House of Commons

Monday 10th October 2011 Commons Chamber

Monday 10 October 2011

The House met at half-past Two o’clock

Prayers

Monday 10th October 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 10th October 2011 Commons Chamber

The Secretary of State was asked—

[Greg Hands (Chelsea and Fulham) (Con)]

1. What steps he is taking to establish security relationships in South Asia.

[Paul Uppal (Wolverhampton South West) (Con)]

6. What steps he is taking to establish security relationships in South Asia.

[The Secretary of State for Defence (Dr Liam Fox)]

First, I am sure the House will wish to join me in paying tribute to Lance Corporal Jonathan McKinlay of 1st Battalion the Rifles and Marine David Fairbrother of Kilo Company, 42 Commando Royal Marines, who were killed in Afghanistan on 14 and 19 September respectively. Our thoughts, as ever, are with their families and friends, for whom this will be an immense personal tragedy.

The south Asia region is one of the United Kingdom’s highest engagement priorities, and the Ministry of Defence enjoys strong historic relationships with most countries in the region. We have developed a broad range of positive initiatives to enhance co-operation between Ministers, senior officials and military officers, and continue to work to broaden and deepen those links in support of the Government's strategic objectives.

[Greg Hands]

I join the Secretary of State in his tribute to the dead. May I also tell him that he has our full support, not least in deepening our security ties with south Asia? Will he use this opportunity to explain to the House his involvement in Sri Lanka?

[Dr Fox]

I shall be delighted to do that, especially in front of so many Members with a new interest in defence.

In 1996, when I was a Minister in the Foreign Office, I worked on what became known as the Fox agreement, which was part of the early peace talks in Sri Lanka. In recent years I have been attempting to work again for reconciliation in that country, and to encourage investment in it. As I said when I spoke there recently, there will be no future for Sri Lanka unless all citizens, whatever their gender, religion or ethnic origin, are treated in the same way and allowed to realise their full potential.

[Paul Uppal]

I thank my right hon. Friend for the sterling work he has done in respect of Sri Lanka. Will he elaborate on the work that he has done in relation to the Sri Lanka Development Trust, and specifically on the work that Ministers have done in that regard?

[Dr Fox]

As I have said, the point of involvement in Sri Lanka is to create greater stability which will contribute to stability in the region. I was particularly keen to see a mechanism for investment that could reduce some of the regulatory restrictions imposed by the Sri Lankan Government, on the basis that a proportion of the profits would go into social projects that would benefit ethnic minorities. I still hope that that project will succeed, and give it my full support.

[Mr Denis MacShane (Rotherham) (Lab)]

Is not the general problem in south Asia as a whole the massive growth, modernisation and aggressive posturing of the Chinese military? As the Chinese launch a blue water aircraft carrier battle fleet, thanks to the Secretary of State’s handling of our affairs we will have no aircraft carriers from which planes can fly for the next 10 years.

[Dr Fox]

For some 17 of the last 20 centuries China has been the world’s biggest economy, but our thoughts tend to be forged in the period when it was not. China will emerge as a global superpower, and as an Asian superpower it has a right to a blue water capability. What we must try to keep in check is what China’s intent may be, as well as the capability. Looking at the two together will give us an idea of the sort of threat that we may have to counter in the future.

[Emma Reynolds (Wolverhampton North East) (Lab)]

I know that the Defence Secretary has a long-standing interest in Sri Lanka. Can he tell us how many times he has visited that country since becoming Defence Secretary, and how many of those visits were on official Government business?

[Dr Fox]

I have been there twice; I am not sure whether it was three times. One of those visits was on official Government business, when I met a number of politicians. I also took the opportunity to deliver a lecture on behalf of my friend Mrs Kadirgamar—widow of the late Lakshman Kadirgamar, who was a Tamil Foreign Minister—in which I set out what I thought was a vision that should cut across Sri Lankan politics. I believe there is a widespread view in the House that Sri Lanka needs reconciliation and an understanding of what happened at the end of the war, and that there must be transparency about who was responsible so that the country can move on to a proper process of reconciliation.

[Mr James Arbuthnot (North East Hampshire) (Con)]

May I return my right hon. Friend to the subject of his current responsibilities? Given that Afghanistan is in south Asia, can he tell us whether he agrees or disagrees with General McChrystal’s assessment of how we are doing in that country?

[Dr Fox]

General McChrystal’s assessment was, in my view, a touch pessimistic; I think we have come a long way. He was referring to the period from 2001 onwards, and we did not make sufficient progress for a large proportion of that time. However, I would argue that since 2006, and particularly since the American surge, we have had the correct force densities to achieve what we wanted. We are now increasingly able to hold the military territory and are increasingly tactically successful, but there must be greater progress in the political and economic spaces.

[Matthew Hancock (West Suffolk) (Con)]

2. What progress he is making in implementing the recommendations of the Levene review of defence reform.

[The Secretary of State for Defence (Dr Liam Fox)]

Since entering office, we have made significant progress in transforming defence. The new Defence Board and the Major Projects Review Board are up and running. The Defence Infrastructure Organisation and the Defence Business Services organisation have both been established. We have appointed the first commander of the new Joint Forces Command. In addition to the specific recommendations in Lord Levene’s report, we have completed the basing and reserves reviews, and, even more importantly, established a broadly affordable future defence programme. This ambitious, but achievable, programme of work is part of transformation across defence, the likes of which has not been seen in a generation.

[Matthew Hancock]

I commend the Secretary of State on the substantial work that he has done so far in implementing the Levene report and ask him to stick to his guns in dealing with the £38 billion hole in the budget. Has he had any word of apology from the Opposition?

[Dr Fox]

I think it is unreasonable for my hon. Friend to expect an apology from the Opposition as they do not yet understand what they did. They are still deficit deniers who not only fail to recognise what they did to the MOD budget, but do not yet understand what they did to the broader British economy.

[Nick Smith (Blaenau Gwent) (Lab)]

Levene recommended strengthening financial and performance management to ensure affordability and accountability. However, the National Audit Office rated the MOD’s response to the major projects report as weak, and criticised the Department for not submitting the multi-million pound costs for contract cancellations. When will Parliament receive the necessary details to be able to scrutinise these big ticket decisions?

[Dr Fox]

The Department will be fully audited on its equipment programme, and let me tell the hon. Gentleman one of the big differences we have made. The Defence Board is the primary decision-making body of the MOD, and we inherited a board that had 24 members and was not chaired by the Secretary of State, which in my view was an utterly absurd position to be in. We now have a Defence Board of nine, chaired by the Secretary of State and with far more vertical management structures, accountability and responsibility.

[Caroline Nokes (Romsey and Southampton North) (Con)]

3. What steps he is taking to promote defence exports.

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

Ministers and officials from across the Government continue actively to promote British defence exports overseas, led by the Prime Minister and my right hon. Friend the Secretary of State for Defence. Last month the UK hosted the defence and security equipment exhibition, which served to showcase the best of the UK’s defence and security industries, and was attended by me and my ministerial colleagues. The exhibition—[Interruption.] Hold it. The exhibition afforded us the valuable opportunity of meeting overseas delegations and British and overseas companies.

[Caroline Nokes]

I thank the Minister for that response, and particularly for drawing attention to an exhibition at which companies from my constituency were exhibiting. Will he join me in congratulating Britain’s defence industry, which remains the second largest exporter in the world and employs more than 300,000 people in the UK, and can he confirm whether the coalition’s policies on defence exports have seen any change compared with those of the previous Government?

[Mr Howarth]

I thank my hon. Friend for that very challenging question, because this Government have a great deal to be proud of, and one thing we have brought to the business of promoting defence exports is enthusiasm for helping our friends and allies to protect themselves in what is a very dangerous world. I am delighted to be able to tell my hon. Friend that in the past year the UK’s share of the defence export market has increased by 4%, which is no mean feat.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

If the Minister is being so enthusiastic and it is all going so well, can he tell the House why British Aerospace has been forced to cut 3,000 jobs across the north-west and Yorkshire, citing the failure of exports as one of the principal reasons for its decision?

[Mr Howarth]

BAE Systems did not actually cite exports as being one of the problems. What it cited was the fact that it is a multinational company operating in a number of markets where there is pressure on the budgets—its principal market is the United States of America. It may have escaped the hon. Gentleman’s attention, but the US is looking to make defence cuts of $1,000 billion over the next 10 years, and that is affecting us all. However, the good news is that the fact that the US has to make savings means that it may well be more receptive to the sort of products made in his constituency and in others across the United Kingdom.

[Mr David Davis (Haltemprice and Howden) (Con)]

The Minister is doing an excellent job of promoting British defence exports. The purpose of a defence export Minister is to promote exports so that our industry will be reinforced and strengthened, thereby helping to defend the country. He will know that, as part of its strategy, BAE Systems intends to sell 350 to 500 Hawks to the USA, not one of which will be built in Britain, and that the company is, at the same time, closing a factory in my constituency, costing 900 jobs. Does he think that that is consistent with the Government’s strategy of trying to defend the British defence industry?

[Mr Howarth]

I was very grateful to my right hon. Friend for bringing the trade unionists representing workers at both Brough and Warton to see me at the Conservative party conference in Manchester the other day. I will tell the House what I told them, which is that we believe that the Hawk is a fantastic, proven training aircraft—I have had the privilege of flying it recently. As he knows, the new T2 has the most sophisticated onboard air-combat simulator. The company and I are working very hard, along with my ministerial colleagues, to impress on the United States that it already operates the T-45 Goshawk, much of which came from Brough, and I hope that it will be able to buy the Hawk. Although the aircraft is unlikely, in serial numbers, to be built in the United Kingdom, the company hopes that there will be real prospects along the whole supply chain for British industry.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I am sure the Minister recognises that one of our best engineering manufacturing sectors, which is world-leading as well as cutting edge, is the defence sector. Obviously, that brings with it the potential rewards of defence exports. Will he give a commitment that ongoing investment in research and technology will be linked closely to the scope to promote exports?

[Mr Howarth]

Exportability is a key component of all our procurement decisions; we are trying to build in exportability, not only to generate revenue, but to reduce the unit costs of the equipment to our armed forces. I can also tell the hon. Gentleman that we would not be having to make some of the difficult decisions that we are having to make had it not been for the destruction of the public finances by the previous Prime Minister and the shadow Secretary of State for Defence. If they had not destroyed the public finances of the United Kingdom, my right hon. Friend the Secretary of State would not have had to make the difficult decisions that he has had to make.

[Andrew Stephenson (Pendle) (Con)]

4. What progress he has made on increasing the number of small and medium-sized enterprises bidding for defence contracts.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

This Government value the flexibility, responsiveness and innovation that SMEs bring to defence, which is why we are taking a number of actions to make it easier for them to participate in defence programmes, both as direct suppliers and as subcontractors. We are simplifying our bidding and contracting processes to make them easier for SMEs. I now chair an SME forum for representatives of small businesses, so that they can better understand and respond to the particular issues they face in doing business with the defence community. We will also set out a number of more specific measures in the White Paper that we will publish later in the year on equipment, security and technology.

[Andrew Stephenson]

I thank the Minister for that answer. I recently met Stephen Shepherd of S Dawes Weaving and Chris Blackadder of Howorths Textiles—both are manufacturers in Nelson, in my constituency. Those SMEs are interested in bidding for more work from the MOD. I would be grateful if the Minister could offer them and other SMEs in my area any advice on bidding for and winning more contracts.

[Peter Luff]

I am happy to reassure my hon. Friend, and Mr Shepherd and Mr Blackadder, that we have a cunning plan to help SMEs, as I hope my original answer suggested. For example, we are revising our internal guidance to ensure that SMEs are not rejected at the pre-qualification stage on the basis of rigid turnover-to-contract value ratios. I would be very happy to arrange for Mr Shepherd and Mr Blackadder to meet departmental officials to ensure that they are fully informed of the opportunities they now have.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

In answer to a question I tabled in June, the Minister suggested that only about 50 of some 6,000 new contracts placed directly by the MOD in 2010-11 across the UK are known to have been awarded to Scottish-based SMEs. Given that that is based on an estimate, does he not agree that it is unacceptable that the MOD does not have the actual figures so that we can scrutinise the amount of work going to SMEs and, at the same time, end some of the myths promoted by the separatists?

[Peter Luff]

I sort of agree with that question and I sort of do not. I do not think that it is our job to keep careful records of exactly which SMEs get which business, but it is part of our job to ensure that Scotland shares fully in the benefits of defence expenditure. I get very surprised when the Scottish nationalists frequently represent Scotland as in some sense losing out, which the hon. Gentleman alluded to in his question. That is simply not the case. I have visited Scotland on many occasions over the past few months and seen the massive footprint of defence in Scotland and the massive contribution made to employment and jobs, all of which will be at risk in an independent Scotland.

[Gordon Birtwistle (Burnley) (LD)]

Westland helicopters has a licensing agreement with Boeing to build Chinook helicopters. Why was the order for 14 new Chinooks worth £1 billion given direct to Boeing rather than the licensing agreement being used to give the order to Westland so that it could take on half the work?

[Peter Luff]

I think it is stretching a point a bit to define AgustaWestland as an SME, but nevertheless I am happy to confirm that I happen to have in front of me the previous Government’s defence industrial strategy, which says of AgustaWestland that it is important to understand that AgustaWestland’s role is

“neither predefined nor guaranteed, but dependent on their performance and the value for money of their propositions.”

Our position is very similar and I am happy to be able to confirm to my hon. Friend that the contract we have for the construction of the new Chinook helicopters will lead to some £350 million-worth of work flowing to the British supply chain, which—

[Mr Speaker]

Order. We are extremely grateful to the Minister, but we need to move on.

[Angus Robertson (Moray) (SNP)]

Last week, in a written answer, the Minister confirmed that the MOD’s estimate for the number of contracts issued in the last financial year was 2,370 in England but only 50 in Scotland. Does he believe that that is fair and equitable?

[Peter Luff]

I do not know about you, Mr Speaker, but I am a half-full man, and the Scottish nationalists seem to be talking about half-empty glasses. I think the hon. Gentleman is quoting extremely selectively from the answer I gave him and, for what it is worth, I share his disappointment about the SME performance. I do not believe the figures or trust them, because they are extraordinarily low. I have seen the vibrancy of the Scottish defence sector for myself on a number of visits and I believe that the share of business is much higher. I invite the hon. Gentleman to abandon his ludicrous plans for an independent Scotland and join me in building a still more robust defence industrial base in Scotland rather than talking it down all the time.

[Mark Lancaster (Milton Keynes North) (Con)]

I congratulate the Minister on the steps he is taking to encourage more SMEs to bid. One criticism we often hear from SMEs is that they are lured into bidding for contracts, only to lose out to much larger firms at the last round with little or no feedback from the MOD. May I encourage the Minister to ensure that in such cases SMEs get full feedback on why their bids have failed?

[Peter Luff]

I absolutely agree with my hon. Friend, who makes a very powerful point. If any hon. Member has an example of an SME receiving inadequate feedback from my Department, I want to hear about it. SMEs deserve full feedback. They have an awful lot that they can bring to defence; their innovation and the cost savings they can offer are extremely important and they must be told why they have failed when they do fail.

[Ian Austin (Dudley North) (Lab)]

5. What assessment he has made of the adequacy of his Department’s budget during the comprehensive spending review period; and if he will make a statement.

[The Secretary of State for Defence (Dr Liam Fox)]

On 18 July 2011, I announced that the defence budget is now broadly in balance over the decade and adequate to enable the Department to fulfil its objectives, including success in Afghanistan and Libya, delivery of the Future Force 2020 and the major process of transformation that follows the strategic defence and security review.

[Ian Austin]

Men and women in the west midlands have always made a huge contribution to the armed forces, not least at MOD Donnington, which provides a first-class logistics service, ensuring that forces get the right kit in the right place at the right time. Will the Secretary of State assure the House that he will use those resources to ensure that the logistics commodity services site at Donnington is retained as the main logistics site for the MOD, safeguarding the 2,000 jobs that depend on it, and will he meet representatives of the work force to discuss this issue?

[Dr Fox]

I and any of my ministerial colleagues will be very happy to meet the hon. Gentleman to discuss the issue. We are keen to retain as much of the defence infrastructure, naturally, as possible within the constraints we are set given the budgetary position in which the Department finds itself. First, may I pay tribute to the excellent logistics the hon. Gentleman has described? We will do what we can to retain what we can.

[Mr Julian Brazier (Canterbury) (Con)]

One of the really excellent initiatives that my right hon. Friend has pressed for to make capacity in defence affordable is the decision to move various elements towards the reserves. May I ask when we can expect a full response to the reserves review? He has already given a very positive preliminary response.

[Dr Fox]

I would like to be able to do it before Christmas, but, as my hon. Friend will understand, there is a lot of very detailed work to be undertaken. Perhaps the biggest challenge is the fact that we are pouring £400 million into the reserves over this Parliament—an unprecedented amount to put into that organisation, which was very badly run down by the previous Government. There will be challenges in absorbing that amount of money and, of course, the rate at which we are able to build up the reserves will determine the rate at which we are able to change the ratio with the regulars.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

The Government have used the issue of cost as the main reason they are scrapping the office of the chief coroner. This is a Justice lead, but it affects fallen servicemen and women and their bereaved families. The Royal British Legion has submitted a compromise proposal in which it outlines reforms that could be made to the coronial system at a much lower cost than the Government estimate. Has the Secretary of State reviewed this proposal and does he support it?

[Dr Fox]

I have had conversations with ministerial colleagues over this and although I am broadly sympathetic to some of the changes outlined, the hon. Lady is right that this is a Justice lead. For her to say that the Government simply use cost as a means of having to make reductions is, again, not to understand what it is to inherit a budget with a £38 billion black hole. Of course we have to learn to live within our means, and we do not yet know from the Opposition what their budget would be and which parts of the SDSR they accept and do not accept. In fact, we hear very little from them except negative criticism. It seems they have nothing constructive at all to say on the matter.

[Derek Twigg (Halton) (Lab)]

7. What recent discussions he has had on the medical care of wounded service personnel and veterans.

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Given the importance that the whole Government, and especially my right hon. Friend the Secretary of State for Defence, place on this issue, both he and I have numerous discussions with ministerial colleagues and others across the Department, Government and the community and voluntary sector on a regular basis.

[Derek Twigg]

I thank the Minister for his answer. He will be aware of the concerns expressed by families recently about the care for seriously wounded and injured service personnel who will have to be discharged from the armed forces because of their injuries—including about their care in the NHS thereafter. What mechanisms have he and his colleagues put in place to ensure that those service personnel get the same standard of care as that provided currently by Defence Medical Services?

[Mr Robathan]

I think the hon. Gentleman and I would agree a great deal about this. We are extremely concerned about the future of many badly injured service personnel when they leave the armed forces, and that is why we have put in place a transition protocol. It is also why I often have meetings with Ministers in the Department of Health—indeed my next one is on Wednesday—to discuss how, going forward, we can better serve those who are badly injured. I beg your indulgence, Mr Speaker, but the hon. Gentleman will know of the Army recovery capability that was put in place by the previous Administration, which is similarly helping very badly injured people to go forward with their lives in future.

[Bob Stewart (Beckenham) (Con)]

The question I was about to ask was properly asked by the hon. Member for Halton (Derek Twigg), so I shall sit down.

[Mr Speaker]

The hon. Gentleman is setting an example that others could usefully follow.

[Dan Byles (North Warwickshire) (Con)]

Effective medical support is essential to any operation, so will the Minister join me in wishing 22 Field Hospital a successful forthcoming tour of Afghanistan, particularly as some 30 servicemen and women from 22 Field Hospital are in the Public Gallery watching these proceedings?

[Mr Robathan]

I certainly join my hon. Friend in wishing 22 Field Hospital a good tour. May I say to any Member of the House on either side who has seen the excellent work done by our medical personnel—both regular and reservist—out in Bastion and elsewhere that we should be very grateful to them for the hard work they do? Many reservists give up several months of their time to help our armed forces.

[Mr Kevan Jones (North Durham) (Lab)]

The right hon. Gentleman has said that the Government are committed to the Army recovery capability introduced by the last Labour Government. A key element of that was the tracking of personnel in the health service once they had left the armed forces. Is that still part of the programme, and if so, when will the deadlines for implementation be met?

[Mr Robathan]

The hon. Gentleman rightly says that we are pursuing the policy of the last Government, because on this occasion it was quite right. We are indeed tracking personnel. I am afraid that this is a work in progress, but I will ensure that he receives an update when there is something to update him on.

[Bob Russell (Colchester) (LD)]

The right hon. Gentleman will be aware of the close collaboration between the Ministry of Defence and the NHS in dealing with traumatic injuries through the joint unit. Bearing in mind that the NHS does not provide the same level of care for our wounded military personnel, is there not a case for the NHS and the MOD setting up a joint unit to deal with ongoing treatment?

[Mr Robathan]

The hon. Gentleman is quite right. The question of how the transition protocol works is very important, particularly when it comes to health issues. We already have a national centre in Birmingham— the Queen Elizabeth hospital—and I was at the opening in January; it deals with trauma in particular. We are going forward with the Department of Health to ensure that proper treatment is available. We will announce a report on prosthetics shortly, because we must make proper treatment available for people who are injured in the service of their country, and who suffer throughout their lives as a result.

[Kevin Brennan (Cardiff West) (Lab)]

8. What assessment he has made of the co-operation on training and support of British armed forces with armed forces in the middle east and north Africa; and if he will make a statement.

[The Minister for the Armed Forces (Nick Harvey)]

Defence engagement has a long and continuing role in contributing to wider UK regional objectives through programmes of world-class training and education. Our relationship with many countries includes work on counter-terrorism that is important to the security of the United Kingdom. That engagement creates lasting relationships with our armed forces and enhances our ability to work together towards regional security and stability.

[Kevin Brennan]

Have British armed forces played any role in the training of forces involved in repression in Saudi Arabia or Bahrain?

[Nick Harvey]

We do not believe so, but we have trained staff over a period of years in those countries, and it is impossible to say with any certainty what they have subsequently gone on to do. When engaging in training programmes, we do our utmost to spread British principles and approaches to military activity, and have done so for many years, in the hope that that will rub off on the countries we are training.

[Patrick Mercer (Newark) (Con)]

Having been involved in a very similar training team, albeit some time ago, I can confirm the value of such training teams, but the weight and burden of those teams falls heavily on the combat arms. Can the Minister reassure the House that cuts in personnel will take into account the need to maintain our combat power for training roles such as those under discussion?

[Nick Harvey]

My hon. Friend makes a good point. Obviously, as numbers contract, the demands put on all our personnel are difficult to balance, but the work to which he alludes, and to which he has given his time in the past, is very important for all the reasons that I have specified, and we will ensure that that is taken into account in deciding force numbers.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

I join in the Secretary of State’s earlier condolences to the relatives of those who have lost their lives in Afghanistan. The whole House will be in awe of the remarkable professionalism of our forces, and all that they have achieved in Libya as part of a wider coalition, so will the Minister for the Armed Forces update the House on progress in persuading other allies who are less involved in the fighting to bear more of the burden in helping to train and stabilise the country?

[Nick Harvey]

The shadow Secretary of State makes a very good point, and that is certainly something we would want to see as we go forward. There are countries that we hoped would have played a more active part in the engagement in Libya, and we very much hope that they will bear more of the responsibility. It is too early yet to have any particular international agreements in place, but he can rest assured that work is in progress towards the objective that he identified.

[Margot James (Stourbridge) (Con)]

9. What recent assessment he has made of the export prospects for the Eurofighter Typhoon.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

Typhoon has already been exported to Saudi Arabia and Austria, where it is in operational service. It is also competing in a number of other important markets. Oman has announced its intention to buy Typhoon, and India has selected it for the final phase of its medium multi-role combat aircraft competition. It is also competing in a number of other countries, including Japan, Malaysia and Qatar.

I confidently expect an increase in interest in Typhoon, following its highly successful air defence and ground attack roles over Libya, in which it has consistently demonstrated exceptional levels of reliability, performance, accuracy, and overall cost-effectiveness over and above our very high expectations.

[Margot James]

I thank my hon. Friend for his answer. Does he agree that Typhoon’s success is down to UK leadership in the design and manufacture of world-class aircraft and that Government support is needed, not just to maximise export potential but to defend this vital national interest?

[Peter Luff]

On the question of supporting exports, I know the close interest that my hon. Friend takes in Japan, particularly through her role in the UK-Japan 21st century group. I am happy to reassure her of the close interest that I personally have taken in the export campaign to Japan, which I visited in April, where I discussed Typhoon with many Japanese interlocutors. I am hopeful of a successful outcome. She is absolutely right, too, to emphasise the importance of the underlying design skills and technology—for example, our strong support for Europe’s first second-generation active electronically scanned radar will be key to our success in these export campaigns.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Ministers talk rather too often about buying off the peg from our international partners, including the USA which, we understand, is struggling at the moment, too. Should Ministers not seek to enhance sales, encourage value for money from British companies and ensure that we retain jobs and skills in the UK? Perhaps the Minister can tell the House whether, given the fall in international demand for top-quality British goods such as the Typhoon and subsequent job losses, he intends to ensure that such phrases are not used in future and that orders go to the UK first.

[Peter Luff]

I welcome the hon. Lady to her new position and, as it is her first outing, I will be relatively kind in my response to her. [Interruption.] I have to say that I have read with considerable interest her party’s defence review procurement document, which advocates a similar policy in relation to off-the-shelf and modified off-the-shelf, so she should read what her own party is suggesting before criticising us. As for her comment that demand for Typhoon is falling, it is true that the four partner nations are stretching out production, but demand is rising fast around the globe, and I am confident that Ministers have a strong commitment to their export diaries, which will lead—

[Mr Speaker]

Order. We need to move on; I am grateful to the Minister. [Interruption.] Order. The Minister’s answers are simply too long—we need to make progress.

[Mr Ben Wallace (Wyre and Preston North) (Con)]

I am grateful for the efforts that the Defence Secretary and his team have made to try to export Typhoon and secure jobs for my constituents in Lancashire at Samlesbury and Warton. However, should the British Government be successful in helping to win those orders abroad, what guarantees can we try to secure from BAE that this is good news for work in Lancashire, and not just good news for BAE shareholders?

[Peter Luff]

I think that it is guaranteed that it will be good news for Lancashire. Of course, the precise composition of the bids is a matter for the company, but I think that it understands the importance of protecting its design skills in my hon. Friend’s constituency, for which he speaks up vigorously and effectively in the House.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

11. What procedures exist to ensure that British military equipment used in operations abroad does not fall into the hands of others.

[The Minister for the Armed Forces (Nick Harvey)]

Robust accounting and security measures exist to prevent the loss of equipment through theft. In the rare event that equipment is damaged and cannot be recovered because of a risk to life or likely loss of further equipment, it is destroyed to prevent it from being used by others.

[Steve McCabe]

I thank the Minister. In the light of his response, can he say anything more about the announcement at the weekend of a £1 million fund to stop weapons proliferation in Libya? Does that fall within his domain, and exactly what is that money going to be used for?

[Nick Harvey]

The concerns that we have in Libya do not relate to our own equipment that our troops have used, but relate to a proliferation of equipment that we believe may now be at large in Libya, much of it having been previously held by the Gaddafi regime. It is in the interests of everyone around the globe that that situation is contained and controlled as quickly as possible, and we have sent personnel out to assist the new Government in Libya in getting those munitions under control.

[Andrew Bridgen (North West Leicestershire) (Con)]

Does my right hon. Friend agree that the report by the Select Committee on Defence on the handling of assets by the Ministry of Defence in 2009-10 is another damning indictment of the mismanagement of the MOD under the previous Government?

[Nick Harvey]

It is true that there has been a problem with inventories and accounting for equipment. Audit processes have identified that, on occasions, that has been a matter of misclassification of items. The situation in practice is probably less gloomy than it sometimes looks in reports.

[Mr Speaker]

Mr Michael Connarty—not here.

[Tom Brake (Carshalton and Wallington) (LD)]

13. What steps he is taking to ensure that any increase in the level of defence exports is transparent.

[Dr Julian Huppert (Cambridge) (LD)]

19. What steps he is taking to ensure that any increase in the level of defence exports is transparent.

[The Minister for the Armed Forces (Nick Harvey)]

The UK has one of the most rigorous and transparent export control systems in the world. All applications to export controlled military goods are assessed against the consolidated EU and national arms export licensing criteria, and decisions are published in the quarterly reports on strategic export controls. Following the Arab spring, the Foreign Secretary undertook a review of export licensing for equipment that might be used for internal repression. That concluded

“that there was no evidence of any misuse of controlled military goods exported from the United Kingdom.” —[Official Report, 18 July 2011; Vol. 531, c. 79WS.]

[Tom Brake]

In July the Foreign Secretary said that more work needed to be done between the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills to strengthen certain aspects of UK arms control. There is an even greater urgency for this work to be done following reports today of an investigation into a EADS Saudi defence contract. Can the Minister set out what work has been done on transparency and UK arms control and how, with a policy of providing weapons to any willing country, he will ensure that those weapons do not fall into the wrong hands?

[Nick Harvey]

Every export licensing application is considered on a case-by-case basis against our strict export controls. In terms of transparency, detailed information on our export policy is on the Foreign Office website. Information on decisions by destination is listed on the BIS website, and the licensing criteria are also published. My right hon. Friend is right to say that further work is ongoing between the Department for Business, Innovation and Skills and the Foreign Office, and they are at present working out how that will be taken forward.

[Dr Huppert]

The Minister is, I am sure, aware of the number of cases in which there have been allegations that defence exports have ended up with people whom we would not want to have them and used for purposes that we would not want to see. He will also be aware that there are a number of cases of defence lobbyists acting in a shady and disreputable manner. Will he consider taking further steps to ensure transparency in who gets the weapons, what checks there are and how lobbyists operate?

[Nick Harvey]

The Government are committed to a thriving British defence and security industry because it is vital for our economy. It is worth more than £6 billion a year to the economy, but we will maintain strict export controls. We promote defence exports that are consistent with the criteria, because that strengthens British influence and helps support British industry and jobs.

[Chris Bryant (Rhondda) (Lab)]

We all want a strong defence industry, but we also want a responsible one, which is why I am proud of the fact that it was a Labour Government who abolished the manufacture, use and sale of cluster munitions in this country. The protocol also places an obligation on us to try to make sure that other countries, including our allies, are no longer using cluster munitions, because all too often such use means that many civilians are killed or maimed many years afterwards. What are the Government doing now to make sure that the Americans stop using cluster munitions?

[Nick Harvey]

I very much agree with the hon. Gentleman’s comments; I, too, was a campaigner on that issue. I am very pleased that the UK duly signed up to that, but clearly our ability to control the US is no greater now than it was at the time of the convention. We will continue to apply pressure on the Americans, but we need to be realistic about the likelihood of their changing their policy.

[Ian Lucas (Wrexham) (Lab)]

What discussions has the Minister had with our European partners to ensure that when a licence is refused by the United Kingdom, similar steps are taken by our European partners and they do not take advantage of our progressive approach to export licensing abroad?

[Nick Harvey]

That is a good question. I will check what sharing of information we have with our EU allies when we turn down an application, and I will write to the hon. Gentleman in due course.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

14. What meetings he has had with his ministerial colleagues on the stabilisation of Libya.

[Mr Philip Hollobone (Kettering) (Con)]

17. What discussions he has had with his ministerial colleagues on recovering from the national transitional council in Libya any of the costs to his Department of the deployment of armed forces to that country.

[The Secretary of State for Defence (Dr Liam Fox)]

The National Security Council, chaired by the Prime Minister and attended by myself and other ministerial colleagues, meets regularly to discuss the ongoing operations in Libya, including stabilisation. In terms of recovering the costs of operations in Libya from the national transitional council, NATO’s intervention in Libya under a clear UN mandate has saved countless lives and is helping to bring new hope to a country that has suffered tyrannical rule for 42 years, but the UK did not play a leading role in this action for financial return.

[Simon Hughes]

Given the extended nature of the Libyan conflict, the tribal nature of the country and the experience in Iraq, will the Defence Secretary assure me that maximum attention will be given to conflict prevention and conflict resolution issues from now onwards, so that we do not have a recurrence of victory followed by great difficulties thereafter?

[Dr Fox]

That is a key question. I visited Libya at the weekend. The right hon. Gentleman mentioned Iraq, but Libya has three big advantages coming out of this conflict compared with Iraq. First, we were careful not to cause civilian deaths, which has given the impression that we value human life higher; secondly, we did not target civilian infrastructure, so it is likely that the country will be able to move much more quickly to economic recovery; and thirdly we encouraged the NTC not to engage in a process similar to de-Ba’athification. I therefore find Libya in a much better place than Iraq was.

[Mr Hollobone]

Given that the cost of our involvement in Libya is about £260 million and rising, at the same time as we have the biggest budget deficit in the G20, should we not be asking Libya and/or the Arab League to repay the cost, just as the Kuwaitis did after the first Gulf war?

[Dr Fox]

As I said, we went into Libya not on the basis of recovering the costs, but because we believed there to be an imminent humanitarian disaster. Mindful of such disasters in previous generations, we can be proud that we averted this one. How costs are apportioned and whether other countries can help with those wider costs can be discussed, but only after the conflict has been concluded, which it has not yet been.

[Mr Speaker]

On question 14, I call Mr John Spellar.

[Mr John Spellar (Warley) (Lab)]

No. 15, Mr Speaker.

[Mr Speaker]

I do not think that the right hon. Gentleman has quite taken my hint, but I am sure that he can ask his question under this one with great dexterity.

[Mr Spellar]

Is there not great concern in Libya about the future of the surface-to-air missiles? When I asked the Minister for the Armed Forces about this back in June, he said:

“We continue to assess the situation in Libya closely, including the potential proliferation of man-portable anti-aircraft missiles.”—[Official Report, 28 June 2011; Vol. 530, c. 672W.]

From his answer earlier, he does not seem to have been doing a great deal. This is a major threat and we need some evidence of urgency and some results.

[Dr Fox]

This is one of the issues that I discussed at the weekend. The right hon. Gentleman is right that it is an urgent matter. We have provided a small team of UK military specialists to work alongside the Libyans and the United States in preventing surface-to-air missile proliferation. We have already disarmed a number of these missiles and identified a large number of sites where further activity will take place.

[John Robertson (Glasgow North West) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Defence (Dr Liam Fox)]

My departmental responsibilities are to ensure that our country is properly defended now and in the future, that our service personnel have the right equipment and training to allow them to succeed in the military tasks and that we honour our armed forces covenant.

[John Robertson]

Does the Secretary of State agree with his junior Minister, the Under-Secretary of State for Defence, the hon. Member for Aldershot (Mr Howarth), that brave Gurkha veterans should be described as asylum seekers, or does he agree with the Gurkha justice campaign that these comments are shocking and unacceptable—or is the cat out of the bag on immigration and defence cuts?

[Dr Fox]

I am afraid that the hon. Gentleman has done a grave disservice to my hon. Friend, who never used any such words and has the highest regard for all those sacrifices made in the past.

[Andrew Stephenson (Pendle) (Con)]

T2. Many small and medium enterprises in Pendle are keen to know when the yellow book review will be completed. Is the Minister in a position to update the House on progress?

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

I am delighted to be able to do precisely that; it was published a few hours ago. [Hon. Members: “Read it out!”] It runs to more than 100 pages, so I think that I would be in trouble with the Speaker if I did that. Section 4 is specifically about SMEs. I invite the whole House to pay careful attention to this important document and to take part in the consultation on it.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

May I say how much I agree with the Secretary of State when he says that we cannot allow the unpopularity of the Iraq conflict in many quarters to prevent us from standing up for what we believe in in other countries around the world? That is why there remains consensus across parties about the action in Libya and Afghanistan. However, now that there is a timetable for the drawdown of our combat role in Afghanistan, can he update the House on how much longer he anticipates Her Majesty’s forces remaining engaged in Libya?

[Dr Fox]

We have set out, in accordance with the plans President Karzai himself has set out, that we do not plan to have a combat role in Afghanistan beyond the end of 2014. The big question now is what we do beyond 2014 and what signals we send to Afghanistan and Pakistan about our determination to provide regional stability. We have already said that we will take charge of the officer training academy and are encouraging other countries to do the same. I anticipate that there will be a role for special forces and mentoring and training as well as what I have set out. That is one of the issues we discussed at the NATO summit last week, and we will set out further details at the Chicago summit in May.

[Dr Julian Lewis (New Forest East) (Con)]

T4. Given the great pressure on MOD finances, has my right hon. Friend considered following the example of the shadow Defence team by accepting very substantial sponsorship from generous British defence companies, such as Cellcrypt?

[Dr Fox]

No.

[Robert Flello (Stoke-on-Trent South) (Lab)]

T3. The Royal British Legion has said that the creation of the chief coroner“is essential to improving bereaved Armed Forces families’ experience of military inquests” and that Government proposals will“fail to meet the needs of bereaved Armed Forces families.” The Secretary of State’s rant about his budget shows that he has not read the Royal British Legion’s proposals, so will he, in the quiet moments that I am sure will follow later this afternoon, take the time to explain to the Cabinet Office and the Ministry of Justice that failing to introduce a chief coroner will be a betrayal of our brave military personnel?

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

As I thought had been made pretty plain earlier, this is a matter for the Ministry of Justice, not the Ministry of Defence. However, I hope that everyone in the House would agree that the important thing is that well-trained coroners do a good job in their inquests on deceased service personnel. That is what we are working to achieve, and I know that the Ministry of Justice is determined that that shall happen.

[Anna Soubry (Broxtowe) (Con)]

T8. Members of the armed forces often have to move very quickly and with short notice, which can affect the education of their children, particular if it happens when school has already started. Will the Minister therefore congratulate the George Spencer academy in my constituency, which intends to change its policy so that priority is given to such children, especially those moving to the Chetwynd barracks, which is also in my constituency?

[Mr Robathan]

I certainly join my hon. Friend in congratulating that school. She will know that admissions codes can now allow favourable treatment for children of service personnel, and we must not forget that the Department for Education has introduced the pupil premium, which will also benefit service children. We have also put £3 million forward to assist schools that have a disproportionate number of service children when they have problems. In general, though, service children do rather better in education than other children.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

T5. Is the Secretary of State aware that the future of high science, research, innovation and design in our country very much depends on a fine balance among the defence industries, universities and the private sector? Many of us believe that that is now at risk because of failing demand from the defence sector.

[Peter Luff]

I am very sorry indeed that the previous Government introduced such massive cuts to the defence science budget, which did great harm to the issues that the hon. Gentleman is rightly concerned about. I can reassure him that the defence White Paper on equipment, support and technology, which will be published later this year, will address these issues very seriously, because he is right to draw the House’s attention to this very important question.

[Mary Macleod (Brentford and Isleworth) (Con)]

I recently visited the Brentford air cadets, squadron 342, in my constituency and was really impressed by the training that the young people are given in respect, discipline and community responsibility. What more can we do to encourage more young people to get involved in the cadets?

[Mr Robathan]

I am grateful to my hon. Friend for that question, because I, too, absolutely support the cadet forces. They do fantastic work that is very much in tune with the Government’s policy of the national citizen service. They keep children off the streets and give them excellent training and discipline, which I think we all applaud. We also have the youth engagement review, but I will brief her on that later if she would like, because you, Mr Speaker, would stop me if I went on too long now.

[Kerry McCarthy (Bristol East) (Lab)]

T6. The Secretary of State and I have a considerable number of constituents who work at the MOD’s Abbey Wood site in Filton. There is real uncertainty there at the moment about how many jobs will be lost, what new work will be sent there and what work will be lost. Could he give some certainty to the people working at the plant about the future of their jobs?

[Peter Luff]

I make regular visits to the Filton Abbey Wood site, as the hon. Lady knows, to discuss those issues with the staff, and I appreciate the concern that they face. The chief of defence matériel, Bernard Gray, is currently conducting a full review of matériel strategy and how the organisation will be structured in future, and I hope that its outcome will give precisely the certainty that she rightly seeks for her constituents.

[Alun Cairns (Vale of Glamorgan) (Con)]

I congratulate the Secretary of State on the leadership that he has shown on Libya. What action is he taking with his Libyan counterparts to help prevent the risk of insurgent activity, in preparation for the national transitional council taking complete control?

[Dr Fox]

The first thing that we require is an end to hostilities; then we require disarmament and the militia’s incorporation into national forces; and then we require the formation of a Government as soon as possible—a Government who include all elements of Libya’s geography and ethnic make-up and are cross-generational.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

T9. The Under-Secretary of State for Defence, the hon. Member for Aldershot (Mr Howarth), waxed lyrical in earlier answers about his support for small and medium-sized businesses and for SME exports, so why are his Government forcing them to bear more of the cost of showcasing their equipment throughout the world?

[The Parliamentary Under-Secretary of State for Defence (Mr Gerald Howarth)]

We are not imposing additional burdens on industry, but clearly we have to take into account the costs of supporting it in these difficult times and in view of the economic inheritance that we were bequeathed by the last lot.

[Bob Russell (Colchester) (LD)]

What future does the Secretary of State envisage for the Ministry of Defence police?

[Mr Robathan]

The Ministry of Defence police are, sadly, as everybody else is, touched by the strategic defence and security review because of the £38 billion black hole that we were left, but I envisage a future for the Ministry of Defence police—providing security for our service personnel and their families—and I visited them in Portsmouth dockyard only last month.

[Mr Bob Ainsworth (Coventry North East) (Lab)]

The future of European security will be enhanced by military capability, interoperability and co-operation; it will not be enhanced by an unnecessary duplication of military headquarters. What more can we do to convince our European colleagues that that is not a sensible proposal, particularly at a time when defence budgets are falling across the continent?

[Dr Fox]

The Government oppose, and I have always very strongly opposed, any concept of an EU military headquarters—and we will continue to do so, whether any proposal is made up-front or attempted with permanent structured co-operation through the Lisbon treaty. NATO is the cornerstone of defence in Europe, and it shall continue to be so, because it brings the United States into the defence of Europe. Such a concept would be a diversion, as the right hon. Gentleman says, and a dilution of scarce resources; it would not produce one bullet, one battle tank or one aircraft; it would be pretentious; and it would be bureaucratic—none of which commends it to me.

[Richard Graham (Gloucester) (Con)]

The Ministry of Defence has invested considerably in additional reserve forces, which are welcomed by many of us across the House. What steps might the Secretary of State be able to take to ensure that the jobs of our reservists, such as those serving in 6th Battalion The Rifles in my constituency, will be protected, especially given that 10 of them are returning from Afghanistan this week?

[Mr Robathan]

My hon. Friend is quite right to raise that issue, and I pay tribute to those reservists who go out to Afghanistan, including those from 6 Rifles. We have the Reserve Forces Act 1996 and the Reserve Forces (Safeguard of Employment) Act 1985, both of which should protect reservists deployed on operations, but he is quite right to raise the issue, which we keep under close review.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Ministry of Defence medical services has a good record of engagement with the carers of wounded service people, but when servicemen are transferred to the NHS system, carers are often told that, because of patient confidentiality, they cannot be engaged with and information cannot be shared. Will the Minister ensure that such continued engagement with carers takes place for service personnel, especially those with traumatic brain injury or mental health problems, once they enter the NHS?

[Mr Robathan]

The hon. Lady raises a very important issue, of which I was not aware. Practitioners in the NHS certainly should get full medical records from the military medical services. If she were able to raise some specific cases with me, I would be most interested to hear them, and I look forward to hearing from her.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The reason why so much public money has been invested in BAE technology is to protect British interests and British jobs. What steps can Ministers take to ensure that jobs at Brough and other BAE sites are retained in this country and not shipped abroad?

[Mr Howarth]

As I have tried to explain to the House, since we took office we have made huge efforts, led by the Prime Minister, to promote these first-class British products. The Typhoon is a world beater—not, as some press commentators have suggested, a cold war legacy programme. It is the most advanced combat aircraft in the world today, and the Hawk is the most proven and effective military training aircraft. We are working flat out to try to promote those in the interests of the constituents of everybody in the House today.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

What further support are the Government going to give to ex-service people who belatedly discover that they have post-traumatic stress disorder?

[Mr Robathan]

The hon. Gentleman raises a very important issue, not least because PTSD can take many years—up to 16 years—to show itself. I am sure that the hon. Gentleman has read the report of my hon. Friend the Member for South West Wiltshire (Dr Murrison), called “Fighting Fit”, which leads a way forward.

Things are not perfect yet, but we are going forward. We are deploying additional mental health nurses across the country in NHS hospitals and we are working closely with Combat Stress to ensure that ex-service personnel get the opportunity, through both a call line and otherwise, to get treatment as necessary. It is extremely important that they get that treatment.

[Dr Julian Huppert (Cambridge) (LD)]

Today is world homeless day. What recent progress has the Secretary of State made in reducing the number of ex-service people who find themselves homeless?

[Mr Robathan]

This looks like my afternoon.

Although there are homeless ex-service personnel, in fact their number is much less than one might expect. Analysis has shown that those ex-service personnel who are homeless very often left the forces some 20 and more years before.

[Mr Kevan Jones (North Durham) (Lab)]

It is 3.8%.

[Mr Robathan]

I hear from the Opposition Front Bench that the figure is 3.8%, and one might expect more than that. We do work with Veterans Aid in London, among others, to ensure that the maximum support available is given to ex-service personnel who, unfortunately, find themselves homeless.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Is the Minister aware of the campaign by the Royal British Legion Scotland to get a Ministry of Defence hospital unit based in Scotland? I understand that the tendering process for that is due to commence in 2013. Will the Minister look into the issue and try to get a better geographical spread for such units?

[Dr Fox]

The hon. Lady is absolutely right, and it is something that we will look at. As I said at the conclusion of the basing review, it is essential to remember that Her Majesty’s forces are for the whole Union, not for any one part of the Union. Having them more evenly spread is part of what the United Kingdom is all about.

Petition

Monday 10th October 2011 Commons Chamber

Mr Robert Buckland (South Swindon) (Con)

- Hansard - - Excerpts

I present a petition signed by Swindon residents and visitors to our town centre. It is made in respect of established street traders. [Interruption.]

Mr Speaker

- Hansard - - Excerpts

Order. It is rather discourteous. There is a lot of noise, including that being made by a Government Whip, who unaccountably is not staying to hear the presentation of the petition; I cannot imagine why. If Members are leaving the Chamber, I feel sure that they will do so quickly and quietly. [Interruption.] We are grateful to the Whip on duty for toddling back to his place to hear the presentation of the petition.

Mr Buckland

- Hansard - - Excerpts

I am grateful, Mr Speaker.

The future role of established street traders in the life of Swindon town centre is supported by no fewer than 4,371 signatories. The prayer reads as follows:

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to request that Swindon Borough Council review its policy on street trading in Swindon town centre.

Following is the full text of the petition:

[The Humble Petition of Swindon residents and visitors,

Sheweth that there is support for the street traders of Swindon town centre; that street traders add to the vibrancy of Swindon town centre; and that the future of street trading must be placed on a secure footing.

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to request that Swindon Borough Council review its policy on street trading in Swindon town centre

And your Petitioners, as in duty bound, will ever pray, &c.]

[P000963]

Defence Responsibilities

Monday 10th October 2011 Commons Chamber

15:32

[The Secretary of State for Defence (Dr Liam Fox)]

I would like to take this opportunity to inform the House about my defence responsibilities in the light of considerable media coverage and the interim report this morning by the permanent secretary. I would like to discuss the meeting in Dubai in June 2011, my relationship with Mr Werritty and my involvement in Sri Lanka. If I may, Mr Speaker, I will take these in turn.

