step towards cutting the budget of Passenger Focus to the point where it is no longer capable of being an effective voice for passengers. I reassure them that this is not the case. We fully accept the need for a powerful and effective passenger advocate. This is reinforced by EU provisions that require us to have a properly independent complaints body to which rail passengers can turn. Passenger Focus plays that role.
The noble Lord, Lord Whitty, asked whether this was not simply an opportunity to weaken and abolish a body that has been critical of the Government in the past. The answer is no. We want to maintain an effective passenger advocate because that is the best way of ensuring that transport operators are held properly to account. This is an effective opportunity to ensure that that role is performed in a robust and cost-effective way.
The Government had originally listed Passenger Focus in Schedule 5 to enable possible changes to its functions. Further work and our discussions with Passenger Focus have clarified that we can significantly reduce the cost to the taxpayer without recourse to legislative change through Schedule 5. For example, efficiencies can be derived by reducing the scope of Passenger Focus’s research and survey work. My noble friend Lord Taylor has added his name to Amendment 98 on that basis to support the removal of Passenger Focus from Schedule 5, which we hope will be welcomed by the Committee. However, the governance changes that we intend require its inclusion in Schedule 3, so we cannot support Amendment 75, which the noble Lord, Lord Whitty, was unable to move on Monday. Amendment 160A, which would remove Passenger Focus from Schedule 7, is effectively redundant in the light of the Government’s decision to remove Schedule 7 from the Bill.
I hope that I have been able to reassure the Committee and the noble Lord that we are not planning to leave passengers without proper protection and I hope that the Committee will accept Amendment 98.
Lord Whitty
I am not sure that it is in order for me to reply, given that my noble friend moved the amendment. However, I am grateful for some of those reassurances about the future of Passenger Focus. It would be helpful if we could be told the nature of the changes in governance that the Government propose, but perhaps that is for another day. However, I think that the body’s removal from this schedule is important. The noble Earl was probably not in a position to reply to my other points, which concerned the broader landscape of consumer representation.
Earl Attlee
The noble Lord asked what reforms we plan under Schedule 3. That schedule can be used to implement changes to the make-up and composition of the Passenger Focus board. Although the details are still to be finalised, the intention is to streamline the board’s operation significantly, which will also result in significant cost reductions.
Lord Whitty
I thank the noble Earl. Of course, some of the make-up of the board reflects the structure of the railway industry and the structure of the company. I hope that we will not lose that geographical dimension in changing its composition. I accept what the noble Earl says in relation to Passenger Focus. Clearly, I am grateful for his support for the amendment, although I think that we will have to return to the wider issue of the consumer landscape as a whole either in this Bill or in some other context in this House.
Lord Taylor of Holbeach
“NOTE
1 Section 21(2)(a) does not apply to an order under section 5 which provides for—
(a) functions of the British Waterways Board falling within section 21(3)(b) to (e) to be transferred to another person;(b) functions of the Environment Agency falling within section 21(3)(b) to (e) to be transferred to a person to whom functions of the British Waterways Board are transferred by virtue of paragraph (a).”
Lord Hunt of Kings Heath
Lord Taylor of Holbeach
Lord Whitty
“( ) In relation to a transfer of functions, duties or powers under section 1 or 5, or to mergers under section 2, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I.2006/246) apply to a transfer which relates to rights or liabilities under a contract of employment whether or not the transfer would, apart from this subsection, be a relevant transfer for the purposes of those regulations.
( ) In the case of an employee of any body whose functions, duties or powers are transferred or merged under section 1, 2 or 5—
(a) a period of employment with the transferor is to be treated as a period of employment with the recipient organisation;(b) the transfer to the recipient organisation is not to be treated as a break in service.”
Lord Whitty
In this amendment, I move away from the detailed consideration of individual bodies and their future to a more general principle. This relates to what happens to the staff of those bodies whose functions are transferred or merged. There is a clear-cut situation where, if bodies are abolished, although some of the bodies are Schedule 1, there has also been commitment by the Government to transfer the functions, duties or powers elsewhere and, therefore, the question of what happens to the staff who are carrying out those functions under the current arrangements does arise.
This amendment would make it clear that, in normal circumstances, the TUPE arrangements would apply as they would apply to mergers in both the private and the public sector, and across the private and the public sector where functions and duties are transferred. Under normal procedure concerning people’s entitlement to terms and conditions, including redundancy terms, pensions and other aspects of their employment, if the functions are moved into a receiving body, it would be for that receiving body to maintain both the continuity of service and the terms and conditions unless and until, either by collective agreement or by individual contract agreement, those terms are changed.
Because of the complexity of the bodies involved and the contractual terms which appear and have grown up in many of these bodies over time, it may not be all that clear, even to eminent employment lawyers, whether a TUPE applies or not. Even in the more simple past, when we were only dealing with one or two mergers of bodies or transfers of functions, it sometimes was not at all clear. The form of words here is almost exactly that which was included in the legislation in 2006 which set up the present Consumer Focus body—the National Consumer Council in legal terms—when we had the merger of the old National Consumer Council, Energywatch and Postwatch. The terms and conditions were preserved, albeit in some situations it was not entirely clear whether TUPE would apply or not.
In 2006 the regulations on TUPE came in. When Consumer Focus was created they were quite new, but similar forms of words have appeared in other legislation where there has been a merger or transfer of functions from one state body—NDPB or equivalent—to another. This Bill has a wholesale raft of such transfers. It does not have quite as many as it started out with but there are still quite a few left, and a few where it is not quite clear whether the transfer is occurring or not, and whether it is a function which normally comes under the TUPE regulations.
This amendment would make it clear, however, that if the function transfers or the duty and power transfers, the staff would go with them unless and until the receiving body decided it might wish to dispense with their services as the new employer. It is not up to the previous employer to declare them redundant until such a rationalisation has taken place by the receiving employer, which can happen more or less instantaneously in certain circumstances. The important point is that up until that point, the terms and conditions of the staff employed under the pre-existing bodies would be preserved.
This important point relates to quite a lot of staff, and there is quite a lot of uncertainty among the trade unions and staff bodies representing them. We need clarity on this and if the Government are unable to accept this form of words then, clearly, I am happy to discuss it with them. The principle needs to be established for all the bodies which remain within this Bill. I beg to move.
Lord Hunt of Kings Heath
My Lords, I would very much like to support my noble friend on this. It is timely to remember that thousands of people who work for the public bodies listed in this Bill are likely to be affected by its provisions. Many will lose their livelihoods; some will find their careers seriously damaged; some, as my noble friend Lord Whitty has said, will find themselves transferred to other employers. It is important that we recognise and acknowledge that those people have given dedicated service, in some cases for many years. Where they are transferring to another body, we must make the transition process as smooth as possible. That is clearly the intent behind my noble friend's amendment. It would ensure that, where a person is transferred to another body, TUPE will apply, with the implications and protections as described by my noble friend. I hope that the Minister will be able to provide the necessary assurances on that. The Government also need to take on board the point that my noble friend made about the complexity of the issue and the need for clarity, which is why his amendment deserves serious consideration.
Lord Taylor of Holbeach
I, too, am grateful to the noble Lord, Lord Whitty, for tabling the amendment, because it raises an important aspect of the reforms and allows the Committee to consider the impact of the Government's reform programme on the staff of the bodies affected. I take this opportunity to pay tribute to the work of the thousands of hard-working staff of public bodies across the country. Specifically, I put on record that our proposed reforms to public bodies are no reflection on the work of the staff.
I assure the Committee that the Government are working with the chairs and chief executives of public bodies and trade union representatives to ensure that necessary change is carried out as smoothly and fairly as possible. As the noble Lord said, that must be an important aspect of this operation. The Government have been diligent in acknowledging the needs of staff during the public bodies review programme, and we will continue to be so—for example, by exploring opportunities for redeployment where possible.
The Cabinet Office has been working closely with other departments since 2010 to ensure that the needs of staff are fully factored into the public bodies programme of work, particularly on the need to provide staff with clarity following reform decisions and the milestones along the route. The Cabinet Secretary has sent a message to departments on that very point. The Cabinet Office has also provided a checklist of considerations for departments which takes the needs of staff and stakeholders into account.
Those arrangements reflect a flexible approach that ensures that government departments can respond in the context of individual changes—based, of course, on the proper protections that are already enshrined in UK employment law. That is the right approach to support our public bodies’ staff. It also reflects the Cabinet Office statement of practice on staff transfers in the public sector. The guiding principles, as set out in the document state:
“The Government is committed to ensuring that the public sector is a good employer and a model contractor and client”.
The principles recognise that the:
“involvement, commitment and motivation of staff are vital for achieving smooth and seamless transition during such organisational change”.
On the specifics of the amendment, I should like to inform the Committee why the Government believe that the blanket application of TUPE is not appropriate. TUPE, and the European law which underpins it, was designed to protect staff where the business for which they worked, or the services to which they were assigned, would be carried out by a different organisation. Staff retain their jobs and conditions, and the new employer steps into the shoes of the old one. The definition of relevant transfer under TUPE is broad and will cover most transfer situations.
However, Clause 23 already provides the mechanism for equivalent protection to be confirmed in non-TUPE situations where that is appropriate. That is underpinned by the Cabinet Office statement of practice on staff transfers, to which I have already referred, which provides that the TUPE principles should generally be followed through a transfer scheme which addresses the imperatives of the particular transfer.
The blanket application of TUPE to all transfers conducted pursuant to this Bill seems likely to lead to inefficiencies and unintended consequences. For example, there may be circumstances where a body following an order made under this Bill is carrying out functions which have significantly altered and which require different skills and resources, with the result that there is no relevant transfer for TUPE purposes. If TUPE were nevertheless to be applied, staff would be transferred to the new body by operation of law, only to be potentially made redundant by the transferee. This would involve extra work and unnecessary expense and delay with no benefit to anyone, increasing uncertainty for staff and possibly disruptive relocation.
I appreciate the concern of the noble Lord, Lord Whitty, and I can assure him that the Government will continue to have a positive approach to TUPE regulations where they properly apply, and seek to make appropriate provision where this is not the case. I hope that, in the light of the assurances I have given, he will feel free to withdraw his amendment.
Lord Whitty
My Lords, I appreciate much of what the Minister has said about the approach of the Cabinet Office advice and what is going on in anticipation of various changes. Of course, we are not at a point, in most cases, where the exact format of the change is clear because we have to go through a period of consultation in association with the secondary legislation. However, I am slightly disappointed that he is not prepared to accept this amendment, because I had seen Clause 23(5), which referred to this, and my amendment was intended to be a rather clearer exposition of that principle and is the formulation that has been used on past occasions. It is true that people will find themselves employed by a new body and that there could be a redundancy very rapidly, but that has been the situation in both the private and the public sector, and is what is laid down in the TUPE regulations for a lot of situations and has happened in past public sector mergers.
The difficulty for me being able to be sufficiently reassured by the Minister’s words and by Clause 23(5)(f) is the question why, if on previous occasions, legislation has provided for a pretty unambiguous form of wording that I have outlined in this amendment, we could not use a similar form of words in here. I think that would be greater reassurance to the staff and trade unions that are having to deal with potential changes of employer. I do, however, accept the good intentions of the Government, and the Minister in particular, and will not press this amendment. I will consider his words carefully to see whether I need to bring it back at a later stage. I beg leave to withdraw the amendment.
Lord Newton of Braintree
“( ) fairness, openness, transparency and justice;”
Lord Newton of Braintree
I wish to move this amendment briefly. I have ended up a bit confused on one point. Until the latest selection of amendments, my little amendment was sailing on its own and I might have regarded it as a sort of beacon of light—a light ship. Somehow, in the course of the past couple of days, it has acquired nine barnacles, and I am not quite sure whether they are benign barnacles or hostile barnacles. I have not studied them sufficiently to know whether I have a view on all of them. I think I am agnostic about some, hostile to some, and supportive of others, but I will sort that out when I have heard what noble Lords have to say.
What I do know is that since there are those who appear to think that I have been a bit troublesome on this Bill, I want to make the point that this is the first amendment I have actually moved, so all the trouble has been made by other noble Lords. My amendment is entirely benign. The only thing I have done that is unkind is to write my notes on the back of an envelope to match the Bill, but perhaps that was unkind. My speech will be short. I trailed it on Monday when something similar cropped up in a speech made by the noble Baroness, Lady Hayter. I gave my main thinking at col. 1409 of the Official Report.
The background is that I looked at Clause 8 and wondered what it is that Ministers have to take into account in making orders under these sections—efficiency, effectiveness, economy and securing appropriate accountability. I indicated on Monday that the accountability argument is pretty fair nonsense. Ministers are accountable for all this, so the issue is about how that accountability is exercised. Leaving that aside, all the other criteria strike me as utilitarian. I would claim as a mere humble former practising Member of Parliament to be interested in values. All I have done is put down an amendment that says they have also got to take account of,
“fairness, openness, transparency and justice”.
That is pretty close to asking the Government to accept motherhood, and if they doubt it, let me say that during some train travelling today—I should say that I used four trains, three of which were at least 15 minutes late—I had plenty of idle moments. What I do in my idle moments is study the document that I carry close to my heart. It is the coalition’s programme for Government. I am a faithful supporter. Its subtitle is, “Freedom, Fairness, Responsibility”. The foreword on pages 7 and 8 was written by my right honourable friends the Prime Minister and the Deputy Prime Minister. It says that,
“we will ensure that fairness is at the heart of those decisions … we will extend transparency to every area of public life”.
In respect of consumer protection the document states:
“We need to promote more responsible corporate and consumer behaviour through greater transparency”.
I think that that should apply to the Government as well. The document goes on to make reference to,
“changes to our political system to make it far more transparent and accountable”.
The only thing I cannot find a reference to is openness.
If Ministers do not like all these words or if the draftsmen say that they are not the sort of thing you put in Bills, I can live with that, but I do think that something along these lines ought to be incorporated. On the basis of the evidence I have just quoted, I claim to be the true believer, and if the Minister resists me, I think that he declares himself a heretic, so I look forward to hearing what he has to say. I beg to move.
Lord Maclennan of Rogart
My Lords, I rise simply to make it clear to the House that, at this hour of the night, my noble friend is not alone. His concern for promoting values in this Bill has been manifest from the beginning, and he enjoys considerable support from his coalition colleagues.
Lord Goodhart
My Lords, I have Amendment 125A in this group. I originally planned to de-group it, because it is different in its purpose from the others. However, in view of the lateness of the hour, and if the Minister agrees, I shall deal with it now and get it over with.
It is clear that this Bill is meant for use in the near future and not in the longer term. It cannot be right for it to create powers which might be exercised several years from now in circumstances which are entirely different from those of the present. This makes it desirable that a time limit be put on the operation of the Bill in the nature of a sunset clause. There should be a reasonable time for the Government to enact their legislation under this Bill. I have suggested in my amendment that the sun should set on the Bill when the present Parliament is dissolved; that is, in a little over four years if we adopt the Fixed-term Parliaments Bill.
That seems to be a reasonable time in which to do everything that is needed here. There is absolutely no need for the provisions of the Public Bodies Act, as it will then be, to continue after the duration of the present Parliament.
Lord Hunt of Kings Heath
My Lords, I shall speak to a number of the amendments in this group. The amendment of the noble Lord, Lord Newton, has indeed acted as a beacon, such a beacon that we all want to join in and follow him. I very much support the intent behind it.
In many ways, this is a very important group of amendments, because they go back to the question of the architecture, as we have come to call it, of the Bill. I repeat that the Opposition are not opposed to a regular review of public bodies—it is right that they should be subject to review. Our concern all along has been that the Bill should not give such overweening power to Ministers without sufficient parliamentary scrutiny.
We have had a number of debates about the architecture of the Bill during our days in Committee. I acknowledge the progress that has been made through amendments and responses from the Government. The removal of Clause 11, Schedule 7 and those clauses relating to forestry are particularly welcome. We have also discussed Clause 8, concerning the matters to be considered by Ministers. The Minister has already said that this is a matter in progress and that he cannot give a commitment, but it is none the less encouraging that he and his officials are discussing the wording of Clause 8. I hope that he will be able to bring some comfort to us when we come back on Report.
Nevertheless, the Bill could still be further improved, first, by enhancing the consultation procedures and then by making order-making procedures in Parliament subject to extra scrutiny. My Amendment 114A to the Minister’s Amendment 114 seeks to ensure that the public would always be consulted if the Minister proposed to make an order under Clauses 1 to 6. I accept that the Minister’s amendment is welcome and extensive. I also accept that in new subsection (1)(g) of the proposed new clause the Minister is given power to consult the public, since it states,
“such other persons as the Minister considers appropriate”.
That is a phrase beloved of parliamentary counsel and officials. I should like to encourage him to go a little further. In the context of this Bill, the provision gives a little too much discretion to Ministers to decide who else they want to consult. The bodies in this Bill are all important and deal with important functions. I believe that there should be no question that if an order is made under this Bill there should automatically be public consultation.