As I said yesterday, I accept that it was a mistake to allow distinctions to be blurred between my professional responsibilities and my personal loyalties to a friend. Mr Speaker, I am sorry for this. I have apologised to the Prime Minister, to the public, and, at the first opportunity available, to the House.

Let me deal first with the Dubai meeting, which has been the subject of so much speculation. Mr Werritty first met Mr Boulter of Cellcrypt on 1 April 2011 in Dubai. This meeting was arranged by the lobbying firm Tetra. At this time, Mr Boulter asked for a meeting to discuss Cellcrypt. Nothing happened for the next three months, but during the week of 13 June, Mr Werritty was dining in Dubai at a nearby table and Mr Boulter again requested a meeting. Mr Werrity suggested that it might be possible the following day, as I was coming through on my return from visiting forces in Afghanistan. The meeting—[Interruption.]

[Mr Speaker]

Order. Let me say at this early stage that the Secretary of State is making a full statement. It is a matter of basic courtesy that that statement be heard. By now the House can trust me, I think, to ensure that there will be a full opportunity to question the Secretary of State, but he must first be heard.

[Dr Fox]

Thank you, Mr Speaker.

The meeting took place on the morning of 17 June, where there was a general discussion about Cellcrypt and what it might be able to do to support the MOD. At the end of the meeting, in the interests of probity, Mr Boulter mentioned that he was in a dispute with 3M alongside the MOD, and I acknowledged this. Beyond this, there was no discussion of the case or any individuals involved, nor was any classified information discussed.

That night, Mr Boulter sent e-mails claiming that he had had discussions on the issue of George Buckley’s knighthood. This correspondence later became the basis of a blackmail case in the United States. I made it clear that I was willing to testify that I had never had any such discussions. Subsequently, Porton Group has since clarified that Harvey Boulter did not in fact discuss the matter of the knighthood.

I accept that I should not have had a meeting with a potential commercial supplier without an official being present. This was entirely my fault and I take full responsibility for it. After the meeting, however, I notified my private office and asked them to prepare a brief on the subject of Cellcrypt.

Let me turn now to Mr Werritty, whom I first met in 1998. While I was in opposition, he worked as a paid intern in my House of Commons office and at this time had a parliamentary pass. He also received payments for research work undertaken during my time in opposition. Records currently show total payment of some £5,800 over the total period. He has not received any payment from me while in government. He has a very wide range of long-standing business, international relations and political links of his own. He did not receive any payment as a result of the meeting in Dubai, nor has he been involved in any defence procurement issues.

As a matter of transparency, I would like to inform the House that I have met Mr Werritty in the margins of trips of various sorts overseas, including annual leave and holidays with family and friends, on a total of 18 occasions.

As the permanent secretary points out today in her report, Mr Werritty visited me at the Ministry of Defence over 16 months, either in my office or in the refreshment facilities, on 22 occasions. The majority of these were short social meetings. In only four instances were others present. Three related to Sri Lanka and one was with Matthew Gould, known socially to both of us. It was also during one of these meetings in June that I first learned about, and told him to stop, using his business card stating that he was my adviser. Mr Werritty was never present at regular departmental meetings. During private meetings we did not discuss either commercial or defence matters. He had no access to classified documents, nor was he briefed on classified matters.

As I said yesterday, I accept, with the benefit of hindsight, that I should have taken great care to ensure a more transparent separation of Government, party political and private business and that meetings were properly recorded to protect myself and the Government from any suggestion of wrongdoing. Again, I accept my personal responsibility for this. The permanent secretary is making arrangements to ensure that such a separation of powers will exist in the future. In addition, because I do not believe that to be enough, Mr Werritty will not make private visits to the MOD in future, will not attend international conferences where I am present, and we will not meet socially abroad where I am on official business. This should ensure that no appearance of potential wrongdoing will occur in the future.

Since 1996, when I was a Foreign Office Minister, I have been involved in attempts to help resolve the conflict in Sri Lanka. As the war with the Tamil Tigers drew to a close, I worked with a number of others in business, banking and politics. It was my aim to create a mechanism that would allow reconstruction funding to occur through the private sector. This was called the Sri Lanka Development Trust, which seeks to promote post-conflict reconciliation and development in Sri Lanka. The aim was to use a proportion of profits made to fund development projects in Tamil communities. Neither myself, Mr Werritty nor others sought to receive any share of the profits for assisting the trust.

During the Shangri-La dialogue of the International Institute for Strategic Studies in 2010, I attended a bilateral meeting with the Sri Lankan Foreign Minister. This was attended by Mr Werritty and MOD officials and was minuted. The purpose of the meeting was to make it clear that although I would no longer be able to participate in the project, the others involved would continue to do so.

In December 2010, Mr Werritty and I met with the Sri Lankan President in London. This was not an official visit, hence why it was held in the Dorchester hotel. In July 2011, I gave a lecture hosted by Mrs Kadirgamar, the widow of my friend and Tamil former Foreign Minister Lakshman Kadirgamar, who was assassinated by the Liberation Tigers of Tamil Eelam in 2005, as the House will know. Mr Werritty is a personal friend of Mrs Kadirgamar and helped with the arrangements, as it was a personal not a ministerial commitment. I know that there are some in the Sri Lankan diaspora who do not want any contact with the current Sri Lankan Government, but as I said in my lecture, unless we have reconciliation based on mutual tolerance and respect for all citizens regardless of ethnic origin, we will not find peace in that island.

I have made it clear throughout this process that my desire is to be as transparent as possible, and I accept where I have been at fault, as Ministers must. Following the interim findings, the Prime Minister has asked the Cabinet Secretary to work with the permanent secretary to complete the report, addressing all the remaining questions that have been raised publicly and privately by this issue, and I shall fully and willingly co-operate with this.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

I remind the House of my properly declared interest and thank the Secretary of State for his statement. I have enjoyed shadowing him in the House of Commons, and until now we have had a good working relationship. Indeed, he will know that I defended him for the first month of this case, until he started to defend himself and his answers unravelled, but this whole crisis is self-inflicted. There have been daily revelations which barely 36 hours ago he described as “baseless”, but yesterday he was forced into a partial and belated apology. It is not a partial apology we want; it is full and complete disclosure of all the issues, so today we will listen with great care to any questions that he does not fully answer.

Some will question the loyalty of a friend who abuses his contacts in that way, and many will doubt the judgment of a Secretary of State who willingly allows himself to be professionally compromised in that manner. But this is not just about the Secretary of State’s judgment; it is also about his conduct and breaches of the ministerial code. The code is clear. Paragraph 7.1 says:

“Ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests”.

Yesterday the Defence Secretary apologised for the “misleading impression” that his actions may have given. His apology in itself is an admission of a breach of the code. So it is beyond doubt that he has breached the ministerial code; the only issue is on how many grounds and on how many occasions?

Paragraph 5.2 of the code says:

“Ministers have a duty to give fair consideration and due weight to informed and impartial advice from civil servants”.

The Secretary of State claims that the infamous meeting in Dubai happened by chance. Today we have another version of events: he has told the House that he did not discuss defence or classified matters with Mr Werritty. How then did Mr Werritty know his diary and how he was travelling back from Afghanistan? Why did the Secretary of State exclude civil servants from that meeting? Did he ask for advice and briefing before the Dubai meeting? Did he seek civil service advice in advance of any of the 22 meetings with Mr Werritty? If so, will the Secretary of State publish all such advice, together with a full list of topics discussed and those who attended, and any actions taken by his private office or his special advisers following those meetings?

The Secretary of State has admitted that distinctions between his professional responsibilities and personal loyalties have been blurred. Again, the ministerial code is clear on this. Paragraph 7.3 says:

“On appointment to each new office, Ministers must provide their Permanent Secretary with a full list in writing of all interests which might be thought to give rise to a conflict.”

Paragraph 7.4 continues:

“Where appropriate, the Minister will meet the Permanent Secretary and the independent adviser on Ministers’ interests to agree action on the handling of interests.”

So on their first day in a new job every Minister has to make a declaration. Under paragraph 7.5 of the code, statements of ministerial interests are published every six months, and the Secretary of State’s entry makes interesting reading. There are mentions of good organisations such as the Strawberry Line project in his constituency, but there is no mention of his adviser who ran a defence consultancy, arranged his meetings and handed out his business cards across the world.

Did the Secretary of State provide full and complete disclosure to his permanent secretary about his links to Adam Werritty and his defence consultancy, Security Futures? What advice did the permanent secretary give him and what was agreed on the handling of this interest? Will the Secretary of State now publish the record of the information that he supplied to his permanent secretary when he took up this job? In the media this morning, the former Chief of the Defence Staff, Sir Jock Stirrup, is reported as saying that he raised his concerns with the Secretary of State for Defence’s office. Is this true, and has the current or any previous permanent secretary ever raised their concerns about his professional proximity to Mr Werritty with him or his office?

Looking at the ministerial code, it is clear that, on paragraphs 5.2, 7.1, 7.2, 7.3, 7.4 and 7.5, the Secretary of State has driven a coach and horses through the rules. He cannot believe that today’s partial apology gives him a free pass round breaches of the ministerial code. Our forces look to him for leadership. When they step out of line, when they break the rules, they take responsibility and accept the consequences. They, and we, expect no less of the Defence Secretary. We all hope that he has done nothing wrong, but the only way to clear his name is total transparency, which is why this case should now be referred to the independent adviser on Ministers’ interests.

In conclusion, we might never know what got the Secretary of State into this crisis—whether it was arrogance, naivety or hubris. The British people

“expect the highest standards of conduct…We must be...transparent about what we do and how we do it. Determined to act in the national interest, above improper influence”.

[Interruption.] Government Members might shout about that, but those are not my words; they are the words of the Prime Minister in the foreword to the ministerial code of conduct. The Prime Minster must now apply those standards to the Secretary of State, otherwise the ministerial code will not be worth the paper it is written on.

[Dr Fox]

I am not entirely sure what questions arise from that. The right hon. Gentleman asked why no civil service advice was sought before social and private meetings. The answer is that civil service advice is not sought before social and private meetings. He asked when the permanent secretary raised concerns. The permanent secretary raised the matter of the business cards with me in August. I told her that I had dealt with that in June when I first saw them. I demanded that they should not be used again and that any subsequent cards should not display either the portcullis or a reference to me as Secretary of State. The right hon. Gentleman has spent most of his time over the last few days focusing on the meeting in Dubai with Cellcrypt. I have set out how the meeting came about, what the conversations were during the meeting, what conversations did not take place, what Mr Boulter said did take place and the action I took as a consequence, which was to ask my private office for a full briefing. No commercial contracts were made and no financial gain was made as a result of any of those discussions. When a man who was involved in a blackmail case is feeding information to the media, which is often taken without question, it is rather difficult to take the shadow Secretary of State beginning his statement without telling us the specifics of the declaration he was making, which is that his Front Bench team took £10,000 from Cellcrypt, the company at the centre of all this, to visit the United States. I hope that today I have answered as many questions as I can; perhaps the shadow Secretary of State might want to answer some that arise for him.

[Sir Malcolm Rifkind (Kensington) (Con)]

May I, as a former Defence Secretary, pay tribute to the robust and effective leadership that my right hon. Friend is giving, which I hope he will continue to give to a Ministry of Defence that has sadly drifted in recent years? With regard to what he said about links with Sri Lanka, may I, from my own personal knowledge going back to the time when he served with me in the Foreign Office, confirm that my right hon. Friend made sterling efforts to try to broker peace between the various factions in Sri Lanka? I think it is a tribute to his integrity and his qualities that he has continued to advance that cause in the years since.

[Dr Fox]

I am grateful to my right hon. and learned Friend for that. A great deal of work is still to be done in Sri Lanka, and I am very pleased that I was able, eventually, to make an official visit as Secretary of State. I hope that the United Kingdom, with all its historical links to the country, will be able to use the levers at our disposal to try to bring peace to a region where, sadly, too little has been done in recent years to try to bring reconciliation.

[Mr Dennis Skinner (Bolsover) (Lab)]

Experience shows that over the last 40 years these decisions are very rarely decided by the raucous voices behind the Government Front Bench. What the right hon. Gentleman really has to consider is the fact that his friends in the right-wing press—not, now, The Guardian, but The Mail on Sunday, The Daily Telegraph today and probably Kavanagh of The Sun—are against him. It looks to me like Cameron is going to get his Fox.

[Dr Fox]

It is certainly possible to keep a good bottle just a little bit too long. The hon. Gentleman makes a valid point—that these issues are not decided purely inside this House, as they reflect the judgments made not just by the media, but by the public in general. Serious issues have been raised here. I accept that, and I accept that they must be investigated fully, which is why I said I would co-operate with the Cabinet Secretary on all the issues raised. It is important not only to be clear that, as I believe, there was no wrongdoing, but to recognise that the perception of wrongdoing also has to be eliminated.

[Mr James Arbuthnot (North East Hampshire) (Con)]

My right hon. Friend has said that he has made a mistake, and he has apologised to the House. Will he accept that many people believe that, compared with the important issues with which he has to deal, this is pretty small-scale stuff? Will he please concentrate on issues such as the conflict we are continuing to fight in Afghanistan, the shortage of money in the Defence budget and the implementation of the strategic defence and security review?

[Dr Fox]

I am grateful to my right hon. Friend, who does not have to remind me of the list of serious projects with which we are currently dealing—not least with our armed forces in combat in Libya and Afghanistan. It is important for me to continue with that work. We will certainly not be diverted from the important issues. I nevertheless think it important for those in front-line politics to be big enough to say that they are sorry and have made a mistake if they have done so.

[Ann Clwyd (Cynon Valley) (Lab)]

As Mr Werritty joined the Secretary of State, attending defence meetings in various countries, will the right hon. Gentleman assure us that at no stage during those meetings were security issues or security relationships raised? Will he also assure us that Mr Werritty had no pecuniary interests whatever in any of the items under discussion at any of the meetings?

[Dr Fox]

The right hon. Lady raises a key point with which I thought I had already dealt, but let me deal with it again for her. I have made it clear that at no point did Mr Werritty attend departmental meetings; that at no point did he have access to classified documents; that at no point did he have classified briefings; and, therefore, that at no point was any issue of security affecting the United Kingdom either discussed or put at risk. As for the pecuniary interests of Mr Werritty in those particular conferences, I am confident that he was not dependent on any transactional behaviour to maintain his income.

[Richard Ottaway (Croydon South) (Con)]

I congratulate the Secretary of State on what he has achieved in the Ministry of Defence to date. Does he agree with one of the oldest maxims in politics? Advisers advise; it is Ministers who decide.

[Dr Fox]

It is Ministers who decide, and, as I have said, I am still awaiting any information or proof that any advice that I was given changed the way in which I made a decision. There has been a lot of speculation and a lot of innuendo, but if someone has an accusation to make—that there was wrongdoing, that there were financial transactions, or that advice was given that changed a ministerial decision—let that person come forward with it.

[Helen Goodman (Bishop Auckland) (Lab)]

This afternoon the Secretary of State said, “with the benefit of hindsight… I should have taken great care to ensure a more transparent separation of Government…political and private business”. However, we know that he was warned by Sir Jock Stirrup and Bill Jeffrey, the then permanent secretary, about his relations with Mr Werritty. Will he tell us why he ignored their advice and shuffled them off quickly, and will he publish their advice?

[Dr Fox]

The two individuals that the hon. Lady mentioned were not shuffled off quickly; they retired after long and distinguished service to the armed forces and to the civil service. In any case, as I said earlier, I accept that there was a lack of transparency and clarity, and that, as the permanent secretary pointed out in her report this morning—which I suggest the hon. Lady read —there is a need for more mechanisms in the Department to ensure that the ministerial code is clearly implemented.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I believe that this may be the first time that the shadow Secretary of State, the right hon. Member for East Renfrewshire (Mr Murphy), has mentioned a registered interest. If that is the case, I wonder whether he could tell the House how long he has had that registered interest, and why it has not been mentioned before.

[Mr Speaker]

Order. The question needs to be put to the Secretary of State. However, it is on the record now, and I do not think that the House can wait any longer to hear from Mr Peter Bone.

[Mr Peter Bone (Wellingborough) (Con)]

I think that Members on both sides of the House will welcome the Secretary of State’s action in coming to the Dispatch Box. I do not recall that, in all my time in Parliament, a Minister has come to the Dispatch Box voluntarily to answer such questions. However, there is one group of people whom we have forgotten today: our armed forces, in Afghanistan and also in Libya, who will be amazed that the House could be packed with Members wishing to discuss a matter relating to a business card when they have a superb Secretary of State getting on with the job.

[Dr Fox]

I accept that tribute with particular humility, given that my hon. Friend has a son serving in our armed forces at present. I think it important for us to deal with issues such as this and for them to be fully and transparently addressed, but I also think it important for me to recognise that I have very important issues with which to deal. I have just come back from Libya, where I was over the weekend. Those were not, perhaps, the best two days on which to be incommunicado, but none the less a very important task is still in hand. I realise that a great deal of attention and time will have to be given to it, and I still fully intend to ensure that that is my primary objective.

[Paul Flynn (Newport West) (Lab)]

I thank the Secretary of State for the letter in which he apologised for misinforming the House on a matter earlier this year, but his judgment is what is in question today. He confessed his lack of judgment yesterday. Is he a fit person to take what can be life or death decisions affecting our troops in Afghanistan?

[Dr Fox]

As soon as I had information from the civil service that there might have been a mistake in a parliamentary answer, I did what you would expect us to do, Mr Speaker, and corrected it immediately. It seems that if we correct mistakes of one kind or another, we are now regarded as lacking in judgment. I think it absolutely correct that, when we make a mistake, we apologise for it; but, as I said earlier, if the hon. Gentleman or anyone else has a substantial charge to make, let him or her bring it out into the open rather than whispering from the weeds.

[Tony Baldry (Banbury) (Con)]

Those of us who were in the House in 1996 will recall my right hon. Friend, as a Minister in the Foreign Office, devoting considerable efforts and energy to the peace process in Sri Lanka. I am sure that any reasonable Member would think it commendable that he has consistently supported the peace process and those involved in it, and I fail to understand why there should be a scintilla of criticism of him for wanting to maintain those contacts and help to bring peace to that benighted island.

[Dr Fox]

I agree that it would be surprising if anyone did not want that peace to occur, but we have to accept that there are forces in that country, and even more in the diaspora, who do not want anyone to deal with the current Sri Lankan Government. My point is this: however much people may regret what the current Government have done or dislike them, unless we deal with that Government and get proper reconciliation, we will not be able to get peace in that island. [Interruption.] The hon. Member for North Durham (Mr Jones) shouts “Foreign Office” from a sedentary position. The Foreign Office, through the Foreign Secretary, agreed that I should make that visit and, indeed, cleared the speech that I gave, as it believed that because of the contacts I had developed over time in Sri Lanka, I was in a good position to try to take the process forward. In respect of achieving peace, what matters is what works, rather than what is a departmentally strictly delineated process.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Secretary of State has twice failed to respond to a specific question, so may I ask him for a third time? When was he made aware that first the permanent secretary and then the Chief of the Defence Staff were concerned about this relationship, what was the advice given to him, and what he did he do as a result of that advice?

[Dr Fox]

As have I said, I was not aware of any direct approach from them. The first direct approach I can remember was when my current permanent secretary came to me in August and said that she had grave concerns about the use of a business card that had “adviser to the Secretary of State” printed on it. She asked what I was going to do about it, and I was able to reply to her that I had already, in June of that year, decided to stop those cards and demand that they not be used again.

[Richard Harrington (Watford) (Con)]

With the revelations today that the Labour Front Bench took money from Cellcrypt, is it not clear that we are witnessing a conspiracy between a desperate business man and a rotten Labour party?

[Dr Fox]

I think we should keep our discussion within the realms of reasonable debate, but I understand the reasons for my hon. Friend’s anxiety. Huge amounts of criticism have been emanating from Cellcrypt in recent times, and the Opposition have said that all they want is to get information. As it has come to light that, in fact, they took a lot of money from that company, we need to know when, and on what terms, that happened, because it raises a potential conflict of interests.

[Ian Lucas (Wrexham) (Lab)]

Will the Secretary of State confirm that he had meetings with Mr Werritty on defence matters in which Mr Werritty had a pecuniary interest, and if so, why does he think he was asked to be there?

[Dr Fox]

As I have made clear, I am not aware of any specific interests in that sense at all, but if the hon. Gentleman thinks there was any particular pecuniary interest, I am sure the Cabinet Secretary would love to hear from him, as would I.

[Mr Julian Brazier (Canterbury) (Con)]

Is it not the case that taking a close interest in a dangerous and divided country with a civil war going on does, indeed, amount to an interest, but is it not also the case that the framers of the ministerial code took it for granted that people reading it would understand the difference between a public and a private interest?

[Dr Fox]

I am sure that is correct, but although we may understand that, it does not allow any of us to absolve ourselves of our responsibility to ensure that it is fully transparent and understandable. As I said in a previous answer, although the code is clearly set out, we must now ensure that we put in place processes that make it properly waterproof.

[Clive Efford (Eltham) (Lab)]

It would appear that if anyone wanted to breach the Secretary of State’s security arrangements all they had to do was check the travel plans of Mr Werritty. Can the Secretary of State take me through this: one day Mr Werritty just happened to be in a Dubai restaurant at the table next to that of somebody who had a pecuniary interest in defence procurement and defence expenditure—Mr Boulter—and that just happened to be the day before the Secretary of State was passing through Dubai? We are being asked to accept that, but can the Secretary of State say—I did not hear his answer earlier on—how Mr Werritty knew of the Secretary of State’s travel arrangements?

[Dr Fox]

Very simply, because I told Mr Werritty, who was in Dubai with his girlfriend at the time, that I would be passing through and that we should meet up. The hon. Gentleman will have to take my word for it that there was a chance meeting with Mr Boulter, and I think that that is perfectly reasonable. [Interruption.] Labour Members are saying, “It is classified”, but we are allowed to tell our friends and family where we are going to be as Ministers, because all Ministers, in ministerial down time, will want to try to get their diaries to coincide. If the Opposition are saying that we can never, as Ministers, divulge to anybody—friend or family—what is in our diary, that is an utterly ridiculous position to take.

[Mr David Davis (Haltemprice and Howden) (Con)]

The Secretary of State said that this issue will not be resolved in this House. Nevertheless, in coming to the House and presenting his apology to it, he has acted both properly and honourably. Let us put this issue in context. He has been attacked and criticised today by members, or previous members, and supporters of the Blair and Brown Governments, for whom a single meeting without officials or a record was not an issue; they made it a whole system of sofa government. Furthermore, in some cases they took very large sums from the attendance of that and changed public policy. Can the Secretary of State confirm to this House that he neither gained financially, either personally or politically, nor changed public policy in any way as a result of these meetings?

[Dr Fox]

I know exactly what my right hon. Friend is referring to, but I want to get back to the point that where there are serious allegations we do have to treat them seriously. I go back to the point I made earlier, which was that my contacts with Mr Werritty were neither for his financial gain in any of the issues I have mentioned, nor for my financial gain. However, I do think that in terms of making sure that there is total transparency, we have to make every effort not only to behave properly, but to be seen to behave properly.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

On the issue of the meeting with the President of Sri Lanka, can the Secretary of State give assurances to the House that the President of Sri Lanka was clear as to Mr Werritty’s status in that meeting?

[Dr Fox]

Yes, the meeting in London, as the hon. Gentleman will remember, was not an official visit to this country by the President. I was very keen to talk to him about some of the projects that I had been running in opposition but was not going to be able to run in government. That meeting included the Sri Lankan Foreign Minister, a long-standing friend of mine, and the governor of the bank of Colombo, who is also a long-standing acquaintance. I simply wanted to try to make it clear that much as I would not be able, as the Secretary of State and a member of the Government, to continue with what I had done in opposition, there were those who were willing to continue to do that in politics and business. I hope that they will be successful.

[Charlie Elphicke (Dover) (Con)]

Listening to my right hon. Friend’s statement one gets the impression that a company, Cellcrypt, spent hundreds of thousands on lobbyists to try to get a contract and failed to do so. Will he confirm that that understanding is correct? Having failed to get that contract, the company then tried to buy the politics of the Labour party, which is now throwing rocks. Does that not have profound implications for our politics, on both sides of the House?

[Dr Fox]

Following the meeting in Dubai, when I had been interested in what Cellcrypt could bring to the Ministry of Defence, I immediately called my private office and asked to be provided with a briefing that I could get on my return. The correct way to make decisions about procurement is through our regular procurement process. It is quite reasonable to talk to contractors, as we do on a regular basis. All Ministers talk to contractors on a regular basis about what they may or may not bring in terms of capability to the MOD. The question is whether, having been given that information, we make snap decisions or we put it through due process, and this—Cellcrypt—is being put through due process.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

The Secretary of State has told us today that on 18 separate occasions he met Mr Werritty on overseas trips. In my experience as a Minister, in the margins of visits the diary secretary records where the Minister intends to be. Was that the case on the 18 separate occasions on which the Secretary of State met his friend on official visits?

[Dr Fox]

As I said earlier, there were a wide range of visits, and they included overseas visits that were family holidays and so on. I included them all for the sake of completeness. A number would have been conferences, such as the International Institute for Strategic Studies Shangri-La dialogue in Singapore or Bahrain, for example, that Mr Werritty was attending in any case. Many of the occasions would have been on the margins and would not have been political meetings. Of a very small number of the meetings I have had, which I set out today, three were about Sri Lanka, where I included him because of the experience we had in opposition, and one was with a member of the diplomatic staff whom we happened both to know personally. I know that the right hon. Lady is trying to get to genuine and legitimate concerns, but I can assure her that we have tried at all times to separate the professional work abroad, either party political or governmental, and the social.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Is my right hon. Friend aware that the Labour party’s so-called independent report on defence procurement was supported by the same company, Cellcrypt, as is funding Front-Bench trips overseas?

[Dr Fox]

I was aware of that issue. The right hon. Member for East Renfrewshire (Mr Murphy) talked about his declared interest today, but I think that it would have been better to have been frank and upfront and to have said that the particular company concerned is the central company in many of the allegations about the meeting in Dubai on which the shadow Secretary of State has so focused. I am not saying that that would in any way diminish his case, but I think it would have been better for transparency all round.

[Huw Irranca-Davies (Ogmore) (Lab)]

I apologise for my voice, Mr Speaker—I was shouting at the television over the weekend. Several years ago, on my first day as a Minister in the Wales Office, the ministerial code was put in front of me and I was asked clearly and precisely whether there were any associations with individuals or organisations that I should declare. I declared them, including my long historical link with the Scout Association. I was advised at that point—and I listened to my private secretary—to break that link on a temporary basis and as far as I know that organisation was not involved in arms lobbying or trading, and neither is it now. Did the Secretary of State make clear his association to this individual and to this lobbying company at all points or did he hide it from his private secretary and the permanent secretary? If he did make it clear, was he ever given advice that this should not be done?

[Dr Fox]

Like all Ministers, on taking office I believed that I was fully within the ministerial code. As I have said to the House several times today, I accept that I have allowed the blurring of the distinctions on occasion and I fully accept my personal responsibility for that. I do not believe that there was a specific allegation for me to deal with at the time, nor a specific interest to deal with.

[Conor Burns (Bournemouth West) (Con)]

May I say to my right hon. Friend that Combat Stress came to the House of Commons earlier today, to the Speaker’s apartment, to launch the next phase of its campaign, “The Enemy Within”, highlighting the plight of veterans who are suffering from mental illness due to the scars of war? As the Secretary of State made his statement on defence responsibilities, he will doubtless have those responsibilities in mind. It is the mood on the Government Benches that we hope that the matter will quickly be put behind him so that he can get on with the excellent job he has been doing as Secretary of State.

[Dr Fox]

My hon. Friend is not the only one who would like this put behind us quickly, but I think that it is more important that it is put behind us thoroughly and comprehensively. I do not wish in any way to diminish the seriousness of some of the questions that have been raised and I hope that what I have set out today, and the process the Prime Minister has set out for the Cabinet Secretary to examine further questions, will ensure that such an inquiry is thorough rather than quick.

[Chris Bryant (Rhondda) (Lab)]

The Secretary of State is right—[Hon. Members: “Hear, hear.”] I am sure that hon. Members will agree with everything I am about to say. The Secretary of State is right that it is perfectly understandable for a Minister, when travelling abroad, to bump into a friend. It is also perfectly understandable for a Minister, even in politics, to have a friend—[Interruption.] The hon. Gentleman is one of mine, so he should be careful. However, the Secretary of State is stretching our credulity by suggesting that he could have done so on 18 separate occasions. Will he provide us with a list of the meetings when he went abroad when Mr Werritty was not present? Is the only reason that Mr Werritty was able to be there because he had access to the Secretary of State’s diary? From what we see he is going to continue to have access to it—surely, that is inappropriate.

[Dr Fox]

In general, it is inappropriate for the civil service or anyone else to release ministerial diaries, which could be a threat to the security of the Minister or to national security. Where Ministers choose to give information in advance about where they will be to family or friends, that is perfectly reasonable. I would say to the hon. Gentleman that Ministers—particularly Defence and Foreign Ministers—travel abroad with excessive regularity and I would be happy to provide him with a list of the times I have been abroad, excluding those 18 times, over the year and a half that I have been Secretary of State.

[Dr Julian Lewis (New Forest East) (Con)]

My right hon. Friend has been very frank indeed in accepting that it was a bad mistake not to have an official present at the Dubai meeting and he has apologised for that. Does he also accept that the main victim of an official not being present was he himself? Had an official been present and had a proper note been taken, it would not have been possible for anyone else at the meeting to misrepresent what was said and then have to withdraw it afterwards.

[Dr Fox]

Yes, it does damage to me as the Minister to have failed to take the appropriate precautions of having a meeting minuted and having an official attend. It also, sadly, does damage to the Government in that it might give the appearance of something being wrong. However, I will say to my hon. Friend that it beggars belief that a particular individual at that meeting, Mr Boulter, has said that I discussed with him a knighthood and said that I was going to have the Cabinet discuss a knighthood being taken away. I was very clear that I was willing to give evidence in a US court if required, because I was very clear about what was said and what was not said. Mr Boulter has subsequently given a totally different version of events, which, sadly, leads me to believe that he is a very poor witness and lacking in credibility.

[Emma Reynolds (Wolverhampton North East) (Lab)]

I should like to ask the Defence Secretary again today exactly how many unofficial visits he has made to Sri Lanka, who sponsored those visits, why they are not registered in the Register of Members’ Financial Interests and what role Mr Werritty played in any meetings during those unofficial visits that the Secretary of State had with Government officials in Sri Lanka.

[Dr Fox]

There are no meetings that were unofficial that were not recorded and I made one official visit as Secretary of State. As I have said, the role of Mr Werritty in that was, first, in the official meeting, to organise the lecture for the Kadirgamar Institute, which he did, and, secondly, to ensure that we were able to try to get continuity in the efforts we were trying to bring to investment and subsequent diversion of profit into social projects. I think that is an enterprise that is still worth following.

[Gavin Barwell (Croydon Central) (Con)]

May I commend my right hon. Friend for his apology to the House and for his answers to the questions that have been raised? Over the weekend, I met two servicemen who are shortly to be deployed to Afghanistan. Now that those answers have been provided, I am sure that they will want him, and indeed the whole House, to focus on that conflict and on sorting out the mess in the defence budget that we inherited from the previous Government rather than on this story.

[Dr Fox]

I am grateful to my hon. Friend for his very kind words. We will continue to focus on those issues because we cannot afford not to. They are literally a matter of life and death and they have to be what we give our greatest attention to. These political matters are matters of extreme discomfort for those of us in the firing line and for our families; however, we have to recognise that the trials and tribulations that we face in public life are nothing compared with the threats facing those in our armed forces.

[Mr Frank Roy (Motherwell and Wishaw) (Lab)]

The Secretary of State has just told the House that Mr Werritty had no access to confidential material. The House knows that the Secretary of State’s diary is highly confidential. Has the Secretary of State ever shown Mr Werritty a copy of his diary, or discussed what was in his diary?

[Dr Fox]

As I have said, it is entirely appropriate for Ministers to show anybody they like what is in their diary. What is not acceptable, under departmental rules, is for the Department to release a diary to any third party when that is not agreed by a Minister. However, because of the question that the hon. Gentleman raises, I have instructed the Department not to release any part of my diary, on paper, to any individual—friend or otherwise.

[David Morris (Morecambe and Lunesdale) (Con)]

First, I would like to thank my friend for being so up-front and honest. I have known him for many years, and he has always been an upstanding gentleman. Let us put this in the truest context: the Opposition are trying to accuse him of some kind of negligence, but 10 years of no spending reviews have been forgotten about; that is true negligence, and that should be put before the House today. That is what the troops are worried about.

[Dr Fox]

All those involved in the complex matters of defence and national security will want to ensure that we are able to put this issue to bed as quickly as possible and to deal with it, as I said, as thoroughly and transparently as possible, because there are great issues at stake for our country, our armed forces, and those countries that we are involved with. I hope that we, and the Cabinet Secretary, can deal with this as quickly as possible. I assure my hon. Friend that in the meantime I will not be deflected from what I understand are the great burdens and responsibilities of my office.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

Can the Secretary of State inform the House whether any information has been passed to Adam Werritty concerning the legal case involving Porton Capital and 3M?

[Dr Fox]

As far as I am aware, the only information has come from Porton Capital’s lawyers, who sent a clarification following the meeting in Dubai to say that the account of the meeting given by Mr Boulter was incorrect. The lawyers accepted, on the legal case that Porton Capital faced with 3M, that none of the accusations made by Mr Boulter were correct, and no confidential information was given.

[Penny Mordaunt (Portsmouth North) (Con)]

I want to place on record my support for the Secretary of State. There is no one I would rather have going in to bat for our armed forces and our country when it comes to the difficult issues in his in-tray. Can he assure me and the House that the issues in his statement will not detract from the way that he deals with the other issues in his in-tray, and particularly our immediate opportunities to get our allies to pull more weight?

[Dr Fox]

It would be disingenuous of me to say to the House that being confronted, as some of my other colleagues have been, by a non-stop bombardment from the media, day in, day out, and the effect that that has on our families, does not in some way make it more difficult to get on with our daily work. I thank my hon. Friend for her comments, and say to her that when we are confronted with these situations, we sometimes find unexpected resilience.

[Kevin Brennan (Cardiff West) (Lab)]

May I clarify that the Secretary of State has told the House today that his officials were, on his instructions, routinely giving out details of his ministerial diary to Adam Werritty, who then passed on that information to the people sat next to him at a dinner table in Dubai? Is that, in essence, what he has told the House today?

[Dr Fox]

The hon. Gentleman will see, when he looks at the official record, that that is not what I said. I was perfectly capable, without officials, of telling any of my friends where I would be, if I wanted to meet up with them. We have to be very clear—the permanent secretary is clear about this in her report today—that it has to be understood by the civil service that it does not give out to anybody details of ministerial diaries unless that is personally sanctioned by a Minister.

[Dan Byles (North Warwickshire) (Con)]

I strongly echo the sentiments of my right hon. Friend the Chairman of the Defence Committee and others: British servicemen and women are daily risking their lives in the deserts and mountains of Afghanistan, and they will be looking in bewilderment at the priorities of Her Majesty’s loyal Opposition. Will the Secretary of State confirm to the House that he will not allow smear, innuendo, and lack of substance on the part of the Opposition to distract him from the important business of his job?

[Dr Fox]

When these stories began to appear in earnest last Wednesday during our party conference, I faced the option of trying to stay and deal with immediate issues or attending the NATO ministerial in Brussels and going on to the planned visit in Libya to Tripoli and Misrata. Had I decided to cancel any part of that official programme because of what was happening domestically and politically in the United Kingdom, it would have sent the wrong signal, not only in this country, but to our allies and to those who are fighting for us overseas.

[Toby Perkins (Chesterfield) (Lab)]

Returning to the subject of the business cards that said that Mr Werritty was the adviser to the Secretary of State, and which the Sri Lankans believed were true, will the Secretary of State confirm that those business cards were known to him before he asked for them not to be used in June, and will he say whether they were funded from his parliamentary expenses or from Ministry of Defence expenditure?

[Dr Fox]

I was first aware of them in June, when I saw them for the first time. I commented that it was inappropriate for a portcullis to be used on a private business card and that it was not appropriate for anyone to say that they were an adviser to the Secretary of State. At that point, I made it very clear that they should be withdrawn and not used again. They were funded privately, and have nothing to do with public or, indeed, my money.

[Bob Stewart (Beckenham) (Con)]

May I commend my right hon. Friend on not changing his programme, and on going to visit our armed forces abroad, when it must have been tempting for him to come home immediately, given what was happening here? I have listened carefully to what he said today, and I personally am very satisfied. May I advise him to go back to his job, which is looking after our armed forces, who are in combat in two operational theatres? That is what he must concentrate on now.

[Dr Fox]

Again, I am grateful to my hon. Friend. I intend to concentrate very much on those issues, which remain at the top of my in-tray. As I said, we in the House understand that those outside have legitimate concerns and that they have a right for them to be addressed, and I think that the correct way to do so is for the Cabinet Secretary to continue the investigation begun by the permanent secretary. I can only reiterate my willingness to co-operate in every way that I possibly can with that investigation.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

What was the perfectly innocent explanation offered up by Mr Werritty when the Secretary of State had to confront him about touting around false business cards?

[Dr Fox]

He—Mr Werritty—accepted that he should not have done so, and I think that with hindsight, he would think twice about doing so. Having made that clear, he told me that he would get new business cards, not use those ones again, and he accepted that what he had done was wrong.

[Andrew Bridgen (North West Leicestershire) (Con)]

May I welcome the statement by the Secretary of State today and his apology? It is clear that some errors have been made, and it is quite right that the Cabinet Secretary should look into those matters. However, it is also clear that there was no breach of security, and I assure the Secretary of State that he retains not only my support but the support of these Government Benches?

[Dr Fox]

The permanent secretary makes it clear that at no time was Mr Werritty given access to confidential information or any security information to which he should not be given access; and that no documents or briefings were given. I am afraid that these accusations that national security was breached, which is probably the most serious accusation that could be thrown at any Government Minister, are utterly baseless. If anyone knows of a genuine case where they believe that to have happened, they have a duty to bring it to the Cabinet Secretary. If they do not do so, they should do what is appropriate and not say anything about it at all.

[Pat Glass (North West Durham) (Lab)]

The Secretary of State has told us today that Mr Werritty was present with him on 18 separate occasions on overseas visits, but he has told us that some of those were family holidays. I think we could all accept that. I have done a quick mental calculation. Since May 2010 I have had two family holidays. Could the Secretary of State clarify for us how many of those occasions were family holidays and how many were official visits?

[Dr Fox]

There were a number of different categories, as I said. Some of them were overseas visits where I was there purely on a defence basis. Some were conferences, for example, where I may have been speaking and Mr Werritty might have been a delegate. Some were long weekends when my wife and I were abroad. Some were longer family holidays. One was a skiing holiday. We need to understand that Ministers have downtime on visits. In particular, when we have long overseas visits, we try to manage our political time, our party political time often, and our personal time. It is unreasonable to think that we should not have any private time at all.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

I would also like to put on the record my support for my right hon. Friend. The way that he has come to the House today, with honesty and courage, to make his statement without any pressure from elsewhere has been excellent. Given where we are, with our troops in action all over the world and with the challenges that we face, it is time that we move on from this and concentrate on the job in hand.

[Dr Fox]

I am grateful to my hon. Friend for much of the help that he has given me in recent days. I finally say this: where there are serious issues of probity to be dealt with, we need to deal with them in an open and transparent manner. I hope I have helped with that process today, but I shall continue to co-operate with the Cabinet Secretary in doing so. However, there is an equal duty on those who have genuine allegations of wrongdoing to make that they bring them into the public domain. When we get sniping from the sidelines and innuendo, it does nothing to improve the health of our political process. I hope that if those exist who have such accusations, they bring them forward. I will be very ready to give my explanation, but what I think is unacceptable is this constant sniping and undermining without, it appears, genuine substance.

Eurozone

Monday 10th October 2011 Commons Chamber

16:32

[The Chancellor of the Exchequer (Mr George Osborne)]

I would like to update the House on the situation in the eurozone and what we are doing to mitigate the impact of the crisis on the UK.

Markets remain exceptionally volatile. Since July stock markets are down by 11% in the UK, 12% in America, 23% in France and 24% in Germany. Bond spreads have widened significantly for a number of European countries. Bank shares have lost a quarter of their value in the past three months, and yesterday the Governments of France, Belgium and Luxembourg came together to rescue the major European bank Dexia.

Although the weakness of the US economy, and its recent downgrade, have contributed to the lack of confidence gripping world markets, it is clear to all that the epicentre of this crisis lies in the eurozone, so we need a comprehensive solution that puts our largest trading market on a much more stable footing. In a string of international meetings, including the recent flurry that began with the G7 meeting in Marseille, Britain has helped to lead the international community in setting out what the components of a solution should look like.

We have again pressed our argument in calls over the past couple of days which I, the Prime Minister and the Deputy Prime Minister have made to the leaderships in Germany, France, the institutions of the European Union and international bodies such as the International Monetary Fund. Half an hour ago the Prime Minister spoke to the President of the United States about the issue.

In short, we need a comprehensive solution which ring-fences vulnerable eurozone countries, recapitalises Europe’s banks and resolves the uncertainty about Greece. Ring-fence, recapitalise, resolve—let me take each in turn. First, we need to see the eurozone members increase the firepower of their bail-out fund. If they are trying to protect larger countries, €440 billion is sadly not enough. How they increase that firepower—whether by using more paid-in resources, more leverage, or more help from the European Central Bank—is up to them. What I can confirm is that Britain will not be a part of any permanent eurozone bail-out fund. We have provided a bilateral loan to Ireland with the support of the House, in recognition of our exceptionally close economic and social ties. But when we came to office we inherited a situation where we were also part of the EU-wide bail-out fund, the European financial stabilisation mechanism. As the price that we extracted for ratifying the treaty change creating the permanent bail-out fund, British taxpayers have made no contribution to the eurozone bail-out of Greece and will not be part of the permanent fund.

Alongside the ring fence, we need the second R, which is recapitalisation. The European bank stress tests have not been nearly tough enough, as proved by the fact that Dexia did not fail them. At the beginning of the year, I said that the new stress tests must be much tougher. The IMF now estimates that sovereign credit strain could have a direct impact of about €200 billion on European banks, and at last the European Banking Authority is working on a plan to test leading European banks against higher capital ratios and more credible benchmarks on their exposure to sovereign debt. European nations will need to set out the backstops that they have in place to raise capital privately if they can or provide public capital if they cannot.

Detailed work by the Financial Services Authority confirms that UK banks are much better capitalised and more liquid than many of their European counterparts. As the IMF showed in its recent assessment of the UK economy, the core tier 1 ratios of all the major UK banks are in double-digit territory, which compares well to most European peers. On Friday, the credit rating agency Moody’s downgraded 12 UK banks. However, it stated explicitly that the

“downgrades do not reflect a deterioration in the financial strength of the banking system or that of the government”.

Rather it is the recognition of the success of the Government’s efforts to reform banking and remove the perceived taxpayer guarantee for banks deemed too big to fail. That is the direction in which policy should be moving.

The third R is a resolution of the situation in Greece. The weekly drama of troika visits, parliamentary votes and uncertainty about the disbursement of future tranches of international funds are causing great instability for the whole world. Our advice to European neighbours about what needs to happen is provided in private, but our overall intent is very public. The speculation about Greece’s future needs to end. The eurozone needs to come to a clear decision now and stick to it, and that decision needs to be based on a rigorous and realistic assessment of what is really happening in Greece and the debt dynamics of that country’s economy. Such an assessment should be provided by the IMF. We need to ensure that the IMF has enough resources to support economies around the world that require the help of the international community.

Ring-fencing, recapitalisation and resolution—that is what needs to happen now. At the same time, the eurozone countries need to undertake structural reforms to make their economies more competitive and move towards greater fiscal integration to underpin the single currency. At the same time, we must ensure that Britain is not part of that integration and that our influence is protected. These things are required by the remorseless logic of monetary union. That is the comprehensive package—all these things—that we have been urging and will urge again at the G20 Finance Ministers meeting on Friday and the European Council meeting, which has now been moved to the end of next week. We believe that the package must be in place as soon as feasible and certainly no later than the G20 leaders summit in Cannes in less than four weeks. Our time frame has been clear and is now broadly accepted by the international community. Indeed, there are now signs of progress from the leadership of the eurozone.

The crisis in the euro may now be inching towards resolution, but it has already delivered a huge knock to international confidence. I said earlier this summer that Britain could not be immune from what was happening on our doorstep. Sadly, that has proved to be the case. That is the principal reason given by the independent Monetary Policy Committee for its decision to request authorisation to undertake further quantitative easing. As Mervyn King said in interviews explaining his decision,

“clearly the impact of the rest of the world on the UK does threaten our recovery. That’s why we took action today to try to head that off.”

I made it clear last year that I would follow exactly the same procedures that my predecessor established. I therefore agreed to the request and authorised a further £75 billion of asset purchases. I think that this is the right response to the deterioration in the international situation.

That is what the Bank of England can do. Although we have gone further than the last Government in extracting commitments from all the high street banks to increase SME lending and extend loan guarantees, I believe that we can do more domestically to get credit flowing, including credit easing.

The purpose of a credit-easing programme will be not only to lower the risk of another credit crunch, but to bring about a structural improvement in access to finance for mid-sized and small businesses so that a loan from their local bank is not the only source of finance, addressing one of the long-standing problems in the British economy. This action will sit alongside the other measures we have announced to improve our infrastructure, invest in science and make it easier to employ people. We will announce more details alongside the autumn forecast next month. All this recognises that our economic problems do not all come from abroad; many were home grown. Last week’s revisions to the GDP data revealed that Britain had one of the biggest booms in the entire world, followed by the deepest recession of any major economy other than Japan’s. We went into that bust with the biggest structural deficit in the G7 and came out with a deficit forecast to be the biggest in the G20.

None of the measures I have described would be possible if Britain did not have what the Governor of the Bank of England himself described last week as

“a credible plan to repay our debts”.

Fiscal responsibility allows the British authorities to be monetary activists. Without that credible plan, market interest rates in Britain would soar as they have in other European nations. Instead, interest rates here are just 2.5%, half of what they are in Spain and Italy. A 1% rise in interest rates would take £10 billion out of the pockets of British families through higher mortgage costs and lead to more repossessions and job losses as companies failed. These low interest rates are hard won and easily lost. I can confirm that the credit rating agency that downgraded the United States, Standard & Poor’s, has this month affirmed our triple A rating, but it made it clear that the greatest threat to that rating would be if

“the coalition government’s commitment to fiscal consolidation falters.”

We will not take that risk with our nation’s credibility and our interest rates.

These are difficult times. There is no doubt that a solution to the eurozone crisis is urgently needed. It would provide the greatest boost available to the British economy this autumn. We have been leading the international effort to help the eurozone find that solution while at home taking the steps needed to ensure that Britain rides out the storm. I commend this statement to the House.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Let me start by thanking the Chancellor for making his statement and for advance notice of it. It is right that he has today updated the House and the country on the ongoing crisis in the eurozone. It is also right that he and I will have the opportunity to debate the ongoing growth crisis in the British economy in the House on Wednesday.

A year ago the Prime Minister told the House that our economy was

“out of the danger zone”—[Official Report, 15 December 2010; Vol. 520, c. 901.]