I also believe—this relates to my Amendments 118A and 118B—that the order-making procedure to be used in Parliament should be thorough. I welcome Amendment 118 in the name of the noble Lord, Lord Taylor. The question is whether it is sufficient. On this we have the advice of the Delegated Powers and Regulatory Reform Committee, which certainly did not think so in its report in November 2010 when the Bill was originally published. On 7 March, we had a further report from the committee. It welcomed the noble Lord’s amendment, which it sees as a further enhancement, but it reminds us that there are still two key differences between the Government’s proposed enhanced procedure and what was in the Legislative and Regulatory Reform Act 2006, which introduced the super-affirmative procedure. The committee says that, under the 2006 Act,
“if a committee of either House recommends that no further proceedings be taken on a draft order, then any further proceedings are automatically stopped unless and until the recommendation is rejected by that House itself (commonly called the ‘veto’)”.
The committee reminds us that, under the 2006 Act,
“a Minister wishing to proceed with an order unaltered after having been required to have regard to representations must lay a statement before Parliament giving details of any representations received”.
The committee points out that such a statement is not required under this Bill or under the amendment in the name of the noble Lord, Lord Taylor. I say to the noble Lord that I welcome the enhanced scrutiny that he is proposing but I do not think that it goes far enough given the order of power that is given to Ministers.
I, of course, listened with great interest to the argument from the noble Lord, Lord Goodhart, for his sunset clause amendment. We support the principle of the sunset clause. The only question that I would put to him—it would be interesting to have further discussions between now and Report—is whether there is not an argument for keeping the Act, which would allow the Government perhaps at the start of every parliamentary term to undertake a further review, but for time-limiting the provisions in relation to an organisation named.
My main concern about the construct of this Bill is the chilling factor on any organisation so named. I think that it would be possible to have a recasting of the noble Lord’s amendment to make it clear to an individual organisation that, unless a Government deal with a matter within a certain time, it falls. However, there is a case for the Government being able to undertake a regular review. It might be that we should keep the provisions of this Bill but limit the time under which an individual organisation can be covered by it.
Lord Goodhart
I am certainly interested in what the noble Lord, Lord Hunt, has said. It is something that I would obviously consider and I would be happy to discuss it with him or the Minister at some time between now and Report.
Lord Hunt of Kings Heath
My Lords, I am most grateful to the noble Lord, Lord Goodhart, and I very much look forward to doing that.
My Amendment 176A deals with omnibus orders. The concern here is that a whole group of bodies could be dealt with under one order, which could mean that much less scrutiny would take place. It is interesting that the Government had an amendment—Amendment 126—to prevent omnibus orders in relation to the bodies listed in Schedule 7. Clearly, that falls, because we are no longer to have Schedule 7. However, if the Government thought that it was reasonable not to use omnibus orders in relation to that schedule, does not the principle arise with the bodies listed in Schedules 1 to 6?
Finally, Amendment 177 is a probing amendment. It relates to hybridity and to Clause 27(4), which states:
“If the draft of an instrument containing an order under this Act … would, apart from this section, be a hybrid instrument for the purposes of the standing orders of either House of Parliament, it is to proceed in that House as if it were not such an instrument”.
Can the Minister give an explanation of that? Perhaps, if it is extensive, he might care to write to me.
Lord Newton of Braintree
Perhaps I may just indicate briefly that, although I said slightly flippantly that I had not had a chance to look at all the other amendments, I had a glance through them. I had some of the same reservations about the amendment in the name of the noble Lord, Lord Goodhart, as the noble Lord, Lord Hunt of Kings Heath, has just adumbrated. The two that I found myself most drawn to were that you cannot have an omnibus order but must deal with things one by one, which seems well worth considering, and this business about hybridity. If there was manifestly something that picked out an individual interest and treated it differently from other interests—if I might do my non-lawyer’s translation of the hybridity problem—that would be a real question to be considered in certain circumstances. I hope that my noble friend will at least be able to reflect on these points.
Lord Mackay of Clashfern
On the amendment in the name of the noble Lord, Lord Goodhart, as the noble Lord, Lord Hunt, said, there is a question of a chilling factor in relation to bodies or organisations once they are named in a Bill. There is something to be said for having a closure in respect of bodies named now but also, if we get the Bill through in a satisfactory way, for it being a model for future reviews of these public bodies. One difficulty has been to provide a definition of what is meant by a public body. If the Bill passes into law as a sound piece of review legislation then, after, for example, the end of this Parliament and the beginning of the next one, there is a good deal to be said for the next Government coming forward with a list of bodies that would be suggested as amendments to this Bill, which would then possibly be subject to review under the powers that we have stipulated in the Bill.
Lord Taylor of Holbeach
I do not suppose that the Committee would have chosen to debate this important group of amendments at this time of night. I do not really want to rush but I am mindful of the time. It is interesting that the amendments contain the workplace of me and the Bill team. This is certainly an area in which we are and have been much engaged. I hope that all noble Lords will understand that it is rarely possible to deliver everything. There are some areas where the Government have to draw a line but there are others—I think that I can indicate these in the debate this evening—where further consideration is justified and where I would hope to come back with amendments before Report, after discussions with noble Lords. I say that by way of preface.
The whole group of amendments relates to the procedures that Ministers must follow. These issues have had substantial discussion in Committee. I thank noble Lords across the Committee for their contributions. As I seek to respond to each amendment, I ask noble Lords to contextualise the debate against the changes that we have already announced in the Bill, notably the removal of Schedule 7 and our ongoing commitment to work with noble Lords on a variety of related issues.
I begin with Amendment 106A in the name of my noble friend Lord Newton of Braintree. This amendment would add the objectives of,
“fairness, openness, transparency and justice”,
to the list to which the Minister must have regard when considering making an order under Sections 1 to 6. I thank him for his amendment and reassure the Committee that these objectives underpin the Government’s rationale for reforming public bodies and, of course, the Government’s programme as a whole. It is good that my noble friend carries the coalition agreement in his inside pocket, close to his heart. I am reassured by that and always value his contributions, even when they are not necessarily supportive of everything that I am seeking to do with this Bill. The only points where I fear we disagree concern whether this amendment would work in practice and whether such wording is necessary on the face of the Bill. The Government believe that such a requirement in legislative terms would be ambiguous and could, as drafted, be quite difficult to measure or assess. However, it is an area in Clause 8 that we have committed to look at.
Amendment 114A returns us to the question of consultation, which was originally debated on our first day in Committee on this Bill. It would amend government Amendment 114 by introducing a specific requirement to consult the public before laying an order using the main powers in the Bill. The Government have accepted the principle that Ministers should be required to consult on their proposals to reform public bodies before using these powers. The Government also accept that in some cases it is completely appropriate to consult the public in relation to such proposals. For example, I can confirm to the Committee that the Department for Business, Innovation and Skills intends to consult this year on its proposed changes to competition bodies. We discussed that earlier this evening. It will be a public consultation. The Government Equalities Office will soon publish its consultation document on reform of the Equality and Human Rights Commission. Later this year, Defra will issue a public consultation on its plans to replace British Waterways with a charitable body.
However, I take issue with the amendment in the name of the noble Lord, Lord Hunt, as it would apply without due regard to proportionality to any proposed reform. Such an approach runs contrary not only to the policy of this Government but also to the existing code of practice on consultation, which was issued in June 2008 by the Government of whom the noble Lord, Lord Hunt, was a part. The introduction to the code of practice is clear:
“Ministers retain their existing discretion not to conduct formal consultation exercises under the terms of the Code. At times, a formal, written, public consultation will not be the most effective or proportionate way of seeking input from interested parties”.
I do not quote from this document to seek to absolve Ministers of responsibility. Subsection (1)(b) in Amendment 114 specifically requires a Minister to consult persons whom he or she considers,
“to be representative of interests substantially affected by the proposal”.
This provision clearly could include the public. The Minister must therefore expect to be held accountable for his or her decisions in relation to this provision. However, the proper requirement that Ministers should consider whether to consult the public does not lead to the conclusion that it will prove necessary or proportionate in all cases. For example, is it proportionate to require a full public consultation on the statutory abolition of Food From Britain, a body that, to all intents, has been defunct since 2009, or on the proposal to use Schedule 2 to merge the Pensions Ombudsman with the ombudsman for the board of the Pension Protection Fund? These two bodies already share services to a great extent and those functions will not change.
As with other cases in the Bill where the public will rightfully expect to be consulted, undoubtedly they will, but the Bill as drafted allows for that possibility and the Government accept their responsibility to ensure that that occurs when necessary. By contrast, the amendment proposed by the noble Lord, Lord Hunt, will remove the ability of Ministers to conduct a more targeted consultation when that is appropriate. While I have sympathy with the sentiment behind Amendment 114A, the Government do not believe that the public will welcome a proposal that would add unnecessary bureaucracy to the order-making process and with it, in effect, the process of reform.
The question of proportionality is also pertinent to Amendments 118A and 118B in the name of the noble Lord, Lord Hunt, which concern the parliamentary procedure that should apply to orders made under this Bill. In responding to these amendments, I should clarify for your Lordships’ House that we have substituted government Amendment 118 with a new version that makes it explicit that the enhanced procedure can be activated by a recommendation of a committee of either House. This clarification responds to paragraph 24(a) of the sixth report of the Delegated Powers Committee—that is, the committee’s second report on this Bill. I am happy to clarify the Government’s intentions in response.
Amendment 118A seeks to make it explicit that a Minister wishing to make an order following a period of consultation must lay before Parliament a draft order and explanatory document. I agree with the spirit of the noble Lord’s amendment, but I do not consider it necessary. While the current drafting of subsection (1) in government Amendment 118 states that a Minister,
“may lay … a draft order, and … an explanatory document”,
it would in practice not be possible to make an order without following this procedure. Our current drafting simply reflects the fact that, following a period of consultation under Amendment 114, the Minister is not obliged to proceed with the proposal.
Amendment 118B would introduce a wholly new parliamentary procedure for these orders, giving a committee of either House the opportunity not only to reject but also to amend an order, or to recommend that the proposals be taken forward only through primary legislation. As I argued when we debated this issue on the first day in Committee, the Government cannot support that proposal for a number of reasons. First, I maintain my position that the noble Lord’s amendment goes beyond the scope of the Bill in seeking to effect a fundamental shift in how this House deals with secondary legislation. Secondly, I do not accept that the powers of the Bill, especially in the light of the removal of Schedule 7 and the additional safeguards that the Government are now proposing, justify the use of such a restrictive parliamentary procedure. It is now the case that no body can be subject to the powers of the Bill unless Parliament has consented through primary legislation to its inclusion in the Bill’s schedules. The waiting room of Schedule 7 has gone. Therefore, the scope of the powers in this Bill has been significantly narrowed. On this basis, to continue to suggest that the Bill requires a more restrictive scrutiny procedure than, for example, the Legislative and Regulatory Reform Act appears a disproportionate response, particularly in the light of the additional safeguards that we have introduced and continued to work towards and the fact that the proposed procedure would apply to each and every order made under this Bill.
I do not intend to quote a list of examples of such reforms. Suffice it to say that I do not consider that the opposition amendment represents a proportionate procedure for an order to abolish a body that is already defunct. Our approach, by contrast, gives Parliament the flexibility to select and enhance procedure while maintaining for the Government the reasonable ability to act to implement their programme. It is for this reason that I cannot accept Amendment 118B or Amendment 117.
Lord Hunt of Kings Heath
My Lords, I am most grateful to the noble Lord for giving way. I will not detain the Committee very long. I want to make two points. First, presumably in the case of defunct bodies, the Select Committee appointed by the House could deal with this matter in very short order. The Merits Committee, for instance, deals with a huge number of statutory instruments every week. It will list a huge number to which it does not draw the special attention of the House and it focuses on the orders it considers to be most important. Secondly, the noble Lord has been pretty forthright in rejecting my amendment. Between now and Report will the Government at least give careful consideration to the report of the Delegated Powers and Regulatory Reform Committee? It has reported only in the past few days and it covers this issue.
Lord Taylor of Holbeach
Of course and I would like to feel that the noble Lord would know that I wish to continue the very useful dialogue we have had on this Bill. I felt it would help the noble Lord if I defined the areas where I feel there is going to be more scope for improving the Bill—as we would both describe it—and areas where I think it is not going to be possible. I thought it was better to be upfront and frank about it and I hope that the noble Lord will understand that. We want to maintain our dialogue because, despite the difficulties the Bill had in its early days, I believe this could be a very useful piece of legislation and one which suits both Government and Parliament in its operation provided we put the proper work into the foundations. We will have a chance to talk about that when we come to other amendments in this now slightly enhanced grouping.
As I said, this is why I cannot accept Amendment 118B or Amendment 176 in the name of the noble Lord, Lord Dubs, which makes provision regarding the commencement date of amending orders using wording which appears to be drawn from the Civil Contingencies Act. That Act was designed to create a framework for dealing with emergency regulations, which, by their extreme nature, circumvent the usual channels of parliamentary scrutiny. I do not accept that there is a parallel between such orders and those which would be made under this Bill.
Originally my speaking note at this point mentioned sunsetting; then my speaking note did not mention sunsetting because the amendment of the noble Lord, Lord Goodhart, was going to be taken separately. If the noble Lord does not mind I will put it at the end because I think it is quite important that I can say a few words on it.
Amendment 176 would prevent an order being made under this Act from applying to more than one body or office. I understand the thinking behind the amendment which seeks to ensure proper parliamentary scrutiny of these important orders. However, I am also anxious that the Bill is not amended in such a way that will restrict the sensible decision-making of departments or overburden Parliament with a requirement to consider separately multiple orders of a similar class. I am thinking, for example, of the multiplicity of drainage boards which might have similar requirements for secondary legislation. I hope that any wording covering this would not exclude that because it would not be in the interests of efficient use of parliamentary time, particularly given that the changes to be taken forward by the said orders will in most cases have been debated thoroughly in primary legislation.
We do not accept the argument that in all cases the use of omnibus orders would necessarily reduce the level of parliamentary scrutiny. I should also say to the noble Lord that the particular amendments under discussion would have what I believe are unintended consequences by preventing any orders to merge bodies using the power in Clause 2 as such orders would by their nature apply to more than one body or office. However, I am willing to consider again whether some form of restriction on the use of omnibus orders might be appropriate. I would be happy to discuss that with the noble Lord prior to Report stage. So that is another item for our agenda.
Amendment 177 would remove the provision in Clause 27 that aims to give certainty to the order-making procedure and to avoid lengthy debates on hybridity that could unnecessarily delay reforms from being taken forward by Ministers. This sort of provision is not without precedent; nor does it broaden the powers of Ministers in any significant way. Indeed, similar provisions form parts of a number of Acts passed by the previous Administration, including the Regional Development Agencies Act 1998, the Freedom of Information Act 2000, the Charities Act 2006, the Climate Change Act 2008 and the Equality Act 2010. In addition, I am happy to assure the Committee that the Government’s initial assessment was that none of the proposed orders to take forward the reform of bodies listed in Schedules 1 to 6 could be considered hybrid.
Amendment 178 would require an annual report from a Minister regarding the use of order-making powers. I understand that the intention of this amendment is to ensure that the Government are properly held to account for their use of these powers, which is of course right and proper. However, the exercise of the powers will be a matter of public record, as is the case in the exercise of any powers made by statutory instrument. In addition, parliamentarians have a variety of means by which to question the Government on all aspects of policy relating to public bodies via Parliamentary Questions and the Select Committee process. I am unclear what is expected to be gained by the creation of a new reporting burden.
It is also the case that these powers will not be exercised centrally via the Cabinet Office but elsewhere by individual Ministers in departments, who will each have set out their own approach to public body reform in their departmental business plans. It is by reference to those documents that the Government have committed to be held to account and departments will report quarterly on them as a matter of course.
I turn to my noble friend Lord Goodhart’s amendments, which seek to sunset the order-making powers contained in Clauses 1 to 6, 13, 17 and 18 so that they could no longer be used after the dissolution of the present Parliament. As noble Lords will know, perhaps all too well, this is not the first time that we have debated this issue. Since our first day in Committee, the architecture of the Bill has changed as the Government have listened and responded to concerns raised by noble Lords. Most recently, that has resulted in the removal of Clause 11 and Schedule 7. For that reason, this is a timely debate as it allows the Committee to consider the issue in the new context in which we find ourselves.
The issue of sunsetting all the parts of the Bill is a complex one. I can see logic in not leaving bodies in schedules in perpetuity; I think that the noble Lord, Lord Hunt, and my noble and learned friend Lord Mackay made a similar point. Although this is something that the Government are still considering, there is perhaps more merit in the option proposed recently by the noble Baroness, Lady Royall, of sunsetting the contents of the schedules to the Bill rather than the powers themselves. That is all the more persuasive in the light of the removal of Schedule 7, which has drastically limited the scope of these powers, something that had not happened when my noble friend Lord Goodhart tabled his amendment.
Inserting a sunset clause that would limit the period in which powers could be used could now be counterproductive and potentially leave us in the same position as we are in today—that is, without a mechanism to take forward reforms following the regular review of public bodies that the Government will take forward, which I hope will continue in future. By contrast, leaving the powers on the statute book would leave open the possibility for Parliament to debate and consent to the repopulation of the Bill’s schedules through later primary legislation, without having to cover what would be well trodden ground. However, as I made clear to the noble Lord, the Government have already committed to consider this issue further prior to Report stage. I do not intend to renege on that agreement. I am happy to engage on this issue with my noble friend Lord Goodhart and other noble Lords. In that spirit, I hope that he will not press his amendment.