We warned then that there was a global hurricane brewing in the eurozone, America and across the developed world. We also warned the Chancellor that ripping out the foundations of the house here in Britain with a reckless approach to deficit reduction was the wrong approach. The global hurricane is now swirling around us. With the eurozone crisis deepening, and in advance of Wednesday’s debate, will he tell us today whether he still believes that Britain is out of the danger zone and that we are still a “safe haven” in a turbulent world? With the European Central Bank unwilling to cut its interest rates, is it really the crisis in the eurozone that has prompted the Chancellor to change so radically his views on quantitative easing? Two years ago he called it

“the last resort of desperate governments when all their other policies have failed”.

We will return to the British economy on Wednesday, but the Chancellor is right to say today that the crisis in the eurozone now constitutes a direct threat to our flatlining economy, not least because only Greece and Portugal in the eurozone have had lower growth than Britain in the past year. With no growth, it is no wonder our interest rates are so low. He is also right to say that the threat is not only to our exporters, but to the stability and solvency of our banking system. Can he update the House on his latest estimate of the full exposure of UK banks to euro sovereign debt? Is the House of Commons Library estimate of a $187 billion exposure correct? Is it correct that, as part of his contingency planning, the Treasury has been working on detailed plans to inject further capital into Royal Bank of Scotland?

The Chancellor is also right that it is a great relief that Britain is not a member of the eurozone, although I was rather surprised to hear him last week give the credit to the Foreign Secretary, who was in opposition, on the Back Benches and writing history books at the time. I have long given up hope of getting any thanks from the Chancellor for that vital judgment. Above all, the Chancellor is right: eurozone leaders have prevaricated too long and need to get their act together to put in place a credible plan before next month’s G20 meeting.

Back in July, the Chancellor told the Financial Times in an interview that eurozone leaders had to “get a grip”, and he called for a eurobond, but what has happened since? Precious little. Has he urged eurozone leaders not just to increase EFSF funding, but to widen its role to help recapitalise troubled banks and to put in place first-loss guarantees on sovereign debt to stop contagion in Spain and Italy? Rather than talking to the newspapers over the summer, perhaps the Chancellor should have gone to those meetings and urged a Europe-wide plan for jobs and growth to get unemployment falling and deficits down.

What do we have today from the Prime Minister? Do we have a report back from weekend meetings with President Sarkozy and Chancellor Merkel? No, because our Prime Minister was not at the meetings; he was too busy dealing with a local difficulty. Instead, we have another interview in the Financial Times, and his solution is that eurozone leaders need to get out their “big bazooka”. Their what? He could have called for political backing for the European Central Bank to act as a lender of last resort in return for credible fiscal policies, for a euro area debt guarantee or for a European plan for jobs and growth, but “big bazooka”—what does it mean? Can the Chancellor explain? I made the mistake of looking it up on Google this morning, and I warn hon. Members, “Do not make the same mistake.”

To be fair, and in conclusion, the Prime Minister did call this morning for a five-point plan to deal with the eurozone crisis, although it was not clear from the Chancellor’s statement what those five points are or add up to, but let us hope that, with Britain badly exposed, our growth flatlining, unemployment rising and borrowing set to be higher than planned, when the Chancellor comes back to the House on Wednesday he will agree to back our five-point plan for jobs and growth here in Britain.

[Mr Osborne]

I welcome the shadow Chancellor to his place. When I heard that the Labour leadership were clearing out their shadow Treasury Front-Bench team today, I was worried that the Conservative party would lose its greatest electoral asset, but it is great to see him still in his place.

Let me address the right hon. Gentleman’s specific questions. First, he asked about the exposures to eurozone nations. The FSA publishes the appropriate information on that, on the exposures overall to peripheral economies and to other eurozone banks, and it is appropriate that it does so. On RBS, I touched specifically on that issue, because there has been speculation, but let me make it very clear: in our assessment, and in that of the FSA, RBS is well capitalised and liquid.

On the eurozone facility, let me answer the right hon. Gentleman’s specific question. I believe that it should be broad in application, as well as deeper in funds, and undertake as many operations as is required. He talks about meetings, but let me reassure him that I have been to many, many meetings over the past few weeks. There has not been a shortage of meetings; there has been a lack of leadership from eurozone leaders in those meetings. But, that is changing, and that is very welcome.

Frankly, it is absolutely astonishing that a shadow Chancellor, who led his entire party through the Division Lobby in July to vote against the increase in IMF resources initiated at the London summit by the previous Prime Minister, should accuse us of a lack of leadership in the international community. Let us just imagine if that vote had been won—presumably the right hon. Gentleman cast his vote hoping to win the Division—we, alone in the world, I think, would not be ratifying the increase in IMF resources, and I would have to turn up at those meetings and explain, “I am very sorry, but the British House of Commons does not want to use the Bretton Woods institutions to help us with one of the greatest financial crises of the century.” As I say, his lectures on leadership come a little thin, and perhaps he should practise what he preaches.

I end by saying this. We will have our debate on the British economy, but it would be hard to imagine the shadow Chancellor coming back from the Labour conference with his party’s economic credibility even lower than it was before he began the conference season, but there is still no recognition from him that his Government spent too much money, ran up a big budget deficit when times were good and spent more money than they had available—even though that is acknowledged by Tony Blair, who was Prime Minister at the time. The shadow Chancellor still thinks that the answer to a debt crisis is to spend more money. His five-point plan is, of course, a complete abandonment of the plan set out by the last Chancellor of the Exchequer, to which, as I understood it, the Labour party was still in theory committed.

When we listen to the combined speeches of the shadow Chancellor and the Leader of the Opposition, they seem to amount to more regulation and more tax on businesses—indeed, they confirm the Labour party’s reputation as the anti-business party. The shadow Chancellor has managed to get the Labour party into an extraordinary position for an Opposition—of complete irrelevance: irrelevant at home and irrelevant abroad. The leader of the Labour party asked a good question—“Why would you bring Fred Goodwin back to run the banks?” But why on earth would we bring the shadow Chancellor back to run the British economy?

[Mr John Redwood (Wokingham) (Con)]

When the Chancellor gave his authority to create another £75 billion of money, what forecast was he given about the impact that that will have in the next couple of years on the price level and therefore on real incomes? So far it has been high inflation that has clobbered real incomes and depressed demand.

[Mr Osborne]

As my right hon. Friend will know, in its most recent quarterly bulletin, the Bank of England did an assessment of the impact that the previous round of quantitative easing had had; it thought that that had increased GDP by 1.5% to 2%, but that it had also increased inflation. However, the Bank was very clear that in recommending or requesting further quantitative easing, it was still aiming to hit its inflation target in the required two-year period.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I am glad that the Chancellor now realises that the policy of quantitative easing was, in fact, a good one and did help get our economy growing. Can he tell us how he plans to ensure that the additional £75 billion gets out of the bank vaults and on to the high street? He has mentioned the credit support scheme, on which we have not yet got some details, but I am sure that he would agree that it is important that the money finds its way out into the economy.

On the question of Greece, is there now an acceptance that the present austerity policies being visited on that country are not going to work? Were the reports coming out of the IMF a couple of weeks ago—that there would have to be some sort of write-down of Greek debts—accurate?

[Mr Osborne]

Let me deal first with the right hon. Gentleman’s question about quantitative easing. I think there is general recognition that what worked was the increase in asset prices and also pushing investors up the risk chain. I defer to the right hon. Gentleman’s view on this, but what did not work so well was an increase in bank lending; that did not happen as a result of QE, although the Government at the time hoped that it would. As he knows better than anyone, the Government also created the asset purchase facility with the idea that the Bank of England might purchase some corporate paper; it ended up purchasing only around £1 billion-worth.

I thought that it was sensible, therefore, that alongside the Bank’s action on QE we separately, as a Government accountable to the House, looked at credit easing options, which directly try to address the bank lending issue and enable the Government—again, directly accountable to elected people—to look at a range of assets that one can buy, such as small business loans.

On the question of Greece, I have to be a little careful; I alluded to that in my statement when I said that the advice that we are giving on Greece is private. But our public intent is very clear: the Greek situation has to be resolved. It is very debilitating for the world that at the moment each week goes past and there is another event risk around Greece—the troika turns up, there is a parliamentary vote in Greece. Of course, a lot of the frustration of eurozone members is not so much at the impact of austerity, but at the feeling that they have that the Greeks have not done what they promised to do. But as I say, if the right hon. Gentleman will forgive me, I will continue to give my specific advice on Greece to my eurozone neighbours in private.

[Mrs Anne Main (St Albans) (Con)]

I am pleased that my right hon. Friend is taking a robust approach towards our economy, but does he share my concern that the eurozone’s attempt to open up our benefits and pensions pots this September will derail his efforts to make sure that we get money back to the British taxpayer?

[Mr Osborne]

I am very clear that the resources we provide to the European Union should be well spent. Indeed, there is a whole separate agenda that we have not touched on today of getting the European Union better focused on trying to encourage growth and competitiveness across the entire continent. Like, I suspect, my hon. Friend, I also share the frustration about the application of European law that means that we have to end up paying benefits to people who are not in this country. That is one of the frustrations that Governments in the past have had to deal with, and we are looking at whether there are potential avenues around it.

[Sir Stuart Bell (Middlesbrough) (Lab)]

It was no doubt an oversight that the Chancellor did not mention the conference at the weekend between President Sarkozy and Angela Merkel where they called for a rapid and global response that had to be in place by the time of the G20 meeting in November. The Prime Minister responded by saying that he did not want to put a single euro into saving the euro after 2013. He said that he did not want the involvement of the investment bank and that all he wanted was participation through the IMF—which, incidentally, I did not vote against earlier in the year. Is this what we call being at the heart of Europe and punching above our weight, or are we moving towards a two-speed Europe?

[Mr Osborne]

I did not directly mention the meeting at the weekend between the French President and the German Chancellor, but I alluded to it when I said that there were signs of progress, as the meeting was one of those signs. They have now decided to delay the European Council until the end of next week to give them more time to put together a package, the components of which are becoming clear. The timetable that we first identified of the Cannes summit being the last possible point when we can resolve this is now generally accepted. On the hon. Gentleman’s substantive point about international resources, I commend him for his sensible vote in defying the Whip imposed by the shadow Chancellor.

[Ed Balls]

There were some people on your side as well.

[Mr Osborne]

Let me address this. There certainly were some people on my side, and no doubt some of them may ask me about it today. I am very happy to stand up and explain why I think that is wrong, why Britain has been a founding member of the IMF, and why the international institutions like the IMF and the World Bank are absolutely central in trying to get an international response to economic problems. However, there is a big difference between Back-Bench Members of this House deciding to vote against this issue as a matter of conscience and the shadow Chancellor leading the entire Opposition into an official vote against an IMF package that—let us remember this—was supposed to be the crowning achievement of the last Prime Minister’s premiership. When we look back at the last Prime Minister’s premiership, the one thing we say he got right was the London G20 summit, and then the shadow Chancellor leads his party into the Division Lobby against it. That is pathetic.

[Martin Horwood (Cheltenham) (LD)]

Does the Chancellor agree that if your neighbour’s house is on fire, with or without exits, and if it threatens to set yours on fire too, the sensible, constructive and intelligent thing to do is to protect your own house, do your best to help your neighbour to put out the fire, and not start an argument about where the boundary line falls between the two properties—or, as Labour Members suggest, throw away the fire extinguisher?

[Mr Osborne]

There are quite a lot of fire analogies there. We are trying to do those things. First, we are trying to protect our own country. Of course, this was an independent decision of the Bank of England, but when it made its decision it explicitly referenced what was happening in the eurozone as the principal reason for doing so. Secondly, we are very actively engaged with the eurozone in trying to find this international solution to its problems. I mentioned all the conversations that have been had just in the past 72 hours or so. There have been a string of international meetings where we have made forceful interventions. We have helped to push the eurozone in the right direction, but there are also people—leaders—in the eurozone who are trying to lead it in the right direction as well. The hon. Gentleman’s point about the rather remarkable vote by Labour Members against the IMF is well made.

[Dr William McCrea (South Antrim) (DUP)]

In these challenging times for UK families, can the Chancellor assure the House that hard-pressed taxpayers throughout the United Kingdom will not be saddled with the financial burden of saving the euro? Will he continue actively to engage with banks to save the financial viability of small and medium-sized enterprises across the UK?

[Mr Osborne]

The hon. Gentleman makes a good point about the financial burden. Obviously we bear a burden as an economy that is closely inter-connected with the eurozone, but we took a decision that we wanted to get Britain out of the EU27 mechanism, and we put considerable negotiating effort into doing that. That meant not just the current mechanism, with its €60 billion capacity which had been established—we are still part of that—but ensuring that the permanent bail-out mechanism did not include people who were not in the euro. If the members of the euro want monetary union and want to move towards greater fiscal union, it is not reasonable to ask countries that are not in the euro to be part of one of the key mechanisms of that union, which is a bail-out fund.

[Mr Douglas Carswell (Clacton) (Con)]

The bail-out-and-borrow approach to dealing with the crisis in the eurozone has not worked. We can call it the three R’s —ring-fence, recapitalise, resolution—but it is still bailing out, and bail-out simply begets more bail-out: more public liability to rescue rich men from the folly of their investment decisions. When will my right hon. Friend advocate a new approach, one that works: instead of bail out and borrow, default and decouple?

[Mr Osborne]

The first thing I would say to my hon. Friend is that he is right to allude to the debt dynamics in some of the countries involved, and I mentioned that specifically in the case of Greece. The difference between the Greek situation and the Irish situation at the moment shows that countries can take different paths, and with political will they can deal with their problems. However, if the political system is unable to address those problems, the rest of the international community has to step in.

My hon. Friend’s second allusion—the decoupling—is, I guess, a reference to the break-up of the euro. As he knows, I was against Britain joining the euro—I perhaps did not argue the case on quite as many occasions as he did—but as the world stands today, the break-up of the euro would be absolutely calamitous for the British economy, and it is not in our interests to advocate that. It is profoundly in our national interest to try to make monetary union work. Monetary unions can be made to work, but greater fiscal integration and fiscal union are needed, and—this is a crucial additional part—we also need the competitiveness of the other, peripheral European economies to be greatly improved.

[Mr George Mudie (Leeds East) (Lab)]

The Chancellor has said that the asset purchase facility is the best way to get money into the real economy and stimulate growth. Why is the Bank of England refusing to use the asset purchase facility, when the last Government used it successfully, and instead allowing the money to be channelled through the banks, which keep hold of it for their own security, and not to be sent into the real economy?

[Mr Osborne]

I am not sure that the asset purchase facility was the enormous success that the hon. Gentleman implies. It probably did do a good job—again, I defer to the views of the Chancellor at the time, who would have seen the data closer up. The asset purchase facility helped to stop the collapse in the corporate bond market at the time, but it never led to the big increase in lending that the previous Government hoped it would. The Bank of England did not make use of the £50 billion facility that was made available. Although the facility remains, to date the Bank has made use of only around £1 billion. Instead of revisiting the theology, as it were, of who is responsible and the role of the Bank, my view has been that in order to maintain the proper division of responsibility between the Bank and the Government, who are accountable to Parliament, the Government should undertake credit easing operations with their own balance sheet, and that is what we are working on at the moment.

[Michael Fallon (Sevenoaks) (Con)]

What was the point of the European Banking Authority conducting two rounds of stress tests that excluded any serious test of banks’ exposure to sovereign debt? Surely it is in the interests of eurozone Governments to have such exposure made more transparent and to start facing up to how to tackle it?

[Mr Osborne]

My hon. Friend makes a very good point. We repeatedly argued that the stress tests should be tougher and more credible, but there were strong vested interests that did not want to see that happen and did not want to confront some of the problems in their own banking system. They are now having to confront those problems, however. The fact that Dexia passed the test, and that when it identified a capital shortfall it was in the low billions of euros across the entire European continent—given that tens of billions of euros were required to deal with the Irish problems that occurred around Christmas—demonstrates that those tests were not credible enough. To be fair, I do not think this is an EBA problem; it is more a problem with the membership of the EBA, but the association is now, with our support and encouragement, finally conducting what I think will be a much more credible set of assumptions for the European banking system.

[Stewart Hosie (Dundee East) (SNP)]

I thank the Chancellor for his statement and for giving me early sight of it. He said that the eurozone countries needed to undertake structural reform and to move towards greater fiscal integration—he later mentioned fiscal union—and that that would form part of a comprehensive package that he had been urging. He has not, however, described what he means by fiscal integration or fiscal union. Would they involve the European Union controlling 2% or 3% of countries’ gross domestic product, or 20% or 30%? Would they involve a counter-cyclical stability mechanism, or an enhanced European stability fund? Would the measures be applied uniformly, irrespective of debt ratios or savings ratios? It is important that we hear publicly what the Chancellor is saying in private, if we are to avoid speculation and confusion over the UK’s position when none need exist.

[Mr Osborne]

The debate on how that fiscal union should take shape is just starting in the eurozone, and we can contribute to that debate while ensuring that Britain is not part of it and that Britain’s important national interests are protected in regard to the single market, competition policy and financial services. Key components of the measures will include some transfer of resources: in effect, the European financial stability fund is becoming a sort of central resourcing fund. The measures will also mean greater surveillance and mutual vetoes and the like over each other’s budget policies. I have raised the issue of eurobonds, as have the Italian Finance Minister and the chair of ECOFIN. I think there will be a number of components. In the end, it has to be, in part, a decision for the eurozone itself to take the lead, provided that our interests are protected.

I cannot help but make the observation that one of the things we are learning about the eurozone is that if we have a single currency, we need much greater co-ordination of economic policy. That is rather contrary to the Scottish National party’s approach, which is to maintain a single currency but to have a dis-integration of fiscal co-ordination.

[Mr William Cash (Stone) (Con)]

On the issue of growth, will the Chancellor accept that, last year, our trade deficit with the eurozone went up from minus £4 billion to minus £38 billion in one year alone? Does he recognise that this has a great deal to do with the problem of over-regulation and that we need to repatriate social and employment legislation so as to create growth in small and medium-sized businesses? Will he also face down the Deputy Prime Minister, as the Home Secretary did the other day?

[Mr Osborne]

Speaking as a member of the Conservative party, I would make it clear, as the Prime Minister has done, that if a future treaty should arise, as it may well do, we will argue the case for bringing back certain powers to this country. I am sure that we will have a very active debate about what those powers should be—

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

And throw union rights out of the window?

[Mr Osborne]

I am sure the hon. Gentleman can put in his bid for things he would like to see repatriated. Perhaps there would be some trade union powers, so that a Government led by the union man, the leader of the Labour party, could get their way more easily. But we will have that debate in due course; it is not active at the moment in European circles. I suggest that we focus on the immediate issue at hand, which is resolving the eurozone crisis.

[Alison McGovern (Wirral South) (Lab)]

In response to the right hon. Member for Wokingham (Mr Redwood), who is no longer in his place, the Chancellor described the Bank of England’s analysis of the impact on inflation of the last round of quantitative easing. At a time when British people have less and less cash in their pockets, few issues could be more important. [Interruption.] [Hon. Members: “It’s Gordon Brown ringing for you!”] Will the Chancellor tell the House, perhaps by telephone, or by e-mail, whether he has requested any analysis from his civil servants in the Treasury of the forecast for the impact on inflation of the current round of QE?

[Mr Osborne]

I think the phone would have been flying through the air rather than ringing, if it had been the last Prime Minister. Of course we have made our own examination of the impact of QE. When I became Chancellor, I set out the procedures I would follow if there were a request from the Monetary Policy Committee. I set it out within weeks of coming into office and I said I would follow exactly the procedures set out by my predecessor—that if there were a request, we would accede to it. I also believe that the MPC has come to the right judgment; its judgment was independent, but I believe it was right.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

The shadow Chancellor would like a pat on the back for keeping us out of the euro. Will the Chancellor tell us how much the euro preparations unit cost under the previous Government?

[Mr Osborne]

I am afraid I do not have the figures to hand, although I will definitely bring them to our debate on Wednesday. What I do know is that when I arrived in the Treasury, the euro preparations unit still existed, and we had to shut it down. Perhaps it was something that the shadow Chancellor did not get round to in all those years at the Treasury when he was running British economic policy during the golden era.

[Kelvin Hopkins (Luton North) (Lab)]

A number of eurozone members will be condemned to permanent deflation, low growth and high unemployment and will require ongoing fiscal handouts unless and until they can leave the euro. Britain is well placed to advise on such a process. Whatever the Chancellor says publicly, will he be offering that advice privately?

[Mr Osborne]

I think that is called a trick question. The hon. Gentleman has been an absolutely consistent and principled opponent of the euro. When I first arrived in the House in 2001, he was making the argument then and he is still making it now, and I respect him for it. As I have said, however, “I told you so” is not an economic policy at the moment. He may well be right about the problems of combining the economies of different countries with totally different structural problems, competitiveness rates and so on, let alone fiscal policies. He is right about all that, but we have to deal with the world as it is, and at a time like this I do not think that advocating the break-up of the euro is in our national interest. We need to make the euro work. Monetary unions can be made to work, but that involves things like fiscal transfers. At last, I think, the eurozone is facing up to that.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I remind my right hon. Friend of what he said on 24 September, when he reminded the world that there were six weeks to save the euro? If we get to 5 November and this crisis is grinding interminably on, will it not be time to start advocating the advice of Lord Lawson, who advocates an orderly break-up of the euro in order to restore growth to European economies and limit the liabilities that are constantly building up the longer this crisis goes on?

[Mr Osborne]

My hon. Friend is right to remind us that the G20 summit in Cannes is the last of a string of international meetings that have involved the G7, ECOFIN, which the Treasury Secretary attended, the International Monetary Fund, G20 Finance Ministers later this week and the European Council next week. It all culminates in the G20 meeting of world leaders at Cannes. That really is the moment when the world needs to be in no doubt that there is a solution to the eurozone problems and that we have the firepower and strength in the banking system to deal with them. If we do not deal with them, the situation will go from bad to even worse. However, as I say, it would not be sensible to advocate to our European colleagues the break-up of the euro. That would greatly diminish what we had to say in these meetings, as it would not be seen as practical—[Interruption.] Well, I also think it would be wrong, as it is not in Britain’s national interest to see the euro break up.

[Graham Stringer (Blackley and Broughton) (Lab)]

The Chancellor of the Exchequer says that he wants to make the euro work, although he also says that it is the epicentre and the cause of instability in the world economy, and he talks about co-ordination of fiscal policy and cash transfers. Is that not just a euphemism for taking central control away from many of the peripheral democracies in Europe, and does not the loss of democracy in countries many of which were recently fascist pose a greater danger than an orderly break-up of the euro?

[Mr Osborne]

The eurozone was also described as the epicentre by the president of the European Central Bank, Jean-Claude Trichet.

The hon. Gentleman is right: we are talking about the exercise of greater control over the finances of other nations by the eurozone authorities, which is one of the reasons we should be very grateful that Britain is not part of those arrangements. The hon. Gentleman mentioned some of the social and political strains that that might lead to. As I have said, those who follow the remorseless logic of monetary union end up with greater fiscal union, which involves all sorts of sovereignty issues for all the countries in the euro; but I must add that I do not recognise the image of the green pastures of a break-up of the euro and what might happen after that event in Greece. I think that political and social tensions could be considerably higher in countries such as Greece if they left the euro, and that such action could bring about the situation to which the hon. Gentleman referred and which none of us wants to see.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great number of Members are still seeking to catch my eye, and I am keen to accommodate them, but progress so far has been at best leisurely. What is required is brevity, a legendary example of which will now be provided by Mr David Tredinnick.

[David Tredinnick (Bosworth) (Con)]

Is not the fundamental problem with the Greeks that even if a package is agreed, there is no way the Government can implement it, because the tax authorities have themselves said that they are not going to do so? A depreciated or, indeed, a new currency for Greece would give my Hinckley constituents and others some chance of buying cheaper Greek holidays and stimulating the economy.

[Mr Osborne]

As I have said, I was always one of those who said that Britain should not join the euro. I worked alongside my right hon. Friend for Richmond (Yorks) (Mr Hague) when he was Leader of the Opposition, and helped him to write many of the speeches that set out that case. Although the shadow Chancellor keeps talking about the important role that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) played in all that, I do not recall lots of passionate speeches about why Britain should not join the euro; but no doubt he was doing his work in private.

Let me say this about the Greek situation. If Greece were to leave the euro, there would be a balance of payments crisis. Greece does not have a primary balance, so there would automatically be a need for a huge international programme. The idea that leaving the euro would get it out of needing international assistance, or out of the clutches of the International Monetary Fund, is just fanciful, because it would need such a programme. There would be a balance of payments crisis and there would probably be runaway inflation as well, which would wipe out any competitiveness gains.

I think that we are depicting a nirvana of Greek exit from the euro which does not exist. Greece is in a very difficult position, and it needs to work through its problems.

[Chris Ruane (Vale of Clwyd) (Lab)]

The private sector is not creating the jobs that the country needs. Will the Chancellor now review his massive cuts in the public sector? Forty-six per cent. of workers in my constituency work in the public sector; what chance have they of employment if there is a double jobs whammy, in both the public and the private sector?

[Mr Osborne]

The hon. Gentleman is the shadow Chancellor’s Parliamentary Private Secretary—[Hon. Members: “No, he’s not.”] Oh, he has been promoted! It is a complete clear-out. Well, well. We are very pleased to see that the shadow Chancellor is still in his place.

Let me draw the hon. Gentleman’s attention to what was said by Digby Jones, one of the members of the last Government. [Interruption.] It is funny how Labour Members disown these people. They booed Tony Blair, and now they are attacking their former Trade Minister. Anyway, he said that the Labour leadership was

“displaying poor statesmanship at a time when the country needs leaders, not players to a union gallery”.

He also said that their policies were

“a kick in the teeth for the only sector that generates wealth, that pays the tax and creates the jobs”

in this country. He added:

“Pro-business? Not!”

It is the businesses that will create the jobs in this country, and being the anti-business party will not get Labour anywhere.

[Margot James (Stourbridge) (Con)]

Does my right hon. Friend recall the howls of derision from Opposition Members when he warned 18 months ago of the possibility of a Greek-style economic catastrophe engulfing this country’s economy? Now that the threat of contagion has reached even Italy, what is his assessment of the dangers to the UK economy of slowing down implementation of the deficit reduction strategy?

[Mr Osborne]

My hon. Friend makes a good point. When we first said, “Look at Greece”, Opposition Members all said, “Well, that couldn’t happen here.” It then extended to Portugal, then Ireland, then Spain, then Italy, and now questions are being raised about the French banks, which France is seeking address, and a Belgian bank has fallen over this weekend. In the end, we can look at what the credit rating agency who gave us the triple A rating said last week. It said that the rating would come under downward pressure if

“the coalition Government’s commitment to fiscal consolidation falters”.

There would be an automatic downgrade if we were to follow the Opposition’s approach. That would lead to higher interest rates, hitting families and leading to more repossessions and more job losses. That is the path to ruin, and we know what it is like because we have been down it before under the shadow Chancellor.

[Helen Goodman (Bishop Auckland) (Lab)]

The Chancellor of the Exchequer has laid great emphasis this afternoon on credit easing, but he has said he cannot tell us how that will operate until the autumn statement, although it will be an alternative to bank finance. When will small and medium-sized enterprises actually get something from this process?

[Mr Osborne]

As I said, we have already extended the loan guarantees that we inherited. We have concluded a deal with all the high street banks—not just the two that were nationalised under our predecessors—to get an increase in SME lending. We want to go further, however, and we will set out the full details in the autumn statement, when the hon. Lady will, no doubt, be present to ask me a question.

[Joseph Johnson (Orpington) (Con)]

Can the Chancellor confirm that Moody’s downgrades of 14 UK banks on Friday reflected the planned and progressive withdrawal of state support for the banking system and a reduction of the likelihood of further taxpayer bail-outs for the UK banks, rather than any weakening of the UK banking system per se?

[Mr Osborne]

Yes, I can confirm that. Moody’s was explicit in saying that that was not a reflection of financial conditions in the UK or the financial strength of the Government. Rather, it was a recognition of the fact that the current Government are trying to move away from the taxpayer either implicitly or explicitly standing behind our largest banks. That is sensible policy, and I hope it commands support on the Opposition Benches.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Returning to the eurozone rather than our domestic concerns, I agree with the Chancellor about the difficulty that would arise if Greece were to leave, or be forced out of, the eurozone. Although he will not tell us his policy, will he give us an estimate in respect of the secure fund for the eurozone? It has been said that €2,000 billion would be required for that fund. How great a contribution from the International Monetary Fund and the World Bank is the Chancellor going to argue for in order to bolster the ability of the eurozone to see itself through the crisis and save Greece from being pushed out?

[Mr Osborne]

We are not arguing for an increase in IMF resources as part of the Greek programme, but I did make reference to the broader resourcing of the IMF. That is increasingly an issue because of its flexible credit lines to Poland and Mexico—neither country is in the eurozone, of course. The truth is that after taking into account the IMF’s existing commitments and the buffers it needs to maintain in order to operate as an institution, it does not have a huge amount of resources—although by most people’s standards it does have a huge amount, of course. Its resources amount to about €400 billion, but that is not as large as some people imagine. There is therefore a debate about whether to try to increase the IMF’s resources, but we are not discussing a possible increase of resources in the IMF programme to Greece.

[Sajid Javid (Bromsgrove) (Con)]

During the 2008 crisis, it turned out that credit default swap spreads were a better indicator of the financial health of a borrower than credit ratings. Over the last 18 months our credit default swap spread has fallen dramatically, and in the last few weeks it has, for the first time, been lower than that of France and Germany. Does the Chancellor have a reason why that might have happened?

[Mr Osborne]

I think it is a reflection of the fact that people around the world believe that we have “a credible plan”—those were the words used by the Governor of the Bank of England last week—to repay our debts. Let us remember that we have the largest budget deficit of any forecast for the G20. That is the situation we inherited and we are trying to bring that deficit down. Other countries with much lower deficits have got into trouble because they have not had credible plans, presented by a united Government and implemented with a good majority in their Parliament. We have those things and we are going to keep them.

[Nia Griffith (Llanelli) (Lab)]

Many small businesses and manufacturers across the country are still very worried. They have seen growth stall under the Chancellor’s policies and now they see the crisis in the eurozone. Can he explain, simply and clearly, how his policies are going to help stimulate growth and help these companies have the growth that they need, particularly given that many of them are going to lose a lot of business when public procurement contracts come to an end?

[Mr Osborne]

The hon. Lady says that public procurement projects are going to come to an end. The British Government are going to be spending £3 trillion over the next four years, so let us make sure that that money is well spent and that good British businesses, small and large, are able to avail themselves of the procurement that will take place under a £3 trillion Government budget. But of course I do not underestimate the difficulty of the situation the world faces at the moment and the situation that Britain faces because of its exposure to the world and to the problems that it itself created in recent years. I understand that, but the whole world is experiencing slow growth at the moment. We have actually grown more this calendar year than the United States and we are currently forecast to grow more next year than France and Germany. That is just a reflection of the fact that our problems are being experienced by other countries but our solutions have kept us out of the financial danger zone, which the shadow Chancellor asked me about earlier. They have meant that our credit default swap rates, our interest rates and market interest rates, our credit rating and so on have been protected at a time when many other European countries have experienced real market volatility.

[Mr Marcus Jones (Nuneaton) (Con)]

Following the problems in the eurozone, there seems to have been a suggestion in some quarters that an EU-wide financial transaction tax should be explored. Will the Chancellor categorically confirm to this House that he will strongly oppose any such move?

[Mr Osborne]

I am not against a financial transaction tax in principle; after all, Britain already has one—the stamp duty on shares. What I am against is a European financial transaction tax that operates only on the European continent and is imposed in Europe. If we can get global agreement, with the United States, China and others, on a world financial transaction tax, all well and good, although I do not think that is terribly likely. If we do not have that, all this business currently conducted in the UK would immediately depart to the United States. We saw the same thing happen when Sweden imposed a financial transaction tax—all the business departed to London. I am therefore against a European financial transaction tax, although, as I say, if we can get global agreement, all well and good.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

It is deeply uncomfortable to hear Ministers say from the Dispatch Box that they give advice in private but they do not share it with the House. I wish to give the Chancellor another chance by asking him whether he agrees that as Greece is unable to regain its competitiveness—because it cannot devalue—he is therefore in favour of permanent bail-outs. Another term for those is “permanent gifts”, because that country cannot regain competitiveness.

[Mr Osborne]

As the hon. Lady knows, these are very market-sensitive issues and I have to be careful, as the UK’s Finance Minister, in what I say about the Greek situation. However, I was pretty clear in my statement in saying that the debt sustainability of Greece had to add up. That is the issue that has to be confronted with Greece in the coming weeks.

[Several hon. Members]

rose—

[Mr Speaker]

Order. At one point I thought that the hon. Member for Reading East (Mr Wilson) had toddled out of the Chamber, but I am delighted that he is back in his place and we want to hear him.

[Mr Rob Wilson (Reading East) (Con)]

My right hon. Friend was right to be concerned in his statement about money finding its way to small and start-up businesses. May I urge him to consider streamlining the current, overly complex enterprise investment scheme and add tax relief to those business angel investors who are making their savings available to small businesses in this country? Such an approach would give a much-needed boost to small business in this country.

[Mr Osborne]

My hon. Friend will be pleased to know that we have just announced reforms to the EIS to make it more generous and, we hope, simpler to claim.

[Mark Durkan (Foyle) (SDLP)]

The Chancellor has repeated that the FSA confirmed that UK banks are better capitalised and more liquid than many of their European counterparts. Is that assurance enough for him and how assured is he about the level of UK banks’ exposure to sovereign debt in the eurozone?

[Mr Osborne]

As the hon. Gentleman will understand, that has been kept under close surveillance at the Treasury—certainly for as long as I have been Chancellor, and no doubt before. We are well aware of the exposure of UK banks to the eurozone peripherals. However, we have satisfied ourselves that even with those exposures—as I said, the FSA has made much of the information public—banks such as RBS are well capitalised and liquid and do not have the kinds of problems that some banks on the continent have.

[Claire Perry (Devizes) (Con)]

It is my belief that the fiscal activism of this Government has created headroom for the next round of quantitative easing. Will the Chancellor tell us what he thinks would have happened if we had carried on spending under the plans of the previous Government and whether there would have been any room at all for a further round of QE?

[Mr Osborne]

My hon. Friend is right to call it fiscal activism, because one has to step in and take difficult decisions, which the Opposition have ducked, to get the deficit under control, to have a credible plan and to allow monetary policy greater freedom of manoeuvre. We are monetary activists while being fiscally responsible and that is the right approach. The alternative advocated by the Opposition is a big increase in interest rates—[Interruption.] Let me let hon. Members into a little secret. The Chancellor does not set the interest rates. They are set not only by the Bank of England but by the markets and if we abandoned our plan and suffered the credit downgrade that the shadow Chancellor is, in effect, advocating, interest rates would go up, families would face higher mortgage bills, people would lose their homes, businesses would go bust and jobs would be lost. That is not a path we will go down.

[Derek Twigg (Halton) (Lab)]

May I refer the Chancellor to Hansard from 12 September, column 770? He might recall that I raised with him the serious problems that small businesses are having in gaining access to financial support, based on talking to businesses in my constituency. Will he tell me what changed in the three weeks between 12 September and his speech at the Tory party conference? If the policy he announced then turns out to be a practical source of extra help, I will welcome it, but he made no mention of it on 12 September and seemed to suggest that enough was being done anyway.

[Mr Osborne]

I always listen closely to my Cheshire colleagues.

[Neil Carmichael (Stroud) (Con)]

Does my right hon. Friend take comfort in the result of the German Parliament’s vote at the end of last month, when it effectively created a fund with conditions? Does he see that as a generation of political support for the robust action that the Prime Minister has been talking about over the past few days?

[Mr Osborne]

The vote in the Bundestag was very encouraging. Of course, it is easier for us in the House of Commons to say that the Germans must act and that we must create this fund, but we must understand that German taxpayers are being asked an awful lot—although I would say that that was one of the consequences of a single currency. Nevertheless, it is reassuring that the vote in the Bundestag was passed not merely with a straightforward majority but with the so-called Chancellor’s majority.

[Andrew Selous (South West Bedfordshire) (Con)]

I very much welcome the action my right hon. Friend has announced about quantitative easing and credit easing. Will he say whether he thinks it would be helpful for the UK economy if our European partners were to adopt the same policy, given that 40% of our exports go to Europe?

[Mr Osborne]

I think I had better leave their monetary policy to the European Central Bank and not offer them such advice.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I am going to ask for very short questions as we will move on at 5.45 pm, irrespective of whether Members are still standing.

[Mr Denis MacShane (Rotherham) (Lab)]

For five centuries, British policy has been to oppose any hegemon on Europe, whether a single religion, a single state, a single economic model or a single ideology. Why is the Chancellor so keen on creating a fiscal and monetary union that would dictate terms of commerce, trade and banking rules to this country?

[Mr Osborne]

That was quite a sweep of history. Of course, Britain has always sought to maintain the balance of power in Europe and one could argue that the enlargement policy was quite a successful extension of that policy, but the decision has already been taken with the monetary union and we have to make it work because we would be directly impacted by its failure.

[Mr Peter Bone (Wellingborough) (Con)]

Is not the euro like the parrot in the Monty Python sketch—dead, extinguished, without life—and is not the German Chancellor like the shopkeeper in saying that it is actually healthy and that we really must buy it? Should not the Chancellor be like John Cleese and say, “This is dead and we should bury it”?

[Mr Osborne]

I think the parrot was a Norwegian blue, and Norway is not in the euro.

[Chris Heaton-Harris (Daventry) (Con)]

Although the Chancellor is completely focused on the eurozone crisis, I am sure that it will not have slipped his notice that meanwhile the European Commission and the European Parliament are asking for more regulation and more money. Could he please instruct his officials to ensure that, while negotiations on these very important matters regarding the eurozone are going on, we kill some of the bad ideas that are flowing from elsewhere in Europe?

[Mr Osborne]

We are also arguing strongly for a real freeze in the budget and—I alluded to this earlier—a change in the direction of European policy making so that we do not price this entire continent, including ourselves, out of the world market.

[Mr Sam Gyimah (East Surrey) (Con)]

Does the Chancellor agree that, in the short term, quantitative easing could produce a weaker pound, and that within clearly defined limits that could help to boost exports and therefore drive growth?

[Mr Osborne]

I have made it a policy not to comment on the value of sterling and I do not intend to break that policy right now.

[Penny Mordaunt (Portsmouth North) (Con)]

Many of my constituents do not want the UK to be part of any new, permanent EU bail-out mechanism. Will the Chancellor confirm that under this Government we will not be part of such a mechanism?

[Mr Osborne]

I certainly can confirm that, and it is down to the hard negotiating effort of the Prime Minister at the European Council where it was agreed to wind down the temporary EU27 fund and that the permanent bail-out fund would not include Britain.

[Christopher Pincher (Tamworth) (Con)]

With instability in the eurozone and fever in the markets, any Government who contemplated changing three of their five Treasury Ministers would be sending a very dangerous signal. Does my right hon. Friend have any advice for any wannabe political leaders when they choose to sack half their Treasury Bench?

[Mr Osborne]

As far as I can tell, they got rid of all the people who wanted the shadow Chancellor to be the leader of the Labour party and the leader has put in place all the people who wanted him to win. That tactic was used by the last two leaders of the Labour party, as well, at the Treasury.

[Andrew Stephenson (Pendle) (Con)]

In addition to the structural reforms and other measures that the Chancellor outlined in his statement, what is he doing to ensure that the eurozone follows the lead he is showing in the UK by cutting regulations to stimulate business growth?

[Mr Osborne]

There is greater recognition in other European member states that we need to make the European continent more competitive, and the pamphlet that we sponsored on making Europe more competitive, which the Prime Minister presented at the European Council, was endorsed by a number of other member states.

[Jake Berry (Rossendale and Darwen) (Con)]

International media, particularly in the USA, are beginning to say that it is a matter of when, not if, Greece defaults on her sovereign debt and leaves the euro. If “I told you so” is not the basis of a good economic policy, what credible and mature plans do we have to deal with the Greek default?

[Mr Osborne]

Of course, we make contingencies for all possible outcomes—and people should not take that either way because we plan for all situations. I do not want to comment specifically on the issue that my hon. Friend raises about Greece, but I have made it very clear that the situation in Greece needs to be resolved. It needs to come to a decision and stick to it, and it needs to get the debt dynamics in that country right.

[Richard Graham (Gloucester) (Con)]

Given the close correlation between my right hon. Friend’s disciplined approach to spending, the ratings of our sovereign debt and the low interest rates from which our constituents benefit, has the Treasury been able to calculate the likely impact on our interest rates of the shadow Chancellor’s higher spending policies so that we can calculate the true cost on the average family’s mortgage of the widely discredited plan B that he advocates?

[Mr Osborne]

We have not done that calculation, but my hon. Friend has given me a very good idea for Wednesday’s debate. We know, because we have all experienced it, what Labour policies lead to: a completely uncontrollable budget deficit; a negative outlook for our nation’s credit rating; and interest rates that were tracking Spain’s. We have been there under the Labour party, and it is remarkable that when it cleared out the shadow Treasury team, it did not clear out the man most responsible in this Parliament for getting Britain into this economic mess.

[Andrew Bridgen (North West Leicestershire) (Con)]

In his statement, the Chancellor quoted the sage remarks of the former Minister, Lord Jones. Perhaps it is the Chancellor’s modesty that prevented him from quoting these remarks that Lord Jones made about the fact that we are sticking with plan A:

“The markets of the world will say, ‘well done George’. That will mean that interest rates are low”,

that we keep our triple A rating, and that we do not become Greece.

[Mr Osborne]

We should certainly listen to the sage words of the former Labour Trade Minister.

[Charlie Elphicke (Dover) (Con)]

Deficit reduction has kept us ahead of the curve, so our triple A rating has been maintained and interest rates are lower than they otherwise would be. Is it the same with quantitative easing, that it will keep us ahead of the curve if the eurozone does not make the right decisions in the next three or four weeks?

[Mr Osborne]

As I said, it was an independent decision of the Bank of England. In the explanation that the Governor gave of why the Bank took the decision, he explicitly referred to the situation regarding the euro. I agree with that decision. Work done by the Bank of England suggests that the method can work.

[Mr David Nuttall (Bury North) (Con)]

Following the bail-out of Dexia, does my right hon. Friend consider that there is an increased risk of the credit rating of other eurozone countries, particularly Belgium, being downgraded?

[Mr Osborne]

Of course, a number of eurozone countries have seen their credit rating suffer, and have seen it downgraded. That has impacted on the cost of borrowing for their Government and their citizens. That is one of the reasons why it is so important that we maintain a credible fiscal policy—something to which the Governor of the Bank alluded last week, and to which all business organisations have alluded. As far as I can see, only the shadow Chancellor now opposes that.

[Mr Deputy Speaker (Mr Nigel Evans)]

I thank the House for its co-operation. We managed to get everyone in, within time.

New Schools

Monday 10th October 2011 Commons Chamber

17:41

[The Secretary of State for Education (Michael Gove)]

Mr Deputy Speaker, with your permission, I would like to make a statement on the next steps in our school reform programme. Just a few weeks ago, we opened the first 24 free schools—new comprehensive schools free from central and local government bureaucracy, designed to tackle educational inequality, widen choice and raise standards. Those schools have provided great head teachers with a new opportunity to extend educational opportunity, and they have given parents who had been denied a choice the chance to secure educational excellence for their children.

In the most disadvantaged areas of Enfield and Bradford, outstanding state school teachers have opened new schools for children who have been denied the good school places that their parents wanted. In Norwich, the new free school is open from 8 am to 6 pm, 51 weeks a year. In Haringey, Birmingham and Leicester, inclusive schools with a religious ethos, whether Jewish, Sikh or Hindu, now provide parents with more choice. In Hammersmith and north Westminster, outstanding academy sponsors are extending to primary schools the superb education that they have already been providing for secondary school children.

Across the country, new schools, by increasing choice, are forcing existing schools to raise their game. By embodying the principle that every child should have access to a great education, free schools are helping to advance social mobility and make opportunity more equal. It is because we want to make sure that more children benefit that we are today accelerating the pace of reform. The 24 free schools set up in the past year were established in record time. It took the Governments of Margaret Thatcher and John Major five years to establish 15 city technology colleges, and it took Tony Blair eight years from winning office before the first 17 academies were established. The speed with which the first 24 free schools have been set up is astounding, and credit is due to the teachers and parents behind them, and to the superb team of officials at the Department for Education who oversaw the reform.

The establishment of free schools is just one of a series of reforms that we have taken forward explicitly to raise standards in the state sector. We have also ensured that more than 1,000 schools have been able to convert to academy status, each enjoying new freedoms, and each using those freedoms to help other schools. When Tony Blair was Prime Minister, he argued that having 400 academies would be transformational; we now have three times that number.

We are using the academy programme to transform underperforming schools. This year, more underperforming schools than ever are becoming sponsored academies. Outstanding schools that enjoy academy status are increasingly sponsoring underperforming schools. By extending academy freedoms to more great schools, the capacity is created to turn round more disadvantaged schools. We have explicitly targeted those secondaries where fewer than 35% of children get five good GCSEs and those primaries where fewer than 60% of children get to the proper level in English and mathematics. We are targeting those local authorities with the worst concentrations of poor schools, and we will lift the floor standard below which no secondary school should fall, so that schools know that by the end of this Parliament at least half their students must get five good GCSEs. Under this Government, there will be no excuses for underperformance.

Sadly, one area where England has underperformed for years is vocational education, but under our reforms and the leadership of my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, that is being addressed. I was pleased that, this weekend, England came fifth in the WorldSkills championships, outstripping nations such as Germany and, indeed, France and proving that, when it comes to vocational skills, our young people are world beaters. [Interruption.] I am always happy to acknowledge that our United Kingdom is stronger for all its constituent parts.

We are building on that success, because there is a new model of academy whose development has the potential to be particularly transformational—the university technical college. Thanks to the leadership shown by Lords Adonis and Baker, and the vision of Sir Anthony Bamford of JCB, the first university technical college opened its doors in September last year. Educating young people from the age of 14 to 19, with a curriculum oriented towards practical and technical skills, with support from industry and sponsorship from a university, these schools have the potential to transform vocational education in this country immeasurably for the better. They combine a dedication to academic rigour—with the JCB UTC delivering GCSEs in English, maths, the sciences and modern languages—with the adult disciplines of the workplace. Longer school days and longer school terms contribute to a culture of hard work and high aspirations.

The JCB UTC was joined by another in Walsall this September, and three more are in the pipeline. If we are to ensure that the benefits of UTCs, academies and free schools reach many more children we have to up the pace of reform. That is why I am delighted to be able to announce today that my Department has given the go-ahead to 13 new UTCs in Bristol, Buckinghamshire, Burnley, Bedfordshire, Daventry, Liverpool, Newcastle, Nottingham, Plymouth, Sheffield, Southwark, Wigan and at Silverstone race track. This Baker’s dozen of UTCs will specialise in skills from engineering to life sciences, and I am convinced they have the potential to change the lives of thousands for the better.

In addition, I am delighted that today we can more than double the number of free schools approved to go through to the next stage of opening by confirming that 55 new applications have been accepted, including the first fully bilingual state-funded schools—Brighton bilingual primary school and Europa school in Oxfordshire. They include schools set up by existing strong educational providers such as the Dixons academy and Cuckoo Hall academy. They include the London Academy of Excellence—a school for sixth-formers set up by Brighton college with the aim of getting talented pupils from disadvantaged backgrounds into our leading universities. They also include a school led by Peter Hyman, a former Downing Street policy adviser turned deputy head who wants to create new opportunities for pupils in east London. They also include Atherton free school, which has been set up by a community group in the constituency of the right hon. Member for Leigh (Andy Burnham), and they join eight free schools already in the pipeline for opening in 2012.

Altogether, the number of wholly new schools, UTCs and free schools that have been approved to go ahead from 2012 is 79. Once they are open, more than 100 new schools will have been established by the coalition Government to help to raise standards for all. More than 70% of the free schools given the go-ahead today are in the 50% most deprived areas of the country. More than 80% of the schools are in areas where population growth means that we need more good school places. Every single one of those schools was born out of the passion, the idealism and the commitment to excellence of visionary men and women.

The proposer of one of the new schools we approve today, Mr Peter Hyman, explained in The Guardian why he was opening a free school—and his feelings are shared by every promoter of free schools and UTCs:

“There is no cause greater in our country today, no mission more important, than giving all children an education that inspires them to do great things.”

I could not agree more, which is why I commend this statement to the House.

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

I welcome the Secretary of State’s statement today and thank him for providing a copy of it in advance.

At the Conservative party conference last week, the Secretary of State said:

“We’re fortunate in this country that we have so many good schools. We’re fortunate that we have so many great teachers.”

I agree with that. May I thank him on behalf of the Opposition for his fitting tribute to Labour’s education record?

Like the Secretary of State, I am pleased to echo the words of Peter Hyman in The Guardian, and I congratulate the university technical colleges and free schools that have secured approval today. UTCs are an exciting innovation modelled, as he said, on the highly successful JCB academy in Staffordshire established under the previous Government. However, there is a real risk that the success of the UTCs will be undermined at birth by the stringent requirements of the English baccalaureate. There is a basic contradiction at the heart of Government policy. The rhetoric is often about freedom and autonomy, but the reality is that the Government want to dictate the details of the school curriculum from the Department.

The Government’s emphasis on the central importance of English and maths is absolutely right and I support them in that, but are we really saying to successful schools and colleges such as the JCB academy that they will be punished because they offer engineering rather than the full range of E-bac subjects? In the summer of 2011 this academy, the first UTC and the model for what the Secretary of State is announcing today, scored 0% on the E-bac. How can that make sense? Surely if we are going to increase the status and quality of vocational education, we need a modern baccalaureate, a policy championed by my predecessor and by Lord Baker?

As we showed in government, Labour supports experimentation and innovation in how we set up new schools. Our academies programme proved that good schools can indeed be delivered. The question for the Government’s free schools policy is will the new schools established be good ones. Will they extend opportunities, particularly in deprived areas? Will they drive up school standards in their localities? Will they be based on a fair admissions policy? Most important of all, will they help to close the attainment gap between children from rich and poor backgrounds? That is the basis on which we will scrutinise and challenge the Government’s policy. The Secretary of State’s belief in the programme is ideological. Our scrutiny will be evidence-based.

However, the bigger challenge is the hundreds of schools that need new capital investment and that are not in today’s announcement, including in areas with a severe shortage of school places. Is not the central problem here that the Secretary of State got such a terrible spending review settlement for schools capital from the Treasury a year ago—a cut of 60% in schools capital, compared with a Government average cut of 29%? His failure to persuade the Treasury to give education the settlement given to other Departments means that thousands of children will continue to go to schools with out-of-date facilities, leaking roofs and asbestos.

Today we have an announcement that focuses on just 68 new schools. We wish those schools well, but there are 24,000 schools in England. The Opposition will support reform, investment and innovation that benefit all schools so that we can improve standards for children in all our communities.

[Michael Gove]

May I thank the hon. Gentleman for his generous words and welcome him back to the Front Bench? He was a superb Minister in the Department for Education. Like Lord Adonis and the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), he was a reformist in government and I am more than happy to underline my appreciation for the work that he did. He is the third shadow Education Secretary whom I have faced across the Dispatch Box. His two predecessors indulged in raucous opportunistic assaults on our reform programme and were promoted as a consequence. I realise that there is now a battle between ambition and principle in the hon. Gentleman’s breast. I know that he will choose principle, as he always has done throughout his political career.

I am grateful to the hon. Gentleman for the support that he has given to the university technical colleges. They are emphatically a cross-party achievement. Lord Adonis played a part. I think others, including the right hon. Member for Morley and Outwood (Ed Balls), acted as fairy godfathers to the project. I am delighted that UTCs have their support.

It is important to recognise that the English baccalaureate is there to ensure that students pursue the sort of subjects that will get them into universities. The great advantage of university technical colleges is that they also have that link with higher education institutions that help to raise aspiration for all. There is no single tool that will raise aspiration in all our communities. We have to use whatever tools are to hand. I believe that the English baccalaureate, as so many head teachers are demonstrating, helps alongside high quality vocational education, to raise aspirations and increase the number of students going into higher education.

The hon. Gentleman said that when he was looking at free schools, he wanted to apply a series of tests. The tests that he asked me to apply are: will they extend opportunity, will they drive up standards, will they have a fair admissions policy and will they close the attainment gap? Those are four sensible tests, and I would add a fifth—can they ensure that we have a low-cost way of adding capacity to our school system so that exactly the solution to the problem that he alluded to, the need for good school places, was found at the lowest possible cost?

The hon. Gentleman asked me about capital and drew attention to the difficulties that we have with capital in the Department for Education. These difficulties, I am afraid, are a consequence of economic decisions that were taken while he was out of the House by his successors in the Labour Government, and they landed us with a poisoned economic legacy. We are doing our very best to deal with it, and one of the things that we can do is ensure that we get more schools more cheaply. That is why I am so delighted that as well as the additional sums that have been made available for school repair, and as well as the additional sums that we are making available for new schools, the free schools programme has seen schools being delivered at a unit cost lower than was the case under the Labour Government’s school building programme.

Finally, the hon. Gentleman asked me whether I regretted not getting the same settlement for the Department for Education as other Government Departments. No, I do not regret it. I am delighted that we secured the same level of funding in cash terms for education as the previous Government had secured. I am delighted that we had the best revenue deal of any domestic Department, apart from the Department of Health. I am overjoyed that, thanks to the support of our coalition partners, there is £2.5 billion of additional money going in the pupil premium to the very poorest schools. It is additional money being spent in a progressive cause, and it is deliverable only thanks to the leadership shown by two parties working together in the national interest.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

The Secretary of State is bringing choice and diversity to our education system while seeing off his shadow at the same time.

For too many 14-year-olds school is an ordeal from which they learn and benefit not at all. I welcome the support for more UTCs, but for those who do not have the choice of a UTC, what steps will the Secretary of State take to ensure that young 14-year-olds can go to college instead of school if they wish?

[Michael Gove]

My hon. Friend makes a very good point, which is that we need to think hard about the paths that those from the age of 14 will follow. One of the things that I believe we can do is ensure that high quality further education colleges make available their resources, whether through sponsoring underperforming schools or allowing lecturers or others from FE colleges to operate in schools. Following on from the Wolf report, we have already changed the law to allow that to happen. But there is more that can be done to integrate the great work that FE colleges and schools do.

[Mr Frank Field (Birkenhead) (Lab)]

May I challenge the slight complacency that I noticed in the Secretary of State’s speech when he referred to UTCs? Is it not true that if we are going to do anything about the competitive position of this country and if we are going to win new markets and offer rising living standards in this country, we do not want a Secretary of State coming to the House offering 13 UTCs? We want a Secretary of State coming and offering 113 such bodies. When does he expect to announce the next round of UTCs? When he does, I hope he will include Birkenhead in the list.

[Michael Gove]

There are few parts of the country that need schools of quality more than the areas around Merseyside. In Birkenhead, the young people who want a better future are lucky to have such a great champion. We will be bringing forward more UTC proposals, but sadly our capacity to invest in schools of that quality is constrained inevitably by the poisoned economic legacy that we were left.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that UTCs are an essential instrument of social justice, that they transform how we look at vocational education and that they provide young people with a conveyer belt to apprenticeships? Will he also confirm that strong bids, such as that from Harlow college and Anglia Ruskin, will be considered in the next round and that there will definitely be funding for the next phase of UTCs?

[Michael Gove]

Absolutely. My hon. Friend, like the right hon. Member for Birkenhead (Mr Field), wants me to go further and faster with reform. If only I could. I can confirm, however, that strong bids, such as those from Birkenhead and Harlow, which have not made the cut this time but which benefit from having very effective constituency advocates and strong backing from an outstanding college or a great university, are bids that we would like to be able to support in the future. We shall continue to work with bidders to try to ensure that they can be agreed.

[Ian Mearns (Gateshead) (Lab)]

On a recent visit to the Department by the Education Select Committee, officials said that they were surprised by the rate of applications for academy status. Undoubtedly many schools will be applying for the right reasons—because they want to unleash the educational potential among their teaching staff and youngsters. However, others will be drawn by the financial carrot—capital—or by the fear of being left behind if they do not apply for that status. Is the Secretary of State certain that he has the resources to fund this package appropriately without leaving other schools behind?

[Michael Gove]

Absolutely. That is a very good point. The hon. Gentleman, in local government and the House, has always tried to ensure that we fund schools equitably. We have always sought to ensure that maintained schools and academies are funded fairly. The word “carrot” is sometimes used to describe the incentives inherent in academy status, but I want to make it clear that if a school becomes an academy, it does not receive any additional money. It is just that it can spend money on it pupils’ priorities—money that had hitherto been spent by others on their behalf.

[Dan Rogerson (North Cornwall) (LD)]

I welcome the Secretary of State’s confirmation that the programme will focus on providing capacity where it is needed. However, when considering applications, will he also bear in mind the need for new providers to work alongside existing providers to complement provision?

[Michael Gove]

It is right that we ensure, when new schools are established, that they add to the great schools already there—whether through a different type of pedagogy or capacity. I am grateful to the hon. Member for Liverpool, West Derby (Stephen Twigg) for underlining the point that I made at the Conservative party conference—the fact that we need new schools and need to reform should not take away for a moment from the significant achievements that have been made over the past several years by schools and teachers doing a great job in the maintained sector.

[Lilian Greenwood (Nottingham South) (Lab)]

How will the Secretary of State ensure that my constituents are fully involved in, and consulted on, plans for the new UTC in our city?

[Michael Gove]

Having visited Nottingham twice over the past six weeks, I am under no illusions about the passion that Nottingham’s MPs and its people have for improving educational performance. I shall do everything possible to ensure that the local community is involved in plans that I think are exciting and will extend opportunities to a particularly deprived constituency.

[Damian Hinds (East Hampshire) (Con)]

May I congratulate my right hon. Friend on the pace of his reforms and his constant focus on narrowing the gap for the underprivileged? Does he agree that the benefit of free schools can be felt not just where they appear but much wider afield? The fact that such a school could be set up helps to raise the bar. They can act as beacons of excellence and innovation.

[Michael Gove]

My hon. Friend makes my own case better than I could ever make it myself. It is true. We have seen with the academy programme that excellent schools prompt the question, “Why can’t all schools be like that?” As more schools adopt longer school days, longer terms and more personalised learning, parents increasingly ask, “Why can’t more schools offer what these schools are offering?” It is a virtuous circle that raises aspiration and attainment for all.

[John Mann (Bassetlaw) (Lab)]

Seventeen scheduled new academies, including three in my constituency, did not go ahead this September because the Secretary of State cocked up the primary legislation on academies and private finance initiatives. By way of an apology, will he guarantee to underwrite all the additional legal costs that these schools face because he messed up the legislation?

[Michael Gove]

As ever, I am grateful for the constructive tone taken by the hon. Gentleman. I have long admired his bipartisanship. I should point out that those PFI contracts were signed by the previous Government. However, I shall refrain from criticising the Ministers responsible for signing them, and instead seek to work with him to ensure that children in that particularly important part of Nottinghamshire receive the support that they deserve.

[Graham Evans (Weaver Vale) (Con)]

I pay tribute to my right hon. Friend and the parents of Sandymoor on the announcement of the new free school there. The Sandymoor free school will provide a rigorous science-based education to all children, from whatever background, which will produce the engineers, scientists and entrepreneurs that this country needs to pay its way in the world.

[Michael Gove]

I am grateful for my hon. Friend’s support. I am convinced that the emphasis on science in so many of the free school applications is exactly what a 21st century education system needs.

[Glenda Jackson (Hampstead and Kilburn) (Lab)]

In a typically self-satisfied statement, the Secretary of State referred to the principle that every child should have access to a great education. The issue in my constituency is a desperate shortage of school places now, not only in junior schools, but in secondary schools. What does he intend to do to ensure that those children benefit from what he regards as a basic principle?

[Michael Gove]

I am delighted that one of the first free schools was opened in the hon. Lady’s constituency. I would be delighted to visit it with her. I am also delighted that organisations such as University college London have sought to extend academy provision in Camden. Sadly some small-r-reactionary and small-c-conservative elements in the local Labour party have not advanced that cause. I cannot imagine that she would make common cause with those who put ideology above children’s futures.

[Neil Carmichael (Stroud) (Con)]

I welcome the Secretary of State’s decision today. I also think that he is absolutely right to quote Mr Hyman’s comments about inspiring young people to do great things. However, will he ensure that those great things include contributing to manufacturing and engineering in this country?

[Michael Gove]

My hon. Friend is absolutely right. We all know that in contributing to economic growth, we cannot at this stage anticipate all the skills that the jobs and companies of the future will require, but we know that a rigorous training in mathematic and scientific disciplines will help. That is the emphasis of so many of the schools being set up today.

[Nic Dakin (Scunthorpe) (Lab)]

Will the Secretary of State clarify whether the free schools and UTCs will be funded on projected student numbers rather than actual student numbers like other schools?

[Michael Gove]

We will ensure that in all free schools and UTCs, the existing funding mechanism for the first 24 free schools and existing UTCs carries on.

[Angie Bray (Ealing Central and Acton) (Con)]

Will the Secretary of State confirm that Ealing is on the list to get a new free school? If so, does he not agree that this will not only help to alleviate pressure on school places in the borough but massively widen the choice for parents of schools to which they might want to send their children?

[Michael Gove]

I am grateful to be able to confirm that there will be a school that should take students, I hope, from both the constituency of the hon. Member for Ealing North (Stephen Pound) and my hon. Friend’s constituency. It is the extension of an already great offer provided by an outstanding head teacher in the state sector. I am delighted that an area of significant population growth is getting the additional capacity that it needs from an outstanding head teacher.

[Fiona Mactaggart (Slough) (Lab)]

I think that I was one of the few MPs who attended the skills olympiad. I was impressed by what British young people could achieve, but I am concerned that the English baccalaureate will reduce the practical skills that young people can learn. Will the Secretary of State think again, as I have asked him frequently to do, about including at least one subject in which young people are making, creating, doing and that will count towards the basic five GCSEs that he expects schools to provide?

[Michael Gove]

I underline to the hon. Lady that the principal accountability measure for schools is five GCSEs, including English and mathematics. Among the other three GCSEs or equivalents, there can be a number of applied, technical and vocational areas. The English baccalaureate is a useful accountability measure and raises aspirations, but it is not the be-all and end-all and it has never been the opinion of the Government that it should be. We recognise achievement in all its forms, and it is incumbent on everyone, on both sides of the House, to celebrate the achievement of those who succeed vocationally, as she did in the first half of her question.

[Chris Heaton-Harris (Daventry) (Con)]

My right hon. Friend will not be surprised to hear that I am delighted that the UTC for new technologies has been approved for Daventry. It is vital for raising aspirations among young people in my constituency and the surrounding area. Part of the vision for the Daventry UTC is to use local procurement solutions for the design-and-build phase. It is envisaged that the lead sponsor, Moulton college, and its partners will be looking for local architects and contractors to assist with the design and build. Will there be flexibility in the procurement phase for UTCs to allow for this, as alluded to by the Chancellor in his previous statement?

[Michael Gove]

I always defer to the Chancellor.

[Robert Flello (Stoke-on-Trent South) (Lab)]

The Secretary of State referred to faith schools in his statement. He might not be aware that there are a number of faith schools across the UK, including a couple in my city of Stoke-on-Trent, that, because they are voluntary aided, are having to pay VAT on the Building Schools for the Future money that is being made available to them. Will he meet me to discuss this issue in greater detail, because it is sapping huge amounts of money that should be going to children but is actually going to the Treasury?

[Michael Gove]

I know that there are some excellent faith schools in Stoke-on-Trent, including an outstanding Roman Catholic grammar school. I would be more than happy for either I or one of my colleagues to talk to the hon. Gentleman.

[Jessica Lee (Erewash) (Con)]

In Erewash, we have seen a number of academy schools established over the past year, including two conversions by the Ormiston trust, which stepped forward and opened those two schools during this academic year. The pace of change has already been mentioned, but for me it is the positive response from head teachers and schools coming forward and taking on this programme with gusto and enthusiasm that really shows that the drive for autonomy and excellence must go on.

[Michael Gove]

I am really grateful to my hon. Friend, not least for the support she gave head teachers early in the life of the coalition Government to overcome some of the entrenched opposition to academy status. She does a superb job as a constituency Member and I know that future generations of children will thank her for it.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

The Secretary of State will be aware that, as well as new schools, we will have a new chief inspector of schools, Sir Michael Wilshaw, whom I first met when he was head of St Bonaventure’s school in Newham, where he ran an inner-city boys school that was 95% African and Afro-Caribbean and got outstanding results. Does the Secretary of State agree that Sir Michael will bring to the inspectorate the same inspired leadership and emphasis on standards that he had at St Bonaventure’s school and at Mossbourne academy?

[Michael Gove]

Obviously, Her Majesty has yet to confirm her decision on who her chief inspector of schools will be. However, with regard to what the hon. Lady has said, I could not have put it better myself.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend has shown his concern for the relative disadvantage often experienced by service children by including them in the pupil premium. One of the main problems is that those children, because they move around a great deal, are sometimes particularly disadvantaged when they apply to the best schools. How will they be helped with free schools and their admissions policies?

[Michael Gove]

We hope that all maintained schools will abide by a new admissions code, which is explicitly designed to make it easier for schools to manage in-year admissions and for service children to secure admission to the school of their parents’ choice.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Of the six secondary schools in my constituency, three have been built new and three rebuilt, thanks to the Labour Government, so I am pleased that the Secretary of State and the Government have agreed to a proposed new 800-place academy near Victoria park in my constituency. It has the benefit of being sponsored by Mossbourne academy, which has a strong track record. In his haste, how will he ensure that other new academies meet the same high standards that all Members across the House would like to see?

[Michael Gove]

I am very grateful to the hon. Lady. I know she has returned to the Back Benches, so may I say on a personal note that I thought she was a distinguished member of the shadow Cabinet and that she has fought amazingly hard for her constituency? Her question absolutely gets to the nub of it. I am delighted that we are supporting the new Victoria Park academy and that it is linked with Mossbourne academy. I will continue to work with the Learning Trust in Hackney and will ask the new chief inspector, whoever he or she may be, to keep a special eye on that borough. I am sure that he or she, whoever they may be, will join me and ensure that it is at the top of their agenda.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Will my right hon. Friend assure me that spending on free schools will not endanger the funding that is needed to replace those schools that were left out of the previous Government’s programme and are in a desperate state, such as the Duchess’s community high school in Alnwick?

[Michael Gove]

I can provide exactly that assurance.

[Stephen Pound (Ealing North) (Lab)]

May I assume from the subtle suggestiveness of the Secretary of State’s reply to the hon. Member for Ealing Central and Acton (Angie Bray) that the inspirational Alice Hudson of Twyford high school has been successful in the proposals regarding north Greenford? The question I wished to ask before that matter was raised was whether he will answer the question I asked him in writing two months ago about whether teachers and head teachers in free schools will be subject to public sector pay controls.

[Michael Gove]

Yes and no.

[Stephen Pound]

In which order?

[Michael Gove]

In that order.

[Henry Smith (Crawley) (Con)]

Will my right hon. Friend join me in congratulating Andrew Snowdon and his dedicated team in Crawley, who set up the new Discovery free school, which has been successfully open now for just over a month? Will he say how free schools and academies will help to increase admissions choice and capacity in my constituency, where that has been a problem in recent years?

[Michael Gove]

I am very grateful to my hon. Friend, who was a very distinguished leader of West Sussex county council. In Crawley we need additional capacity and people also need proper choice. The Discovery free school provides both.

[Julie Hilling (Bolton West) (Lab)]

I, too, attended the world skills event at the ExCel centre—I was supporting my constituent, Andrew Fielding, from MBDA, who was competing in electronics. His employers and others at the event told me how essential it is that young people are taught technology in school. What will the Secretary of State do to ensure that there is good technology teaching with up-to-date equipment for all young people in all schools, not just technology colleges?

[Michael Gove]

We are doing everything possible to attract new teachers into science, technology, engineering and mathematics by transforming initial teacher training and providing additional support for teachers who are qualified in those disciplines. We will say more on that when we publish our teacher training strategy, which I hope will be later this month or early next month.

[James Wharton (Stockton South) (Con)]

I thank the Secretary of State for the support he has given me and the residents and parents campaigning for a new free school in my constituency. Will he confirm that the statements he has given today mean that his Department will do all it can to support those campaigners to deliver the new school that is so badly needed in Ingleby Barwick? I cannot thank him enough for his support, which has meant an awful lot for parents and campaigners. Will he confirm that the Department will give them its full and wholehearted support?

[Michael Gove]

Absolutely. When I visited my hon. Friend’s constituency, he showed me not only a superb existing maintained school that needed additional support, which I was delighted to visit, but the parental campaigners for the Ingleby Barwick free school. They were a model of what the big society is about and I am delighted to offer them our support.

[Mr Nick Raynsford (Greenwich and Woolwich) (Lab)]

The Secretary of State is probably aware that the Greenwich free school, which is one of those approved in his statement, has not yet got premises. The site that the school is looking at is, in my judgment and that of others, including the education authority, very unsuitable for a secondary school. I understand his wish to proceed fast, but he will appreciate that going too fast without suitable premises could be a recipe for disaster for something that ought to be a success. Will he ensure that his officials and the promoters of the Greenwich free school give more attention to finding a really suitable location?

[Michael Gove]

That is a very fair point. I know that some promoters have superb visions for their schools and that there is real demand, but in some areas, such as London, there are difficulties in securing the right site. If we can work constructively, I am sure that we can make it happen.

[Andrew Selous (South West Bedfordshire) (Con)]

May I warmly welcome the new university technical college announced by the Secretary of State today for Houghton Regis in my constituency? What difference does he think it will make to the manufacturing industry locally, which has had a challenging time in recent years?

[Michael Gove]

We are all committed across the House to rebalancing the economy and ensuring that, in addition to our strength in financial services, we recover our strength in manufacturing. If we are to do that, we need to ensure that children acquire the necessary mathematical and scientific skills at the earliest possible age. I think that the involvement of more than 130 companies in the UTC programme, as well as high-performing higher education institutions, will help us to do just that.

[Mrs Jenny Chapman (Darlington) (Lab)]

I am afraid that I must inform the Secretary of State that the Tory group on Darlington borough council somewhat embarrassed him recently by inviting Lord Baker to Darlington to discuss the prospect of a UTC. I do not think that they fully understood the scheme, because in Darlington we have enough secondary school places. The scheme seems quite inflexible, as a new school would have to be established, rather than an existing one converted. Will the Secretary of State spare their blushes in future by allowing schools to convert, rather than being brand new?

[Michael Gove]

Rather than embarrassing me, Darlington Conservatives have shown that they have exceptionally good judgment by inviting Lord Baker rather than me to address them. I absolutely take the hon. Lady’s point. Sometimes we will look at existing schools to see how we can allow them to develop a specialism that will support high-quality vocational learning.

[Craig Whittaker (Calder Valley) (Con)]

In addition to welcoming the announcements made today, I would also like to welcome the Government’s recent announcement of the £500 million pot for rebuilding the most dilapidated schools in the country, such as Todmorden high and Calder high in Calder valley, which never qualified under BSF because they overachieved and there was no deprivation. Will the Secretary of State look at guidance for those many schools across the country that want to convert to academies but are so dilapidated that the fabric of their buildings is a liability for the people doing it?

[Michael Gove]

Those are two very fair points. I would never want to prevent any school that wanted to become an academy from doing so, nor would I wish to coerce unduly any school that was reluctant to take that step, but it is important that any judgment on capital be made on the basis of need, not on the status or location of any school. That is why schools such as the Duchess’s community high school in Alnwick, a school I visited along with Todmorden high, which were not in the Building Schools for the Future programme, are being judged alongside other schools that were, and they are being done so on a totally equal basis.

[Mr Denis MacShane (Rotherham) (Lab)]

Some two hours ago, my right hon. Friend the Member for Rother Valley (Mr Barron) received a faxed letter from the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), announcing the opening of a free school in my constituency. It is called Rotherham, not Rother Valley. The proposed head teacher, Miss Charlotte Blencowe, is a failed Conservative municipal candidate who was rejected from a job at Clifton comprehensive and wants to open the school on a disused B&Q site next to one of the busiest and most fume-filled roundabouts in south Yorkshire.

I have had no communication on the matter, and it is going to cause real problems. We have falling rolls in Rotherham, but we had the best GCSE results this year, beating the Department’s own standards, so will the Secretary of State, out of courtesy, meet me to discuss the issue, and will he at the Dispatch Box now guarantee that no money is to be taken from the existing education budget for Rotherham in order to allow Miss Blencowe to award herself, as the Secretary of State said, the salary that she deems appropriate?

[Michael Gove]

It is an uncharacteristic lapse from the normally high standards of bipartisanship and open-mindedness that the right hon. Gentleman brings to the House, and I am sorry that he feels churlish about the establishment of a new school in his constituency.

[Mr MacShane]

The letter was faxed to somebody else.

[Michael Gove]

I hope that this—I am sure, outstanding —new school will attract, from all of south and west Yorkshire, students who will want to benefit from the high quality of education. It is always a pleasure to talk informally to the right hon. Gentleman, and always a pleasure to work with him in his relentless crusade to put politics aside and our children first.

[Richard Fuller (Bedford) (Con)]

The Secretary of State must be heartened by the encouraging words from Members on both sides of the House for his policy announcement today, but, as he knows, there are still Sirte-like pockets of opposition to his policies from stonewalling councils and knee-jerk ideologues in some unions, including unfortunately the general secretary of the NASUWT, who today claimed that for young people UTCs

“could reduce their employment chances later on.”

Does the Secretary of State agree that the best action the shadow Secretary of State can take is to go back to his union paymasters and tell them to drop their opposition to UTCs and free schools and get on board with a policy that is all about social mobility in our country?

[Michael Gove]

It is very good point by my hon. Friend. The hon. Member for Liverpool, West Derby (Stephen Twigg) is new to the job, but, on the basis of everything that he has said so far, I think that there may be a real change in the Labour party’s approach towards the issue, so I encourage him on the path of virtue and say no more than that.

[Pat Glass (North West Durham) (Lab)]

May I clarify the Secretary of State’s response to my hon. Friend the Member for Ealing North (Stephen Pound)—that head teachers and teachers in free schools will not be subject to the public sector pay freeze? Will there be any upper limit at all, or will governors and trustees be able to pay those people whatever they want? Will there be a limit so that such teachers cannot pay themselves 20% more than the lowest-paid member of staff?

[Michael Gove]

Not just free schools and UTCs, but all academies have the freedom to depart from national terms and conditions, and, as a result, teachers in academies, even though they are younger on average than teachers in other maintained schools, are paid on average £1,000 a year more. I personally think that, notwithstanding the real problems we have in dealing with the poisoned economic legacy of the previous Government, we should do everything we can to reward great professionals. Paying teachers more at every level is something that we, across the House, should aspire to do as resources allow.

[Matthew Hancock (West Suffolk) (Con)]

The Secretary of State will know that in West Suffolk we have two proposed free schools at different stages of development to replace closing middle schools. Will he join me in urging parents not only in Brandon, at the Breckland middle school, but in Ixworth and in Stanton to put forward expressions of interest in joining the free schools—whether or not they come through, and I hope that they do—in order to ensure that the project gets off the ground?

[Michael Gove]

Absolutely. One of the great things about Suffolk as a local authority is that its leader and its lead member for education recognise that, at a time of change, embracing academies and free schools can complement the already great state schools for which they are responsible. As for visionary leadership in local government, you have to go a long way to beat Suffolk.

[Alok Sharma (Reading West) (Con)]

Will the Secretary of State join me in congratulating the All Saints junior free school, which opened its doors in my constituency in September? The reason why parents pressed for it is quite simple: there is huge pressure on school places in Reading, parents and students are not able to obtain their choice of feeder school, and the school’s opening will help parents and students throughout Reading.

[Michael Gove]

I am grateful to my hon. Friend for his support, and I am delighted that Reading is one of the areas benefiting. It is an area of real population growth.

[Mr Edward Timpson (Crewe and Nantwich) (Con)]

It is only right that free schools and, indeed, academies should follow the school admissions code, particularly in relation to the high priority that should be given to looked-after children. Yet, despite having been given that highest priority for many years, there is still a dearth of looked-after children in our best schools. What can the Secretary of State do to encourage new free schools and academies to play their part in raising the social mobility of, in particular, children in care?

[Michael Gove]

Looked-after children, like children who are eligible for free school meals, are eligible for the pupil premium, which is a strong incentive for free schools either to prioritise admissions or to locate in a way that helps those children. More needs to be done, however, and we will bring forward some proposals, I hope, later this year to help ensure that the whole care and education system is better oriented towards the welfare of looked-after and adopted children.

[Andrew Stephenson (Pendle) (Con)]

I am delighted to welcome the news that the Visions Learning Trust’s proposal to create a UTC in east Lancashire has been approved. The bid was sponsored by Rolls-Royce, Fort Vale Engineering, Graham Engineering, Weston EU, Training 2000 and many other significant employers in my constituency. Does the Secretary of Stage agree that, in an area as reliant on manufacturing as Pendle, that is a huge boost to local businesses and jobs?

[Michael Gove]

Yes, it was a cracking bid, and I am delighted that Pendle will benefit from it.

[Patrick Mercer (Newark) (Con)]

May I thank the Secretary of State for supporting the bids for free schools in Newark? He will share my delight at the Grove school being placed top of the list of priorities by Nottinghamshire county council, but what message does he now have for the Grove?

[Michael Gove]

I am grateful to my hon. Friend for the way in which he has championed those schools in his constituency that lost out as a result of the unfortunate cancellation of the Building Schools for the Future programme, and I look forward to having a private meeting with him and then discussing how I and my ministerial team can do more to help schools in his constituency.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

I was thrilled to receive the letter from Lord Hill stating that the proposed school in Saxmundham has been given clearance to go to the next stage, and I am sure that my right hon. Friend the Secretary of State will join me in thanking parents, community leaders and the Seckford Foundation for taking the scheme further, but what advice does he have for certain head teachers in neighbouring schools who see it as a competitive threat, rather than as a welcome addition to the educational offering in Suffolk?

[Michael Gove]

The experience so far of existing head teachers, where new free schools have been set up, has been in some cases concern before the application has come forward and, afterwards, some trepidation, but after the school has opened there has been a general recognition that wider choice and an emphasis on helping the most disadvantaged students has helped to raise the prestige and reputation of state education overall, so such proposals should be seen as friendly emulation and not as a threat to any school.

[Mr David Ward (Bradford East) (LD)]

Last week, I visited a school in Bradford, you will not be surprised to hear, Mr Deputy Speaker. Indeed, you will know that it was not in Bingley and Ilkley when I tell you that 60% of the children in one year 3 class were not in it in year 1. We have more than 7,000 in-year starters in our schools, and that exceeds the number of children who start in reception class each year. That is the level of mobility and churn, so will the Secretary of State please tell me how on earth the local education authority is to fulfil its statutory responsibility for the strategic planning of school places at the same time as maintained sector begins to fragment completely?

[Michael Gove]

I am grateful to my hon. Friend for his question. I appreciate that one of the challenges in Bradford is that we have not just huge population churn, but different communities with different needs and a requirement to ensure that those communities feel that they are part of one Bradford. It is therefore important that, when we bring forward proposals for free schools and the growth in academies, we recognise the achievement of the local authority and of the leadership of existing maintained schools. I hope that, before too long, I will have the chance to come to Bradford and talk to existing and new head teachers about how we can all work together in the interests of Bradford’s children.

[Mr Rob Wilson (Reading East) (Con)]

I warmly welcome my right hon. Friend’s statement. I am delighted that the new school that I championed in Reading East is moving towards a 2012 opening. Will he confirm that UTCs are an essential addition to choice in our schools and join me in acknowledging the huge contribution that Lord Baker of Dorking has made to this successful programme?

[Michael Gove]

I am delighted to underline my debt to both Lord Baker of Dorking and my hon. Friend, who was one of the early advocates of free schools and the pupil premium. I am absolutely delighted that this ministerial team is able to take forward proposals that he championed when we were in opposition.

[Mr Steve Brine (Winchester) (Con)]

This morning, I visited Harestock primary school in my constituency, where nearly 20% of pupils have a family member serving our country in the armed forces. The Secretary of State knows how warmly I welcome the new school places that the Government have created, but many of the service parents whom I met this morning are greatly concerned about the availability of school places in the system, as families return from Germany over the next few years. Will the Secretary of State work with his colleagues at the Ministry of Defence to see that those families can come home with some confidence in the next two or three years, instead of feeling fear, as they do currently?

[Michael Gove]

I absolutely will. Of course, it is for the best of reasons that 14,000 service personnel are returning from Germany; thanks to the inspirational leadership of Baroness Thatcher and Ronald Reagan, we won the cold war and are able now to welcome back the servicemen of the British Army on the Rhine.

We need to make sure that those who have worn the Queen’s uniform enjoy the best possible education. The service premium and the additional changes that we are making to the admissions code are part of that. Of course, we have to work with the Ministry of Defence to do so, and I will be delighted to work—for many years to come, I hope—with my right hon. Friend the Member for North Somerset (Dr Fox), who is doing such a great job in championing service families and defending the armed forces covenant.

[Mr Deputy Speaker (Mr Nigel Evans)]

Last but not least, I call Dr John Pugh.

[John Pugh (Southport) (LD)]

To finish on a factual note, how many free school applications have been rejected or declined and what percentage is that of the total?

[Michael Gove]

More than 200 have been declined. I should emphasise that some of those were free school applications that had significant merits, but required additional work to take forward. One of the reasons why only some 50-plus were taken forward is that we wanted to make sure that every free school application was meritorious.

The point was well made by the shadow Education Secretary—the quality and performance of charter schools in the United States was variable. However, in states where the performance of charter schools was strong, a filter had been placed by the authorising authority to make sure that only the best applications went forward. Overall, between a fifth and slightly more than a fifth—I do not know the exact percentage—of proposed schools have been approved. One of the reasons for that is that, like the hon. Gentleman, we want to make sure that when we spend public money, it goes to people who are going to use it in the public interest.

Protection of Freedoms Bill (Programme) (No. 3)

Monday 10th October 2011 Commons Chamber

18:33

[Mr Deputy Speaker (Mr Nigel Evans)]

The debate may continue for 45 minutes. I should inform the House that Mr Speaker has selected the amendment on the Order Paper in the name of Mr Edward Leigh.

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I beg to move,

That the Order of 1 March 2011 (Protection of Freedoms Bill (Programme)) be varied as follows—

1. Paragraphs 4 and 5 shall be omitted.

2. Proceedings on consideration and Third Reading shall be concluded in two days.

3. Proceedings on consideration shall be taken on each of those days as shown in the following Table and in the order so shown.

4. Each part of the proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in relation to it in the second column of the Table.

[Mr Philip Hollobone (Kettering) (Con)]

My hon. Friend said that the Government have generously given the House two days at this stage of the proceedings. We have already lost three hours because the Government decided to make three statements to the House; with one hand they provide time generously, but with the other they take that time away.

[James Brokenshire]

As my hon. Friend will appreciate, there is a balance to be struck in all these proceedings. We maintain that the programme motion strikes that right and appropriate balance in respect of consideration of the Bill.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

The Minister listed a number of items that the Committee rightly dealt with in great detail. However, it did not cover in any detail the issues raised in new clause 17, which is enormously important to the whole research community. Can the Minister guarantee that time will be available for a debate on that new clause?

[James Brokenshire]

We have sought to structure the programme motion to enable consideration of the Bill, and that is right and proper for Report. A priority appropriately has to be given to enable scrutiny of the Bill as drafted. Obviously, it is for the House to decide within the programme motion the extent to which it will debate particular clauses, but we have had to strike as fair a balance as we can on the provisions of the Bill to ensure that appropriate scrutiny is applied.

[Mr Peter Bone (Wellingborough) (Con)]

I appreciate that my hon. Friend is a coalition Minister and not a Conservative one; before we got into power, the Conservative party was against having programme motions.

Given that we have lost three hours or so to statements, would not a fair balance have been to have allowed us to go for three hours extra tonight? We have been away from this place for a long time; surely an extra three hours this evening would have been fair. That is what democracy is about—we are not trying to force things through. Let us have three hours extra tonight.

[James Brokenshire]

My hon. Friend takes the issues of the House extremely seriously, and I respect him for that. The Government have made important changes to how legislation is scrutinised. We are having two days on Report for the Bill, and that is markedly different from what we would have seen from the previous Government; we would have had a day for consideration of a Bill of this kind.

The terms of the programme motion will come as a disappointment to my hon. Friend the Member for Gainsborough (Mr Leigh) and the other right hon. and hon. Members who have put their name to new clause 1. Despite the two days that we have set aside for Report, twice the normal allocation that we were accustomed to seeing in the last Parliament, regrettably it is unlikely that the House will be able to consider all the new clauses tabled for debate.

As I said, the programme motion has been constructed to ensure that there is adequate time to consider the key provisions already in the Bill. I believe that that is the right approach. Although this is not the occasion to consider the substance of new clause 1, which seeks to amend section 5 of the Public Order Act 1986, I fully recognise that the matter is of considerable interest to a number of Members on both sides of the House. That much is clear from the number of right hon. and hon. Members who have added their names to the new clause.

We agree that the issue should be examined further. That is why, in the next few days, we will publish a consultation seeking views on whether section 5 should be amended along the lines proposed by my hon. Friend the Member for Gainsborough. I will be happy to meet him to hear his views on this important issue. Once the consultation has concluded—it will run to early in the new year—the Government will set out their conclusions as quickly as possible, so that they can inform the debate on the issue while the Bill is in another place. I have no doubt that there will be other opportunities for the House to consider section 5, either when we next examine the Bill on its return from the other place or on some other suitable occasion. I can assure my hon. Friend that through the consultation we want to promote debate on this issue, not seek to curtail it, by widening and broadening it outside this House.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

I am grateful for what my hon. Friend says, which helps to set in a more attractive context the otherwise uncharacteristic step that was taken by moving new clause 1 to the very end of the Bill’s consideration. Is he saying that the Government will facilitate a parliamentary opportunity to legislate if a clear conclusion emerges from these discussions?

[James Brokenshire]

The timing of the consultation is intended to be such that it can inform proceedings in the other place. There may therefore be time, in the context of the consideration of the Bill as a whole, to be able to address issues that may come through from the consultation. I hope that my hon. Friend the Member for Gainsborough will accept the consultation as a mark of our determination to undertake a proper review of section 5 and that on that basis he will agree not to press his new clause.

We believe that the programme motion strikes the right balance. I commend it to the House and ask Members to support it so that we can get on with debating the important issues that lie within the Bill.

18:41

[Mr David Hanson (Delyn) (Lab)]

I sense that, deep down, the Minister knows that he is on a sticky wicket and that the programme motion is not really adequate for debating the issues before the House.

As the Whip responsible for this Bill, my hon. Friend the Member for Alyn and Deeside (Mark Tami), and his colleagues, would have accepted the programme motion had we not had, as the hon. Member for Kettering (Mr Hollobone) said, three hours of statements, which have taken us up to 6.41 pm. This Bill determines the very important issues of DNA that my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) wishes to discuss, and those discussions will reach their conclusion at 8.30 pm.

Although I disagree with the hon. Member for Gainsborough (Mr Leigh) on those issues, I support his right to say what he wishes about his concerns. His concerns on public order issues will not be debated at all because the programme motion means that we will run out of time. However, I cannot support the hon. Gentleman if he presses his amendment to a vote, for the simple reason that it would knock out the business of my right hon. Friend the Member for Kingston upon Hull West and Hessle regarding the important issues of DNA.

On reflection, the Minister will know that this is an inadequate programme motion that requires an 8.30 pm completion time for important issues of life and death, which is what DNA is about. It is about the prevention of crime, the security of our citizens, and ensuring that our citizens can walk safely, free of fear of crime. Those issues will not be debated at the length that my right hon. Friend wishes. We have had debates in the past when I have sat where the Minister sits and he has sat where I am now. I suspect that if I had come along this evening with a programme motion that provided for one hour and 45 minutes—potentially even one hour and 15 minutes—on DNA, he would be standing here saying what I am saying. As a Minister, I moved programme motions from the Government Front Bench just as the Minister has; I know and respect that fact. I am not averse to programme motions. My hon. Friends the Whips are not averse to programme motions, and, in the past, the Labour Government introduced programme motions. However, there has to be an element of fairness about them. We cannot support a programme motion that gives us, potentially, one hour and 15 minutes on the life and death issue of DNA and upsets the hon. Member for Gainsborough because he is not having a debate at all.

If I had moved that programme motion tonight, the Minister would have opposed it. If I had spoken as he has tonight, he would have opposed it. He will vote for it tonight, but he knows that he would vote against it if he were in my place. In fairness to the Opposition, he should allow time for this debate and reflect on the programme motion. The hon. Member for Wellingborough (Mr Bone) made some sensible points, and we could have further discussions based on those. There is no problem with that. I will happily consider a small Adjournment of the House if Ministers want to discuss this with my hon. Friend the Member for Tynemouth (Mr Campbell). He is an amenable chap. We have worked together in the Home Office and we know about these matters, and he will help us to reach a conclusion.

It is not acceptable to have these major issues debated in this way and rushed through the House. We did not do that when the Minister opposed our proposals on DNA, which were fair and responsible. He needs to reflect on that. If he does not, then I cannot support the hon. Member for Gainsborough for the reasons I have outlined, as much as I wish him to have his say, but I will certainly not support the programme motion, and I ask my hon. Friends to vote against it.

18:45

[Mr Edward Leigh (Gainsborough) (Con)]

I beg to move amendment (a), after “Proceedings” on the first day insert—

‘New Clauses relating to the Public Order Act 1986; and’.

I have tabled this amendment to the programme motion because I simply cannot believe that the Government are trying to stifle debate on new clause 1 —the only new clause in the Bill to attract support from dozens of Members from all parties in this House. One would have thought that the Government would welcome hon. Members trying to improve the Bill—is that such an outrageous thing? One would have thought that they would welcome the fact that 65 Members have put their names to new clause 1.

On Friday, the Joint Committee on Human Rights produced a voluminous report which says on page 61:

“We support the amendment of the Public Order Act 1986 to remove all references to offences based on insulting words or behaviour. We consider that this would be a human rights enhancing measure and would remove a risk that these provisions may be applied in a manner which is disproportionate and incompatible with the right to freedom of expression”.

One would have thought that surely a Government committed to free speech would realise that this was an important issue and allow some time for new clause 1 to be debated, especially as it is normal, if not a convention, for new clauses to be debated early on Report because they are debated last in our Committees. Because new clauses are often not reached in Committee, it is normal for a Government who want to have open debate to allow them to be debated at an early stage on Report.

This is one of the most extraordinary programme motions that I have seen, because it ensures that no new clauses are debated. Why have the Government done this? For the life of me, I do not know why we are being pushed to the back of the queue. There is no point in having emollient words. There is not some small chance that new clause 1 will be debated; as a result of this programme motion, there is no chance that it will be debated or voted on. We have had three hours of statements, and we now have two hours to debate many important issues. However, we are going to spend an hour and a half on car parking. I am sure that car parking is very important, but so is freedom of debate. How ironic that the Government are using their own powers under guillotine procedure to stifle a debate on freedom of speech. It is an extraordinary situation.

I know that we are discussing my amendment to the programme motion, not new clause 1 itself, but it is worth saying that it is a very modest proposal that seeks only to change one line of legislation, would not cost the Government one penny, and would not affect anything in the manifesto or the coalition agreement. There would have been no harm in our having a civilised debate. Perfectly valid arguments could have been made on both sides of the issue, and the Government would have got their way in the end, so why not have a debate?

I do not want to be unfair to the Government, who have written to me and said that they are now going to have a review. That is strange. We have been campaigning on this for a whole year. For several months, we got the same letters from the Minister that we used to get from the previous Labour Minister, no doubt written by the same civil servant sitting in front of the same potted plants and serving out the same cups of tea. We made no progress whatsoever. Yet suddenly, hey presto, because 65 people are prepared to put their name to new clause 1 and because my amendment is selected for debate, we get this promise of a review. Why is it starting tomorrow or next week? Why did it not start six months ago, when the amendment was put on the Order Paper? Is this a very complex issue? I have not yet been consulted about the issue, and neither have the National Secular Society, which supports the amendment, or the Christian Institute. We are going to have a review, and the only people who will not be consulted formally are those of us in the House of Commons. What a strange situation. Is this not the home of democracy? Is it not beyond the wit of the Government and the programme managers to allow just three quarters of an hour for an important debate about freedom of speech? But no, the one body that will not be allowed to debate the issue is the House of Commons. We are told by the Government, “Oh, don’t worry, we’ll have this review”—although there can be no debate in the House of Commons—“and then the House of Lords will debate it.” However, they could have had such a review months ago. It is hardly rocket science: we are not talking about a technically complicated issue such as trying to reform the entire national health service or anything like that

I say this to hon. Members on both sides of the House: why do Governments—I am not talking about this Government; I mean all Governments—accept amendments only in the House of Lords? Why not here? Why can we not accept the revolutionary proposal that, in a grown-up way, a Member of Parliament might produce a cross-party amendment on a serious issue, the Government could consider it on its merits and it might actually be agreed to? Why do all Governments take the view that they are prepared to accept amendments only in the other place? Frankly, I have never been an enthusiast for House of Lords reform, but I am beginning to think that until the other place is reformed, the Government will never take this place seriously.

We are talking about an important issue that is too serious to delay. There are so many cases, affecting people from all walks of life: demonstrators threatened with seizure of property and arrest under section 5 of the Public Order Act 1986 for protesting against seal culling by using toy seals coloured with red food dye; the young man prosecuted for growling at two Labrador dogs; the countless street preachers harassed by police for daring to mention Bible passages that some people do not like. Just last month, a café owner in Blackpool was told by the police that displaying verses from the New Testament on a video screen was a breach of section 5. What are the police suggesting? That we should cut and paste things from the Bible but leave out things that people do not like? Many people do not like many things from the Bible, but the Bible is the Bible and if people want to quote from it, they should be allowed to do so without PC Plod tapping them on the shoulder and telling them that it is against some piece of legislation.

All those things are happening under section 5 of the 1986 Act. There is something fundamentally wrong with the way it is being used. That needs to be properly debated in the House of Commons and nowhere else. The fact that the Government have agreed—only today, as a result of all the pressure from colleagues—to discuss such matters with outside groups shows that they acknowledge that there is a problem. All I am asking for is a debate. Why are the Government so concerned about our new clause? What we are proposing is hardly radical. It would not leave the police powerless to prevent public disorder. As the former Director of Public Prosecutions, Ken Macdonald, says in his legal opinion on new clause 1, there are plenty of other powers in existence to prevent or prosecute behaviour that is abusive or risks a breach of the peace; indeed, we have always had breach of the peace powers. There are numerous other powers that could be used, but section 5 is being used as a kind of catch-all and is chilling debate.