I thank all noble Lords who have contributed to this debate and who have engaged in discussions at earlier stages as this is a culmination of other debates on mechanisms in this Bill. I have made it clear that we continue to look at Clause 8. I hope that my responses today and the amendments and the commitments that the Government have already made reassure the Committee that this Government will ensure that the procedure applicable to orders made under this Bill is proportionate and sensible and allows for proper parliamentary scrutiny of Ministers’ actions. In light of those assurances, I invite my noble friend Lord Newton of Braintree to withdraw his amendment.
Lord Newton of Braintree
My Lords, I need hardly say that I intend to withdraw the amendment. However, I wish to make a few observations. If I understood my noble friend aright, he said that there was no possibility that any order made in relation to any of these bodies could be hybrid.
Lord Newton of Braintree
In that case, why does subsection (4) of Clause 27 need to be in the Bill? I do not expect an answer to that now but given that a large part of my noble friend’s argument was about whether or not things needed to be in the Bill, to put in the Bill something against a risk that does not exist—or is said not to exist—seems to me superfluous. My other point is more friendly. I rather agree: I cannot see much point in the annual reporting requirement.
Beyond that I will not comment except on my own amendment. As I have already said, I could have predicted the “don’t think it ought to be in the Bill” stuff. I could have predicted the line of argument that all these values are so engraved on the hearts and minds—and no doubt other parts of the anatomy—of Ministers that there is no need to engrave them in the legislation, which gives them the powers to do what they can. However, given that they should be committed to the declarations in the coalition’s programme, they should be bound to observe those declarations in the legislation which the coalition passes. I cannot think that that is unreasonable.
My next observation increases my puzzlement. As I said on Monday, when I raised somewhat comparable points with the noble Baroness, Lady Ashton of Upholland, in relation to the terms of reference of a justice council in the Tribunals, Courts and Enforcement Bill, she went away and produced an amendment which wrote in some of these values. I have not been able to consult the noble Baroness as she has rather different responsibilities on her plate in other climes, but my guess is—I hope that I do not upset my noble friend by saying this—that she took my amendment away from a Committee in the Moses Room and went back to the department and it said, “We don’t think this needs to be in the Bill”, and then she said words to the effect of, “Get stuffed. I think this is reasonable and I think Lord Newton is a decent bloke. Let’s put it in the Bill”. I hope that something similar will happen between now and Report. But for the moment, such is my docility and my dedication to the coalition that I beg leave to withdraw my amendment.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
My Lords, government Amendments 113ZA to 113E would change the circumstance in which consent is required from the devolved Administrations for orders brought forward under Clauses 1 to 6. Clause 9 stipulates the circumstances in which the consent of the devolved Administrations should be sought. At present, consent is required from the Scottish or Welsh Ministers or the appropriate Northern Ireland department. The Constitution Committee’s report recommended that consent should more appropriately be obtained from the Scottish Parliament, the Welsh Assembly or the Northern Ireland Assembly.
Following that report, and in consultation with the devolved Administrations, the Government have tabled amendments to change the current reference to Ministers to reference to the legislatures, in order to reflect the views of the Constitution Committee and the devolved Administrations, which are content with these proposals and have agreed to legislative consent Motions based on this provision.
The remaining government amendments are in response to further consultation with the devolved Administrations. They widen the circumstances in which consent from the Scottish Parliament and the Northern Ireland Assembly would be required in order properly to reflect the relevant devolution settlements, and have been reached in agreement with those Administrations and, again, the devolved Administrations have agreed to legislative consent Motions based on this provision.
Amendment 113AA extends the need for consent from the Scottish Parliament to take into account situations that may arise where functions of Scottish Ministers are altered by changes made by the Bill, but where those changes are not already covered by Clause 9(1) as it stands. The amendment excludes the need for consent to some changes under Clauses 1 and 2, because it would not be appropriate to require consent from devolved Ministers where a body’s functions are in a reserved area and the body is being abolished, or abolished by way of merger. Without this exception, consent of devolved Ministers would be required in areas that are primarily reserved under the Scotland Act 1998.
The drafting reflects agreement reached with the Scottish Government, and we believe that it is a sensible and pragmatic solution that will allow us to implement orders under this Bill effectively. The amendments also ensure that the Bill is consistent with the legislative consent motion currently lodged in the Scottish Parliament, following discussions between my department and the Scottish Government. I beg to move.
Lord Rowlands
I warmly welcome the amendments introduced by the Minister, because the Constitution Committee made a sensible proposal. It was obviously clear that it should apply to not only Welsh Ministers but the Welsh Assembly.
Lord Taylor of Holbeach
(b) which modifies the functions of the Scottish Ministers.(1A) Consent is not required under subsection (1)(b) in relation to provision abolishing a function of the Scottish Ministers which relates to a body abolished under section 1 or 2.”
“(2) An order under sections 1 to 6 requires the consent of the Northern Ireland Assembly to make provision—
(a) which would be within the legislative competence of the Northern Ireland Assembly if it were contained in an Act of the Assembly, or(b) which modifies the functions of a person within subsection (2A).(2A) The persons referred to in subsection (2)(b) are—
(a) the First Minister and deputy First Minister of Northern Ireland;(b) a Northern Ireland Minister;(c) the Attorney General for Northern Ireland;(d) a Northern Ireland department;(e) a person exercising public functions in relation to a transferred matter (within the meaning of the Northern Ireland Act 1998).”
Lord Taylor of Holbeach
“(4) An order under sections 1 to 6 requires the consent of the National Assembly for Wales to make provision which would be within the legislative competence of the Assembly if it were contained in a Measure of the Assembly (or, if the order is made after the Assembly Act provisions come into force, an Act of the Assembly).
(4A) An order under sections 1 to 6 requires the consent of the Welsh Ministers to make provision not falling within subsection (4)—
(a) which modifies the functions of the Welsh Ministers, the First Minister for Wales or the Counsel General to the Welsh Assembly Government, or(b) which could be made by any of those persons.”
Lord Taylor of Holbeach
Lord Taylor of Holbeach
“Consultation
(1) A Minister proposing to make an order under sections 1 to 6 must consult—
(a) the body or the holder of the office to which the proposal relates,(b) such other persons as appear to the Minister to be representative of interests substantially affected by the proposal,(c) the Scottish Ministers, if the proposal relates to any matter, so far as applying in or as regards Scotland, in relation to which the Scottish Ministers exercise functions (and where the consent of the Scottish Parliament is not required under section 9),(d) a Northern Ireland department, if the proposal relates to any matter, so far as applying in or as regards Northern Ireland, in relation to which the department exercises functions (and where the consent of the Northern Ireland Assembly is not required under section 9),(e) the Welsh Ministers, if the proposal relates to any matter, so far as applying in or as regards Wales, in relation to which the Welsh Ministers exercise functions (and where the consent of the National Assembly for Wales is not required under section 9),(f) where the functions affected by the proposal relate to the administration of justice, the Lord Chief Justice, and(g) such other persons as the Minister considers appropriate.(2) If, as a result of consultation under subsection (1), it appears to the Minister appropriate to change the whole or part of the proposal, the Minister must carry out such further consultation with respect to the changes as seems appropriate.
(3) It is immaterial for the purposes of this section whether consultation is carried out before or after the commencement of this section.”
Lord Taylor of Holbeach
“Procedure
(1) If after consultation under section (Consultation) the Minister considers it appropriate to proceed with the making of an order under sections 1 to 6, the Minister may lay before Parliament—
(a) a draft order, and(b) an explanatory document. (2) The explanatory document must—
(a) introduce and give reasons for the order (including reasons relating to the objectives in section 8(1)),(b) explain why the Minister considers that the conditions in section 8(2)(a) and (b) are satisfied, and(c) contain a summary of representations received in the consultation.(3) The Minister may not act under subsection (1) before the end of the period of twelve weeks beginning with the day on which the consultation began.
(4) Subject as follows, if after the expiry of the 40-day period the draft order laid under subsection (1) is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.
(5) The procedure in subsections (6) to (9) shall apply to the draft order instead of the procedure in subsection (4) if—
(a) either House of Parliament so resolves within the 30-day period, or(b) a committee of either House charged with reporting on the draft order so recommends within the 30-day period and the House to which the recommendation is made does not by resolution reject it within that period.(6) The Minister must have regard to—
(a) any representations,(b) any resolution of either House of Parliament, and(c) any recommendations of a committee of either House of Parliament charged with reporting on the draft order,made during the 60-day period with regard to the draft order.(7) If after the expiry of the 60-day period the draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the draft order.