This is an important issue and the arguments are strong. The Government might even make a concession on it in the Lords—they have as good as admitted it today—in which case why could they not make the same concession here, in the home of democracy? Why do they make concessions only in the other Chamber? I feel passionately about new clause 1 because it is what the Bill is all about. This Bill is called the Protection of Freedoms Bill, but we are not being allowed to debate free speech. I thought that the aim of the Bill was to reverse the widespread erosion of civil liberties in recent years. Well, there is no greater civil liberty than freedom of speech. It is the foundation of our civil freedoms and new clause 1, which is supported by people from all parties, is all about freedom of speech.

18:54

[Dr Julian Huppert (Cambridge) (LD)]

I shall be brief. I am not sure that the hon. Member for Gainsborough (Mr Leigh) and I necessarily agree on all things in this area, but on this we completely agree. I am a signatory to new clause 1, which I am delighted to support. It is essential that we look at this issue. We have heard, for example, that Liberty took up a case where somebody was threatened with prosecution under section 5 of the 1986 Act for peacefully holding a placard that said, “Scientology is not a religion, it is a dangerous cult”. That is a matter of opinion rather than a matter for prosecution.

[Ben Gummer (Ipswich) (Con)]

It is also true.

[Dr Huppert]

So the hon. Gentleman says, from a sedentary position. I tend to agree with him, but that is a topic for another debate.

I entirely support the new clause tabled by the hon. Member for Gainsborough. However, I have concerns about his amendment to the programme motion. I would like the issue debated, but I am concerned because we need to discuss issues such as DNA and fingerprinting. DNA is a topic of particular interest to me, as someone who used to work on it, and we are at risk of reducing our debate on it to something like an hour. I am concerned about that, and for that reason I shall not be supporting his amendment to the programme motion, although I support his proposed amendment to the Bill. I very much welcome what the Minister said about how the Government are going to get on with it, and I hope that we will have an opportunity to discuss that in this House.

[Mr Bone]

The hon. Gentleman is making a fair point. Given what the Opposition spokesman said, does that mean that he will be voting against the programme motion in toto, so that we can have proper debate?

[Dr Huppert]

It might be tempting to vote against all these things. I would love to see a reform of our entire process, so that time is not taken up on things that the public simply do not understand. However, I will not vote against the programme motion. I have seen what happens in the other place when there are no programme motions, which is filibusters. I do not think that many right hon. or hon. Members in this Chamber could claim that they have not been aware of any filibusters in this House or any efforts to waste time simply to put things off—not necessarily on this occasion, but on a number of others. I would like to see better self-government by this House and the other place, and then we could move away from programme motions.

[Mr Hanson]

If the hon. Gentleman voted against the programme motion along with my hon. Friends and it was defeated, the Government could, if they wished to, call an Adjournment, negotiate and then draft a new programme motion that covered some of the points raised by Government Members and us. Nothing is finalised; such a programme motion could still be put in place.

[Dr Huppert]

I have not gone through the right hon. Gentleman’s previous speeches on such issues to see what he has said before, but such an Adjournment would take time and would be likely to result in even less time for the debate. We need to move on, and I personally would like to move on in my speech.

I very much welcome what the Minister said about the review. It is important and I look forward to it being introduced into the Bill. However, let me talk about one issue that I have with the programme motion, on which I would be grateful for the Minister’s comments. New clause 11, which stands in my name, would repeal provisions in the Digital Economy Act 2010 that the Government have already accepted do not work and which they have accepted they will not use. It would be helpful to debate that, so I would be grateful if the Minister could say whether there will be any opportunity for that to happen. Debating that issue would be helpful, partly because I and others are passionate about supporting the creative industries, and creators have problems with piracy. The 2010 Act’s approach to web blocking simply does not work. I would like a debate in this House on the alternatives. I should therefore be grateful if the Minister would comment on the Government’s intentions with regard to those provisions in the 2010 Act now, if he will be unable to do so later.

18:58

[James Brokenshire]

I am grateful for the contributions of a number of right hon. and hon. Members to our consideration of the programme motion. As I said in my opening remarks, we judge it right that the programme motion should be drafted so as to allow this House to scrutinise the key provisions that are actually in the Bill. I appreciate that a number of hon. Members would have wished to amend the Bill to include various other provisions—in particular, given the level of support for new clause 1, the amendment of section 5 of the Public Order Act 1986. My hon. Friend the Member for Gainsborough (Mr Leigh) sought to characterise that as simple or straightforward. However, I would say to him that there are complexities attached, which is why the Government would prefer to consider and reflect on the matter carefully, and to enable a public consultation to take place so as to ensure that all relevant issues are considered in the round and to inform the debate. It is worth mentioning that section 5 of the 1986 Act covers issues such as swearing at police officers and the case against the poppy burning on Remembrance day. It is therefore appropriate to ensure proper consultation before taking any action.

However, I reiterate that the intent is to move quickly to enable consideration of the results of the consultation in another place. Obviously, the consultation will provide an opportunity for hon. Members, the Christian Institute, the police and many others to set out their views, and I look forward to the debate and to meeting my hon. Friend the Member for Gainsborough to hear his views at first hand.

The hon. Member for Cambridge (Dr Huppert) mentioned the Digital Economy Act 2010. He will be aware that the Government announced in August that they did not intend to commence sections 17 and 18 of the Act. There might not be time to debate his new clause, but we are now working on a wide-scale review of the communications sector with a view to publishing a Green Paper by the spring of next year, and a draft Bill by mid-2013. Policy on tackling online copyright infringement, including site-blocking, is being considered as part of that review and, given our intention to conduct that wide-ranging review, it would be premature to act now to repeal sections 17 and 18 of the Act in isolation from any other legislative changes that might be needed.

We believe that the programme motion is right to focus on the provisions of the Bill to ensure that this House is able to apply appropriate scrutiny to the legislation before us. We have introduced important changes. I welcome the right hon. Member for Delyn (Mr Hanson) to his new position in the shadow home affairs team—he and I have had a number of debates on these issues, in relation to the Bill and elsewhere—but I think that some of his comments were a bit rich, because I can certainly remember previous occasions on which we have had less time than we have tonight to debate important legislation. This Government have made important changes that will allow us to debate these matters for two days, rather than rushing them through in one day, as would have happened in the past. I therefore commend the programme motion to the House.

Question put, That the amendment be made.

19:01

Division 354

Ayes: 62

---

Conservative: 40
Labour: 9
Scottish National Party: 5
Democratic Unionist Party: 3
Liberal Democrat: 2
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 243

---

Conservative: 198
Liberal Democrat: 42
Labour: 1

Main Question put.

19:15

Division 355

Ayes: 275

---

Conservative: 228
Liberal Democrat: 45

Noes: 233

---

Labour: 214
Conservative: 7
Scottish National Party: 5
Democratic Unionist Party: 3
Social Democratic & Labour Party: 1
Green Party: 1
Independent: 1
Plaid Cymru: 1

Protection of Freedoms Bill (Ways and Means)

Monday 10th October 2011 Commons Chamber

Resolved,

That, for the purposes of any Act resulting from the Protection of Freedoms Bill, it is expedient to authorise—

(1) the making of provision under the Act in relation to income tax, corporation tax, capital gains tax, stamp duty, stamp duty reserve tax or stamp duty land tax in connection with the transfer of property, rights or liabilities to the Disclosure and Barring Service by a transfer scheme; and

(2) the charging of fees in connection with making datasets, or parts of datasets, available for re-use.—(Lynn Featherstone).

Protection of Freedoms Bill

Monday 10th October 2011 Commons Chamber

[1st Allocated day]

Consideration of Bill, as amended in the Public Bill Committee

Clause 3

Persons arrested for or charged with a qualifying offence

19:30

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

I beg to move amendment 89, page 3, line 43, leave out from ‘offence’ to end of line 44.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Government amendment 1.

Amendment 91, page 4, line 2, leave out ‘3’ and insert ‘6’.

Amendment 92, page 4, line 4, leave out ‘3’ and insert ‘6’.

Government amendments 2 to 5.

Amendment 94, in clause 4, page 5, line 32, at end insert

‘Otherwise the retention period is 6 years.’.

Amendment 83, page 5, line 34, at end add—

‘(4) If the person was under the age of 18 at the time of the offence the retention period is three years.’.

Government amendment 6.

Amendment 84, in clause 9,page 8, line 5, after ‘retained’, insert

‘for an initial period of six years, then’.

Government amendment 7.

Amendment 108, in clause 20, page 13, line 26, leave out from ‘must’ to end of line 28 and insert—

‘place a report in both Houses, after consultation with the Association of Chief Police Officers (ACPO), on the suitability of a Commissioner for the Retention and Use of Biometric Material (referred to in this section and sections 21 and 22 as “the Commissioner”.

‘(1A) Subject to the approval of a report laid under subsection (1) by resolution of both Houses of Parliament, the Secretary of State may appoint a Commissioner to be known as the Commissioner for the Retention and Use of Biometric Material.’.

Government amendments 8 to 15.

Amendment 109, in clause 25, page 16, line 27, at end insert—

‘(1A) The provisions of this Chapter may not come into force until the conditions of 20(1) have been met.’.

Amendment 85,  page 16, line 33, leave out ‘3’ and insert ‘6’.

Amendment 86,  page 16, line 39, leave out ‘3’ and insert ‘6’.

Amendment 87, page 17, line 1, leave out ‘3’ and insert ‘6’.

Amendment 88, page 17, line 4, after ‘derived’, insert ‘6 years or more’.

Amendment 82,  page 17, line 9, at end insert—

‘(d) in the case of material taken or derived less than six years before the commencement day from a person who—

(i) was arrested for, or charged with, the offence and

(ii) has not been convicted of the offence,

the destruction of the material at the end of the period of six years beginning with the day on which the material was taken or derived.’

Government amendments 33 to 38, 65, 66, 72 and 73.

[Alan Johnson]

There are several amendments in this group that seek to maintain the current position on DNA retention, as agreed by this House in April 2010 under the Crime and Security Act 2010. We have debated this issue many times, so Members will know that the argument centres around for how long the DNA of those arrested or charged but not convicted should remain on the database. The Government say the period should be three years for those arrested but not convicted of a serious offence—the so-called Scottish model—whereas we say it should be six years if arrested but not convicted of any recordable offence, as agreed by this House 18 months ago.

I realise that I am susceptible to the charge of being an old, sad former Home Secretary revisiting the scene of previous debates, and I may well be guilty of that, but let me explain why I, and colleagues on both sides of the House, have proposed these amendments. When I was Home Secretary—and the newly appointed shadow Minister, my right hon. Friend the Member for Delyn (Mr Hanson), was the police Minister—we took a lot of time and trouble over this topic. We looked at all the available research before coming down in favour of a period of six years. I hope I can convince the House that we made the right decision in 2010 and that moving to the so-called Scottish model would be a terrible and potentially disastrous mistake.

This is a cross-party amendment. It is sponsored by the hon. Members for Kettering (Mr Hollobone) and for Bury North (Mr Nuttall) as well as the five supporters whose names appear, along with mine, on the amendment paper: my right hon. Friends the Members for Salford and Eccles (Hazel Blears) and for Delyn, my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), and the hon. Members for Brigg and Goole (Andrew Percy) and for Shipley (Philip Davies).

That DNA is the most important breakthrough in modern policing, and a science in which Britain leads the world, is incontestable. It provides the police with 3,300 matches to crime scenes each month, which amount to almost 40,000 a year. It has led to forensics—the use of DNA and fingerprints—being the critical information in securing a quarter of primary detections in routine crimes such as burglary and car crime in England and Wales, as against only 6% in the mid-1990s. It has made a contribution to the huge decline in those crimes. It has also transformed the ability to detect the perpetrators of the most serious crimes: murder, manslaughter and rape. There were 832 positive matches in 2009. The European Court of Human Rights has accepted that the use of DNA evidence can make a valuable contribution to the prevention and detection of crime and the protection of the crucial rights to life, liberty and security. It said that any mechanism for the retention of biometric material must be justified as both necessary and proportionate to a legitimate aim.

There is no question but that those convicted of a recordable offence should have their DNA stored indefinitely; that is not a point between us in this House. It is necessary but insufficient, as the Government apparently accept which is why they seek to go further. The European Court ruled that indiscriminately keeping the DNA of those arrested but not convicted of a recordable offence was not proportionate. It breached the famous article 8 on the right to privacy and family life, which after last week’s shenanigans may well be known from now on as “the cat’s clause”. [Interruption.] That sounded good in front of the bathroom mirror this morning! The issue therefore is for how long the DNA of those arrested but not charged or convicted should be retained, consistent with the principle of necessity and proportionality. The Government say three years, in accordance with the so-called Scottish model; we say six years, in accordance with all the evidence.

It is worth mentioning that the Crime and Security Act 2010 broke from the Scottish model in not retaining the physical material from which the DNA is derived. That must be destroyed within six months after it has been translated into a series of numbers known as a DNA profile. This meets an important criticism by the European Court and addresses the concerns of those who are rightly worried about the purposes to which such genomes could be put. The Scottish model retains the DNA of those arrested but not convicted of serious offences only for three years, with a provision for a two-year extension that is so complex, bureaucratic and time-consuming that it has never been used or even applied for.

The three-year retention period used in Scotland is not based on any evidence or analysis that I can find. The figure appears to have been plucked from the air. The Minister will tell us that a review of the Scottish system by a Professor Fraser a year after it was introduced proves that the system works, but that review did not assess whether a longer retention period would be beneficial or whether retention for three years was detrimental to solving serious crimes. The retention of the DNA of those arrested but not convicted can be justified as necessary and proportionate under the terms of the European Court’s decision if their risk of being re-arrested is higher than that of the general population. Analysis conducted by the Home Office suggests that that is indeed the case and that the risk falls to that of the level of the rest of the population gradually over a period of six years. It dips after three years, but it leaves a significant tail that is not eradicated until after six years.

This analysis also established that the propensity to be re-arrested is not determined at all by the nature of the original alleged offence; in other words, there is no case for maintaining the DNA of those arrested but not convicted of serious offences. For instance, Mark Dixie, the murderer of Sally Anne Bowman, had his DNA taken because he was involved in a pub brawl—a minor offence. The provisions in the 2010 Act which we seek to retain are therefore based on evidence, unlike the Scottish model which is based on no evidence whatever.

The coalition partners decided to adopt the Scottish model when they were in opposition, since when they have struggled to make the facts fit their policy, rather than their policy fit the facts. Therefore, every so often they ask for a new hazard curve—the research that was done when I was Home Secretary—the latest of which they have published and circulated, claiming, tendentiously, that it is broadly supportive of the approach taken by the Government. That is so in the way that health professionals broadly support the Government’s NHS reforms. This supposed new research comes up with an absolute minimum of three years, a wide variance and a health warning about the size of the data sample.

I have also today seen a piece of Home Office research that the Department sought to bury, and which was painfully extracted from it through freedom of information requests. My right hon. Friend the Member for Delyn will say more about this, but it shows that 23,000 people every year who would be on the DNA database under our proposals but not under the Bill as it currently stands will go on to commit further offences. That illustrates the scale of the crime and security problems that will be created if the House defeats this amendment and supports the Government policy.

[Mrs Anne Main (St Albans) (Con)]

I am intrigued by the figures the right hon. Gentleman cites. Is he suggesting that being on the database for longer is a deterrent, and if so, why would people go on to offend?

[Alan Johnson]

Potential rapists, murderers, burglars and car thieves knowing about the science of DNA is certainly a deterrent. The argument here, which the Home Office shares both under its new management and its old management, is that we need to look at that hazard curve. The propensity of those arrested to be rearrested is much higher than for the general population. The crucial issue is how long it takes for that curve to even out. If we do not find that out and set this accurately, we will wipe the DNA of people who are likely to commit more crimes—some of them the most serious crimes—and not have the DNA to find and convict them.

The Government persist in seeking to apply the Scottish model in England and Wales, when all the evidence and the very strong police advice—from both sides of the border—is that Scotland should apply the model of England and Wales. Scotland’s rape conviction rate is less than half that of England and Wales. The DNA database in Scotland is far less effective in solving crime than that in England and Wales. In 2009-10, a DNA profile loaded on to the DNA database in England and Wales had an 18% higher chance of finding a match than was the case in Scotland. In 2008-09, 79 rape, murder or manslaughter cases were matched from DNA profiles belonging to individuals who had been arrested but not convicted, 36 of them for non-serious offences. The chief constable of the west midlands, who leads on this issue for the Association of Chief Police Officers, estimates a loss of about 1,000 matches per year if we use three rather than six years.

Let us, for a moment, turn those dry statistics into the actual facts about the people we are here to protect. Abdul Azad was arrested for violent disorder—a non-serious offence—in his Birmingham home in February 2005. A DNA sample was taken and he was released without charge. Five months later, a stranger rape occurred in Stafford, 25 miles away. There were no clues until skin from beneath the victim’s fingernails was profiled and was found to match the DNA taken from Azad. The senior investigating officer said:

“We would never have caught him had his DNA not already been on the database”.

He continued:

“He didn’t even live locally so we had no intelligence leads either.”

Under the Government proposals before the House today, this rapist would have escaped justice.

[Mr David Hanson (Delyn) (Lab)]

Does my right hon. Friend accept that not only would this person not have been caught, but he may well have committed further offences? That answers the point made by the hon. Member for St Albans (Mrs Main) about why it is important that we take action on this database.

[Alan Johnson]

Given that we know that the nature of rapists is to rape again if they get away with it, that is a very important point.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

My right hon. Friend is making a powerful case. Will he speculate as to why the Government are doing this? Does he agree that it is based on the wrong-headed analysis that somehow the last Labour Government created a quasi-police state? If the Government start from that view, they will end up with legislation that does not protect the public, but puts them at greater risk. A few weeks ago, we saw that with the watering down of the protections against terrorism and now we see it with this proposal. Why are the Government so addicted to watering down the protection of the public?

[Alan Johnson]

It puzzles me. The Under-Secretary of State for the Home Department, the hon. Member for Old Bexley and Sidcup (James Brokenshire), is an honourable man. He was engaged in these debates in 2010 when the Labour Government were proposing what became the Crime and Security Act. I thought that things would have moved on since then. I read the record of the Committee stage of this Bill and saw the arguments put forward by my hon. Friend the Member for Eltham (Clive Efford), and I find the paucity of the Government’s case astounding. They latched on to something called the Scottish model. Incidentally, nobody has challenged me about there being no basis of any research for the three-year provision—Labour was in power, by the way, so I am not knocking other parties. This was a figure plucked out of the air. The Government are reluctant to examine this issue on the basis of the evidence, even to the extent of completely ignoring the police, who do have a bit of expertise in this area.

In 1995, a 17-year-old girl was walking home from a night out in Banbury when she was forced into a car by two men, taken to an isolated area and repeatedly raped. In 2003, Lee Ainsby was arrested for being drunk and disorderly, and a DNA sample was taken. Two years later, in 2005, the evidence from the rape case was re-analysed and the DNA profiles were loaded into the national database—one matched, that of Lee Ainsby. He had committed a non-serious offence and he would not have been on that database under the Government’s proposals. A sample taken from his brother matched the second sample and so both of those rapists were caught and convicted.

19:45

[The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)]

I just wish to check on the point that the right hon. Gentleman made about that case. I believe he said that this individual had been convicted. As he knows, under the arrangements—I think that there is agreement on this point—where there is a conviction, the DNA would be retained indefinitely.

[Alan Johnson]

I did not say that this individual had been convicted. He had been arrested but not charged of a non-serious offence and his DNA remained on the database. The Minister has all these statistics—the Home Office provided me with them, so it can provide him with them too.

[Gareth Johnson (Dartford) (Con)]

Will the right hon. Gentleman concede that unless we take the DNA of every man, woman and child in the country there will always be instances when DNA is found at the scene and not matched with any offender?

[Alan Johnson]

I will not concede that argument because, as I said at the beginning, our job, in accordance with the European Court of Human Rights judgment, was to come up with something that is necessary and proportionate. There has to be a logic to this; we cannot have blanket and indiscriminate retention of DNA. Because that is the requirement on us, we need to examine and research, as the Home Office and others have done, the hazard curve for those arrested but not convicted—that is the whole nature of this debate. The Government are not proposing to not keep the DNA of those arrested but not convicted, they are not proposing to take the DNA on conviction and they are not proposing to take the DNA when someone is charged. They are taking the DNA of those arrested but not convicted—innocent—for a reason; they think that it should be kept for three years, with various permutations and lots of complications. Labour Members say that six years is the correct level.

I shall give a final example, because it is important to translate all this into people rather than statistics. In June 2009, Gary Grubb attacked two women while working temporarily in Middlesbrough, indecently assaulting them both and then fleeing for South Africa. However, a DNA sample from the crime scene matched a sample placed on the national DNA database after he was arrested but not convicted for drink-driving—a non-serious offence—in 2006. He was arrested when he tried to re-enter the UK in 2010 and was sentenced to 10 years in prison. He would be free today if the proposals in this Bill had been in force at the time.

Let me say to Members on the Government Benches that lots of these cases will crop up in the future and this will come back to haunt them if they decide to support what is in this Bill today. The Government are ignoring these and the many other examples of the folly of their dogmatic approach. Their attempt to take the moral high ground consists of trotting out a mantra about these measures being consistent with the principle of innocent until proven guilty. That would be the case only if DNA were taken on conviction. Everybody is innocent when it is checked against previous crime scenes—there is nothing wrong with that, apparently—and the collective view is that DNA should be maintained to match against future crime scenes for a limited period. The Government do not even seek to return to the situation pre-2003, when DNA was taken upon someone’s being charged, not upon their being arrested. The Government will continue to take DNA upon arrest, when every person from whom a sample is taken will be innocent. They now propose, under amendment 5, to introduce a convoluted, bureaucratic system to retain the DNA of innocent people where

“the retention of the material is necessary to assist in the prevention or detection of crime.”

So someone is innocent until proven guilty, unless they are innocent of a serious offence, in which case they will have their DNA retained under a procedure that is bureaucratic, convoluted and complex, and that the police are unlikely to use, as with the Scottish extension.

We are now to have the gloriously named “biometric commissioner”. I remember when my son was small buying him a bionic man—Steve Austin was “the bionic man”—and we now have the biometric commissioner. At best, he will have to open a file for each of the 17,000 suspected rapists, and the police will have to put forward a case in respect of every one of those 17,000 suspected rapists that Rape Crisis says are likely to be wiped off the DNA database. At worst, as Rape Crisis fears, those 17,000 profiles, or a large proportion of them, will be wiped.

Although all the evidence points to the need to adopt this amendment, we all need to accept that much of the research is based on projection. We do not have the six years of actual evidence required to make a proper assessment, and if we carry the Bill unamended we never will. DNA profiles for those arrested but not charged or convicted that are more than three years old will be wiped, never to be retrieved. Let us accept the amendment so that the proper assessment of all the evidence, when we have six years’ worth of it, can take place in a few years’ time. We can go from six years down to three, but we will never be able to go from three years up to six, which is why my right hon. Friend the shadow Home Secretary has implored the Government—they might be right about the three-year limit, although we doubt it, and it might even be necessary to have a limit of four or five years—to wait until we have evidence rather than projections. Is that not eminently sensible, given that we are dealing with life and death and issues that are so pertinent to criminal justice and so important to our constituents?

The role of the Home Office for the past 229 years of its existence has been to weigh the rights of the individual against the needs of society as a whole. For the Government to pursue their retention policy against all the available evidence and in the teeth of fierce opposition from the police, who will be restricted in their ability to catch criminals, and in defiance of the sensible alternative of reviewing the situation when more reliable evidence is available, is a huge, avoidable and potentially catastrophic error that they will live to regret.

[James Brokenshire]

One point of agreement between me and the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) is that I think that this is a question of balancing collective protection and individual freedom. We can agree on that much, but in some ways the right hon. Gentleman is looking through the other end of the telescope. Through the indefinite retention regime that was the hallmark of the previous Labour Government, he seeks to retain data and information for as long as possible in case it becomes useful. I think he was accusing us of being dogmatic on this point in some ways, but he and his right hon. and hon. Friends come at it from the perspective that they want indefinite retention of everyone’s DNA for as long as possible. Our starting point is different. Our concept is that of innocent until proven guilty, so we come at this from a different direction.

I shall address some of the right hon. Gentleman’s direct points, but, as this is a wide-ranging group of amendments, it might assist the House if I explain the Government’s amendments before responding to those tabled by the right hon. Gentleman and others.

[Clive Efford (Eltham) (Lab)]

Will the Minister give way?

[James Brokenshire]

I will give way to the hon. Gentleman, who played a key part in Committee. I am sure that I will welcome his contribution to the debate.

[Clive Efford]

The Minister has just said that he has accepted the principle of innocent until proven guilty, but will he confirm that everyone who is arrested will, at the point at which they are arrested, have their DNA sample taken and checked against the national DNA database, so that principle does not hold? The Government accept the principle that innocent people will have their DNA retained for up to three years for various crimes, so does he accept that we are debating the principle of who should have their DNA retained for three years or for six years? On the question of people’s civil liberties, will the Minister take into consideration the civil liberties of those who might be the victims of crimes that will not be detected because of the position that the Government have taken?

[James Brokenshire]

I say to the hon. Gentleman—he and I had a fair and clear debate on this matter in Committee—that the Government take into consideration the position of the victim, which is why I said that that principle was our starting point. That is why we are adopting the provisions in the Bill. We recognise that more than 5.7 million people are on the national DNA database and about 70% of the profiles in the EU are on our national database, so it important—and our responsibility—to consider the issues extraordinarily carefully to ensure that we judge the balance correctly.

I shall go briefly through the Government’s amendments before returning to the important issues of principle and to do with the duration of retention. Government amendments 1 to 15, 33 to 38, 65, 66, 72 and 73 fine-tune the provisions governing the retention of DNA. In a number of cases, they pick up on points raised in Committee. The key amendments all touch on the role of the commissioner for the retention and use of biometric material and I shall detail those amendments first.

When we considered clause 3 in Committee, the hon. Member for Eltham (Clive Efford) and others expressed concern that much of the detail about the arrangements for retaining biometric material taken from those arrested for, but not charged with, a qualifying offence was left to subordinate legislation. I gave the hon. Gentleman an undertaking that the Government would take the issue away and consider it. The Joint Committee on Human Rights also raised concerns about the issue in their recent report on the Bill. We have considered the issue further and agree that it is appropriate to place such detail on the face of the Bill. Amendments 1 to 5 therefore remove from clause 3 the existing order-making power for the Secretary of State to prescribe circumstances in which such retention would be permitted and replace it with new section 63FA of the Police and Criminal Evidence Act 1984.

New section 63FA sets out the circumstances in which a chief officer of police may apply to the commissioner to retain DNA profiles and fingerprints of those arrested for, but not charged with, a serious offence. The first circumstance, in new section 63FA(2), is where the victim of the alleged offender is a minor, a vulnerable adult or is “associated” with the suspect. The second circumstance, in new section 63FA(3), is where none of the criteria in subsection (2) apply but the chief officer none the less considers it necessary to retain the material to prevent or detect crime. The chief officer must give the person to whom the biometric material relates a copy of the application made to the commissioner. It is then open to that person to make representations to the commissioner within 28 days and it will then fall to the commissioner to determine the application based on these papers. Amendment 15 to clause 24 enables the National DNA Database Strategy Board to provide guidance to the police in such cases, thus helping to ensure consistency in the making of applications to the commissioner. Amendment 9 to clause 20 ensures that the provisions dovetail with the Terrorism Prevention and Investigation Measures Bill.

In addition to the commissioner’s review function in individual cases, we believe that the commissioner should also have a more general oversight role. Amendment 11 therefore extends the role of the commissioner to provide him or her with a general function of keeping under review the retention and use of DNA and fingerprints by police and other law enforcement authorities.

I draw the House’s attention to amendment 7, which makes two further exemptions from the normal retention rules. First, new subsection (2A) of section 63T of PACE, inserted by clause 17, ensures that the police can retain hard copies of material on case files. That is in order to ensure that a copy of the material remains available for examination by defence experts, and potentially the Criminal Cases Review Commission, in accordance with the disclosure provisions of the Criminal Procedure and Investigations Act 1996. The changes are therefore intended to ensure that the provisions discharge CPIA compliance obligations. The CPIA exists to prevent miscarriages of justice and I am sure that we would all agree that nothing in the Bill can undermine that purpose.

In order to enable the police to meet their obligations, new section 63T(2A) provides for the police to retain the minimum amount of biometric material necessary. So the records on the DNA and fingerprint databases would be destroyed in accordance with the existing provisions of the Bill, leaving only hard copies on the police case file that could be examined by the defence or the Criminal Cases Review Commission as necessary.

The second part of amendment 7, which inserts new subsection (2B) of section 63T, arises from a concern raised with us by Forensic Science Northern Ireland. The service was concerned that, because of the way that PACE is drafted, all samples taken compulsorily from a suspect would be caught by the requirement to destroy them in clause 14 of the Bill. That would include material originating from another person that is evidence of contact between people and would often be key evidence in a trial examining that contact. An example may be where traces of a victim’s blood have been taken from a suspect’s hand. New subsection (2B) of new section 63T therefore provides that where material is taken from one person that originates from another it is not required to be destroyed within six months but can be retained for as long as is necessary in the same way as crime scene material can because it is, essentially, crime scene material.

20:00

Let me address the amendments in the name of the right hon. Member for Kingston upon Hull West and Hessle and others. As we have heard, the amendments return to the question of how long we should retain the DNA and fingerprints of innocent people. They would replace the Government’s provisions, which meet our coalition commitment to adopt the protections of the Scottish model, with the core of the previous Government’s Crime and Security Act 2010.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Minister give way?

[James Brokenshire]

I will, because I know that the hon. Gentleman has taken a close interest in these matters for some time.

[Steve McCabe]

The country’s police chiefs have rather helpfully told us that large numbers of those who were arrested following the summer riots were arrested because of matches against the existing DNA database. Has the Minister undertaken any work to ascertain how many of those would have escaped justice under his proposals?

[James Brokenshire]

The hon. Gentleman highlights a key issue—the retention of the DNA of those convicted of offences, with which I absolutely agree. Some 75% of those who were engaged in the rioting—or, at least, those who were brought before the courts—had committed prior offences. That clearly makes the point that there is a need to put the DNA of those who are guilty of crimes on the database, rather than keeping those who are innocent of any crime on it, which is the approach of the Opposition and was the approach of the previous Government. The Labour party persists in its approach of keeping the DNA and fingerprints of innocent people for many years, no matter what those people have been accused of and no matter how little evidence was ever uncovered in relation to them.

It is worth putting these issues into context. Of course, DNA is important. I fully recognise the scientific breakthrough of being able to take DNA to search against the database and, most importantly, to retain crime scene DNA evidence in a cold case database against which matches can be made. However, the collection of DNA is part of a process of investigation and is not a panacea in itself. I think that if the Labour party could have its way, it would continue with the previous approach of simply trying to put more and more data on the database regardless of people’s guilt or innocence. However, it is interesting to look at what has been the result of adding many more people on to the database. In 2004-05, 2.8 million people were on the national DNA database and in 2009-10, the figure was 4.8 million people. Now, let us look at the number of detections in those years. In 2004-05 there were 35,605 and in 2009-10 there were 32,552, so when there were 2 million more people on the database, there were 3,000 fewer detections. I therefore challenge the suggestion of the right hon. Member for Kingston upon Hull West and Hessle that the more people’s DNA is on the database, the more effective it is. The figures do not necessarily equate in that way, as the historic evidence shows.

[Alan Johnson]

The total number of detected crimes in which a DNA match was available fell by 11% between 2003-04 and 2008-09—that is what the Minister basically just told us—but over the same five-year period, police recorded crime fell by 17.1%. So there was an 11% reduction in DNA detections and a 17.1% reduction in recorded crime. Those are the figures that the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) tried to fiddle in the previous Parliament. Burglary was down 29%, vehicle crime was down 40% and criminal damage was down 23%—so much for fewer cases being solved through DNA.

[James Brokenshire]

As a proportion of total detections, DNA detections have remained pretty static. If the right hon. Gentleman is right that the figures I gave were all down to there being less crime—I think that is his argument—what he said about DNA detections would not be the case. Some 2 million extra people have been put on to the database and if hon. Members are suggesting that that change has been positive and would generate many more detections, I am afraid to say that that is not borne out by the evidence.

[Mr David Davis (Haltemprice and Howden) (Con)]

I think this is quite a good indicator of how much the Labour party played with the politics of this issue when they were in government rather than dealing with the reality. The biggest handicap to the use of DNA in evidence is collection at the crime site, which is very poor. Our police have been poor at that for a long time but Labour did nothing about that throughout the entire period being discussed.

[James Brokenshire]

My right hon. Friend makes a very important and powerful case about the effective use of DNA and the fact that crime scene issues can be very important in the detection of crimes and in ensuring that perpetrators are brought to justice.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

Will the Minister give way?

[James Brokenshire]

I will give way because I know that the hon. Lady has focused closely on the disproportionate impact that the DNA database can have on some minority communities. I will be very interested to hear her thoughts.

[Ms Abbott]

I will of course be supporting the amendment in the Lobby tonight, but is the Minister aware that the professor who devised the use of DNA detection processes, Professor Jeffreys, is against keeping the DNA of innocent people? He argues that the amount of DNA that has to be held for that purpose and the intrusion of civil liberties that that brings is not justified by the marginal improvements in detection.

[James Brokenshire]

The hon. Lady, who has taken a close and personal interest in these issues for a number of years, makes an important point. I know that some people will say that we should take everybody’s DNA from birth and that this would solve all the problems, but neither party seeks to make that argument here, although some people may. The issue of disproportionality is very important when considering how to strike the right balance on what the retention period should be, on how DNA is used and on the protections that are afforded. That is why we have taken the approach we have in the Bill.

[Mr Philip Hollobone (Kettering) (Con)]

Will the Minister give way?

[James Brokenshire]

I will, because I know that my hon. Friend has put his name to some of the amendments.

[Mr Hollobone]

On the gap between the fall in DNA detections and the fall in crime, my hon. Friend the Minister is ignoring the deterrent effect, which my hon. Friend the Member for St Albans (Mrs Main) mentioned earlier. If one’s name is on the database, one is less likely to commit crime and therefore will not be detected, so the matches will go down less than the crime rate is falling. I think that my constituents will be alarmed that there are 23,000 people on this database whose details will be wiped if we go along with the Government’s suggestions. The former Home Secretary has pointed out that on the hazard curve, they are likely to be rearrested within that missing three-year period.

[James Brokenshire]

That point was made by the right hon. Member for Kingston upon Hull West and Hessle, but I pray in aid Professor Fraser’s report. I appreciate that the right hon. Gentleman says that the terms of reference were not wide enough and that it is not appropriate to rely on the report, but those terms of reference took account of available information and experience elsewhere when the appropriateness of the Scottish system was considered. Indeed, it was the right hon. Gentleman’s colleague in the other place, Lord Bach, who said:

“In determining the appropriateness of the current legislation, Professor Fraser considered data on reoffending rates and conducted a wide consultation. He did not uncover any evidence to suggest that this approach to retention has caused any detriment to the detection of serious crime in Scotland.”

I therefore think it is appropriate to look to Professor Fraser’s investigation, as he is a learned expert on forensics, rather than simply trying to skate over and ignore it as the right hon. Gentleman appears to be doing.

[Alan Johnson]

According to the evidence that the hon. Gentleman’s Department gave to the Home Affairs Committee,

“It has been suggested that the research carried out into the Scottish system (by Professor Fraser) did not uncover any evidence to suggest that the Scottish approach to retention had caused any detriment to the detection of…crime…However, that is to misunderstand this research which did not assess whether alternative systems would have been more effective. It was also unable to review how many serious crimes went undetected as the relevant DNA profiles had been deleted and, therefore, was not in a position to conclude whether there was any detriment to the detection of serious crime.”

That is the hon. Gentleman’s Department’s evidence to the Select Committee—collapse of stout party.

[James Brokenshire]

Again, I would point to the right hon. Gentleman’s colleagues in the Ministry of Justice, who obviously wrote the letter saying that Professor Fraser’s report came to the conclusion that there was no detriment to the detection of serious crime. As I have highlighted, Professor Fraser’s report was wide-ranging in scope. Needless to say, we have a difference of view on this important point.

[Dr Julian Lewis (New Forest East) (Con)]

In deciding whether to support the amendment or the Government tonight, I have to balance the loss of rights of those people who had crimes committed against them, or who may have crimes committed against them as a result of reducing the period of the retention of DNA from six years to three, against the injustice that might be visited on innocent people whose DNA is kept for three years longer than it otherwise would be. Can the Minister tell me, in words simple enough even for me to understand, what exactly the loss of human rights and the injustice will be to those innocent people who have their DNA kept for three years longer before it is wiped? Can he compare that with the suffering of victims who have crimes committed against them by people who will not be detected?

[James Brokenshire]

This is about getting the right people on the national DNA database. By that, I mean those who have been convicted of crimes. We should focus on those who have committed crimes; we should look at recidivism and getting persistent prolific offenders, those who have been in prison and those who have committed crimes on the national DNA database. Interestingly, that was not the approach of the previous Government; they were more fixated with keeping the innocent on the national DNA database. If we take the approach that I suggest, we can ensure that we focus attention where it is needed, and that we do our duty—this is something that I take very seriously—when it comes to protecting the public and ensuring that the police can do what is necessary. I certainly believe that the provisions before the House will enable the police to do that.

[Dr Lewis]

My hon. Friend is very generous in giving way, particularly as he knows that this will not be a supportive question. With the greatest respect, he did not answer my question, which was: in practical, simple terms, in what way will these innocent people—let us accept that they are innocent—who will have their DNA kept on record for an extra three years suffer, or have their rights infringed? Can we compare that with the suffering and infringed rights of people who will otherwise have crimes committed against them by criminals who go unpunished?

[James Brokenshire]

When I look at the Members of Parliament who contact me about the DNA database, there are not huge stacks of correspondence relating to the retention of DNA. The correspondence relates to the many people who complain about their DNA remaining on the national DNA database when they are innocent of any crime, and who say how that offends them. Let us look at some of the cases involved. GeneWatch UK has been quite helpful in highlighting the issues. There is the 12-year-old schoolboy arrested for allegedly stealing a pack of Pokémon cards; the grandmother arrested for failing to return a football that was kicked into her garden; the 10-year-old victim of bullying who had a false accusation made against her; and the 14-year-old girl arrested for allegedly pinging another girl’s bra. Those people have been arrested; their DNA would be retained under the arrangements that the previous Government seemed to laud. That issue of injustice is very much at the heart of the matter.

[Mr Hanson]

Will the hon. Gentleman place in the Library information on exactly how many letters he has received on the topic and how many complaints he has had, as compared with the number of innocent people who will be killed, raped, maimed or injured because of the proposals before the House?

20:15

[James Brokenshire]

I am sorry that the right hon. Gentleman has chosen to try to take us down that path. I am speaking honestly and fairly about the correspondence that comes from hon. Members on both sides of the House on the injustice that some minority communities feel in particular. The hon. Member for Hackney North and Stoke Newington (Ms Abbott) has highlighted how acutely many communities feel about the issue.

Ultimately, it comes down to a question of judgment and balance. The Labour party, when in government, did not focus properly on putting the guilty on the database. We are focused on doing that, and on not retaining all the DNA of those innocent of any crime. The right hon. Member for Kingston upon Hull West and Hessle may perhaps suggest that privacy is in some way a science, but it is not. Liberty cannot be decided on by testing in that way. It is a question of judgment and looking at the evidence, and reaching a conclusion on how to strike the balance fairly between collective protection and individual liberty.

As for what has been said about the previous Government’s proposals, the right hon. Member for Kingston upon Hull West and Hessle may pray in aid all sorts of things, but there was very limited support for the idea that six years was appropriate. We believe that the protection given by the Scottish model means that that is the right approach, and it strikes the right balance, and I therefore commend it to the House.

[Mr Hanson]

I confirm to the Minister that this is a matter of judgment—a judgment as to whether one is on the side of victims and the prevention of crime. There are very difficult issues that the Minister knows we have wrestled with to do with balancing civil liberties with the protections that my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) has so eloquently spoken about today. I pay tribute to him; he has made a compelling case that Government Members ignore at their peril. I do not say that to the Minister in a threatening way; I am simply saying that I suspect that there will be people who are victims of crime because he rejects my right hon. Friend’s amendment this evening.

The Minister will know that my right hon. Friend and I included the provisions that we are discussing in the Crime and Security Act 2010 after considerable thought and consideration of the European judgments that were brought against us. We tried to balance the civil liberties of the British people with their ability to secure their future, free of murder, rape and crime. The Minister will know that there are balances to be struck; ministerial life is about balances. I accept the point made by the hon. Members for New Forest East (Dr Lewis), for Dartford (Gareth Johnson), and for St Albans (Mrs Main): if the amendment tabled by my right hon. Friend is accepted, there will be people whose DNA is on the database for three years longer than the Government propose. Those people may not commit a further crime, and they may well feel aggrieved, but the purpose of the House is to protect the rights of citizens as far as we can.

When my right hon. Friend and I were in government, and were Ministers in the Department in which the Minister is now privileged to serve, we felt that, within European law and within the rights of protection of those liberties, we should try to extend the window of opportunity so as to protect as many people as possible, by ensuring that DNA was collected. We have to balance the aggrieved feelings that the hon. Member for New Forest East mentioned with the rights of citizens as a whole. There will undoubtedly be people who feel aggrieved, but we have to accept those consequences. Ministerial life is about making not just judgments, but the right judgments. On this occasion, the Minister has got that judgment wrong.

Britain is leading the world in DNA technology, which provides critical investigative leads. The DNA database provides the police with almost 3,300 DNA matches per month. There were 832 positive matches on the DNA database in cases of rape, murder, and manslaughter and other serious crimes in 2009. My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) mentioned his concerns; Chris Sims, the chief constable of the West Midlands police, who leads on the issue not for the West Midlands but for the Association of Chief Police Officers, has said that much more detailed information is important to ensure that we protect the public from serious crime. There is no dispute about the fact that three years should be included in the Bill—both sides have accepted that. We are arguing for the maximum envelope that we introduced in 2010, which will protect future victims of crime.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

In the oral evidence given to the Select Committee on Home Affairs by Chris Sims of ACPO on 5 January 2010, it was clear that while DNA evidence is an important tool used by the police, it is just one tool that is used in 0.67% of convictions.

[Mr Hanson]

Why make the police’s job harder? There are people who would be on the database because they have been caught—they have not been charged or convicted—whose DNA would be on record for between three and six years. My right hon. Friend eloquently described cases that led to people being arrested who would not otherwise be arrested. Those people have been arrested, and as a result they have not committed more crimes: they have not gone on to rape if they are serial rapists; they have not gone on to kill if they are serial killers; and they have not gone on to commit serious violence if they are individuals who commit serious violence. The public is safer, so I do not understand why the so-called party of law and order can sit back and watch a Minister roll back crime-fighting tools that would save people from becoming victims of crime in future.

Unpublished evidence, which freedom of information requests have dragged out of the Home Office—my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) mentioned this last week—shows that every year, 23,000 people, who under Labour’s system would be on a DNA database, will, under Government plans, go on to commit further offences. In the next eight minutes of this short debate, I urge the Minister to tell us which one of those 23,000 crimes he can explain to future victims of crime? Can he look them in the eye and say, “We could have stopped that and prevented it from happening, but we chose, for the sake of the civil liberties of the few”—and I accept those few do have civil liberties—“to allow 23,000 people to become victims of crime in future.”

Of those 23,000, some 6,000 a year will go on to commit serious crimes, including rape, sexual offences, murder and manslaughter. The Government’s so-called hazard curve supports Labour’s six-year retention plan, rather than three years. Members do not have to believe me or the Home Office: that is independently verified by the House of Commons Library. Changes to DNA evidence will make it harder, not easier, for the police to catch and convict criminals. The Government’s weakening of the DNA database goes against Home Office evidence, and 17,000 people arrested but not charged with rape will, amazingly, be removed from the database, thus putting more women at risk.

I hope that the Minister will reflect on that, and listen to my right hon. Friend the Member for Kingston upon Hull West and Hessle, who has served this country in high office, and who has looked at the issue seriously to protect the public, as we all have. We will not crow in triumph if the Minister supports my right hon. Friend’s amendment: we will cheer his common sense. If he does not support the measure, perhaps he can look at amendment 108, which was tabled by my hon. Friend the Member for Gedling (Vernon Coaker), whom I congratulate on his promotion to the shadow Cabinet, where he will serve with distinction. My right hon. Friend’s amendment, which I am pleased to support, suggests that perhaps we could delay the measure for a few years, so that we could consult ACPO on what is going to happen.

At the moment, the Bill allows police forces to apply to the so-called biometric commissioner for provisions on those who are arrested but not charged, which means that police forces can effectively say that they do not want to have someone deleted from the database. There could be an additional 17,000 cases, and how much police time will be devoted to that? The Minister is transferring risk from the Home Office to the chief constable of every force in the country, who will say, “I will not apply for that risk. I will not apply to ensure that that happens.” What will the work load be for the biometric commissioner? What resources will they have? Who is responsible if a chief constable applies for a waiver, it is not dealt with, and the person concerned commits a further offence?

The Minister has not thought through his proposals, and as my right hon. Friend said, this is about people. It is about John Warboys, the black-cab rapist, who was caught because his DNA was stored when he was arrested, but not charged, for a sex assault. [Interruption.] I would love to give way to the Minister, but his programme motion allows us four more minutes of discussion, and my right hon. Friend needs to reply. If he wishes to reconsider his position, I will certainly give way. The black-cab rapist was caught as a result of DNA evidence. [Interruption.] Well, Kensley Larrier, whom we discussed at length in Committee in 2010—officials presented good information then, so it must be correct, as it was the information supplied at the time—was arrested in May 2002 for the possession of an offensive weapon. His DNA would not be retained under Government plans, but he was jailed for five years, and his name added to the sex offenders register for life.

Mark Dixie murdered 18-year-old Sally Anne Bowman close to her home. DNA evidence was retrieved from the murder victim, and within five hours, he was under arrest, and sentenced to life imprisonment. I do not want to see other Mark Dixies wandering the streets in those three years; I do not want crimes to be committed by other individuals who could be caught and stopped. I accept that civil liberties issues are at stake, but our job is to balance those civil liberties, and make a judgment that protects the public. I urge my right hon. and hon. Friends to support the amendment tabled by my right hon. Friend, because this is about judgment. His judgment is right, and I believe that the judgment of Opposition spokespeople is right. I believe that, sadly, if the Minister does not change his mind, the Government’s judgment will be shown to be flawed in due course.

[Alan Johnson]

I have been a Member of the House for 14 years, and I have not heard such a feeble reply from a Minister, not because he is any way inadequate—he is a very good Minister—but because the paucity of the argument is unbelievable. We heard an argument from the Opposition that there was no research behind the three-year Scottish model—that argument was not refuted. The Opposition made the argument that there is no evidence whatsoever that suggests that if someone is arrested, but not convicted of a non-serious offence, that makes a difference to their propensity to go on and be arrested for a serious offence. We put forward evidence about the proportion of DNA evidence and forensics that are used increasing from 6% in the mid-1990s to 25% now, showing the importance of DNA evidence. We put forward evidence of individual cases where, if the Government’s policy became law, murderers and rapists would not be caught, because their DNA would not be on the database.

The arguments that we get back are that the Government originally wanted to keep DNA indefinitely, which is not pertinent to the argument today, or that we would have as many names on the DNA database as we could, as though we were evil repressionists, which may be what the Minister believes, whereas those on the Government Benches are civil libertarians to the core, despite the fact that most of them want to abolish the Human Rights Act. The Government need to engage in the argument. There is no evidence for what they are seeking to do—no evidence whatever about three years. The evidence that has emerged since the Scottish model was introduced in 2007 supports six years. All the projections made by the Department indicate that DNA should be kept for six years.

We are seeking to save the Government from themselves. Members on the Government Benches had better understand, as those who support the amendment understand, that the issue will come back to haunt the Government. The question put by the Leader of the Opposition to the Prime Minister about the number of rapists being wiped off the DNA database is only the start. Ignore the amendment and the Government make trouble for themselves, as well as making this country a less safe and secure place.

Question put, That the amendment be made.

20:29

Division 356

Ayes: 232

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Labour: 218
Conservative: 5
Democratic Unionist Party: 4
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Liberal Democrat: 1
Green Party: 1

Noes: 291

---

Conservative: 241
Liberal Democrat: 46
Labour: 2

20:44

Proceedings interrupted (Programme Order, this day).

The Deputy Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 3

Persons arrested for or charged with a qualifying offence

Amendments made: 1, page 3, line 44, leave out ‘any prescribed circumstances apply’ and insert

‘the Commissioner for the Retention and Use of Biometric Material has consented under section 63FA to the retention of the material’.

Amendment 2,  page 4, leave out lines 24 to 31.

Amendment 3,  page 4, leave out lines 43 and 44.

Amendment 4,  page 5, leave out lines 6 to 11.

Amendment 5, page 5, line 11, at end insert—

‘63FA Retention of section 63D material by virtue of section 63F(5): consent of Commissioner

(1) The responsible chief officer of police may apply under subsection (2) or (3) to the Commissioner for the Retention and Use of Biometric Material for consent to the retention of section 63D material which falls within section 63F(5)(a) and (b).

(2) The responsible chief officer of police may make an application under this subsection if the responsible chief officer of police considers that the material was taken (or, in the case of a DNA profile, derived from a sample taken) in connection with the investigation of an offence where any alleged victim of the offence was, at the time of the offence—

(a) under the age of 18,

(b) a vulnerable adult, or

(c) associated with the person to whom the material relates.

(3) The responsible chief officer of police may make an application under this subsection if the responsible chief officer of police considers that—

(a) the material is not material to which subsection (2) relates, but

(b) the retention of the material is necessary to assist in the prevention or detection of crime.

(4) The Commissioner may, on an application under this section, consent to the retention of material to which the application relates if the Commissioner considers that it is appropriate to retain the material.

(5) But where notice is given under subsection (6) in relation to the application, the Commissioner must, before deciding whether or not to give consent, consider any representations by the person to whom the material relates which are made within the period of 28 days beginning with the day on which the notice is given.

(6) The responsible chief officer of police must give to the person to whom the material relates notice of—

(a) an application under this section, and

(b) the right to make representations.

(7) A notice under subsection (6) may, in particular, be given to a person by—

(a) leaving it at the person’s usual or last known address (whether residential or otherwise),

(b) sending it to the person by post at that address, or

(c) sending it to the person by email or other electronic means.

(8) The requirement in subsection (6) does not apply if the whereabouts of the person to whom the material relates is not known and cannot, after reasonable inquiry, be ascertained by the responsible chief officer of police.

(9) An application or notice under this section must be in writing.

(10) In this section—

“victim” includes intended victim,

“vulnerable adult” has the meaning given by section 60(1) of the Safeguarding Vulnerable Groups Act 2006,

and the reference in subsection (2)(c) to a person being associated with another person is to be read in accordance with section 62(3) to (7) of the Family Law Act 1996.’.—(James Brokenshire.)

Clause 8

Persons given a penalty notice

Amendment made: 6, page 7, line 33, after ‘2001’ insert

‘and in respect of whom no proceedings are brought for the offence to which the notice relates’.—(James Brokenshire.)

Clause 17

Exclusions for certain regimes

Amendment made: 7, page 11, line 43, at end insert—

‘(2A) Sections 63D to 63P, 63R and 63S do not apply to material which is, or may become, disclosable under—

(a) the Criminal Procedure and Investigations Act 1996, or

(b) a code of practice prepared under section 23 of that Act and in operation by virtue of an order under section 25 of that Act.

(2B) Sections 63D to 63S do not apply to material which—

(a) is taken from a person, but

(b) relates to another person.’.—(James Brokenshire.)

Clause 20

National Security: Appointment of Commissioner

Amendment proposed: 108, page 13, line 26, leave out from ‘must’ to end of line 28 and insert—

‘place a report in both Houses, after consultation with the Association of Chief Police Officers (ACPO), on the suitability of a Commissioner for the Retention and Use of Biometric Material (referred to in this section and sections 21 and 22 as “the Commissioner”.

‘(1A) Subject to the approval of a report laid under subsection (1) by resolution of both Houses of Parliament, the Secretary of State may appoint a Commissioner to be known as the Commissioner for the Retention and Use of Biometric Material.’.—(Mr Hanson.)

Question put, That the amendment be made.

20:45

Division 357

Ayes: 227

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Labour: 218
Democratic Unionist Party: 5
Conservative: 2
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 291

---

Conservative: 242
Liberal Democrat: 44
Plaid Cymru: 3

Amendments made: 8, page 13, line 28, leave out ‘sections 21 and 22’ and insert ‘section 21’.

Amendment 9, page 13, line 38, at end insert—

(iiia) paragraph 11 of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011 (paragraph 6 material retained for purposes of national security),’.

Amendment 10, page 14, line 10, after ‘functions’ insert ‘under subsection (2)’.

Amendment 11, page 14, line 17, at end insert—

‘(5A) The Commissioner also has the function of keeping under review—

(a) the retention and use in accordance with sections 63A and 63D to 63S of the Police and Criminal Evidence Act 1984 of—

(i) any material to which section 63D or 63Q of that Act applies (fingerprints, DNA profiles and samples), and

(ii) any copies of any material to which section 63D of that Act applies (fingerprints and DNA profiles),

(b) the retention and use in accordance with paragraphs 20A to 20I of Schedule 8 to the Terrorism Act 2000 of—

(i) any material to which paragraph 20A or 20G of that Schedule applies (fingerprints, relevant physical data, DNA profiles and samples), and

(ii) any copies of any material to which paragraph 20A of that Schedule applies (fingerprints, relevant physical data and DNA profiles),

(c) the retention and use in accordance with sections 18 to 18E of the Counter-Terrorism Act 2008 of—

(i) any material to which section 18 of that Act applies (fingerprints, DNA samples and DNA profiles), and

(ii) any copies of fingerprints or DNA profiles to which section 18 of that Act applies,

(d) the retention and use in accordance with paragraphs 5 to 14 of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011 of—

(i) any material to which paragraph 6 or 12 of that Schedule applies (fingerprints, relevant physical data, DNA profiles and samples), and

(ii) any copies of any material to which paragraph 6 of that Schedule applies (fingerprints, relevant physical data and DNA profiles).

(5B) But subsection (5A) does not apply so far as the retention or use of the material falls to be reviewed by virtue of subsection (2).

(5C) In relation to Scotland—

(a) the reference in subsection (5A)(b) to use of material, or copies of material, in accordance with paragraphs 20A to 20I of Schedule 8 to the Terrorism Act 2000 includes a reference to use of material, or copies of material, in accordance with section 19C(2)(c) and (d) of the Criminal Procedure (Scotland) Act 1995, and

(b) the reference in subsection (5A)(d) to use of material, or copies of material, in accordance with paragraphs 5 to 14 of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011 is to be read as a reference to use only for a purpose mentioned in paragraph 13(1)(a) or (b) of that Schedule to that Act.

(5D) The Commissioner also has functions under sections 63F(5)(c) and 63FA (giving of consent in relation to the retention of certain section 63D material).’.—(James Brokenshire.)

Clause 21

Reports by Commissioner

Amendments made: 12, page 14, line 36, leave out ‘carrying out of those’ and insert “Commissioner’s’.

Amendment 13, page 14, line 39, leave out from ‘the’ to end of line 40 and insert ‘Commissioner’s functions.’.—(James Brokenshire.)

Clause 22

Guidance on making a national security determination

Amendment made: 14, page 15, line 14, after ‘Commissioner’ insert

‘for the Retention and Use of Biometric Material’.—(James Brokenshire.)

Clause 24

National DNA Database Strategy Board

Amendment made: 15, page 16, line 12, leave out ‘this section’ and insert ‘subsection (2).

‘(3A) The National DNA Database Strategy Board may issue guidance about the circumstances in which applications may be made to the Commissioner for the Retention and Use of Biometric Material under section 63FA.

(3B) Before issuing any such guidance, the National DNA Database Strategy Board must consult the Commissioner for the Retention and Use of Biometric Material.’.—(James Brokenshire.)

Schedule 1

Amendments of regimes other than PACE

Amendments made: 33, page 90, line 24, at end insert—

(da) any of the fingerprints, data or samples obtained under paragraph 1 or 4 of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011, or information derived from such samples,’.

Amendment 34, page 95, line 31, at end insert—

‘(1A) Subject to sub-paragraph (1), a relevant search (within the meaning given by paragraph 20A(6)) may be carried out in relation to material to which paragraph 20A or 20G applies if the responsible chief officer of police considers the search to be desirable.’.

Amendment 35, page 96, line 10, after ‘(1)’ insert ‘, (1A)’.

Amendment 36, page 97, line 16, leave out ‘paragraph 20H’ and insert

‘a relevant search (within the meaning given by paragraph 20A(6)) or for the purposes of’.

Amendment 37, page 100, line 18, at end insert—

‘(1A) Subject to subsection (1), section 18 material may be checked against other fingerprints, DNA samples or DNA profiles held by a law enforcement authority or the Scottish Police Services Authority if the responsible officer considers the check to be desirable.’.

Amendment 38, page 103, line 6, at end insert—

Part 3A

Material subject to the Terrorism Prevention and Investigation Measures Act 2011

4A After paragraph 10(2) of Schedule 6 to the Terrorism Prevention and Investigation Measures Act 2011(fingerprints and samples) insert—

(2A) But a person is not to be treated as having been convicted of an offence if that conviction is a disregarded conviction or caution by virtue of section 88 of the Protection of Freedoms Act 2011.”’.—(James Brokenshire.)

New Clause 15

Offence of issuing excess parking charges

‘(1) A person commits an offence who, without lawful authority requires a driver or any person in possession of a vehicle to pay parking charges in relation to a contract to park that vehicle.

(2) The express or implied consent (whether or not legally binding) of a person otherwise entitled to enter into a contract regarding parking is not lawful authority for the purposes of subsection (1).

(3) Subsection (2) does not apply where—

(a) the person or body attempting to enforce the parking charges is a member of an Accredited Trade Association so accredited by the Secretary of State;

(b) the penalty charge can be appealed to an independent body;

(c) the person or body attempting to enforce the parking charges takes reasonable steps to inform the driver or keeper of the vehicle about the right to appeal; and

(d) the person or body follows a prescribed parking enforcement process including clear signage and contact numbers.

(4) The Secretary of State can, by way of regulation, introduce a maximum charge, under which parking charges would not be subject to subsection (1).

(5) A person who is entitled to remove a vehicle cannot commit an offence under this section in relation to that vehicle.

(6) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine,

(b) on summary conviction, to a fine not exceeding the statutory maximum which must be no higher than charges for an on-street parking offence.

(7) In this section “motor vehicle” means a mechanically propelled vehicle or a vehicle designed or adapted for towing by a mechanically propelled vehicle.’.—(Diana Johnson.)

Brought up, and read the First time.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to discuss Government amendments 21, 76, 39 to 54, 77, 55 to 61, and 78 and 62.

[Diana Johnson]

The Bill sets out in chapter 2 to outlaw wheel-clamping on private land and to introduce a ticketing regime. We had an extensive debate on this issue in Committee. The major concern that still arises from the way the Bill is drafted is that there is nothing to offer any regulation or protection for the motorist from the problems experienced so far with rogue wheel-clampers. We believe that the rogue wheel-clampers will now move on and become rogue ticketers, and we are not alone in this. We have the support of the RAC, the AA, and the British Parking Association—and I am very pleased to say that today a leader in The Times supports Labour’s amendment on this point.

Our new clause seeks to offer a level of sensible protection for those parking on private land equivalent to the protections offered to people who park on the highway and wish to appeal when they have received a parking fine. For many of our constituents, it is bewildering that the law in each situation is so different. If someone parks on the highway, there is a limit on the fines and an independent appeals process, but if they park in a small private car park, or even a large retail car park, they can face unlimited fines and there is no formal regulated appeals system.

The real reason we need to move this amendment and have this debate is that the coalition Government rushed into the decision to get rid of wheel-clamping, and they did not go through any meaningful consultation with key stakeholders to discuss what the effect of removing wheel-clamping as something that a private landowner could use to protect their land. When the previous Government considered how to deal with rogue wheel-clampers and set out provisions in the Crime and Security Act 2010, those provisions were widely consulted on. Issues that had to be addressed concerned signage, the level of fees that should be paid, the methods available for payment, the evidence required and a full appeals process. They were set out fully in the drafting of the 2010 Act in order to deal with rogue wheel clampers, because it was recognised that regulation was required.

The Government have decided to introduce a ban on wheel clamping on private land, but they have failed to address the real issue now facing motorists, which is what happens when they are faced with rogue ticketers. In this regard, as in so many others, the Government have reacted in a knee-jerk fashion without really thinking through the consequences of the legislation they are bringing before the House.

21:00

[Jeremy Corbyn (Islington North) (Lab)]

Does my hon. Friend have any view on unadopted private roads in areas where there is a local authority parking scheme all around and where quite successful operations are currently run, with minimal levels of clamping? From now on clamping will be banned, so far more expensive systems will have to be introduced, which will cost residents a great deal of money—including council and social housing tenants in the area—but achieve nothing different from what exists now.

[Diana Johnson]

My hon. Friend makes an important point. That issue was debated in Committee, but unfortunately the Government set their face against dealing with it and recognising that there was a problem.

We believe that under the ticketing regime set out in the Bill, the motorist could still end up facing extortionate fees from rogue parking companies, which could be enforced by aggressive security staff against the driver and, if necessary, against the keeper of the vehicle. We also believe that it may still be possible to use a barrier or even a chain to block an exit to a car park, forcing individuals to pay extortionate ticket fees. We believe that rogue parking companies could threaten motorists with the bailiffs and that their credit ratings could be affected. Our amendments have wide-ranging support from the parking industry and motoring organisations. The Government’s impact assessment recognises the risk of rogue wheel-clampers becoming rogue ticketers, but the Bill is silent on what should happen in those circumstances.

Patrick Troy, the chief executive of the British Parking Association, made it clear in his evidence to the Committee that rogue clampers will just move into another form of criminality—rogue ticketing. He recognised that parking is complicated and that it is often difficult for members of the public to understand the difference between the highway and private land. In the main, motorists remain ignorant of their rights, and rogue ticketers will take advantage of this.

Edmund King of the AA said that the current arrangements for street ticketing—that is, on the highway, for which there is a good independent appeals system through the traffic penalty tribunal—are independent and accepted by motorists and the industry alike as fair and proportionate. Parking companies pay a 65p levy per penalty charge notice to pay for the system, which is fair. We should have the same ticketing provisions on appeal for those who receive tickets on private land, especially as the Government are introducing keeper liability provisions in the Bill. Without a proper, independent appeal, it is unfair and unjust that a keeper could be held liable for a ticket that he or she knows nothing about.

In his evidence to the Committee, Edmund King talked about the following situation arising:

“A company, which seems to be incredibly profitable, is carrying out private ticketing. Its website says, ‘Welcome to the ultimate recession-proof business opportunity’ which has ‘limitless earnings potential’. All the company does is…suggest…that if you have a small piece of land and wanted to make some money, you could apply to my company, and I will send you some parking notices.

You will take your digital camera and take pictures of the cars of neighbours you do not like or of anyone who parks there, and send the pictures to”

that company, which will then

“apply to the Driver and Vehicle Licensing Agency for their details, send out tickets, and if 60% pay up, which they currently do,”

it will give £10 to the landowner for each ticket and pocket the rest. He continued:

“That company claims to have 1,200 agents who ticket in that way…even though that company claims to be a member of the British Parking Association, the 1,200 people are, as far as we know, just individuals. There is no control, and our worry is that the clampers who have been making money for nothing for the past 10 years are not going to give up”.––[Official Report, Protection of Freedoms Public Bill Committee, 24 March 2011; c. 145, Q419.]

Instead, they will become rogue ticketers.

Mr King also gave examples of problems in challenging the issue of a ticket, because there is at present no opportunity to do so. He cited the example of Mr B’s car, which incurred a private penalty in a Glasgow hospital car park even though Mr B and his car were in the south of France. The company involved commenced debt recovery procedures. A second case involved an AA member who had been issued with a parking charge notice by X. He had parked in the car park of a major DIY store and spent more than £1,000 in the store. It had taken him some time to choose the goods, and he received a parking charge notice from X, which stated that he had overstayed the maximum permitted time of three hours by 19 minutes. He had to pay £80, which would be reduced to £50 if he paid by a certain date.

A third example involved a Bristol driver whose car was spotted during two different visits to a fast-food outlet. The camera or operator took this to be one single visit and issued a penalty notice for 41 days’ parking. Two AA executives were also sent parking charge notices by post for infringing unclear bay marking rules in a local supermarket. Both of them challenged the parking charge notices, but they were threatened with damage to their credit rating and a visit from the bailiffs if they did not pay up.

[Andrew Gwynne (Denton and Reddish) (Lab)]

May I give my hon. Friend another example? It involves the Peel centre, a retail park in the centre of Stockport where many of my constituents have received penalty fines for overstaying in the car park. One of my constituents challenged this in the courts and had the penalty overturned because the signage was so small that it was considered unreasonable to expect people to read the notices. Does my hon. Friend agree that it would be better to have a proper appeals system in place, rather than expecting our constituents to have to go through the courts in such cases?

[Diana Johnson]

That is exactly right, and our new clause sets out clearly that anyone wishing to issue tickets should be a member of the British Parking Association or an accredited trade association, and should comply with the code of practice agreed with the DVLA on proper signage and a proper appeals system. We believe that that would solve the problem.

[Guy Opperman (Hexham) (Con)]

I was retained counsel by the Automobile Association in 2000, in the case of Vine v. London borough of Waltham Forest, so I come to this matter with a degree of experience. Subsection (1) of new clause 15 attempts to create a criminal offence in certain circumstances. Does the hon. Lady agree, however, that those circumstances are already covered by the measures in the Theft Act 1968 relating to obtaining property by deception, or by consumer protection legislation?

[Diana Johnson]

It is quite clear that consumer protection legislation has not worked in the motorist’s favour in the past. Creating a criminal offence, as the amendment would do, would send a clear signal about how serious the matter is and how people who are going to issue tickets should be properly regulated. I am not sure that I agree with the hon. Gentleman.

I want to move on to the RAC, which gave evidence that the provisions in the Bill would not create a landscape for parking in which the motorist could be guaranteed a fair deal from the parking industry. I know that the Government have made much of the fact that they are on the side of the motorist, but when motoring organisations and members of the industry itself are saying that the system being proposed in the legislation is unfair, the Government need to think again.

As drafted, the right to challenge a ticket is very limited. It would apply only to cases in which liability could be enforced against a keeper. That means that if a person did not pay up to the parking company, the company could go after the keeper of the vehicle, whose information is held by the DVLA. The protection offered is that only a member of an accredited trade association—currently the British Parking Association—will be allowed access to DVLA information. However, the Government state in the impact assessment that they expect 74% of penalty tickets to be paid up front at the time the ticket is issued, rising to 82% when keeper liability is added in. The expectation is that people will just pay up and will not have the opportunity to lodge any kind of appeal. There is no independent appeal procedure. We understand that, under the Government amendments, members of the British Parking Association must have an internal disputes procedure, but we say that is not good enough: it is not fair and not independent. It is widely perceived that it must be independent.

I mentioned the example of the company that Edmund King suggested made a lot of money out of ticketing. Will the Minister respond on the issue of road parking companies that are not members of the British Parking Association but are able to get information about a vehicle—for example, the address of a commercial vehicle on the side of a van parked in a private car park—or to gain access to lists of customers’ details in a private car park? In those circumstances, the ticketing organisation could pursue the keeper without having gone through the DVLA. As I understand it, that could be done perfectly legally, but it could be threatening if money is demanded quickly in order to avoid the bailiffs coming round.

Will the Minister talk more about contract law and consumer protection? She made much in Committee of the fact that consumer protection law was already in place, but we made the case that that did not provide adequate protection for motorists. Will she therefore comment on the Unfair Contract Terms Act 1977 and explain whether she feels it needs to be strengthened or whether further information needs to be given to the public about its provisions?

Let me make some specific points about the amendments in the group. New clause 15 would ensure that anyone issuing a penalty ticket must be registered with an accredited trade association, that all ticketers were currently members of the British Parking Association who must abide by the trade association’s code of practice, which is agreed, in turn, with the DVLA. The new clause also means that tickets placed on the vehicle or those issued later through the use of ANPR—automatic number plate recognition—would be subject to an independent appeals procedure. This would ensure that the maximum fines on private land are the same as for those on public roads and that the same terms and conditions, the same right of appeal and the same prompt payment discount would apply. This has widespread support. The RAC and the AA have recently conducted a populist poll of 12,000 people, of whom 98% thought that there should be some form of licensing for ticketers. That shows that there is clear and overwhelming public support for this new clause, so I hope the Minister will think again and support it.

Will the Minister clarify some points about the other amendments in the group? We welcome Government amendment 21, which came out of the evidence given to the Committee by Patrick Troy of the British Parking Association and Edmund King of the AA. The Opposition took the view that the drafting of the clause dealing with a fixed barrier was ambiguous. I am glad that the Government have recognised the issue raised by the Opposition and have sought to amend the provisions. I know, however, that the BPA still has some doubts about the new wording, as it fails specifically to mention wheel-clamping.

Government amendment 76 passes liability from the car hire company to the person who has hired the car where appropriate. Will the Minister comment on the fact that she is making it easier to transfer keeper liability in those circumstances? Has she given any thought to the circumstances where, for example, a motorist takes their car to a garage and the garage parks it on someone else’s private land? In that case, can the liability be passed back to the garage? As currently drafted, keeper liability means that the individual car owner would be liable as the keeper, even though the actions were carried out by the garage.

Amendments 39 to 54 are technical, but will the Minister explain why she wants to move from the term “relevant contract” to “relevant obligation” in the wording of the affected clauses?

21:15

Government amendment 59 deals with the issue of keeper liability. I understand that it relates to the use of ANPR and would allow a ticket to be sent to the keeper after the parking infringement has taken place. Let us suppose that a disabled person is dropped at an airport where there is a 15-minute limit for use of a parking space. Because of the nature of the disability, it takes up to 30 minutes for the car to be unpacked and moved away. What redress is open to the disabled person? If a ticketing regime were in operation, the person issuing the ticket would presumably be allowed to exercise some discretion on the basis of the disability, but an ANPR system would merely register that the car had entered the parking space at a certain time and left at a certain time, and a ticket would automatically be issued.

There has been a real failure to address issues involving disability, which we discussed at length in Committee. It is a great shame that the impact assessment still fails to acknowledge or deal with the equality issues raised by parking bays and the time that people are allowed in which to park. Perhaps the Minister will comment on the example that I have given.

I understand that the latest definition of car hire is not included in Government amendment 78. According to the hire car associations, specifying a six-month time limit is a rather old-fashioned approach, and it would be better to reflect modern leasing practices, which often involve a much longer period than six months. Perhaps the Minister could comment on that as well. As for Government amendment 62, why do the Government need the power to change the definition of “relevant land”?

I look forward to hearing from the Minister that she has had an opportunity to think again about the Bill’s failure to deal with the issue of ticketing and introduce a fair, independent system of appeal to deal with the problem of rogue ticketers, which I believe will come back to haunt the Government.

[The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)]

As the hon. Member for Kingston upon Hull North (Diana Johnson) pointed out, we had a long debate in Committee on issues such as ticketing and clamping. Before I reply to her specific questions, let me remind the House what was said by many of the people she cited when we announced that we were going to ban wheel-clamping on private land. Edmund King, president of the AA, said:

“An outright ban on wheelclamping on private land is a victory for justice and common sense.”

The hon. Member for West Bromwich East (Mr Watson) said:

“I just want to say that this part of the Bill is fantastic and that the Home Secretary has my full support for it.”—[Official Report, 1 March 2011; Vol. 524, c. 210.]

Gillian Guy, chief executive of Citizens Advice, said:

“We are extremely pleased that the government has decided to deal with the scourge of clamping and towing on private land, as a matter of urgency.”

The AA said in a press release:

“It is a momentous decision to prepare new legislation to end this scourge that has blighted the name of parking control in private parking areas for so long.”

I quoted those comments partly to remind Opposition Members that what they proposed to do was license the companies concerned—in fact, individuals have been licensed, which clearly has not worked according to the tales told by almost every Member in the House about those whose cars have been clamped and from whom money has been more or less extorted—and also to remind them that the system that we propose was wanted by Members on both sides of the House. The issue now is how to ensure that we can implement it. Licensing clamping businesses, as suggested by the Opposition, was not the answer.

We have discussed the “what ifs”—all the issues that might arise—and the potential problems if rogue clampers became rogue ticketers. In Scotland clamping was banned in 1992, very successfully. On deciding to consider the option of banning, the first thing I did was ask my officials to inquire what the repercussions and difficulties had been in Scotland, such as whether the use of barriers had been impossible and whether there were rogue clampers. I looked into those matters in 2010, which was after 18 years, and my officials came back and said there had been just a handful of letters about any problems in all that time.

[Jeremy Corbyn]

The hon. Lady will have received correspondence from the Aberdeen Park Maintenance Company, which manages a private road in my constituency. It has an effective, low-cost system of controls and a minimal level of clamping. Under this legislation, however, it will not be allowed to do any clamping at all. Instead it will have to install expensive barriers and employ staff. That will cost everyone, including council and social housing tenants, a great deal of money. I realise this is a somewhat anomalous argument, but in every city there are private and unadopted roads where such issues will arise, and I would be grateful if she would share her thoughts and say what response she will give to this company.

[Lynne Featherstone]

I am sure such issues will arise across the land. The way to deal with them will be through either ticketing or barriers. However, it is also possible—although this is not required—for a local authority to take over responsibility for that land and issue tickets. Such matters can be addressed in that way, therefore. I cannot give a specific response on every circumstance that might arise across the land, but in Scotland the answer was barriers or ticketing; it was not particularly complicated.

We will carefully watch how things pan out, but our proposal is our best effort to get the balance right and to make sure that we proceed without the burdens of regulating everything in the land and instead let the parking industry look after itself so there is no cost to the taxpayer if ticketing is taken forward. An appeals process will also be put in place, and I shall address the detail of that shortly.

I listened carefully to the comments of the hon. Member for Kingston upon Hull North, and I think we are all trying to achieve the same outcome, but we just believe that we can get there in different ways. The best way in which I can respond to new clause 15 is by reference to the Government amendments in this group, which address ticketing issues.

The Government amendments propose a number of changes to schedule 4, which makes provision for vehicle keepers to be held liable for unpaid parking charges in certain circumstances. The amendments, many of which are of a drafting or technical nature, seek to clarify the effect of the provisions in order to reduce the potential for them to be misunderstood either deliberately or inadvertently by motorists, vehicle keepers and those responsible for parking restrictions and enforcement on private land.

In Committee, the hon. Lady argued for the introduction of a statutory scheme for the regulation of parking on private land which was the same as the one we are discussing now. The Opposition were particularly concerned for there to be statutory provision in respect of signage at car parks and appeals rights. That theme is again picked up in new clause 15.

[Diana Johnson]

I want the Minister to set out very clearly that the Government amendments do not provide for an independent appeals process, but are instead limited to keeper liability in very specific circumstances. They therefore do not provide proper and adequate independent appeals for anyone who receives a ticket.

[Lynne Featherstone]

For any land that is properly signed and under lawful authority, people will be protected by either consumer law or the appeals process that will be set up by the British Parking Association. If the hon. Lady lets me pursue my argument, I think that some of her questions will be answered.

I made it clear that parking enforcement was properly a matter for existing contract and consumer protection law, backed up by self-regulation by the parking industry. That remains the Government’s position—that is clear. However, we have looked again at the provisions in schedule 4 to see whether they include adequate safeguards for motorists and vehicle keepers, and the amendments strengthen those in two ways.

First, on appeal rights and keeper liability, I fully agree with the hon. Lady that there should be appropriate safeguards for motorists, including access to an appeals body for drivers or vehicle keepers to challenge parking charges where they believe they have been wrongly or unfairly imposed. Amendment 59 makes it clear that the notice to the driver or the keeper of a vehicle must set out the arrangements for the resolution of disputes or complaints. We have asked the parking sector, led by the British Parking Association, to establish an independent appeals body, funded by the parking industry and free to consumers, to cover tickets issued by members of the BPA or another accredited trade association. We have also made it clear that we will not bring the keeper liability provisions in schedule 4 into force unless and until the sector establishes, financially supports and agrees to abide by the decisions of an independent challenge body. Unlike the hon. Lady, we do not see a need to constitute this appeals body in legislation. We believe that effective self-regulation by the parking industry is the right way forward, wherever possible, rather than relying on a governmental regulatory approach.

[Diana Johnson]

I am interested in what the Minister is saying. However, self-regulation for wheel-clamping clearly did not work and we are ending up in a similar position in this area. By providing self-regulation, we will find that the good ticketing and parking companies will be members of the BPA but the organisations that are just going to intimidate and impose excessive charges through ticketing notices on vehicles will not be covered by the appeals process.

[Lynne Featherstone]

Intimidation is against the law. I would say to any motorist intimidated by a rogue ticketer that they should report it immediately to the police.

Secondly, on signage, amendment 61 sets out a reserve power to prescribe requirements on the display, content and location of signs at car parks and other relevant land. I say a “reserve power” because parking providers will be able to access DVLA keeper data, and therefore benefit from the keeper liability provisions, only if they abide by the British Parking Association’s code of practice on signage. We do not consider that regulation on signage will be necessary and we would want to introduce statutory rules on signage only if there was clear evidence that the BPA code was not living up to the job. I would be more than happy to read out to the hon. Lady the BPA code on signage, but it is quite long. Suffice it to say, it is big, clear and exactly what one would want in terms of proper parking signage. If that was not the case, we would keep an eye on the situation, but we do not want to introduce statutory rules about signage automatically because we believe that the BPA code will work.

The third significant change introduced by these amendments is to extend the application of the keeper liability regime to circumstances where an obligation to pay a parking charge arises as a result of parking on land without permission, which is to say in the context of a trespass or other tort. This change will help to address the concerns expressed by tenant associations and others about their ability to tackle unauthorised parking in communal parking areas once the ban on wheel-clamping comes into force. We have also made it clear in relation to vehicle hire companies that liability for any parking charges during the period of hire will rest with the hirer of the vehicle once the vehicle hire company provides a copy of the relevant documentation to the creditor. Again that reflects the position for on-road parking contraventions.

Finally, the amendments will allow for the use of CCTV or automatic number plate recognition technology, as well as the physical ticketing of vehicles, in order to manage parking on relevant land. Taken together, these amendments to schedule 4 will ensure that parking providers and other landowners will have an effective means of enforcing unpaid parking charges which are, at the same time, fair to the motorist and vehicle keepers.

On the concerns expressed about rogue ticketers, the Government are fully committed to monitoring the effect of the ban on vehicle immobilisation and removal and the associated keeper liability provisions in schedule 4.

21:30

I have cited the case of Scotland, where such things did not happen in anything like the way described by the hon. Member for Kingston upon Hull North, but if there is evidence that we need to take further steps when the new arrangements are in place, we will do so. We recognise that some may attempt to extort money through rogue ticketing, but the evidence from Scotland is that that has not been a significant problem. Rogue ticketers, by definition, will not have access to the DVLA database, so will not be able to pursue the vehicle keeper. All they will be able to do is issue a ticket and hope the recipient pays up, which is quite a different level from the intimidation and extortion that exists through the bad practices of rogue wheel-clampers.

Ticketers will not be able to possess the car and prevent the person from getting away from the place where the car was parked. That is a different level of intimidation and threat to that experienced by those targeted by wheel-clampers who were out to extort money unfairly. No longer will motorists have their cars held hostage, which was clearly the main reason why the unscrupulous clampers were able to levy excessive charges. We believe that the measures we are introducing in the Bill, together with existing consumer protection laws, are sufficient to deal with issues such as rogue ticketing, inadequate signage and excessive charges.

Let me deal briefly with Government amendment 21 to clause 54, which responds to an issue raised by the hon. Member for Kingston upon Hull North in Committee. The hon. Lady referred to the concerns expressed by the British Parking Association about the effect of subsection (3) of the clause. The provision is intended to permit the continued use of barriers as a legitimate means of parking control and enforcement once the ban on wheel-clamping comes into force. As I said many times in Committee, it is not our intention that the presence of a barrier should, in itself, confer lawful authority for the wheel-clamping of a vehicle. It is clear, however, that subsection (3) as drafted has been read as providing such authority. The Government amendment puts the matter beyond doubt. A landowner will not be committing the clause 54 offence in circumstances where a fixed barrier, present at the time when a vehicle was parked on the land in question, restricts the movement of the vehicle, but that does not mean that the landowner will be able to resort to wheel-clamping or towing away in those circumstances. I trust that the amendment makes the position crystal clear.

[Diana Johnson]

Let us be clear. Are we saying that if someone receives a ticket in a private car park and there is a barrier that restricts the car from being driven away, that is completely legitimate? Is the Minister saying that a vehicle can still be immobilised by a barrier being put down at the front of the car park, with a ticket being issued, so that the car cannot move away? Is that correct?

[Lynne Featherstone]

The presence of the barrier means that the owner has either expressly or implicitly consented to pay the parking charges, which must be clearly labelled under either consumer protection law or the new laws under the keeper liability or BPA rules. If he or she has paid the charge, the barrier will be lifted and they can leave the car park. They must pay the charge for the barrier to be lifted, like a normal car park. That is what happens in a normal car park—when I go shopping, that is what happens. One complies.

[Diana Johnson]

The point I am trying to make to the Minister is that some rogue landowners will put down barriers to immobilise vehicles but will put a ticket for, say, £500 on the car, saying, “Pay the £500 and we will take the barrier up.” That is the issue. I am concerned not about legitimate parking organisations that are members of the BPA, but about those rogue companies that are out to make a fast buck.

[Lynne Featherstone]

That has not been the experience in Scotland. I would say to motorists, first, that they should not enter unless the signage is clear and they know what they are doing, and, secondly, that if that were to happen, they should call the police. [Interruption.] I was about to say that I hope, in the light of the reassurance I have provided in respect of appeal rights and signage, that the hon. Lady will feel able to withdraw her new clause and support the Government’s amendments, but I am not sure that the timing is entirely appropriate.

The hon. Lady asked about the six-month limit for hired cars and she made a good point that we are happy to consider further. She also asked about the effect of consumer protection legislation on ticketing. Where the terms and conditions on which land may be used for parking are displayed on a prominent sign at the entrance to the land, existing consumer protection legislation applies. Such legislation protects consumers from misleading information and unfair contract terms. That deals with the point about the £500 ticket the hon. Lady mentioned, which would, under that protection, clearly be an unfair contract term. For example, where signs for motorists in a car park are misleading or where other misleading or deceptive information is given, such as the use of tickets that look like local authority tickets, there may be a breach of consumer protection regulations. If so, local authority trading standards services and the Office of Fair Trading can take enforcement action.

Where there is no prominent sign setting out the terms and conditions according to which the land may be used, there is no protection, as I have said, and the motorist should not park there as he or she is probably trespassing. However, that may not always be clear and it may be that a car park provider could be accused of making a misleading omission under the Consumer Protection from Unfair Trading Regulations 2008 if they fail to provide information that no parking is allowed. Maximum penalties under the regulations are a £5,000 fine on summary conviction—that is in a magistrates court—or a fine or imprisonment for a term not exceeding two years, or both, on conviction or indictment in a Crown court. Furthermore, companies can pursue motorists for a parking fee only when they have the motorist’s contact details, and the DVLA will provide those details only to companies that are registered with an accredited trade association. I have seen no evidence that contract law and consumer protection are defective in any way in that regard.

Let me return to the issue of extortionate fees and barriers, which the hon. Lady mentioned. If she was asking whether the exemption for barriers in clause 54(3) means that a landowner will still be able to charge extortionate fees to let motorists out of a car park where there is a barrier, the answer is no because, as I have said, subsection (3)(a) requires that

“there is express or implied consent by the driver of the vehicle to restricting its movement by a fixed barrier”.

Secondly, in order to establish a contract as a basis for payment, the terms for parking have to be clearly displayed. We consider that if a landowner demanded a fee for the vehicle’s release without that basis, he would be committing an offence under subsection (1).

[Stephen Pound (Ealing North) (Lab)]

I know that the hon. Lady’s heart is in the right place and that we are trying to achieve something good with this Bill, but it is riddled with holes and exemptions. I foresee a scenario in which a person gets a ticket from one of these companies and the DVLA then provides that person’s address to the ticketing company, which then applies for a bailiff’s warrant in a distant court, and a bailiff then turns up and takes the person’s car. With the best will in the world, ringing up trading standards or the police will not help. If these companies cannot get you one way they will get you another way, and bailiffs’ warrants on vehicles will be in use.

[Lynne Featherstone]

I thank the hon. Gentleman for that, but he is wrong. A rogue ticketer who is not a member of an accredited trade association or the British Parking Association would not be able to access the information from the Driver and Vehicle Licensing Agency.

[Stephen Pound]

It is not rogue; it is the norm.

[Lynne Featherstone]

It is not the norm. This is about making parking work for everyone. We are changing what was an appalling blot on the landscape. There is probably not an MP in the House who has not written to me or the Minister who previously held my position with terrible tales of rogue clamping. At the very worst, if the hon. Lady—sorry, the hon. Gentleman—[Interruption.] I have forgotten my point now; it is lost to posterity.

Anyway, I hope that I have answered the points raised by the hon. Member for Kingston upon Hull North. We are trying to do the right thing; we are removing a scourge. The measures have been welcomed by motoring organisations and people across the land. There is nothing as popular as the measures, as a result of people’s experiences of being clamped in unfair circumstances. I hope that the hon. Lady will feel able to withdraw her new clause and support the Government amendments. I fear that she may not, but I live in hope.

[Mr Ben Bradshaw (Exeter) (Lab)]

I rise briefly to support new clause 15, tabled by my hon. Friend the Member for Kingston upon Hull North (Diana Johnson). In over 14 years as Member of Parliament for Exeter, I cannot recall a local grievance that has caused as many constituents to complain to me or seek my help as have done about the behaviour of private car park operators over the last 18 months or so. Constituents have been fined while going to buy a ticket; fined despite buying and displaying a ticket; and fined despite the fact that the ticket machine was broken at the time and the driver had left a note to that effect on his windscreen. One car park at Exeter airport, which has 24-hour digital recording of the cars going in and out, has fined motorists for using the car park to turn around in, or for driving in and out of it by mistake.

The vast majority of cases concern people who have been fined, not clamped. The common grievance is the sense of summary injustice and the lack of any right of proper appeal. In some cases, when I have intervened, the companies concerned have reduced or even waived the fines. My local newspaper, the Express & Echo, has also taken up individual cases and sought to name and shame the rogue operators, but no system of justice should have to depend on the intervention of an MP or a local newspaper. I wholeheartedly agree with the excellent editorial in The Times today that warned that the Bill threatens to make a bad situation worse. We need a proper right of appeal, and I am afraid that the appeal process outlined by the Minister, which will be on a voluntary basis, will not reassure my constituents.

[Lynne Featherstone]

Is the right hon. Gentleman saying that he would allow wheel-clamping on private land to continue?

[Mr Bradshaw]

No. I am making the same point that other Members have made: if we ban wheel-clamping, the danger is in the unforeseen consequences. As I hope that the hon. Lady will appreciate from her experience as a Minister, there is always a danger of moving the problem elsewhere. We are already seeing that happen in towns and cities such as mine. Her approach of a voluntary appeals process is wholly inadequate, given the problem out there; it certainly will not reassure my constituents who have suffered rogue fines.

I completely support the requirements in the new clause for any organisation enforcing a parking charge to be a member of an accredited association; for all parking signage to be clear; and for fine limits to be set at similar levels to maximum on-street parking fines. I hope that my hon. Friend the Member for Kingston upon Hull North will push the new clause to a vote, and that hon. Members will support her.

[Guy Opperman]

I used to be one of the Automobile Association’s retained counsels. That is not necessarily a recommendation, but it is a past fact that I must acknowledge. I am no longer one of its retained counsels, and I am no longer a wheel-clamping specialist, but I was the counsel who represented Mrs Marina Vine. On 6 March 1997, she went to Langthorne hospital in Leytonstone. She was suffering from ulcerative colitis, and effectively she was being tested for a type of cancer. She left hospital, and on her way home, she felt violently sick. She pulled over to the side of the road, went on to what turned out to be private land, and was violently sick approximately 15 yards away from her car, just around a corner from it. In the time that intervened before her return—approximately three to four minutes—her car was wheel-clamped. She literally had to beg the clamper to release her car, but they would not do so unless she paid £105.

21:45

Everyone in the House, whether they have been here for as little as 18 months, as I have been, or for longer, understands that there is a significant problem with wheel-clamping which, it is fair to say, the previous Government attempted to address—no one disputes that. It is right that we should change the law to try to reform it, but I wish to stress one point. The hon. Member for Kingston upon Hull North (Diana Johnson) has tabled new clause 15, which seeks to make it a criminal offence to issue an excessive parking charge. I do not intend any disrespect to the hon. Lady, but section 1 of the Fraud Act 2006, which was introduced by the previous Government, the Theft Act 1968 and other measures that deal with obtaining property by deception apply in circumstances in which someone commits an offence without lawful authority—effectively dishonestly—and requires a driver or anyone in possession of a vehicle to pay a parking charge in relation to a contract to park that vehicle.

Effectively, those people take money from someone in circumstances in which they have no lawful authority to do so. I have no objection to reforming or tightening up the law in relation to wheel-clamping, but the new clause alleges that it creates a new criminal offence, when that is manifestly not the case.

[Mr Mark Spencer (Sherwood) (Con)]

Does my hon. Friend have any sympathy with the small company that has a piece of land in front of its office for its staff to park on, only for a member of the public to abuse that car park and park inappropriately and selfishly? The company lacks the ability to enforce provisions on its own land in front of its own building.

[Guy Opperman]

Everyone would have sympathy with those circumstances. We have all, in the process of representing our constituents, encountered wheel-clamping cases that are to the detriment of the industry itself and the previous measures that applied.

I am mindful that other Members wish to speak on an important provision, so I shall merely make the point that new clause 15 adds nothing whatsoever to the existing criminal law. As much as I support the efforts of The Times and various organisations, what we have is sufficient.

[Henry Smith (Crawley) (Con)]

I am conscious, after the previous debate in which we discussed DNA, civil liberties and serious crime, that this may appear to be a mundane matter. However, as we have heard this evening and on other occasions, it is a source of great concern to our constituents up and down the country. I am pleased that it will be addressed in the Bill.

I very much support, as my hon. Friend the Member for Hexham (Guy Opperman) said a few moments ago, the introduction of a ban on wheel-clamping. As the Minister pointed out, a ban has been successful for 19 years in Scotland, and it is high time that such a provision was introduced in England and Wales. However, I very much wish to echo the concerns outlined by the right hon. Member for Exeter (Mr Bradshaw) and the hon. Member for Kingston upon Hull North (Diana Johnson) that we may be shifting the problem elsewhere.

The protections that motorists enjoy as consumers differ enormously, depending on whether they park on local authority-controlled land or on privately controlled land. Under the local authority system, which is covered extensively by legislation, as we have heard, there is an appeals process that is laid down in legislation, and there is a reasonable level of fining. If someone transgresses, or apparently transgresses, the rules in a council car park, they are issued with a penalty notice of about £50, which is reduced to half that amount if it is paid within 28 days. Some two thirds of people who appeal to local authority car-park operators are successful, because they can demonstrate that they did indeed buy a ticket, which perhaps fell off the dashboard, or they can give another legitimate reason for their appeal.

That contrasts significantly with the situation of people who park on privately available public car parks and those operated by rogue car park operators. I have had one of those in my constituency. I know from raising the issue in a Westminster Hall debate that many other hon. Members have had similar problems. People, often elderly and vulnerable, receive a threatening letter in the post demanding payment, sometimes of £70 or even more. Within a couple of weeks that demand is hyped up to perhaps double the amount. There are then threats to send in the bailiffs and threats to destroy credit ratings. Even people whom we would not describe as vulnerable get very concerned, understandably, that their credit rating might be affected, and they end up paying the so-called fine—it is not, of course, a criminal penalty—because they simply want the problem to go away.

Earlier in the Session I introduced a private Member’s Bill on the very issue of consumer protection in relation to private car parks. Of course my Bill is rapidly going the way of the vast majority of private Members’ Bills. In it I proposed that local authorities should have the ability to license the operation of private car parks, in the same way as they license publicans or taxis. That would allow a responsive approach through the democratic system at a local level. However, I accept that my Bill is unlikely to find its way on to the statute book.

I hear what the Minister says with regard to self-regulation through the British Parking Association. I have met the chief executive of that organisation on a number of occasions. My assessment of its operation has been that the pilots that it has run so far have not been overly successful. It tends to be the responsible companies that are involved in such schemes, and the irresponsible ones that, understandably, are not.

I recognise that we have enough regulation on the statute book, and that the self-regulation route is the best way to go. However, if we are to go down the self-regulation route, I note that the legislation has provision for reserve powers to have the matter reviewed. I seek an assurance from the Minister that when the British Parking Association and perhaps other accredited organisations introduce an independent system of appeals, that is reviewed in a timely manner. If, as I suspect—I hope I am wrong— self-regulation does not work, those reserve powers will have to be used.

[Diana Johnson]

We have had an interesting debate re-examining the issue. Having listened to the Minister explaining the provisions that she is seeking to introduce by means of amendments to the Bill, and having heard her explanation of clause 54(3), I am even more concerned that companies that wish to get round the law, operate in an intimidating way and issue excessive parking tickets will see this as an opportunity to go ahead. Under clause 54(3) putting down a barrier in effect immobilises a vehicle, so I am particularly concerned about the Minister’s response on that.

The impact assessment sets out that when issued with a ticket, 74% of people will pay up, so it is well worth rogue ticketing companies putting tickets on vehicles and getting those 74% of people to pay up. They do not have to worry about dealing with the 26% who might appeal from the keeper liability angle.

I am keen to test the opinion of the House on new clause 15. In terms of rogue wheel-clampers, I think that motorists are going to be out of the frying pan and into the fire and that the rogue companies will run riot. The problem will not be solved and I think that we will be back here another day.

[Guy Opperman]

Does the hon. Lady not accept that the Theft Act 1968, consumer protection legislation or, more particularly, the Fraud Act 2006 apply in exactly the same way as new clause 15?

[Diana Johnson]

Unfortunately, none of those Acts has ever been used to deal with wheel-clamping problems. I assume that the hon. Gentleman thinks that they could be used where people have obtained excessive amounts of money by wheel-clamping and immobilising a vehicle. However, our new clause has the support of the AA, the RAC and the British Parking Association. Furthermore, given the views expressed by 98% of the 12,000 people polled on this issue, I think that we are on the side of motorists and the British public, and I certainly wish to push the new clause to a vote.