(8) If after the expiry of the 60-day period the Minister wishes to proceed with the draft order but with material changes, the Minister may lay before Parliament—
(a) a revised draft order, and(b) a statement giving a summary of the changes proposed.(9) If the revised draft order is approved by a resolution of each House of Parliament, the Minister may make an order in the terms of the revised draft order.
(10) For the purposes of this section an order is made in the terms of a draft order or revised draft order if it contains no material changes to its provisions.”
Lord Norton of Louth
My Lords, I rise briefly to welcome the decision of the Government not to proceed with Clause 11 and Schedule 7 to the Bill. As I said on Second Reading, the prime mischief of the Bill is to be found in Clause 11 and Schedule 7. It is not the only mischief—hence several of the other amendments under discussion—but it is the prime mischief. As the Constitution Committee emphasised, the provision was objectionable on constitutional grounds. The concerns expressed in the report recurred on Second Reading and have been pursued since. There were problems with the inclusion of quasi-judicial bodies, as explained in a powerful speech by the noble and learned Lord, Lord Woolf, and the Government came to recognise the force of that argument.
However, even with the removal of the bodies with a quasi-judicial role, the basic objection to the provision remained. I saw no clear rationale for placing statutory public bodies in a living uncertainty. As I said in November, this was a lazy way of legislating: effectively parking certain bodies in Schedule 7 until such time as the Government decided what to do with them, whereupon they would place them by order in another schedule. I am very pleased that the Government have now recognised the force of the argument against Clause 11. That argument has been widely accepted in the House.
As I said on Second Reading, there is an alternative to the clause. The Government plan a triennial review of non-departmental public bodies. Why should we not have a public bodies Bill in each Parliament, thereby enabling concrete proposals to be put before Parliament and given proper scrutiny by both Houses? That is the way forward. I am delighted that my noble friend Lord Taylor of Holbeach has added his name to oppose the Motion that Clause 11 stand part of the Bill, and I pay tribute to the way in which he has listened to Members in all parts of the House and taken on board the points made.
Lord Goodhart
My Lords, I support what my noble friend Lord Norton said. The independence of the judiciary is a central and essential part of the constitution. In particular, the provision that would have enabled the Government to get rid of the Judicial Appointments Commission was plainly unconstitutional and could only have been dealt with by primary legislation.
Baroness Hayter of Kentish Town
My Lords, first, I declare an interest as chair of the Legal Services Consumer Panel, which is part of the Legal Services Board and thus funded indirectly by lawyers, although technically appointed by the Secretary of State. Although we are about to see the LSB dropped from the Bill, I will raise some issues. It will become clear as I speak why I need to do that.
The UK has a long and proud record of an independent Bar, and of independent solicitors. This is important for its own sake, but also because the Bar is the pool from which our judiciary is drawn. They are thus already known for their robustness and independence from political influence by the time they don their judicial wigs. Even before that, lawyers can freely represent clients who are prosecuted by the state or even represent clients taking action against the state safe in the knowledge that their licence and freedom to practise cannot be removed by the state, as it was given by the Bar Council or the Law Society, over which the state has no control.
It is that security that enables lawyers to feel quite free to represent clients without looking over their shoulder to see whether they will be jeopardising their future livelihood. It is very hard to emphasise how important this tradition has been both here and abroad. There were therefore concerns when it was decided that the role of the Bar Council and the Law Society in authorising and disciplining lawyers was to be overseen, and indeed authorised, by the Legal Services Board, which was set up by statute with its members appointed by an elected politician, or at least a member of the legislature—the Secretary of State.
Although they accepted that the era of full self-regulation was past and that some independent membership of relevant boards was required, lawyers here and abroad were wary of the Government taking over ultimate responsibility for effectively granting or removing the licence to practise, with the implication of the regulation of lawyers coming under government control. Nevertheless, when the LSB was set up, albeit funded by lawyers, there were many—I am sure sincere—assurances as to the independence of the Legal Services Board from political interference. Lawyers both here and abroad—because of course many are trained here—were assured that government Ministers would not remove a lawyer who could upset or challenge them. It is very much for that reason that I am delighted about the loss of Clause 11 and Schedule 7, which of course list the LSB. However, in the mean time, another part of government has taken a quite serious swipe at the LSB, as well as my own Legal Services Consumer Panel, and at the new Legal Services Ombudsman set up under the same 2007 Act.
On 8 October last year, just days before the 14 October announcement of the bodies to be abolished or amended by this Bill, all three bodies received letters from the Ministry of Justice saying that the Secretary of State had received a letter from Francis Maude, the Minister for the Cabinet Office, telling us that our three independent, stand-alone websites “will have to be closed” and that we would need to use “an approved government website”—in other words, a .gov.uk domain. It will not come as any surprise that all three bodies protested most strongly that, being independent of government, we would not be treated in that way. Elizabeth France, the chair of the Legal Ombudsman, wrote to the Minister of Justice on 25 October saying that there was no justification for an ombudsman, set up to demonstrate independence from government regulation and the profession and spending no government money, having a .gov address. As she stressed, other ombudsmen, whether it be the Local Government Ombudsman, the Pensions Ombudsman or the Financial Ombudsman, all have .org.uk URLs, signifying their independence from the sectors on which they adjudicate and their independence from government. Our three websites cost nothing to the public purse as they are funded by lawyers, so there is no public expenditure rationale for this. However, it raises serious constitutional issues about the independence of the governance of those bodies—something to which the Government seem a little deaf.
On 28 February, we had confirmation of the very welcome decision to drop Clause 11 and Schedule 7, as reported at col. 799 of Hansard, and indeed had the Minister’s declaration that:
“The Government absolutely recognise that some public functions need to be carried out independently of Ministers”.—[Official Report, 28/2/11; col. 798.]
Just days after that, on 2 March, guess what? We received another e-mail from the Ministry of Justice telling us, “You will need to close your website by 31 March 2011”. To my knowledge there is no legal basis for such diktat from the Cabinet Office and there is, of course, no saving of public money.
Lord Rowlands
My Lords, I had tabled two amendments in this group, Amendment 131, to leave out the Advisory Council on Public Records, and Amendment 161, to leave out the Public Records Office. While I, like everyone else, welcome immensely the fact that Clause 11 and Schedule 7 have gone, I am dying to know what would have happened to these two bodies had the schedule remained.
What would have happened, for example, to the Advisory Council on Public Records? I had the pleasure of serving on this council for a number of years; I thought we were rather a useful body. Most Lord Chancellors seemed to think we were helpful, giving independent advice on whether sensitive records should be released or not. We were a kind of independent buffer, and assisted the Lord Chancellor in that respect. I hope this does not sound boastful but we were quite a well qualified group on the council, and very cheap. It was chaired by the Master of the Rolls, and the last time I saw it was costing about £2,500 a year in expenses to run.
I would be fascinated to know what the intention of including the Advisory Council on Public Records in Schedule 7 was. What was the alternative? I would love to know whether former Lord Chancellors thought a change was necessary.
On a much larger count, what were the Government going to do about the Public Records Office, which was included in this Bill? At various times in my life I have almost become a resident of the Public Records Office and an ex officio member. I have admired and benefited enormously from the fantastic research facilities at Kew and the quality and the dedication of the staff there.
I am happy to tell you that, thankfully, these bodies are now outside the scope of the Bill, but can the Minister tell us what they would have done with them had they left Schedule 7 in? I would very much welcome my curiosity being satisfied in this respect.
Baroness Royall of Blaisdon
I, too, am delighted that the Minister has added his name to the Clause 11 and Schedule 7 stand part debate, and pay tribute to him for listening so attentively to everyone around the Chamber.
I feel sure that I know exactly how it will have happened. He will have been in the Cabinet Office, or wherever, and the Secretary of State will be saying, “Don’t be silly. Of course you can get it through the Lords”. He will be saying, “No, I’m listening. I can't. It’s too difficult”. Eventually, the noble Lord’s arguments will have prevailed, and I am delighted about that.
In moving that the Bill be read a second time, the noble Lord said:
“The fact that a body is named in Schedule 7 to the Bill should not be misconstrued as constituting an intent to abolish or otherwise reform”.—[Official Report, 9/11/10; col. 67.]
He said that in good faith, but it is understandable that any body mentioned in Schedule 7 was immediately worried. Its current operations and future prospects were thrown into doubt and confusion. I recognise that that cannot have been the Government’s intent—that simply does not make economic sense or for good governance—but it was the reality. Each organisation believed itself to be just two orders away from modification, merger or, even worse, abolition. The chilling factor already mentioned was mighty.