Question put, That the clause be read a Second time.

21:56

Division 358

Ayes: 230

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Labour: 220
Democratic Unionist Party: 5
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Green Party: 1

Noes: 301

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Conservative: 254
Liberal Democrat: 45

22:10

Proceedings interrupted (Programme Order, this day).

Mr Speaker put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 54

Offence of immobilising etc. vehicles

Amendment made: 21, page 38, leave out lines 14 to 18 and insert—

‘(3) But, where the restriction of the movement of the vehicle is by means of a fixed barrier and the barrier was present (whether or not lowered into place or otherwise restricting movement) when the vehicle was parked, any express or implied consent (whether or not legally binding) of the driver of the vehicle to the restriction is, for the purposes of subsection (1), lawful authority for the restriction.’.—(James Duddridge.)

Clause 56

Recovery of unpaid parking charges

Amendment made: 76, page 39, line 11, leave out from ‘keeper’ to ‘has’ in line 12 and insert

‘or hirer of a vehicle in certain circumstances)’.—(James Duddridge.)

Schedule 4

Recovery of unpaid parking charges

Amendments made: 39, page 113, line 11, leave out ‘a relevant contract’ and insert

‘virtue of a relevant obligation’.

Amendment 40, page 113, line 14, leave out

‘or have only been partly paid’

and insert ‘in full’.

Amendment 41, page 113, line 22, leave out ‘claim’ and insert ‘recover’.

Amendment 42, page 113, line 24, leave out from ‘service”’ to end of line 25 and insert

‘means—

(a) in the case of the keeper, an address which is either—

(i) an address at which documents relating to civil proceedings could properly be served on the person concerned under Civil Procedure Rules; or

(ii) the keeper’s registered address (if there is one); or

(b) in the case of the driver, an address at which the driver for the time being resides or can conveniently be contacted;’.

Amendment 43, page 113, line 30, at end insert—

‘“notice to driver” means a notice given in accordance with paragraph 6A;

“notice to keeper” means a notice given in accordance with paragraph 6B or 6C (as the case may be);’.

Amendment 44, page 113, line 31, leave out from ‘charge”’ to end of line 33 and insert—

‘—

(a) in the case of a relevant obligation arising under the terms of a relevant contract, means a sum in the nature of a fee or charge, and

(b) in the case of a relevant obligation arising as a result of a trespass or other tort, means a sum in the nature of damages,

however the sum in question is described;’.

Amendment 45, page 113, line 33, at end insert—

‘“registered address” means, in relation to the keeper of a registered vehicle, the address described in paragraph 7(3)(b) (as provided by the Secretary of State in response to the application for the keeper’s details required by paragraph 7);’.

Amendment 46, page 113, line 39, after ‘on the’ insert ‘relevant’.

Amendment 47, page 114, line 3, at end insert—

‘“relevant obligation” means—

(a) an obligation arising under the terms of a relevant contract; or

(b) an obligation arising, in any circumstances where there is no relevant contract, as a result of a trespass or other tort committed by parking the vehicle on the relevant land;’.

Amendment 48, page 114, leave out lines 4 to 6.

Amendment 49, page 114, line 8, at end insert—

‘(2) The reference in the definition of “parking charge” to a sum in the nature of damages is to a sum of which adequate notice was given to drivers of vehicles (when the vehicle was parked on the relevant land).

(3) For the purposes of sub-paragraph (2) “adequate notice” means notice given by—

(a) the display of one or more notices in accordance with any applicable requirements prescribed in regulations under paragraph 7A for, or for purposes including, the purposes of sub-paragraph (2); or

(b) where no such requirements apply, the display of one or more notices which—

(i) specify the sum as the charge for unauthorised parking; and

(ii) are adequate to bring the charge to the notice of drivers who park vehicles on the relevant land.’.

Amendment 50, page 114, line 40, leave out ‘claim payment of’ and insert ‘recover’.

Amendment 51, page 114, line 42, leave out sub-paragraphs (2) to (6) and insert—

‘(2) The right under this paragraph applies only if—

(a) the conditions specified in paragraphs 5, 6, 7 and 7A (so far as applicable) are met; and

(b) the vehicle was not a stolen vehicle at the beginning of the period of parking to which the unpaid parking charges relate.

(3) For the purposes of the condition in sub-paragraph (2)(b), the vehicle is to be presumed not to be a stolen vehicle at the material time, unless the contrary is proved.

(4) The right under this paragraph may only be exercised after the end of the period of 28 days beginning with the day on which the notice to keeper is given.’.

Amendment 52, page 115, line 17, leave out ‘claimed’ and insert ‘recovered’.

Amendment 53, page 115, line 18, leave out

‘the driver under paragraph 6(2)(d) less’

and insert

‘keeper under paragraph 6B(2)(c) or (d) or, as the case may be, 6C(2)(d) (less’.

Amendment 54, page 115, line 20, leave out ‘notice is given’ and insert ‘time so specified)’.

Amendment 77, page 115, line 23, at end insert—

‘(9) The right under this paragraph is subject to paragraph 7B (which provides for the right not to apply in certain circumstances in the case of a hire car).’.

Amendment 55, page 115, line 26, leave out from ‘vehicle’ to ‘but’ in line 28 and insert

‘the requirement to pay the unpaid parking charges;’.

Amendment 56, page 115, line 29, leave out ‘enforce those terms’ and insert

‘take steps to enforce that requirement’.

Amendment 57, page 115, line 32, leave out sub-paragraph (2) and insert—

‘(2) Sub-paragraph (1)(b) ceases to apply if (at any time after the end of the period of 28 days beginning with the day on which the notice to keeper is given) the creditor begins proceedings to recover the unpaid parking charges from the keeper.’.

Amendment 58, page 115, line 34, leave out sub-paragraph (3).

Amendment 59, page 115, line 38, leave out paragraph 6 and insert—

‘6 (1) The second condition is that the creditor (or a person acting for or on behalf of the creditor)—

(a) has given a notice to driver in accordance with paragraph 6A, followed by a notice to keeper in accordance with paragraph 6B; or

(b) has given a notice to keeper in accordance with paragraph 6C.

(2) If a notice to driver has been given, any subsequent notice to keeper must be given in accordance with paragraph 6B.

6A (1) A notice which is to be relied on as a notice to driver for the purposes of paragraph 6(1)(a) is given in accordance with this paragraph if the following requirements are met.

(2) The notice must—

(a) specify the vehicle, the relevant land on which it was parked and the period of parking to which the notice relates;

(b) inform the driver of the requirement to pay parking charges in respect of the specified period of parking and describe those charges, the circumstances in which the requirement arose (including the means by which it was brought to the attention of drivers) and the other facts that made those charges payable;

(c) inform the driver that the parking charges relating to the specified period of parking have not been paid in full and specify the total amount of the unpaid parking charges relating to that period, as at a time which is—

(i) specified in the notice; and

(ii) no later than the time specified under paragraph (f);

(d) inform the driver of any discount offered for prompt payment and the arrangements for the resolution of disputes or complaints that are available;

(e) identify the creditor and specify how and to whom payment may be made;

(f) specify the time when the notice is given and the date.

(3) The notice must relate only to a single period of parking specified under sub-paragraph (2)(a) (but this does not prevent the giving of separate notices each specifying different parts of a single period of parking).

(4) The notice must be given—

(a) before the vehicle is removed from the relevant land after the end of the period of parking to which the notice relates, and

(b) while the vehicle is stationary,

by affixing it to the vehicle or by handing it to a person appearing to be in charge of the vehicle.

6B (1) A notice which is to be relied on as a notice to keeper for the purposes of paragraph 6(1)(a) is given in accordance with this paragraph if the following requirements are met.

(2) The notice must—

(a) specify the vehicle, the relevant land on which it was parked and the period of parking to which the notice relates;

(b) inform the keeper that the driver is required to pay parking charges in respect of the specified period of parking and that the parking charges have not been paid in full;

(c) state that a notice to driver relating to the specified period of parking has been given and repeat the information in that notice as required by paragraph 6A(2)(b), (c) and (f);

(d) if the unpaid parking charges specified in that notice to driver as required by paragraph 6A(2)(c) have been paid in part, specify the amount that remains unpaid, as at a time which is—

(i) specified in the notice to keeper, and

(ii) no later than the end of the day before the day on which the notice is either sent by post or, as the case may be, handed to or left at a current address for service for the keeper (see sub-paragraph (4));

(e) state that the creditor does not know both the name of the driver and a current address for service for the driver and invite the keeper—

(i) to pay the unpaid parking charges; or

(ii) if the keeper was not the driver of the vehicle, to notify the creditor of the name of the driver and a current address for service for the driver and to pass the notice on to the driver;

(f) warn the keeper that if, at the end of the period of 28 days beginning with the day after that on which the notice to keeper is given—

(i) the amount of the unpaid parking charges (as specified under paragraph (c) or (d)) has not been paid in full, and

(ii) the creditor does not know both the name of the driver and a current address for service for the driver,

the creditor will (if all the applicable conditions under this Schedule are met) have the right to recover from the keeper so much of that amount as remains unpaid;

(g) inform the keeper of any discount offered for prompt payment and the arrangements for the resolution of disputes or complaints that are available;

(h) identify the creditor and specify how and to whom payment or notification to the creditor may be made;

(i) specify the date on which the notice is sent (if it is sent by post) or given (in any other case).

(3) The notice must relate only to a single period of parking specified under sub-paragraph (2)(a) (but this does not prevent the giving of separate notices which each specify different parts of a single period of parking).

(4) The notice must be given by—

(a) handing it to the keeper, or leaving it at a current address for service for the keeper, within the relevant period; or

(b) sending it by post to a current address for service for the keeper so that it is delivered to that address within the relevant period.

(5) The relevant period for the purposes of sub-paragraph (4) is the period of 28 days following the period of 28 days beginning with the day after that on which the notice to driver was given.

(6) A notice sent by post is to be presumed, unless the contrary is proved, to have been delivered (and so “given” for the purposes of sub-paragraph (4)) on the second working day after the day on which it is posted; and for this purpose “working day” means any day other than a Saturday, Sunday or a public holiday in England and Wales.

(7) When the notice is given it must be accompanied by any evidence prescribed under paragraph 6D.

6C (1) A notice which is to be relied on as a notice to keeper for the purposes of paragraph 6(1)(b) is given in accordance with this paragraph if the following requirements are met.

(2) The notice must—

(a) specify the vehicle, the relevant land on which it was parked and the period of parking to which the notice relates;

(b) inform the keeper that the driver is required to pay parking charges in respect of the specified period of parking and that the parking charges have not been paid in full;

(c) describe the parking charges due from the driver as at the end of that period, the circumstances in which the requirement to pay them arose (including the means by which the requirement was brought to the attention of drivers) and the other facts that made them payable;

(d) specify the total amount of those parking charges that are unpaid, as at a time which is—

(i) specified in the notice; and

(ii) no later than the end of the day before the day on which the notice is either sent by post or, as the case may be, handed to or left at a current address for service for the keeper (see sub-paragraph (4));

(e) state that the creditor does not know both the name of the driver and a current address for service for the driver and invite the keeper—

(i) to pay the unpaid parking charges; or

(ii) if the keeper was not the driver of the vehicle, to notify the creditor of the name of the driver and a current address for service for the driver and to pass the notice on to the driver;

(f) warn the keeper that if, after the period of 28 days beginning with the day after that on which the notice is given—

(i) the amount of the unpaid parking charges specified under paragraph (d) has not been paid in full, and

(ii) the creditor does not know both the name of the driver and a current address for service for the driver,

the creditor will (if all the applicable conditions under this Schedule are met) have the right to recover from the keeper so much of that amount as remains unpaid;

(g) inform the keeper of any discount offered for prompt payment and the arrangements for the resolution of disputes or complaints that are available;

(h) identify the creditor and specify how and to whom payment or notification to the creditor may be made;

(i) specify the date on which the notice is sent (where it is sent by post) or given (in any other case).

(3) The notice must relate only to a single period of parking specified under sub-paragraph (2)(a) (but this does not prevent the giving of separate notices which each specify different parts of a single period of parking).

(4) The notice must be given by—

(a) handing it to the keeper, or leaving it at a current address for service for the keeper, within the relevant period; or

(b) sending it by post to a current address for service for the keeper so that it is delivered to that address within the relevant period.

(5) The relevant period for the purposes of sub-paragraph (4) is the period of 14 days beginning with the day after that on which the specified period of parking ended.

(6) A notice sent by post is to be presumed, unless the contrary is proved, to have been delivered (and so “given” for the purposes of sub-paragraph (4)) on the second working day after the day on which it is posted; and for this purpose “working day” means any day other than a Saturday, Sunday or a public holiday in England and Wales.

(7) When the notice is given it must be accompanied by any evidence prescribed under paragraph 6D.

6D (1) The appropriate national authority may by regulations made by statutory instrument prescribe evidence which must accompany a notice which is to be relied on as a notice to keeper for the purposes of paragraph 6(1)(a) or paragraph 6(1)(b) (as the case may be).

(2) The regulations may in particular make provision as to—

(a) the means by which any prescribed evidence is to be generated or otherwise produced (which may include a requirement to use equipment of a kind approved for the purpose by a person specified in the regulations); or

(b) the circumstances in which any evidence is, or is not, required to accompany a notice to keeper.

(3) The regulations may—

(a) include incidental, supplementary, transitional, transitory or saving provision;

(b) make different provision for different purposes.’.

Amendment 60, page 116, line 23, leave out paragraph 7 and insert—

‘7 (1) The third condition is that—

(a) the creditor (or a person acting for or on behalf of the creditor) has made an application for the keeper’s details in relation to the period of parking to which the unpaid parking charges relate;

(b) the application was made during the relevant period for the purposes of paragraph 6B(4) (where a notice to driver has been given) or 6C(4) (where no notice to driver has been given);

(c) the information sought by the application is provided by the Secretary of State to the applicant.

(2) The third condition only applies if the vehicle is a registered vehicle.

(3) In this paragraph “application for the keeper’s details” means an application for the following information to be provided to the applicant by virtue of regulations made under section 22(1)(c) of the Vehicle Excise and Registration Act 1994—

(a) the name of the registered keeper of the vehicle during the period of parking to which the unpaid parking charges relate; and

(b) the address of that person as it appears on the register (or, if that person has ceased to be the registered keeper, as it last appeared on the register).’.

Amendment 61, page 117, line 2, at end insert—

‘7A (1) The fourth condition is that any applicable requirements prescribed under this paragraph were met at the beginning of the period of parking to which the unpaid parking charges relate.

(2) The appropriate national authority may by regulations made by statutory instrument prescribe requirements as to the display of notices on relevant land where parking charges may be incurred in respect of the parking of vehicles on the land.

(3) The provision made under sub-paragraph (2) may, in particular, include provision—

(a) requiring notices of more than one kind to be displayed on any relevant land;

(b) as to the content or form of any notices required to be displayed; and

(c) as to the location of any notices required to be displayed.

(4) Regulations under this paragraph may—

(a) include incidental, supplementary, transitional, transitory or saving provision;

(b) make different provision for different areas or purposes.’.

Amendment 78, page 117, line 2, at end insert—

‘Hire vehicles

7B (1) This paragraph applies in the case of parking charges incurred in respect of the parking of a vehicle on relevant land if—

(a) the vehicle was at the time of parking hired to any person under a hire agreement with a vehicle-hire firm; and

(b) the keeper has been given a notice to keeper within the relevant period for the purposes of paragraph 6B(4) or 6C(4) (as the case may be).

(2) The creditor may not exercise the right under paragraph 4 to recover from the keeper any unpaid parking charges specified in the notice to keeper if, within the period of 28 days beginning with the day after that on which that notice was given, the creditor is given—

(a) a statement signed by or on behalf of the vehicle-hire firm to the effect that at the material time the vehicle was hired to a named person under a hire agreement;

(b) a copy of the hire agreement; and

(c) a copy of a statement of liability signed by the hirer under that hire agreement.

(3) The statement of liability required by sub-paragraph (2)(c) must—

(a) contain a statement by the hirer to the effect that the hirer acknowledges responsibility for any parking charges that may be incurred with respect to the vehicle while it is hired to the hirer;

(b) include an address given by the hirer (whether a residential, business or other address) as one at which documents may be given to the hirer;

(and it is immaterial whether the statement mentioned in paragraph (a) relates also to other charges or penalties of any kind).

(4) A statement required by sub-paragraph (2)(a) or (c) must be in such form (if any) as may be prescribed by the appropriate national authority by regulations made by statutory instrument.

(5) The documents mentioned in sub-paragraph (2) must be given by—

(a) handing them to the creditor;

(b) leaving them at any address which is specified in the notice to keeper as an address at which documents may be given to the creditor or to which payments may be sent; or

(c) sending them by post to such an address so that they are delivered to that address within the period mentioned in that sub-paragraph.

(6) In this paragraph and paragraph 7C—

(a) “hire agreement” means an agreement which—

(i) provides for a vehicle to be let to a person (“the hirer”) for a period not exceeding 6 months (whether or not the period is capable of extension by agreement between the parties so as to exceed 6 months); and

(ii) is not a hire-purchase agreement within the meaning of the Consumer Credit Act 1974;

(b) any reference to the currency of a hire agreement includes a reference to any period during which, with the consent of the vehicle-hire firm, the hirer continues in possession of the vehicle as hirer, after the expiry of any period specified in the agreement but otherwise on terms and conditions specified in it; and

(c) “vehicle-hire firm” means any person engaged in the hiring of vehicles in the course of a business.

7C (1) If—

(a) the creditor is by virtue of paragraph 7B(2) unable to exercise the right to recover from the keeper any unpaid parking charges mentioned in the notice to keeper, and

(b) the conditions mentioned in sub-paragraph (2) below are met,

the creditor may recover those charges (so far as they remain unpaid) from the hirer.

(2) The conditions are that—

(a) the creditor has within the relevant period given the hirer a notice in accordance with sub-paragraph (5) (a “notice to hirer”), together with a copy of the documents mentioned in paragraph 7B(2) and the notice to keeper;

(b) a period of 21 days beginning with the day on which the notice to hirer was given has elapsed; and

(c) the vehicle was not a stolen vehicle at the beginning of the period of parking to which the unpaid parking charges relate.

(3) In sub-paragraph (2)(a) “the relevant period” is the period of 21 days beginning with the day after that on which the documents required by paragraph 7B(2) are given to the creditor.

(4) For the purposes of sub-paragraph (2)(c) a vehicle is to be presumed not to be a stolen vehicle at the material time, unless the contrary is proved.

(5) The notice to hirer must—

(a) inform the hirer that by virtue of this paragraph any unpaid parking charges (being parking charges specified in the notice to keeper) may be recovered from the hirer;

(b) refer the hirer to the information contained in the notice to keeper;

(c) warn the hirer that if, after the period of 21 days beginning with the day after that on which the notice to hirer is given, the amount of unpaid parking charges referred to in the notice to keeper under paragraph 6B(2)(f) or 6C(2)(f) (as the case may be) has not been paid in full, the creditor will (if any applicable requirements are met) have the right to recover from the hirer so much of that amount as remains unpaid;

(d) inform the hirer of any discount offered for prompt payment and the arrangements for the resolution of disputes or complaints that are available;

(e) identify the creditor and specify how and to whom payment may be made; and

(f) specify the date on which the notice is sent (if it is sent by post) or given (in any other case).

(6) The documents mentioned in sub-paragraph (2)(a) must be given by—

(a) handing them to the hirer;

(b) leaving them at an address which is either—

(i) an address specified in the statement of liability mentioned in paragraph 7B(2)(c) as an address at which documents may be given to the hirer; or

(ii) an address at which documents relating to civil proceedings could properly be served on the hirer under Civil Procedure Rules; or

(c) sending them by post to such an address so that they are delivered to that address within the relevant period for the purposes of sub-paragraph (2)(a).’.

Amendment 62, page 117, leave out lines 17 to 34 and insert—

‘9 (1) The appropriate national authority may by order made by statutory instrument amend this Schedule for the purpose of—

(a) amending the definition of “relevant land” in paragraph 3;

(b) adding to, removing or amending any of the conditions to which the right conferred by paragraph 4 is for the time being subject.

(2) The power to amend this Schedule for the purpose mentioned in sub-paragraph (1)(b) includes, in particular, power to add to, remove or amend—

(a) any provisions that are applicable for the purposes of a condition; and

(b) any powers of the appropriate national authority to prescribe anything for the purposes of a condition by regulations made by statutory instrument.

(3) An order under this paragraph may—

(a) include incidental, supplementary, transitional, transitory or saving provision;

(b) make different provision for different purposes.

10 (1) A statutory instrument containing regulations under any provision of this Schedule is subject to annulment by—

(a) a resolution of either House of Parliament (in the case of regulations made by the Secretary of State); or

(b) a resolution of the National Assembly for Wales (in the case of regulations made by the Welsh Ministers).

(2) A statutory instrument containing an order made under paragraph 9—’.—(Lynne Featherstone.)

Bill to be further considered tomorrow.

Business without Debate

Monday 10th October 2011 Commons Chamber

Business of the House

Ordered,

That, at the sitting on Wednesday 12 October, paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motions in the name of Edward Miliband as if the day were an Opposition Day; proceedings on the Motions may continue, though opposed, until the moment of interruption and shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Sir George Young.)

Motion made,

That, at the sitting on Monday 17 October, notwithstanding Standing Order No. 14(3A) (Arrangement of public business), the Speaker shall put the Questions necessary to dispose of the proceedings on the Motion in the name of Sir George Young relating to the Parliamentary Contributory Pension Fund not later than two hours after the commencement of proceedings on the Motion; and such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved.—(Sir George Young.)

[Hon. Members]

Object.

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Tribunals and Inquiries

That the draft First-tier Tribunal (Immigration and Asylum Chamber) Fees Order 2011, which was laid before this House on 12 July, be approved.—(James Duddridge.)

Question put.

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 12 October (Standing Order No. 41A).

Swindon Town Centre

Monday 10th October 2011 Commons Chamber

22:11

[Mr Robert Buckland (South Swindon) (Con)]

I present a petition signed by Swindon residents and visitors to our town centre. It is made in respect of established street traders. [Interruption.]

[Mr Speaker]

Order. It is rather discourteous. There is a lot of noise, including that being made by a Government Whip, who unaccountably is not staying to hear the presentation of the petition; I cannot imagine why. If Members are leaving the Chamber, I feel sure that they will do so quickly and quietly. [Interruption.] We are grateful to the Whip on duty for toddling back to his place to hear the presentation of the petition.

[Mr Buckland]

I am grateful, Mr Speaker.

The future role of established street traders in the life of Swindon town centre is supported by no fewer than 4,371 signatories. The prayer reads as follows:

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to request that Swindon Borough Council review its policy on street trading in Swindon town centre.

Following is the full text of the petition:

[The Humble Petition of Swindon residents and visitors,

Sheweth that there is support for the street traders of Swindon town centre; that street traders add to the vibrancy of Swindon town centre; and that the future of street trading must be placed on a secure footing.

Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to request that Swindon Borough Council review its policy on street trading in Swindon town centre

And your Petitioners, as in duty bound, will ever pray, &c.]

[P000963]

Interpretation Services (Ministry of Justice)

Monday 10th October 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Bill Wiggin.)

22:13

[Mr John Leech (Manchester, Withington) (LD)]

I am delighted to have secured this end-of-day Adjournment debate on the proposed outsourcing of interpretation services by the Ministry of Justice. I wish that it had not been necessary and that the coalition Government had recognised the mistakes made by the previous Labour Government in not taking action to stop police forces around the country outsourcing interpreting services to agencies, which has resulted in a poorer level of service not only to defendants but to police forces and the criminal justice system around the country. This is not the first time that I have raised this issue in Parliament. Back in March 2009, I secured a Westminster Hall debate in response to the north-west police forces planning to outsource their interpreting services. Unfortunately, it fell on deaf ears; I hope that it will not do so this time.

I would like particularly to thank my constituent Marc Starr, who originally brought this issue to my attention, and Geoffrey Buckingham, the chairman of the Association of Police and Court Interpreters, for providing me with a lot of information for the debate, and to recognise colleagues who have contacted me about this issue, including my right hon. Friend the Secretary of State for Business, Innovation and Skills and the hon. Member for Bromsgrove (Sajid Javid), who is in his place.

A framework agreement to regulate the supply of police and court public service interpreters has been brokered by the Ministry of Justice. Its intentions are to endeavour to ensure that interpreting services to the judiciary and police are delivered to a high standard via qualified interpreters in a way intended to save about £18 million annually against the current £60 million budget. The Ministry of Justice has decided that the best way to do so is to let a contract to a single self-regulating commercial organisation that will book interpreters, individually or through agencies, to service the police and courts; determine a rate for the job; and monitor not only the quality of the interpreters’ work and need for further training and review, but its own performance. However, it is highly questionable whether this framework agreement and Applied Language Solutions, which is the agency that will provide interpreters, will be able to meet the Ministry of Justice’s requirements.

The plans introduce three tiers of interpreters, and the intention is to rank interpreters into one of three categories, with a rate of pay of £22 for tier 1, £20 for tier 2, and £16 for tier 3. Interpreters will be ranked according to their qualifications, but also subject to the agency’s own assessment, to which already fully qualified interpreters would be expected to subject themselves at their own personal cost. These rates of pay, along with severe restrictions on travel expenses and an end to travel-time payments, will result in interpreters refusing to sign up to the agency, or to take specific jobs, because of the low rates of pay. I have received evidence from one interpreter in Greater Manchester whose current net pay after travel expenses for a typical magistrates court job in Greater Manchester is £103.75 for anything up to a three-hour job, whereas under the proposed framework agreement it would be £10 for a one-hour job or £50 for a three-hour job, which equates to £4.44 per hour for one hour, rising to £11.76 per hour if the job lasts three hours.

Perhaps an even starker example is that of a Lithuanian-speaking interpreter who sometimes has to travel to Plymouth Crown court from Surrey because of a lack of qualified Lithuanian-speaking interpreters. Under the current agreement, they would receive £246.25 after travel costs for the 11.5-hour return trip. Under the new framework agreement, this would be minus £65.10 after travel costs. Does the Minister seriously think that that is acceptable, and does he really think that this will be an incentive to accept that particular job?

[Jonathan Evans (Cardiff North) (Con)]

I assure my hon. Friend that the worries that he has outlined are shared by interpreters in Wales, whose concern is not so much the finance but the fact that the service is going to deteriorate because of the quality of interpreters who will work at these rates.

[Mr Leech]

I thank my hon. Friend for that contribution. That is a common issue that has been raised with me by interpreters around the country, in England and in Wales.

When one adds in the additional disincentives of no pension, holiday pay or sick pay, as well as no job security and no increase in interpreters’ rate of pay since 2007, it is unthinkable to assume that these proposed rates of pay and costs are suitable. It also seems perverse that the new framework agreement encourages the use of an interpreter’s car rather than public transport. Currently, standard-class fares are reimbursed in full, while the car mileage rate is 25p a mile. A higher rate of 45p a mile, which is more in line with the true cost of running a car per mile, along with parking costs, is payable only if the interpreter can show that there was no public transport option. However, under the new arrangements all calculations will be based on the use of a personal car and public transport costs will not be covered—not much of an incentive for interpreters to reduce their carbon emissions and travel on public transport.

One of the stated aims of the framework agreement is increasing the number of suitably qualified and vetted interpreters to meet the demand. There are currently around 2,300 interpreters registered with the national register of public service interpreters. Applied Language Solutions claims that 1,000 linguists have signed up to its Linguist Lounge recruitment website. That means a cut of around 1,300 qualified interpreters available to the courts system, assuming that all 1,000 are NRPSI-qualified. If they are not, the cut in qualified interpreters will be even greater. The failure of ALS to reach agreement with at least 1,300 qualified interpreters shows the level of opposition to the proposals, in spite of evidence to suggest that ALS has sought to pressurise interpreters into signing up, with thinly veiled threats that the registration is closing soon. Does the Minister think that that is appropriate behaviour for a company purporting to implement the legal interpreting and translation register, which surely must be consistently open to applicants as a public resource?

Does the Minister also think that closing the list when more than half the NRPSI-qualified interpreters have refused to sign up will increase the availability of suitably qualified and vetted interpreters? Of course it will not. We should look at the evidence from where outsourcing has already taken place and at its impact on the quality and availability of interpreters. The Ministry of Justice claimed on 6 July that “collaborative authorities” had

“concerns that NRPSI registration does not necessarily guarantee quality. The evidence for this is anecdotal, but has been consistent enough to warrant action.”

I would prefer to rely on hard evidence, and there is significant evidence that the outsourcing of interpreting services by police forces has resulted in the use of unqualified interpreters.

When Cheshire constabulary outsourced to ALS, only 34% of the interpreters provided by ALS were on the NRPSI. In Lincolnshire, outsourcing led to a reduction of registered interpreters from 68% to less than 30%. Where outsourcing has taken place there has been a significant reduction in the number of registered interpreters being used—clear evidence that the quality and availability of interpreters is reduced.

[Lilian Greenwood (Nottingham South) (Lab)]

Does the hon. Gentleman agree with my constituent Svetlana Clark who is a member of the Chartered Institute of Linguists and a public service interpreter on the national register, that the potential cost to the judiciary of adjournments, mistrials, appeals and failed prosecutions as a result of inadequate interpreting cannot be overestimated and does not serve the interests of justice?

[Mr Leech]

I do agree with the hon. Lady’s constituent. There is lots of evidence to suggest that where unqualified interpreters have been used there have been delays in police and court action, resulting in additional costs. I have been handed pages and pages of examples of unqualified interpreters being sent to police stations and courts by agencies, or interpreters proficient in the wrong language. One example that made it into Private Eye was ALS providing a Czech-speaking interpreter for a Slovak-speaking suspect. ALS’s explanation was that

“it is fair to say that most people from Slovakia essentially speak Czech.”

Is this really the sort of organisation that we want in charge of ensuring that justice is done?

Other questions have been raised about the suitability of ALS to fulfil the role. The Minister has already assured me that the Department’s procurement specialists were satisfied by the company’s stability and probity, but the fact remains that more than 50% of qualified interpreters do not and will not work for it. The company has been found to be in breach of the Data Protection Act 1998 on three occasions since 2007. Can the Minister assure me that potentially highly sensitive data are safe and that is it appropriate for them to be handled in non-UK call centres?

Finally, will the Minister explain why foreign-language-speaking interpreters are being treated differently from British sign language interpreters, who will retain their existing terms and conditions? Surely that contravenes sections 13 and 19 of the Equality Act 2010, by providing less favourable terms to foreign-language interpreters? The Ministry of Justice also intends effectively to re-test foreign-language interpreters, but not British sign language interpreters. Surely it is a contradiction that the Ministry accepts BSL qualifications as valid but rejects foreign-language interpreters, even though they have the same level of accredited qualification.

These proposals have not been properly thought through. The MOJ has failed to look at the evidence from outsourcing, and failed to treat all interpreters equitably. I hope that it is not too late for the Government to take a step back and review this decision. If they cannot do that, I would at the very least strongly urge the Minister closely to monitor the performance of the service, paying close attention to the delays and additional costs that will undoubtedly occur when cases are delayed as a result of a lack of an available interpreter, or when mistakes are made when under-qualified interpreters are used.

22:25

[Sajid Javid (Bromsgrove) (Con)]

I should like to thank my hon. Friend the Member for Manchester, Withington (Mr Leech) for raising the important issue of the outsourcing of interpretation services by the Ministry of Justice. I want to raise the case of a local company, Sign Solutions, which is based in my constituency and which specialises in interpretation services for British sign language. It was formed in 1998, following the retrial of the case of R v. Smith, Smith and Sams. This murder trial had been running in the Old Bailey for seven weeks using an unskilled, unqualified BSL interpreter. The interpreter errors eventually became so great that the judge had to stop the trial.

My constituent Sean Nicholson and his friend Gloria Ogborn were interpreters of known expertise, and they were approached by the Ministry of Justice to undertake the retrial. Their company, Sign Solutions, went on successfully to tender for civil and family court work for more than 10 years. Since then, it has helped to streamline interpreting services, and introduced cost savings by reducing the number of interpreters booked for cancelled hearings and supplying the right number of interpreters for each case. It has also suggested cost-saving ideas to the MOJ, such as using a web-based video system that could cut pricing by up to 50% without compromising quality. Sign Solutions is an award-winning national vocational qualification centre that offers post-qualification training in police and court work. It employs apprentices who are training to become the next generation of BSL legal interpreters. Its services encompass all languages and telephone interpreting, in order to be able to compete for one-service tenders.

During the recent MOJ tender process, Sign Solutions was rejected on the basis of having insufficient turnover, despite being one of the most experienced BSL court interpreters in the country, with more than 12 qualified interpreters in house, four of whom have more than 20 years of legal experience each. Small and medium-sized enterprises such as Sign Solutions are just the kind of business that this Government are committed to supporting, so may I ask the Minister for Policing and Criminal Justice to look carefully at the MOJ procurement process, to see how a more level playing field could be created so that companies such as Sign Solutions have a better chance of winning Government business?

22:28

[The Minister for Policing and Criminal Justice (Nick Herbert)]

I congratulate my hon. Friend the Member for Manchester, Withington (Mr Leech) on securing this debate. I understand his concerns, and this debate gives me a welcome opportunity to address them. There are two points I would like to clarify before turning to his key concerns. The first is that the Government’s reforms do not limit in any way the circumstances in which relevant parties to proceedings are entitled to the services of an interpreter. An interpreter is made available as soon as practicable once an apparent need is identified, irrespective of the language involved. That will not change.

Secondly, I believe that we need to take care in our use of the word “outsourcing”, which has characterised this debate. I am referring not only to this Adjournment debate, but to the wider debate taking place on this matter outside the House. Interpretation and translation services are not currently provided in house; they have always been outsourced. The difference is that, in future, the Government will be outsourcing to a single supplier rather than to individual freelance interpreters and translators.

There is no doubt that, at a time when we are striving to make savings across all public services, there is an opportunity to make savings in this area. Currently, the annual spend on these services is in the region of £60 million across the justice sector, so it is by no means insignificant. We estimate that moving over to the framework agreement will result in savings of at least £18 million a year—significant savings.

The decision to move to a single supplier is not a snap decision. Officials in the Ministry of Justice have conducted a lengthy, thorough and robust procurement process, as required by EU law, engaging with a range of bidders to ensure that we get the best possible service for the best possible price. The single supplier with which we have signed a framework agreement is Applied Language Solutions. ALS will provide a single point of contact, available to staff 24 hours a day, seven days a week, through which the provision of face-to-face interpreting, telephone interpreting, written translation and language services for the deaf and deaf-blind can be obtained.

Under the framework agreement, the Ministry of Justice will sign a contract on behalf of MOJ central functions, Her Majesty’s Courts and Tribunals Service and the Prison Service. Other organisations—for example, individual police forces and the Crown Prosecution Service—can also sign contracts with ALS, but the MOJ cannot mandate this. It is important to be clear that a wide range of justice organisations support the need to make these changes.

The changes will primarily affect England and Wales. However, it will be open to justice organisations in Scotland and Northern Ireland to sign contracts under the framework, although the Scottish Court Service already has its own contract with a commercial supplier.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The Minister has said that the tendering process is robust. Will he assure us for the record that he is clear that what he is doing in the single tendering to ALS will conform to the directive on the right of interpretation in criminal proceedings?

[Nick Herbert]

My understanding is that it does.

Some of our stakeholders—primarily interpreters and their representative organisations—oppose the new model. My hon. Friend the Member for Manchester, Withington has eloquently set out some of their concerns. They suggest that our proposals will reduce the quality of interpreters and translators working in the justice sector to the detriment of justice itself. Interpreters have suggested that there will be breaches of articles 5 and 6 of the European convention on human rights with, for example, suspects spending longer in custody, collapsed trials and miscarriages of justice. I do not accept that these are valid claims.

Let us first remember that the current system does not meet our needs. We already have the unacceptable position that approximately 400 magistrates court trials and a number of considerably more expensive Crown court trials cannot go ahead as listed because the interpreter does not attend court.

Let us consider the following scenario. A member of court staff receives notification that a defendant due to appear in court for a pre-trial hearing the following Monday morning requires an interpreter. That member of staff accesses the register and starts to make phone calls. Interpreter 1 is not available. Interpreter 2, despite repeated call-backs, cannot be contacted. Interpreter 3, who lives some considerable distance away, is available and takes the booking. At around the same time, the Crown Prosecution Service needs to book an interpreter in the same language for a prosecution witness due to give evidence in a trial. The witness is due to give evidence on Monday afternoon. The interpreter originally booked has pulled out. The CPS accesses the register and starts to make phone calls. Interpreter 1 is not available; interpreter 2 answers the phone and accepts the booking. After 20 minutes of phone calls, we now have two interpreters in the same language travelling to the same court building on the same day. Under the current arrangements, we would pay each of them a payment equivalent to a minimum of three hours work and possibly travel time on top of that.

[Mr Leech]

Does the Minister accept, though, that where services have been outsourced to an agency to arrange interpreters rather than directly to the registered interpreters, there have been more rather than fewer problems?

[Nick Herbert]

I do not accept that the problems my hon. Friend describes will characterise the new service we are setting out under the framework agreement. The difference with our new framework agreement is that the court staff and the CPS each make a single phone call or send a single e-mail to ALS. ALS then not only contacts the interpreters, but its infrastructure means that it knows about the two jobs and can ensure that one interpreter is used for both jobs—saving on costs for the justice sector and providing a more worthwhile piece of work for the interpreter who is booked.

Ensuring that interpretation and translation are of the appropriate quality and widening the available pool of interpreters are fundamental elements of this reform and have always been so, and the Government believe that they will be delivered. The framework agreement is clear about the quality standards that are expected. It requires detailed and meaningful management information and comprehensive key performance indicators, and it will be properly managed. In addition, all interpreters and translators will be required to abide by a comprehensive code of conduct, which emphasises that they should accept only assignments that they are competent to undertake.

Clearly, in any system for the provision of such services there will be exceptional cases in which it is not easy, or always possible, to find a person with the specified qualification requirements within the time scale sought. That happens under the present arrangements, and—we must be realistic—we cannot rule it out entirely under the new arrangements. Such cases are currently managed as well as possible on the ground by the police and courts as appropriate, and that will continue. The new arrangements will help to mitigate the problems with a tiered approach, and, perhaps most crucially, with objectives to promote the recruitment and training of new interpreters, particularly in certain areas of the court or in certain languages.

Our proposals constitute a reasonable and sensible response to the need to improve efficiency in our spending on interpreters, drive up standards and reduce burdens on the justice system, while ensuring that we maintain quality standards. We believe that when, for example, a defendant or witness needs an interpreter, he or she should be entitled to one. We do not want police officers, court staff and other workers to spend time telephoning and booking interpreters. We do not believe it is acceptable that the taxpayer can pay hundreds of pounds in fees and travel expenses to an interpreter who will deal with a 10-minute traffic hearing in a magistrates court which results in a fine of less than £100. We want interpreters to spend more time interpreting than travelling, and we believe that positive benefits will result from the introduction of more competition.

We have considered carefully what interpreters have told us. What they have said has influenced this project, and has, I believe, resulted in a more robust model. The fact that we have decided to adopt a framework agreement that is opposed by some interpreters does not negate that consultation. The alternative models that they suggested would clearly have led to some savings—we acknowledge that—but they did not meet all the objectives that we sought, and did not offer us the controls that we needed. As I said earlier, we were looking for the best possible service at the best possible price. The Government are satisfied that the framework agreement will ensure that the justice sector continues to have access to quality language services, while ensuring the provision of value for money on behalf of the public.

My hon. Friend raised the issue of the pay that interpreters will receive under the new arrangements. We have always been aware of the claims by interpreters that lower pay will cause them to seek alternative work. As a result, bidders involved in the procurement process were tested to ensure that rates of pay would be sufficient to attract and retain linguists with the appropriate quality standards. ALS has now published the rates that it will pay interpreters. We know that making that information available has not eased the concerns of some foreign language interpreters. We have seen calculations by interpreters which suggest that revised terms and conditions would lead to a reduction of between 40% and 60% in remuneration, and would drive them from the profession. However, the situation is not as simple as those calculations suggest.

It is not possible at this stage to produce a detailed analysis of how individual interpreters will be affected, because the whole model is being changed, not just the hourly rate, but we believe that the improved technology available to ALS will enable interpreters to be given work in a more efficient and co-ordinated manner. For instance, an interpreter may be given a series of assignments on the same day and in the same general location. We also know that a large number of interpreters have registered with ALS. Ultimately, the framework agreement offers the opportunity to any linguist, irrespective of race or other protected characteristic, to perform services for the justice sector if appropriately qualified.

My hon. Friend also expressed concerns about the company, and concerns have been expressed by others about the competitive process. During a dialogue that was robust and rigorous, ALS satisfied the procurement specialists at the Ministry of Justice of its financial stability and probity. Failure to satisfy officials in that regard would have resulted in its elimination from the process. I am satisfied that my officials took all the necessary steps to ensure the financial probity of ALS such that the framework agreement was properly awarded to that company. My officials were aware of the criticism that had been made by some interpreters of ALS. The selection of questions and criteria used for the procurement process was influenced by the issues that had been raised. In particular, the process focused on relationships with interpreters, market rates and quality issues. This process was applied equally to all bidders, including ALS, in line with procurement law principles.

This is nothing new. Many goods and services are provided successfully across the justice sector by commercial entities, and in many cases this ensures a continued improvement in quality and standards. Opportunity for, and creation of, profit can be a useful tool in establishing greater quality standards. We are not creating a monopoly. The UK market for language services is worth about £940 million annually and the justice sector currently represents about 7% of that market.

My hon. Friend also asked why language services professionals for the deaf and deaf-blind are treated differently from foreign language interpreters. While there are differences in the detail and operation of the frameworks for foreign language interpretation and language services for the deaf and deaf-blind in tiering and assessment, we do not accept the suggestion that this constitutes unlawful discrimination under the Equality Act 2010. Ultimately, the framework agreement offers the opportunity to any linguist to perform services for the justice sector, if appropriately qualified.

I appreciate my hon. Friend’s concerns about these issues, but I hope I have gone at least some way to allaying his concerns about the way in which this framework agreement will operate, in particular by emphasising not only the importance of ensuring quality in relation to interpretation services, but the significant savings that can be made in this sector of the justice system.

The public finances are under great pressure. We have to deal with the deficit, so we have to make savings in the criminal justice system, where costs have risen very substantially over recent years. This is one way in which we can make those significant savings. We cannot dismiss an £18 million a year saving in this sector. That is a substantial sum, which is why we think it is important to maintain our commitment in this regard.

Question put and agreed to.

22:42

House adjourned.

Ministerial Correction

Monday 10th October 2011 Ministerial Corrections

Monday 10 October 2011

Defence Equipment and Support: Recruitment

Monday 10th October 2011 Ministerial Corrections

[Anas Sarwar]

To ask the Secretary of State for Defence what estimate he has made of recruitment and retention rates for Defence Equipment and Support staff based in (a) Glasgow and (b) Bristol.

[Official Report, 6 September 2011, Vol. 532, c. 546W.]

Letter of correction from Andrew Robathan:

An error has been identified in the written answer given to the hon. Member for Glasgow Central (Anas Sarwar) on 6 September 2011. The original answer failed to take account of organisational changes that took place in April 2011 but which were not recorded on the departmental HR management information system until August. The data provided in the original answer covered the period August 2010 to July 2011 only.

The full answer given was as follows:

[Mr Robathan]

Defence Equipment and Support currently employs around 100 civilian staff in Glasgow and around 5,500 civilian staff at its headquarters in Bristol. The significant difference in numbers means that direct comparisons cannot readily be made. In the year to July 2011, about 2.5% of Bristol staff and about 1% of Glasgow staff left through retirement or resignation compared with around 4.5% for Defence Equipment and Support as a whole.

The restrictions on recruitment across the whole of the Ministry of Defence mean that there has only been external recruitment into critical or specialised posts. In the year to July 2011, we recruited around 150 new staff in Bristol and none in Glasgow.

The correct answer should have been:

[Mr Robathan]

As at 31 August 2011, Defence Equipment and Support employed around 200 civilian staff in Glasgow and around 6,700 civilian staff at its headquarters in Bristol. The significant difference in numbers means that direct comparisons cannot readily be made. In the year to August 2011, about 2.2% of Bristol staff and about 0.5% of Glasgow staff left through retirement or resignation compared with around 4.1% for Defence Equipment and Support as a whole.

The restrictions on recruitment across the whole of the Ministry of Defence mean that there has only been external recruitment into critical or specialised posts. In the year to August 2011, we recruited around 160 new staff in Bristol and none in Glasgow.

Petitions

Monday 10th October 2011 Petitions

Monday 10 October 2011

Leacroft surgery (Crawley)

Monday 10th October 2011 Petitions

The Petition of residents of Crawley,

Declares that the Petitioners are concerned by the current proposals to close a general practitioner’s surgery in the Crawley Borough Ward of West Green

The Petitioners therefore request that the House of Commons urges the Government to take all possible action to ensure that Leacroft surgery is able to maintain health service provision in the area.

And the Petitioners remain, etc.—[Presented by Henry Smith, Official Report, 7 September 2011; Vol. 532, c. 517.]

[P000953]

Observations from the Secretary of State for Health, received 19 September 2011:

The issue raised in the petition is a local matter and my Department will bring it to the attention of the local NHS.

Bridgwater by-pass

Monday 10th October 2011 Petitions

The Petition of residents of Bridgwater,

Declares that the Petitioners believe that EDF Energy should not be granted permission to proceed with the Hinckley Point C Nuclear Development without first constructing a northern bypass for Bridgwater from Junction 23 of the M5 to connect with the A39 west of Cannington; that such a bypass would ensure that construction traffic would avoid Bridgwater’s already over-congested roads and leave the whole area a worthwhile legacy after the construction of the Hinckley Point C Nuclear Development is complete; and that the Petitioners believe that a bypass would render an EDF facility and the Bridgwater Gateway Development an unnecessary and unjustifiable intrusion on farmland close to the residential area of North Petherton.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that permission for EDF Energy to proceed with the Hinckley Point C Nuclear Development should be conditional on the construction of a northern bypass for Bridgwater from Junction 23 of the M5 to connect with the A39 west of Cannington.

And the Petitioners remain, etc.—[Presented by Mr Ian Liddell-Grainger, Official Report, 19 July 2011; Vol. 531, c. 906.]

[P000946]

Observations from the Secretary of State for Transport, received 3 October 2011:

It would be for the developer to put forward a transport strategy as part of any development consent application, for consideration by the Infrastructure Planning Commission. Interested parties would be able to make representations on the application through the planning process.

There are clear statutory and policy frameworks in place governing arrangements for processing and determining planning applications and applications for development consent for major infrastructure projects—including matters relating to conditions, obligations and requirements. It is important that these are adhered to. It would be inappropriate for the Government to comment on any specific aspect of a prospective planning or development consent application, or speculate about conditions that may or may not be applied by the decision-maker to any eventual consent.

Dartford Crossing Tolls

Monday 10th October 2011 Petitions

The Petition of residents of Dartford and readers of the Dartford Messenger newspaper,

Declares that the Petitioners are opposed to any increase in tolls charged for the Dartford Crossing.

The Petitioners therefore request that the House of Commons urges the Department for Transport not to increase tolls on the Dartford Crossing and to reconsider the emergency measures to lift the barriers during severe congestion and extend the local residents discount scheme.

And the Petitioners remain, etc.—[Presented by Gareth Johnson, Official Report, Wednesday 14 September 2011; Vol. 532, c. 1146 .]