If the Minister had not indicated that the Government were minded to delete Clause 11 and Schedule 7, I can assure him that Committee stage would have lasted for even longer, because it would have been our duty to table an amendment on each of the bodies to tease out from the Government their intentions for the body in question. Thankfully, such scrutiny was not needed but, more importantly, the clause and schedule are being deleted, so the axe has been lifted and the bodies mentioned can get on with their work.
I do not want to detain noble Lords at this hour, but I must say that Clause 11 and Schedule 7 were very unwise. They are a testament to rushed drafting and a woeful lack of consultation between the Cabinet Office and other departments. The Government have seen sense; and I am glad. I have a question for the Minister. I presume that some of the bodies mentioned in the schedule might be moved at some stage in the legislative process. Can he say which or how many bodies will be moved, where they will be moved to and when that will be? I would naturally also be grateful for confirmation that the necessary consultation is taking place at this moment with any bodies likely to be moved from Schedule 7 into another schedule.
I have great sympathy with the noble Lord, Lord Norton of Louth, when he says that there should be a Public Bodies Bill at the beginning of each Parliament but, in essence, if we are all content with the framework of this Bill and the schedules are sunsetted, that is what we will have.
Lord Taylor of Holbeach
I am very grateful for those contributions. If there were any doubt why we were wise not to keep Schedule 7 in the Bill, the answer lies in the comments of the noble Lord, Lord Rowlands. As like as not, nothing would have happened to those bodies. They would have been subject to a review in another three years under a periodic review of public bodies, which is an ongoing commitment of the Government. As the noble Baroness pointed out, it was very difficult for any representative of the Government to convince public bodies that that was the case. We may now have a much more satisfactory solution—from both a parliamentary and a practical point of view—to how the review of public bodies can be an ongoing process.
I thank my noble friend Lord Norton of Louth. He and I have known each other longer, I guess, than any other people in this House. We were youngsters together. Indeed, my noble friend was the William Hague of his day at Conservative Party conferences, but he will probably not thank me very much for revealing that to the House. I thank him for his comments. We have taken the committee’s reports seriously and sought to address them, because I have taken the view that the guidance of this House has been positive rather than destructive.
I turn specifically to a comment of the noble Baroness, Lady Royall, that there was a lack of discussion between the departments. I do not think there has been any Bill in which there has been so much discussion across government departments. It is one of the complexities of this Bill that it involves every department, so all departments have been involved in the preparation and structure of the Bill.
As for the detailed question which the noble Baroness asked me about any movement of bodies into schedules during various stages of the Bill, I am not in a position to give an answer on that at this stage, but I will keep the House informed. We are determined that nothing should be introduced to the Bill that cannot be justified by a strong sense of purpose and suitability, and it is not a large number of bodies involved. Consultations are going on, but there will be a number of bodies where proposals exist to come into the Bill that will not be introduced into the Bill because we do not consider that they are in a suitable state of preparation. We feel that we have to justify the admission of any body that we bring into the Bill at this stage. I think that is a reasonable position, and I hope all Members of the Committee will agree with that.
The noble Baroness, Lady Hayter, and I have talked about the problem that she has. When she talked about the Government being deaf, I hope she was not referring to me. I hope she would acknowledge that I responded immediately to the point she made; I got a response and I showed it to her this evening before we came in here in the hope that we would not have to debate it. That is because it is not really a matter for this Bill; it is a matter of the relationship between public bodies—and particularly those in the legal sector—and Government. I will, of course, write to her on the situation as it is, and I note her interest in the matter. I hope that we can keep in touch.
I should just say a few words on these parts of the Bill. As set out in the House on 28 February, these parts of the Bill were designed to facilitate the Government’s stated commitment to the regular review of all public bodies by creating a means by which changes to such bodies could be made following future reviews without recourse to further primary legislation. It was not, as some have suggested, intended to threaten the status of public bodies that the Government had decided needed to be retained. In particular, the Government recognise that some public functions need to be carried out independently of Ministers. Schedule 7 was never intended to hinder or threaten their independence. However, following representations from noble Lords across the House, including Members of the Delegated Powers and Regulatory Reform Committee, the Government have acknowledged the significant concern within the House that these parts of the Bill represented a significant delegation of powers to Ministers and had the potential to constitute a threat to the necessary independence of some public functions.
Accordingly, I have added my name to those of other noble Lords opposing the question that Clause 11 and Schedule 7 should stand part of the Bill. The consequences of removing these parts from the Bill will be that the powers in the Public Bodies Bill cannot apply to any body or office without the express approval of Parliament through primary legislation for that body or office to be listed in one of the Bill’s schedules. Accordingly, any changes to public bodies following the Government’s planned future reviews which necessitate legislation will require a primary legislative vehicle. I hope that this change provides a significant assurance to the Committee both as regards the status of bodies and the Government’s commitment to the appropriate parliamentary scrutiny of government policy.
As I set out on 28 February, it will also be necessary, as a result of the removal of Schedule 7, to introduce a small number of amendments to move bodies currently in that schedule to one or more of the other schedules. These changes will ensure that all the reforms announced in last year’s review can be implemented. These amendments will be made at a later stage of the Bill.
I thank noble Lords for their contributions to the debate and for their positive and helpful engagement on the question of the proper scope and mechanism of this Bill. Throughout its passage to date I hope that, in agreeing to oppose the question that Clause 11 and Schedule 7 should stand part, I have been able to demonstrate the Government’s commitment to engage with and respond to the concerns of noble Lords.
Viscount Eccles
This clause covers the procedure for orders made under Clause 11, so I imagine that it must go. It is about orders made under Clause 11(1). If Clause 11 has gone, Clause 12 must go, too.
Lord Taylor of Holbeach
Having just been speaking, it was quite difficult to get order into my papers, but I am there now.
Lord Wigley
“Welsh language requirements
(1) An eligible person to whom functions are transferred by an order made under section 1 or 5 shall be subject in relation to the exercise of those functions to any Welsh language requirements applicable to the body or office from which functions are transferred.
(2) A new or existing body, office or eligible person to which or to whom functions are transferred by an order made under section 2 shall be subject in relation to the exercise of those functions to any Welsh language requirements applicable to the body or office from which functions are transferred.
(3) A new body, the Welsh Ministers, the Environment Agency, the Forestry Commissioners, the Countryside Council for Wales (“CCW”), or any other person exercising public functions in relation to Wales, to whom any function is transferred by an order made under section 13 shall be subject in relation to the exercise of that function to any Welsh language requirements applicable to the CCW, the Environment Agency, the Forestry Commission, the Welsh Ministers or any person exercising any Welsh devolved function relating to the environment.
(4) A body specified in section 15(2) or section 15(3) which makes arrangements under section 15(1)(a) to exercise a function of another such body shall be subject in relation to the exercise of that function to any Welsh language requirements applicable to that other body.
(5) This section does not prevent the amendment of Welsh language requirements by a further language scheme, Welsh language scheme or standards.
(6) In this section—
“language scheme” means a language scheme prepared in accordance with section 5 of the Welsh Language Act 1993;
“standards” means standards specified by regulations made by the Ministers or the Welsh Ministers under section 26(1) of the Welsh Language (Wales) Measure 2010;
“Welsh language requirements” means requirements arising under any language scheme, Welsh language scheme or standards which is or are in force on the coming into force of any order or arrangements to which this section applies; and
“Welsh language scheme” means a Welsh language scheme adopted under section 21 of the Welsh Language Act 1993.”
Lord Wigley
My Lords, in moving this amendment I shall speak also to Amendment 166BZB. I certainly shall not unduly detain the Committee at this late hour, and we touched on certain aspects relating to Welsh speakers in the context of S4C earlier today—it seems very much earlier by now. Ministers will be aware that public bodies in Wales have Welsh language responsibilities under the Welsh Language Act 1993. This is now in the process of being replaced by new legislation passed by the National Assembly for Wales last year. The question that arises in the context of the Public Bodies Bill is that of ensuring continuity, clarity, consistency and the safeguarding of Welsh language rights when bodies operating in Wales may be merged with other bodies which do not necessarily currently have either a statutory or possibly a voluntary language plan.
These new clauses address two aspects of this. Amendment 166BZA provides for the continuity of language requirement when functions transfer from one body to another under this Act. Amendment 166BZB places a responsibility on relevant Ministers, before making an order under this legislation in relation to a public body that provides services to the public in Wales, to undertake an assessment of the implications of change on the use of the Welsh language in the provision of those services. Consultation for such assessment could be done either by the Minister here or by Ministers of the Welsh Government, as might be appropriate.
I would therefore ask the Minister either to accept these new clauses, to consider before the Report stage how to deal with the issue, or to give me an assurance that somehow these matters have already been looked after in a way that neither I nor the Welsh Language Board, which helped me with these amendments, are aware of so far. I beg to move.
Baroness Royall of Blaisdon
My Lords, we support the amendments because they would safeguard and promote the Welsh language. They are fundamental to the protection of the Welsh language in Wales and to good governance there. We hope that the Minister will be able to take them away and consider them before Report.
Baroness Rawlings
My Lords, we return to Wales. At this late hour, I am sure that noble Lords will appreciate my being brief, but this does not imply that we do not take the two amendments seriously.
The Government sympathise with the desire of the noble Lord, Lord Wigley, to make certain that support for the Welsh language, which is undertaken by many bodies providing public services in Wales, is not lost when roles are transferred from one person to another. This is not our desire and we are committed to making certain that this work is not undermined. However, where we differ with the noble Lord is on whether the amendments represent the best means of achieving this aim.
I shall first consider the noble Lord’s Amendment 166BZB, on Welsh language assessments. I understand that there are 18 bodies whose roles could be transferred under the Bill which currently have Welsh language schemes and services. If the roles of those bodies are transferred elsewhere, the Government will consider the options for maintaining these services. Ministers will conduct impact assessments when proposing to make orders under the Bill. The Bill will require them to consult a wide range of interested parties.
I turn to Amendment 166BZA, on the application of Welsh language requirements. Welsh Ministers already have the power to bring bodies within the scope of the Welsh language legislation. The precise duties which are imposed are then a matter for negotiation with the Welsh Language Board. In the Government’s view, these powers provide a more appropriate way of addressing this issue than the noble Lord’s amendment. Indeed, the amendment could even reduce Welsh language provision. We consider it more appropriate to assess what requirements are needed in the context of each specific transfer, using the powers available in Welsh language legislation and in the Bill.
I thank the noble Lord for bringing up this matter. Consultation is going on. I hope, therefore, that he will not wish to press his amendments.
Lord Wigley
I am very grateful for that response. On the second of the two proposed new clauses, that an assurance has been given that assessments of the impact of any changes on the Welsh language will be possible in many ways meets the point that I make in that clause.
On the first of the proposed new clauses, the Minister’s comments with regard to the powers of Ministers in the National Assembly for Wales reassure me that those powers can be used fully to ensure that there is no loss of Welsh language requirements. That was my interpretation of what the Minister said. If there are any aspects of the ongoing discussions to which she referred that bring out questions that have not been covered, perhaps there will be an opportunity to tie up those matters fully on Report. On the basis of the assurances that have been given tonight, I beg leave to withdraw the amendment.
Lord Lester of Herne Hill
“Restrictions on Ministerial powers
(1) The modification or transfer of a function by an order under the preceding provisions of this Act must not prevent it (to the extent that it continues to be exercisable) from being exercised independently of Ministers in any of the following cases.
(2) Those cases are—
(a) where the function is a judicial function (whether or not exercised by a court or tribunal); (b) where the function’s exercise involves enforcement activities in relation to obligations imposed on a Minister;(c) where the function’s exercise otherwise constitutes the exercise of oversight or scrutiny of the actions of a Minister.(3) Provision made by an order under the preceding provisions of this Act must be proportionate to the reasons for the order.
(4) In this section “enforcement activities” means—
(a) the bringing of legal proceedings or the provision of assistance with the bringing of legal proceedings;(b) the carrying out of an investigation with a view to bringing legal proceedings or to providing such assistance; or(c) the taking of steps preparatory to any of those things.”
Lord Lester of Herne Hill
I believe that Charles James Fox became known as the dinner bell because when he got up to speak everyone had dinner. This is the second time this week that the House has had the misfortune to hear me after midnight, so I hope that I do not become known as the nightcap as a result. However, it reminds me of the barrister who once asked an Irish judge for time and the judge replied, “Thou hast exhausted time and trespass now upon eternity”.
This amendment is tabled in substitution for Amendment 175. It has support from all sides of the House. I am extremely grateful to the Bill team, the Government’s senior legal advisers and my noble and learned friend Lord Mackay of Clashfern, who have enabled an amendment to be produced to give effect in clear terms to Amendment 175. I am also grateful to the noble Lord, Lord Pannick, who managed a successful revolt on the first day in Committee to obtain the House’s approval of our paving amendment. I express thanks to the noble Lord, Lord Hunt of Kings Heath, and the Minister, without whom what is now proposed would not have come to pass before the Bill left the Committee. Three scrutiny committees have also played a vital role: the Constitution Committee, the Delegated Powers and Regulatory Reform Committee and the Joint Committee on Human Rights, of which I am a member. Ministerial clearance of the amendment came too late to be able to advise those committees before the amendment was tabled yesterday late afternoon.
Lord Mackay of Clashfern
I have been privileged to put my name to the amendment and of course I support it wholeheartedly. It makes clear the legal framework within which the ministerial powers under the Bill may be exercised. I thank my right honourable friend Francis Maude for seeing me on this matter and I assure the noble Baroness, Lady Royall, that the consultation right across Whitehall was necessary. That is perhaps one of the reasons why we were not quite as early with this as some of us might have liked. I thank members of the Bill team very much for the patience that they exhibited in listening to me preaching to them about this, in a manner to which your Lordships are accustomed.
Lord Hunt of Kings Heath
My Lords, I say to the noble Lord, Lord Lester, that if he continues to table amendments of this quality he will be very welcome to move them after midnight, day after day. I, too, thank him, as this is an important amendment. It provides considerable reassurance to noble Lords about how the Bill will operate when enacted. I am grateful to him; it goes right back to that first vote on day one in Committee, which seems a little time ago. I also thank the noble and learned Lord, Lord Mackay, for his great assistance, and the Bill team and the Minister. This is a very positive outcome.
Lord Norton of Louth
I add my thanks to the noble Lord, Lord Lester, and all those involved in generating the amendment. I have previously made the point that, in terms of parliamentary scrutiny, the work on the Bill has been an example of best practice. The amendment is a particularly fine example of that in terms of the consultation that has taken place to produce an amendment for which there is agreement throughout the House. It is an excellent addition to the Bill.
Lord Taylor of Holbeach
My Lords, I am delighted that the amendment has received such a welcome. As noble Lords will know, my name is on it, too. I have a note here that thanks an awful lot of people, quite correctly, including my noble friend Lord Lester of Herne Hill, for his persistence and commitment to get this right, and my noble and learned friend Lord Mackay of Clashfern, whose advice has been invaluable to us all. I am grateful for the support that the noble Lord, Lord Pannick, has also given to this and to noble Lords opposite for their support. We have all wanted to see the amendment included. My speaking note contains no mention at all of the people who probably had to work hardest of all on the amendment—the Bill team—in trying to get the wording right. I am grateful to the noble Lord, Lord Hunt, for mentioning that and I thank members of the team for their commitment to get this right.
As noble Lords have said, the amendment will, I hope, provide substantial reassurance to the Committee and the wider public that the Bill will be used to bring forward only necessary and proportionate reforms that will maintain the independence of those public functions that clearly need to operate at arm’s length from government. I am delighted that it has been added to the Bill and I trust that it will secure the support of all sides of the House.
Lord Henley
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, it is with some delight and some relief that I move Amendment 175C and in doing so speak to Amendments 175D, 175E and 182. The relief for all those in the Committee at this stage is because this is the last substantive group in the entire stage.
Before I finish, I offer an apology to the noble Lord, Lord Wigley, in that I promised him that we would end with a Welsh amendment. I am afraid that we are not doing that—it was going to come earlier but it was not moved.
I informed the Committee last week that the Government had decided to remove the forestry clauses from the Bill, and this we have now done. This set of amendments would remove a series of references to the Forestry Commission from Clauses 23 and 24. It is a tidying up exercise. I beg to move.
Baroness Royall of Blaisdon
My Lords, I warmly welcome these amendments and the removal of the final references to the Forestry Commission. We have been told on numerous occasions that the campaign against the sale of our forests and woodlands was inflammatory and misguided, but the forestry clauses were, I believe, a testament to the fact that the Government wished to enable the sale of our woodlands and forests. The Minister responsible made that clear on a number of occasions. I am glad that the Bill is now being amended. I know that hundreds of people up and down the country will feel mightily relieved—the very people who welcomed the independent panel looking into the future of forestry. We look forward to their deliberations in due course.
Lord Taylor of Holbeach
Lord Taylor of Holbeach
Lord Taylor of Holbeach
“(2) In this Act, references to the “30-day”, “40-day” and “60-day” periods in relation to any draft order are to the periods of 30, 40 and 60 days beginning with the day on which the draft order was laid before Parliament.
(3) For the purposes of subsection (2) no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.”
Lord Taylor of Holbeach