[P000960]

Observations from the Secretary of State for Transport, received 3 October 2011:

The Government have not yet made any decisions regarding the future ownership of the Dartford Crossing.

I understand that several key factors need to be considered in the decision-making process including whether a new concession structure would provide better value for the taxpayer, the flexibility needed to provide possible additional crossing capacity in the future, and how user charging policies would be affected.

The Budget statement (22 June), confirmed that decisions will be made on the possibility of providing future additional crossing capacity and the possibilities for letting out a concession at the conclusion of the spending review.

High Speed Rail

Monday 10th October 2011 Petitions

The Petition of residents of South Northamptonshire and others,

Declares that the Petitioners are strongly opposed to the proposed high speed railway; declares that the Petitioners believe it to be a massive waste of money; declares that it will destroy miles of beautiful countryside, thousands of homes and villages; and further declares that there is no business case or environmental case for this railway and upgrading existing rail networks is a better alternative.

The Petitioners therefore request that the House of Commons urges the Government to reconsider its support for the proposed high speed railway and support the upgrading of existing rail networks.

And the Petitioners remain, etc.—[Presented by Andrea Leadsom, Official Report, 14 July 2011; Vol. 531, c. 585.]

[P000944]

Observations from the Secretary of State for Transport, received 3 October 2011:

The documents published to support the recent public consultation on high speed rail set out the Government’s case that a national high speed rail network would offer a once-in-a-generation opportunity to transform the way we travel in Britain and would provide a step-change in rail capacity, speed and connectivity.

Analysis carried out by HS2 Ltd has indicated that the Government’s proposed Y-shaped network would generate monetised economic benefits with a net present value of around £44 billion and the first phase (from London to the West Midlands) alone would support the creation of more than 40,000 jobs. We estimate that over 50% of the benefits of HS2 would fall to cities and regions outside of London and the South East, helping boost long-term and sustainable economic growth and regeneration in the areas that need it most.

In respect of upgrades to the existing network, the Government are committed to one of the most far reaching programmes of rail capacity improvements since the Victorian era, despite the pressure on the public finances caused by the deficit. However, this will not be enough to deal with capacity pressure of the future which is why we have put forward our high speed rail proposals. Work carried out by Atkins on strategic alternatives to high speed rail concluded that major enhancement packages could provide only a fraction of the potential benefits of a national high speed rail network, while potentially creating significant disruption for travellers during the construction period and creating risks for service reliability.

In addition, the Government’s objectives for high speed rail are broader than can be achieved by simply upgrading current lines. High speed rail would offer potential to release capacity on the existing network, to promote economic growth and regeneration, and to enhance connectivity between inter-urban, urban and international networks, for example via new links to Crossrail and HS1.

The public consultation on the Government’s proposals for a national high speed rail network closed on 29 July 2011 and we are carefully considering all the responses received. I can assure petitioners that any responses they have submitted during the consultation period will be given thorough and detailed consideration.

I fully acknowledge the need to design any high speed line in a way which reduces local environmental and social impacts as far as possible. The Government have been clear that high speed rail must be delivered sustainably; balancing the benefits of high speed rail with the local impacts on landscapes and communities. I believe that through carefully designed mitigation measures the most intrusive local impacts can be eliminated and a solution found which is balanced and fair.

I expect to announce the Government’s response to the consultation process and our decision whether to proceed with the proposal by the end of this year.

Swansea Coastguard Station

Monday 10th October 2011 Petitions

The Petition of people concerned about maritime safety in the Bristol Channel,

Declares that the recommendation of the UK Government to close the Swansea Maritime Rescue Co-ordination Centre at Tutts Head, Mumbles, would endanger the lives and wellbeing of people on the water and around the coast of the Bristol Channel.

The Petitioners therefore request that the House of Commons press the UK Government to retain the Swansea Maritime Rescue Centre as a 24-hour staffed coastguard station.

And the Petitioners remain, etc.—[Presented by Martin Caton, Official Report, 13 September 2011; Vol. 532, c. 1008.]

[P000957]

Observations from the Secretary of State for Transport, received 4 October 2011:

The future of the Maritime Rescue Co-ordination Centre at Swansea is a specific question within the wider consultation on the modernisation of the coastguard that I announced on 14 July 2011.

That consultation ended on 6 October 2011. The Government are considering all the responses to that exercise and will make an announcement in due course.

Written Ministerial Statements

Monday 10th October 2011 Written Statements

Monday 10 October 2011

Tax Agreement (Switzerland)

Monday 10th October 2011 Written Statements

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

On 6 October the Government signed an agreement with the Swiss confederation on co-operation on tax matters. The agreement seeks to tackle tax evasion by UK residents through the use of Swiss financial services. It will clear up past tax liabilities through the imposition of a significant one-off levy, safeguard future revenues through a new withholding tax on investment returns, and expand the powers of HM Revenue and Customs to find out about Swiss assets.

The text of the agreement has been deposited in the Libraries of both Houses and is available on the HM Revenue and Customs’ website.

Work of the Department (Conference Recess)

Monday 10th October 2011 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

I would like to update hon. Members on the main items of business undertaken by my Department since the House rose for conference recess on 15 September.

Delivering better services

Under the last Administration, thanks to policies engineered in Whitehall, millions of homes saw cuts to their local rubbish collections. Weekly rubbish collections are the most visible of all front-line services and I believe every household in England has a basic right to have their rubbish collected every week.

In June 2011, the Government review of waste policy in England stated:

“The Government will be working with local councils to increase the frequency and quality of rubbish collections and make it easier to recycle, and to tackle measures which encourage councils specifically to cut the scope of collections”.

On 30 September, my Department announced a new fund of up to £250 million to support councils to deliver weekly collections of household waste. The new weekly collections support scheme will support councils which switch from fortnightly to better weekly collections, and will support weekly collection councils which wish to keep and improve the weekly service they offer, such as through better procurement, new technologies and reward schemes like Recyclebank and others.

Councils will be able to bid individually or in consortiums, and with the private sector, where that increases value for money. In order to encourage the most innovative and locally tailored solutions, authorities will be able to bid for a mix of revenue and capital funding.

In due course, I will make a further statement on the detail of this scheme, and the details for inviting councils to submit innovative bids for funding. This initiative will help councils deliver better weekly collections, and in the process make it easier for families to go green and improve local amenity and local environment. It also builds on the abolition of bin taxes through the Localism Bill and our plans to abolish unfair bin fines introduced under the last Administration.

Helping local families

Under the last Administration, while bin collections halved for many homes, across the country council tax more than doubled. In 2011-12, the coalition Government introduced a council tax freeze, which was taken up by all participating councils.

On 3 October, the my right hon. Friend, the Chancellor of the Exchequer, announced £805 million support to help freeze council tax bills for a further year. The support for local authorities, on top of the existing freeze, means that taxpayers living in an average band D home in England could save up to £72 compared to a 5% rise in council tax. In addition to providing real help to households in difficult times this provides a positive contribution to those local authorities who wish to keep council tax down while protecting vital front-line services.

I will shortly make a written statement setting out the provisions for English local authorities and my officials will then write to the authorities with full details of the scheme for 2012-13, including providing an indicative breakdown of estimated grants to help local authorities with their budget planning.

Improving transparency and accountability

Transparency is at the core of delivering efficient and accountable Government. On 29 September, my Department published the final code of recommended practice for local authorities on data transparency. The code of practice calls on local authorities such as councils and fire and rescue services to shine a light on every part of their business, from employees’ salaries over £58,200 and details of all their contracts and tenders to details of grants to voluntary organisations, spending data and the locations of public land and building assets.

Subject to consultation, Ministers will consider making the code a legally binding requirement to ensure authorities are fully accountable to the people they serve. The coalition Government have abolished top-down inspection and increased local autonomy making local accountability more important than ever. Central Government have a role in ensuring that local people can exercise their right to know how their money is being spent and have the information they need to question that spending. Decentralisation and a robust local democracy needs greater local accountability.

On 5 September, I informed the House that I had asked the Audit Commission to outsource its audit work from next year, as the first step towards disbanding the Commission and introducing a new, decentralised audit regime which will allow local authorities to appoint their own auditors. Following careful consideration of the options, we determined that outsourcing was likely to offer the best value for money for the taxpayer. In line with our commitment to transparency, on 10 October my Department published on its website a summary of the independent report we commissioned to inform our decision.

In September and October my Department published two further groups of reports presenting the findings from research projects commissioned by the previous Administration. The reports and findings are of general policy interest, but do not relate to forthcoming policy announcements. We are publishing these documents in the interests of transparency. The first group was published on 29 September and relates to immigration; a summary of the reports and their cost to taxpayers can be found online at:

http://www.communities.gov.uk/statements/corporate/legacyresearchimmigration1

The second group, published on 6 October relates to housing; a summary of the reports and their cost to taxpayers can be found online at:

http://www.communities.gov.uk/statements/newsroom/legacyresearchhousing

Ensuring fairness for council workers and taxpayers

The cost of local government pensions to the taxpayer has risen from £1.8 billion in 1997 to £6 billion in 2009-10 increasing burdens on council tax—and in turn, hitting pensioners the hardest. In the light of changing demographics, this growing burden is not sustainable or fair on the taxpayer. Moreover, Lord Hutton’s report sets out why public sector pensions need to be reformed to more fairly protect taxpayers.

On 7 October, my Department published a consultation that proposes how to deliver the £900 million of savings required by the spending review 2010 to the local government pension scheme in England and Wales by 2014-15.

The paper proposes a progressively phased increase in employees’ contribution tariff from April 2012 that would raise an additional £450 million, or 1.5% of pay, and a change in the accrual rate from April 2013 to raise an additional £450 million, or 1.5% of pay. This provides a balance between increasing employee contributions and adjusting the accrual rates while making the necessary savings to better protect the taxpayer.

To ensure the scheme continues to be an attractive scheme to all existing and future members. Any increases in contribution rate will protect low earners, with no increase for those earning less than £15,000, and mean high earners pay in proportionally more reflecting their more generous pensions.

We will continue to engage with local government and trade unions throughout the consultation as they have a key role to play. We hope all parties will take the time to consider these proposals in a constructive manner.

Building a better Britain

We believe that creating the conditions for sustainable growth and thriving economies begins at a local level, with local control and responsibility and local investment.

On 3 October, the coalition Government invited the Lancashire and Hull and Humber local enterprise partnerships to develop proposals for two new enterprise zones. This is in response to the recent announcement by BAE systems on their sites in Brough, Warton and Samlesbury. The zones will benefit from simplified planning rules, super-fast broadband and tax breaks for new business for the next four years. The Government will work closely with these local enterprise partnerships to develop strong and viable proposals for enterprise zones that will accelerate local growth, generate hundreds of jobs and attract many new start up firms.

On 10 October, my Department published a consultation on reforming the community infrastructure levy to provide that a proportion of the money raised from development will go directly to the neighbourhood where it takes place. Local people will have the freedom to spend this money to deal with the demands that new development places on their community, for example by providing facilities such as parks, playgrounds and community centres or new and improved transport.

The levy will also continue to be used to contribute to larger infrastructure projects across areas like new roads, transport, or hospitals. Developers will benefit from a system that ensures they know upfront how much they will be expected to contribute towards the infrastructure needed to support new development and communities will benefit because they will be able to decide for themselves how the demands placed on their area are best addressed.

The Government are also moving ahead with plans to release disused public land and empty offices with enough capacity to build up to 100,000 new homes by 2015. On 5 October, four Departments with significant landholdings published their strategies that set out how their formerly used land and property has the capacity to deliver more than 50,000 desperately needed new homes.

Over the summer these departments have moved swiftly to identify land and property that could be released for new development. This builds on the 11,000 housing starts that will be achieved through the release of land owned by the Homes and Communities Agency. The amount of previously-developed land owned by the public sector is more than twice the size of Leicester, and its development could support as many as 200,000 construction and related jobs.

At the same time, my right hon. Friend, the Minister for Housing and Local Government announced fresh steps to help communities across the country reclaim and develop hundreds of acres of unused public sector land and buildings, which could be used to deliver the schemes communities want to see in their areas. Members of the public will now be able to request a sale of public land and buildings by filling in a simple and user-friendly form. It will replace a system that is so obscure and restrictive that it has hardly ever been used, with only one successful application in the past 13 years.

The improved process for requesting the sale of public land and property will be one way of applying for land to be released by Government Departments, and will also apply to land owned by councils and other public bodies.

Promoting home ownership and affordable housing

The Government also want to support people to meet their aspirations of home ownership. Since 1980, nearly 2 million social homes have been bought by their occupants under Right to Buy, improving social mobility and building mixed communities. The Right to Buy gave something back to families who worked hard, paid their rent and played by the rules. It allowed them to do up their home, change their front door, improve their garden—without getting permission from the council. It gave people a sense of pride and ownership not just in their home, but in their street and neighbourhood. Yet under the last Administration. Right to Buy discounts were cut significantly.

On 2 October, the Prime Minister announced the intention to raise Right to Buy discounts to a level which will make the scheme attractive to tenants across England. The receipt from the Right to Buy will be used to pay off the housing debt and build more housing for affordable rent—for every home bought under Right to Buy, a new affordable home will be built, over and above our existing plans. Further details of this will be set out in the forthcoming housing strategy. The reform of the housing revenue account system is and remains a coalition priority and the timetable for the reform remains unchanged.

Tackling the 700,000 empty homes across the country is a top priority for my Department. On 20 September, the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), announced more powers for community groups to bring empty homes back into use. Community and voluntary organisations will be able to bid for a part of £100 million of Government funding for pioneering housing schemes that will ensure empty properties are lived in again. This will also help to provide more affordable housing. The coalition Government are already providing more incentives for councils to bring empty homes back into use, including them in the new homes bonus. In one year of the new homes bonus just under 16,000 previously empty properties have been brought back into use.

My Department will also consult in due course on plans to allow councils local discretion to introduce a council tax premium on homes in their area that have been empty for more than two years, to provide a stronger incentive to get the homes back into productive use and remove the blight from such properties on local neighbourhoods.

The coalition Government will stand by and help families who work hard and play by the rules, while tackling the small number of people who abuse the system. In this context, it has been estimated that there could be 6,000 households living in this taxpayer-funded social housing with incomes greater than £100,000. This is not fair to the millions of people in genuine housing need and those who work hard, earn a modest income, yet still remain on a housing waiting list. On 4 October, the Minister for Housing and Local Government indicated that he will be looking at introducing a “pay to stay” scheme for social tenants on incomes greater than £100,000 who want to stay in those properties. A consultation on this will be published in due course.

I am placing in the Library copies of the press notices and papers associated to this statement.

Independent Review of Single Source Pricing Regulations

Monday 10th October 2011 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

On 26 January 2011, Official Report, columns 10-11WS, I announced that Lord Currie of Marylebone would chair an independent review of the regulations used by the Ministry of Defence (MOD) in single source, non-competitive, procurement, the so-called Yellow Book. Lord Currie has now submitted his independent report, a copy of which has been placed in the Library of the House. I would like to thank Lord Currie and his team for the report. The MOD and other interested parties will now consider his recommendations.

The Government welcome Lord Currie’s recommendations. In broad terms his report focuses on achieving a more open relationship between MOD and defence industry, ensuring standardised high-quality cost data are provided by contractors to the MOD. This will help ensure greater transparency of costs and should improve the MOD’s ability to negotiate realistic prices. Industry will be incentivised to deliver efficiency by the opportunity to make greater returns should they deliver cost savings for the MOD. Making industry more efficient should not only achieve value for money to the taxpayer, but also lead to a more competitive role for the UK defence industry in the export market.

Small and medium enterprises (SMEs) will be offered fewer data reporting requirements and a simplified profit rate process. Larger contractors will provide an annual statement on how they have engaged SMEs in their supply chain.

Lord Currie recommends these arrangements are overseen by an independent Single Source Regulations Office (SSRO) which would replace the existing review board to provide stronger oversight over both MOD and industry.

The Department will now consider the report’s recommendations as part of the next stage of consultation, which will run until 6 January 2012. Responses to all aspects of the report are welcome, but the Government particularly seek views on the merits of the establishment of the SSRO or possible alternatives such as the strengthening of the existing cost assurance and analysis service. A final report will then be produced which we intend to publish in early 2012 when I shall report back to the House.

Boundary Commission for Wales (Appointments)

Monday 10th October 2011 Written Statements

[The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)]

On 4 October 2011 Mr Paul Loveluck CBE and Professor Robert McNabb were appointed as members of the Boundary Commission for Wales (BCW), following the resignation of two former members of that commission earlier this year.

Mr Loveluck’s career has included spells as president of the National Museum and Libraries of Wales, CEO of the Wales Tourist Board, and CEO of the Countryside Council for Wales. Professor McNabb is professor of economics at Cardiff university, a fellow of the Higher Education Authority and Learned Society of Wales, and a former dean of Cardiff Business School.

The appointments are for five years and made following a fair and open public appointments process competition, in accordance with the code of practice published by the Commissioner for Public Appointments. Ministers made the appointments in line with the recommendations of a panel which comprised a Cabinet Office official, the deputy chair of the BCW (Mr Justice Lloyd Jones) and an independent assessor approved by the Office of the Commissioner for Public Appointments.

The Boundary Commission for Wales has stated that it will publish its initial proposals for the 2013 review of parliamentary constituencies in January 2012 and that it expects to complete the 2013 review within the deadline stipulated by Parliament. The Government made the replacement appointments as quickly as possible and will continue to take the necessary steps to ensure there is no risk to this deadline.

New Schools

Monday 10th October 2011 Written Statements

[The Secretary of State for Education (Michael Gove)]

I will be making an announcement on new schools this afternoon via an oral statement in the House of Commons. A list of new schools will be placed in the Libraries of both Houses to coincide with this oral statement.

Global Abolition of the Death Penalty

Monday 10th October 2011 Written Statements

[The Minister of State, Foreign and Commonwealth Office (Mr Jeremy Browne)]

I wish to make the House aware of the 2011 update to HMG’s strategy on global abolition of the death penalty and provide an update on progress which the Government have made against the strategy since it was publicly launched on 11 October 2010.

Promoting human rights and democracy is a priority for the UK Government. It is the long-standing policy of the UK to oppose the death penalty in all circumstances as a matter of principle. We believe that its use undermines human dignity; that there is no conclusive evidence of its deterrent value; and that any miscarriage of justice leading to its imposition is irreversible and irreparable.

Since the publication of the “Strategy for Abolition of the Death Penalty”, the Government have raised the death penalty bilaterally with a number of our priority countries at both official and ministerial level in Asia, Africa, the middle east, the USA, Europe and the Caribbean.

We have had some success through our project work. The British High Commission in Uganda is currently supporting a project which aims to provide access to justice for those who have been on death row for over three years, and through this we have funded work by an organisation which has applied to the courts for those on death row to have their sentences commuted to life imprisonment. The FCO is also currently funding a project in the middle east and north Africa region covering Tunisia, Morocco and Jordan, funding workshops which have provided others with the tools to advocate for abolition. This project has also led to the publication of a book that shows the death penalty is not implicit in sharia law. Through the funding of projects in Commonwealth Caribbean and Commonwealth African countries, we have worked to achieve further restrictions on the use of the death penalty, for example in June the mandatory death penalty for felony murder was ruled unconstitutional in Trinidad and Tobago as a result of one of these projects. In July the FCO funded a regional workshop in the Caribbean, providing training to 70 mental health professionals from across the Caribbean, which should lead to improved mental health assessments for those facing the death penalty in the region. In Kenya we supported a regional seminar on the abolition of the death penalty, which took place in April, and we are also currently supporting project work in Nigeria and China.

Consular staff in London and at our overseas missions continue to work hard, in collaboration with the NGO Reprieve, and local lawyers to make progress on the cases of British nationals facing the death penalty. For each case, we have agreed with the key stakeholders our handling strategy, to ensure that our representations are targeted and appropriate. In recent months we have made ministerial and head of mission representations on cases in the US, Ghana, Democratic Republic of Congo, Indonesia, Malaysia, and Pakistan.

We have also worked with the EU to create an international voice for abolition. We have raised the death penalty with a number of countries, through statements, dialogues and project work. We have also raised many cases of third country nationals who are facing the death penalty.

In November 2010 the UN General Assembly resolution on the moratorium on the use of the death penalty was adopted with record support. As part of an EU campaign, the UK lobbied several states to vote in favour of the resolution or at least move from voting against to abstention. We have also made recommendations to several countries on the death penalty through the universal periodic review process since October 2010.

We have welcomed a number of other positive developments over the past year. Illinois became the 16th US state to abolish the death penalty in March, and in China we welcomed the return of the power of final review to the Supreme People’s Court and the reduction of the number of crimes eligible for the death penalty from 68 to 55 in February. The international momentum towards abolition continues to grow and the Government will continue to work to make progress against their strategy in order to achieve their ultimate objective of global abolition of the death penalty.

A copy of the updated strategy to 2015 will be placed in the Library of the House and published on the FCO website (www.fco.gov.uk) on 10 October.

Sino-British Joint Declaration (Hong Kong)

Monday 10th October 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

The latest report on the implementation of the Sino-British Joint Declaration on Hong Kong was published today. Copies have been laid in the Library of the House. A copy of the report is also available on the Foreign and Commonwealth Office website (www.fco.gov.uk). The report covers the period from 1 January to 30 June 2011. I commend the report to the House.

Southern Cross Healthcare and Social Care Market

Monday 10th October 2011 Written Statements

[The Minister of State, Department of Health (Paul Burstow)]

I wish to update the House on Southern Cross and the Government’s wider response to the issues which this case has raised.

On 30 September, Southern Cross announced that 250 of the care homes in which it operates have been transferred to new care operators. This represents one third of all of Southern Cross’s homes, involving 249 homes in England and one in Scotland. In each case, the transfer was scrutinised and approved by the relevant national regulator. For the time being, Southern Cross will continue to provide care services in the remainder of its homes.

Two further transfers of homes are expected in October and when the transfers are concluded Southern Cross will no longer be a provider of care services.

The Association of Directors of Adult Social Services is maintaining a list of Southern Cross’s care homes with information on plans for transfer to alternative providers, as well as contact information for residents, relatives and any other interested parties. This is updated weekly and is available at:

www.dh.gov.uk/health/2011/09/transfer-of-southern-cross-healthcare-to-new-operators/

This first set of transfers is an important step towards the consensual and orderly winding down of the company. Throughout, it has been the Government’s overriding concern to secure the welfare and safety of the residents in Southern Cross’s care. This transfer and the ones to follow should ensure that this is achieved, with minimal impact on the residents of these homes and clear arrangements to ensure continuity of care.

We will continue to monitor closely the remaining steps to the full transfer of all homes, and will work closely with all interested parties, but I am encouraged that those involved in the restructuring negotiations have put in place the necessary agreements to secure a successful outcome.

As noted by the National Audit Office in its recent report on the social care market “Oversight of user choice and provider competition in care markets”, the case of Southern Cross has highlighted the risks associated with a large care provider facing financial difficulty.

In my previous written ministerial statement to Parliament, I said the Government would shortly be publishing a discussion paper on the issue. This paper has been published today, and forms a part of the Government’s wider engagement exercise on care and support reform, as reported to the House on 15 September 2011.

The paper considers the issues raised by the risk of financial failure in large providers and seeks views on service continuity and/or whether new measures are necessary. It sets out what the Government think is the key objective of any reform, and outlines the key considerations which need to be balanced when coming to a view on what measures may be appropriate. It then lists a range of possible options that could be pursued, drawing on experience in other sectors and considering both regulatory and non-regulatory approaches. This includes possible roles for Monitor, as allowed for in the Health and Social Care Bill currently before the House. The paper invites comments on these options, but also welcomes other ideas. At this stage the Government have not formed a firm view on what would be the best approach. They want to take this opportunity to hear different views, before settling their position ahead of next year’s White Paper.

“Oversight of the Social Care Market; Discussion Paper” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper office.

Changes in Immigration Rules

Monday 10th October 2011 Written Statements

[The Minister for Immigration (Damian Green)]

The Government are today laying before the House a statement of changes in the immigration rules. The first change will allow the UK Border Agency to refuse entry or stay in the UK to those subject to immigration control with outstanding unpaid NHS charges of £1,000 or more. This change will be phased in from 1 November.

On 18 March 2011, I announced the Government’s response to the 2010 consultation on refusing entry of stay to NHS debtors and signalled my intention to lay a new rules change in respect of outstanding NHS charges. This will deter overseas visitors from misusing the NHS and encourage overseas visitors to meet their obligations to pay for the NHS services that they use. The UK Border Agency will continue to work closely with the Department of Health on a range of measures to prevent health tourism.

I can also confirm that we are publishing the impact assessment for the changes in respect of outstanding NHS charges on the UK Border Agency website and I will arrange for a copy to be placed in the House Library.

A minor technical change to the evidential requirements for settlement is also being made which will oblige economic migrants to provide supporting documents to show they are earning a minimum amount before they are granted settlement.

I am also making minor changes to rule 317 on parents, grandparents and other dependent relatives to improve the drafting and transparency of the rule. Consequential changes will be made to rule 319(v) which deals with the dependent relatives of refugees and those with humanitarian protection.

We are also making some technical corrections to the rules for other dependent relatives of a refugee or beneficiary of humanitarian protection. We are deleting a provision in the rules that requires an applicant to be refused if he or she has one or more unspent convictions within the meaning of the Rehabilitation of Offenders Act 1974 when they apply for entry clearance or further leave to remain in this route. This provision was included in error, as Government policy is that indefinite leave to remain (ILR) should be refused to people with unspent convictions, but not that an application for entry clearance or limited leave to remain should be refused. We are also clarifying the existing rules to ensure that other family members who wish to switch into the further leave to remain or settlement route in this category can do so. The amendments will also affect the criteria for granting settlement as we are clarifying the need for an applicant to have valid leave to enter or remain in the United Kingdom so that those who have overstayed do not qualify under the rules.

We are also making minor, technical changes to the immigration rules on students, including: to reflect that Education Scotland is the new name for Her Majesty’s Inspectorate of Education; to amend the definition of UK-recognised body to confirm that this includes foundation programme offices for post-graduate doctors and dentists; to clarify the definition of who benefits from the streamlined application process for tier 4. A minor correction is being made to the rules laid on 6 April to make provision for spouses and civil partners of a British citizen or settled person in the United Kingdom in line with the policy intention relating to in-country switching.

Minor changes are also being made to the immigration rules relating to unmarried and same-sex partners of a British citizen or settled person in the United Kingdom to enable in-country switching into this route, reflecting the policy intention.

The last change relates to the Olympic and Paralympic games. The UK needs to manage effectively the entry and stay of persons accredited for the 2012 Olympic and Paralympic games such as athletes, umpires, technical staff and broadcasters and other individuals before, during and after the games in order to deliver a safe and secure games. Such persons are referred to as games family members.

In order to do this, and fulfil contractual and agreements reached with the International Olympic Committee (IOC) and the London Organising Committee of the Olympic Games and Paralympic Games (LOCOG), it is necessary to make two sets of changes to the UK’s immigration rules.

The first change amends appendix 1 to the immigration rules by exempting certain holders of the Olympic Identity and Accreditation Card (OIAC) and Paralympic Identity and Accreditation Card (PIAC) from visa requirements during the accreditation period of the games, which runs from 30 March 2012 to 8 November 2012, providing the card is presented with a valid national passport or other document satisfactorily establishing nationality and identity, and providing the requirements set out in the statement of changes to the immigration rules have been met.

The second change amends the visitor category of the immigration rules by creating two new categories of visitor—an “Olympic or Paralympic games family member visitor” and an “Olympic or Paralympic games family member child visitor”. Leave in these two visitor categories will only be available during the accreditation period of the games to games family members who meet the requirements of the immigration rules. Individuals granted leave to enter or remain as an Olympic or Paralympic games family member visitor and Olympic or Paralympic games family member child visitor, during the period of 30 March 2012 to 8 May 2012, will be admitted for up to six months, while those who are granted leave to enter or remain during the period of 9 May 2012 to 8 November 2012 will be admitted up until, and including, 8 November 2012. In both cases conditions prohibiting recourse to public funds and restricting employment to employment only related to Olympic and Paralympic games, will be attached to the leave.

These changes to the immigration rules will help the UK facilitate the entry and stay of games family members in the UK during the games while also allowing the UK Border Agency to maintain a robust immigration control.

We previously informed Parliament, in the explanatory memoranda accompanying the Immigration (Provision of Physical Data) (Amendment) Regulations 2011 and the Nationality, Immigration and Asylum Act 2002 (Amendment) Order 2011 and during their debate in the House of Commons and House of Lords, that we would be amending the Channel Tunnel (International Arrangements) Order 1993 and Channel Tunnel (Miscellaneous Provisions) Order 1994 to enable the collection of fingerprints and facial images from visa nationals accredited for the 2012 Olympic and Paralympic games at the UK’s train juxtaposed controls in France and Belgium. The aforementioned 2011 regulations enable biometric information to be taken from persons accredited for the Olympic and Paralympic games who would usually be required to apply for a visa and therefore have their biometric information taken as visa nationals but as part of the host city contract Her Majesty’s Government gave a commitment that in specified circumstances there would be no requirement for certain holders of an accreditation card to apply for a visa before travelling to the UK. The amendments to the channel tunnel orders are no longer considered necessary as the 2011 regulations, when read with the provisions of the channel tunnel orders, provide us with the legal power to make the collection at the UK’s train juxtaposed controls in France and Belgium.

Emergency Towing Vessels

Monday 10th October 2011 Written Statements

[The Secretary of State for Scotland (Michael Moore)]

I am pleased to confirm to the House that the Scotland Office is now leading efforts to secure a long-term replacement for the emergency towing vessels (ETV) service in waters surrounding the Northern Isles and Western Isles.

It has been agreed that interim funding will be provided from the UK Government to support the service for up to three months while this work continues. The contract will be managed by the Maritime and Coastguard Agency and every effort will be made to ensure value-for-money for the public purse.

The Scotland Office, drawing on technical and operational advice from the Maritime and Coastguard Agency and Scottish stakeholders from the UK ETV working group, will lead efforts to broker a long- term replacement for the service. Time scales are tight and this work will be progressed as a matter of urgency. I will convene a meeting of a Scottish ETV working group on Monday 17 October, comprising representatives of Highlands and Islands local authorities. Marine Scotland, KIMO (Kommunenes Internasjonale Miljøorganisasjon) and other interested parties. An announcement will be made by the end of the year notifying the House of the outcome of this work.

Parliamentary Written Question (Correction)

Monday 10th October 2011 Written Statements

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I regret to inform the House that there was an inaccuracy in the answer I gave to parliamentary question 58263 on 20 June 2011, Official Report, column 20W, about rolling stock. The variable track access charges that were contained in the table were incorrect. The corrected table is reproduced below.

Incident at Gleision Colliery

Monday 10th October 2011 Written Statements

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

On Thursday 17 September, a retaining wall holding back a body of water collapsed in Taren Gleision drift mine near Pontardawe in the Swansea Valley. Of the seven men working in the mine three men were able to escape, but all of the remaining four miners tragically died. The four trapped miners were named as Charles Breslin, 62; David Powell, 50; and Garry Jenkins, 39, from the Swansea Valley; and Phillip Hill, 45, of Neath.

It is a distressing time for the families and friends of those who lost their lives and I send my sincere condolences to them. I would also like to pay tribute to the efforts of the whole community and the organisations, including the Red Cross and the WRVS, who provided support to all concerned during what were very difficult days.

The emergency services and mine rescue workers involved in the search and rescue operation carried out their work in incredibly difficult and dangerous circumstances. We are deeply indebted to them for their tireless determination and dedication.

The Cabinet Office Civil Contingencies Secretariat provided full co-ordination in the immediate aftermath ensuring all parts of Government with a role to play were fully appraised of the situation on the ground and of any actions that needed to be taken locally and centrally. We worked closely with the Welsh Government in the initial stages of the operation. The right hon. Member for Neath (Mr Hain) was present as events unfolded and my office worked closely with him in the immediate aftermath.

The South Wales branch of the National Union of Mineworkers set up the Swansea Valley Miners Appeal Fund as a trust to administer the donations to support the families of those involved in the disaster. His Royal Highness, The Prince of Wales, has agreed to be the Royal patron of the fund. The Wales Office worked with the Charity Commission to assist the fund in gaining its charitable status, which was confirmed on 26 September. Until this point the Wales Office has agreed to reimburse the appeal fund for the funding it did not receive from gift aid contributions while charitable status was being sought.

South Wales police are currently the primary lead for the investigation and are working closely with the Health and Safety Executive. The gathering of evidence has been extremely difficult and dangerous. This evidence will need to be reviewed and the Government will continue to do all they can to facilitate a full investigation.

Cold Weather Payments Scheme 2011-12

Monday 10th October 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I am pleased to announce that regulations to amend the cold weather payment scheme will be laid later today. The changes will come into force on 1 November this year, in time for the beginning of the winter period.

Following advice from the meteorological office the amendments will introduce four new weather stations to the scheme for winter 2011-12 and withdraw the current stations at Dundrennan, St Catherine’s Point and West Freugh. As a result of the changes the postcodes that are currently linked to the withdrawn stations will be re-assigned to different weather stations. The four new weather stations are:

Aboyne

Auchincruive

Bainbridge

Threave

The new stations have been chosen to maintain weather station to postcode links that are at least as representative as the current arrangement.

I have written to each Member who made representations about the administration of the scheme last winter to make them aware of the advice from the meteorological office.

Cold weather payments are separate from, and in addition to, winter fuel payments.

The amendments resulted from the Department’s annual review of the cold weather payments scheme. The review drew on expert advice from the meteorological office and took account of representations from benefit claimants and Members of Parliament.

For winter 2011-12 the cold weather payment rate will continue to be £25 for each seven-day period of very cold weather.

Employment, Social Policy, Health and Consumer Affairs Council

Monday 10th October 2011 Written Statements

(3 October 2011)

Monday 10th October 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

The Employment, Social Policy, Health and Consumer Affairs Council met on 3 October 2011 in Luxembourg. Andy Lebrecht, UK deputy permanent representative to the European Union, represented the UK.

The first item on the agenda was a policy debate on the future shape of the European social fund (ESF) and its role in the implementation of the Europe 2020 strategy. The Commission confirmed that it would publish its draft regulation on the ESF in 2014-2020 later in the week. The presidency stressed that it was vital to strengthen the role of the ESF in cohesion policy. Member states agreed that the ESF should contribute in helping to achieve Europe 2020 targets and that ESF should be more efficient and targeted at the most disadvantaged. For the UK, Andy Lebrecht intervened to stress the need to focus EU resources on the less developed member states, to improve value for money, and that ESF should add value to national investment in employment and skills. The UK also raised concerns about the effectiveness and added value of the European globalisation fund.

The second item on the agenda was a report from the presidency on preparations for the tripartite social summit which will take place on 17 October 2011.

The Council also adopted Council conclusions on the role of voluntary work in social policy and managing demographic changes.

Under any other business, a debate on the EU Aid for the Needy scheme took place. France and Slovenia had circulated a joint paper asking Employment Ministers to lobby their agriculture counterparts to agree a short-term continuation of the programme, which would allow food to be sourced from the open market as well as from increasingly limited intervention stocks, and to introduce an element of co-financing. The Commission reiterated its support for the scheme and indicated that it would table a revised proposal with a dual cohesion and agriculture legal base, reverting to 100% EU funding. A number of member states expressed support for the scheme and the Commission’s efforts to find a solution. The UK, along with Germany, the Netherlands and Sweden stressed that measures such as these should be delivered at national level. A Europe wide scheme raised competence issues and was not as effective as national measures. The presidency noted the positions in Council and would send a note on the discussions to the Agriculture Council.

The other items under any other business were reports on Polish presidency conferences and the EPSCO informal which took place in July. The presidency also reported on preparations for the first annual convention of the European platform against poverty and social exclusion which takes place in October. The French reported back on the G20 labour and employment Ministers which took place in Paris and the Germans reported back on the meeting of an informal ministerial group on employment and social policy which took place in Potsdam.

Grand Committee

Monday 10th October 2011 Grand Committee

Monday, 10 October 2011.

Arrangement of Business

Monday 10th October 2011 Grand Committee

Announcement

15:30

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)]

Good afternoon, my Lords. I begin by reminding the Committee that if there is a Division in the Chamber while the Committee is in session, the Committee will adjourn at the sound of the Division Bell and resume 10 minutes thereafter. May I also remind Members of the Committee of the new procedure during Grand Committee on the Bill for Divisions in the Chamber? Members who have registered with the Clerk of the Parliaments may vote in their places in the Grand Committee provided they are present in the Grand Committee when the question is put in the Chamber after three minutes. Members who have not registered or who are not here at the three-minute mark will not be able to vote in their places. I hope that is clear.

It has been brought to my attention that some Members of the Committee are occasionally having some difficulty in hearing other Members when they speak, so may I recommend to speakers that they speak up? There is no need to push any buttons on the microphone stands; the microphones are automatically on and you need do nothing but speak into them.

15:31

Welfare Reform Bill

Monday 10th October 2011 Grand Committee

Committee (3rd Day)

Relevant document: 17th Report from the Delegated Powers Committee.

Clause 5: Financial Conditions

Amendment 22A

Moved by

[Baroness Drake]

22A: Clause 5, page 3, line 7, after “it” insert “excluding amounts arising from the sale of a primary residence and held in a deposit or other prescribed account for a period of no greater than 12 months”

[Baroness Drake]

My Lords, in moving Amendment 22A I will also speak to Amendments 22E and 52A. Amendment 52A is a probing amendment to establish clarity on the treatment of capital—that is, the types of capital disregarded and for how long for the purposes of entitlement to universal credit. In Schedule 1 to the Bill, line 9 on page 107 refers to universal credit supplementary regulations, which may,

“specify circumstances in which a person is to be treated as having or not having capital or earned or unearned income”.

However, the schedule does not refer to such regards for limited time periods. We have received an initial illustrative set of regulations on the treatment of capital and it is clearly not a final version. I obviously recognise that this is work in progress. None the less, the Bill is before us and it is important to understand the Government’s intention.

Currently, there is a long list of items of capital that are exempted from the calculation of entitlement to means-tested benefits. In many instances, the exemptions are time limited. These range from the value of one’s home and personal possessions to tax rebates and training programme payments. It is not clear whether all these exemptions will continue under universal credit, a point that I noticed at the weekend was registered by the Institute for Fiscal Studies, although I recognise that the draft regulations have started to set these out. It is clear from the briefings we have received from the DWP team that there are gaps and further work to be done. For example, there is an acknowledgement that the treatment of capital where it is jointly held with another person who is not included in the claim still has to be addressed by the Government and a view taken.

This is a particularly important issue, because as a result of the proposed treatment of capital, some of those in work might consequently experience a reduction in their income. This is going to be of some significance for those in work because tax credits do not set a capital cut-off, although there is provision for income that is derived from that capital to be taken into account. Capital above £6,000 will be taken into account in universal credit. Furthermore, with the integration of the in-work and out-of-work benefit, the Government will be applying a tariff approach whereby capital is deemed to produce an income by applying certain rates.

On that basis, will the Minister say whether the current circumstances in which a person is treated as not having capital, including time-limited circumstances, will all continue under universal credit? I have a long list before me, having tried to do my homework, and I can see that there are several not covered in the illustrative list, including: certain payments made to disabled people; the refund of council tax liability; payment by social services; employment and training programme payments; and tax rebates, for future interest in most kinds of property. There are clearly some gaps, which I have already identified. Will the Minister also say when it is anticipated that the definitive regulations on the treatment of capital in universal credit will be available?

Amendments 22A and 22E address the desire to exclude amounts arising from the sale of primary residence from the claimant’s capital for the purposes of entitlement to universal credit for a period of 12 months. Under current rules, money received from selling a primary residence or from surrendering tenancy rights to a landlord is ignored as capital for a period of up to 22 weeks from the date of the sale. I recognise that the briefings we have received have advised us of the Government’s intention to continue this practice, but, in the absence of absolute clarity on the definitive set of rules, it is necessary to table amendments. Equally, however, I seek to extend those rules to allow the capital to be ignored for 12 months.

Under the current rules, capital held on the sale of a primary residence is disregarded for a period of 26 weeks. Clearly, however, already under the existing rules there is discretion to extend that. I am saying that rather than have discretion between 26 weeks and 12 months, a disregard for a period of 12 months should be allowed because selling a house is not easy, particularly in current circumstances. A geographic relocation may be involved, vendor behaviour may be difficult and surveyor problems may occur, and 26 weeks strikes me as a very small period for someone to manage the difficulties of selling and purchasing a new house. Hence, this clause seeks to extend the ability to disregard the capital from the sale of primary residence to a period of 12 months.

[Lord McKenzie of Luton]

My Lords, I speak in support of my noble friend’s amendment and to catch up on one or two points. We understand the need to merge two different systems of dealing with capital: the tax credit rules and the tariff rules in the benefit system at the moment. One question to the Minister is: why did the Government opt to do it that way round rather than the reverse way round? It could lead to complexities. Someone whose income swings around that £16,000 cut-off point could be in benefit or in the universal credit one day and out the next.

My second question is: can the Minister say something about the practicalities of how this is going to work? What is going to be the process for reporting capital, and how often will that have to be updated? Will it be on a six-monthly basis? Will there be a look back if the capital has changed during an assessment period, giving rise to adjustments to universal credits? I am picking away at some of the complexities around this, because we often promulgate universal credit on the basis that it is a simplified system, and we accept that in some respects it is. However, it still has attached to it these sorts of complexities from the changes in people’s lives. It would be good to know which of the existing exemptions will be carried forward into the new system.

The £16,000 cut-off point will penalise savers, making it harder for low-income working families to save. It will particularly penalise families with high tax credit awards such as high childcare costs or indeed disabled children. Therefore, we see this as a disincentive to save. I was going to ask whether this is wise when there are rumours about auto-enrolment being deferred, but I am advised that that is not now in the Government’s mind.

I was a little surprised in the briefings that we had from the department by comments about it being right that people should, over a period in some circumstances, disinvest their assets before wholly relying upon state support. However, the briefing note quotes in aid,

“earlier means-tested benefits including National Assistance required applicants to exhaust all or most of their savings (and to sell personal possessions regarded as unnecessary)”.

That has a resonance for many people, particularly on the left, and it is why, for a period, reference to means-tested benefits was a derogatory and hated term because it took you back to circumstances in which people knocked on the door, entered the front room and told you to sell every stick of furniture you had before you could rely on benefits. Reverting to references to national assistance and those practices is probably not going to be the most helpful way for the Government to sell this policy.

I support my noble friend on the one-year rule in relation to disposals of properties because the current market is extremely difficult, and even if individuals have the cash to make the purchase, people get caught up in chains and it is difficult for them to complete and sell on so that a satisfactory result can ensue. It is therefore very reasonable to request simply extending that period and that disposals from the sale of property are excluded from the calculation.

[Baroness Turner of Camden]

My Lords, I, too, support these amendments. I understand that this is a rather difficult question, but one can hardly pick up a magazine directed at older people without encountering articles urging people to save so that when they are older enough money will be available for them to be provided with social care. We do not yet know what the Government intend to do with the report that we have had on social care, but it could very well involve people having to have a lump sum available at a particular time. Quite obviously, it is in everybody’s interests to ensure that people have cover for when they are ill and require social care, particularly as the report includes a general recommendation that people are best off being looked after in their own home. You have to take account of these sorts of possibilities when assessing what is a reasonable amount of money to be regarded as suitable to be retained by the individual concerned when assessing the requirement for benefit.

15:43

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, this is one of three amendments about capital. I shall start by explaining our intentions for the capital rules and universal credit. I will then be able to be briefer on that context and background when we come to the next two groups. The rules for the current income-rated benefits will be carried forward into universal credit. We intend to limit eligibility for universal credit to claimants who have less than £16,000 of capital. Claimants may save up to £6,000 before there is any impact whatever on their entitlement to universal credit. If they have between £6,000 and £16,000, we would assume a tariff income from this capital. These rules ensure that support is focused on those who really need it rather than on people who have significant resources on which they can draw. This is an important principle, which is essential to ensure that the system remains affordable. As noble Lords have pointed out, there is a slightly opaque area here in the sense that capital can be deferred income and vice versa. It is important to have some rules around the appropriate capital.

In order to be fair to the taxpayer, we have assessed how much families typically save. While nearly one in three pensioner households have savings in excess of £16,000, only 13 per cent of households with a working age adult in them have this much savings. A typical working age household has only £300 in savings. On the point about importing the tax credit system to universal credit, the noble Lord, Lord McKenzie, asked why it is this way around. The answer is simply that it would be unaffordable.

The first group of amendments seek to amend the financial conditions for universal credit by requiring capital derived from the sale of the claimant’s primary home to be excluded from the calculation of capital for up to 12 months when held in a deposit or a prescribed account. However, it is already our intention to provide claimants who have capital from the recent sale of their main home with a significant level of protection. This is clear from the illustrative draft regulations on capital and income recently shared with Peers. The illustrative schedule on capital to be disregarded sets out our intentions on this point.

Capital from the sale of the claimant’s main home received within the previous 26 weeks will be disregarded, which is to be used for the purchase of their new home. That period may be extended where the decision-maker determines that it will be reasonable to do so in the circumstances of the case. An example would be where accommodation suitable for a disabled member of the family has not yet been found. We believe that this approach balances our duty to be fair to the claimant with the need to safeguard universal credit.

Turning to the power in Schedule 1 to treat a claimant as having or not having capital, this is simply taken in order to replicate the notional capital rules that existed in the current benefits system and that guard against claimants deliberately depriving themselves of capital. The exemptions for types of capital covered by the rules in the existing benefits system will be maintained. Some types of payments cited by the noble Baroness, Lady Drake, are classed as income. It is not necessary to add a specific power taken by Amendment 52A. As I have said, the illustrative draft regulations demonstrate that we already have the power to limit the time period for which claimants are treated as having or not having capital where we choose to do so. I hope that this account has clarified the Government’s proposals for protecting the capital of claimants who have recently sold their main home and therefore explains why we could not support Amendments 22A, 22E and 52A.

[Lord McKenzie of Luton]

Perhaps the noble Lord can help me a little on some of the practicalities of that. We are saying that the existing exemption operates when someone has disposed of their main residence and reapplies it within a 26-week period. Is it a requirement that it is wholly reapplied for the purchase of a property? My noble friend Lady Turner made a point about someone who wanted to save some of that because they were downsizing for carers. Is this looked at retrospectively? Will someone look after the event and see as a matter of fact that it was so applied and, if it was not, what the ramifications are for the application of the universal credit?

[Lord Freud]

Yes, my Lords. The way it works is that the amount of money that is being reserved for the purchase of a new house is the amount of capital that would be exempted. Other capital would not be exempted. We are currently working on the exact workings of the system and getting these regulations—the next iteration—right. Therefore, I am not currently in a position to lay down clearly, as the noble Lord rightly says, the practical applications and fine tuning of how we apply this. That will come at the appropriate time.

[Baroness Hollis of Heigham]

My Lords, I wonder whether the noble Lord can help me with some stats. It was interesting that in his reply he told us that the current percentage of people who have savings above £16,000 is 13 per cent. However, when you start netting the figure and taking into account the notional income derived from that tariff, and given that something like 85 per cent of people on JSA expect to get back to work within nine months to a year, what does he think the real savings, or loss of savings, would be were he in a broader sense to accept that, with the integration of the two benefits, one should go for the tax credit system rather than the JSA system? Can he help us on that? In the light of that, we can perhaps press him further, but what real savings is he expecting to generate, given that most people who come on to JSA will be back in work within the year? In their first six months their benefit is contributory, so they are not affected and they will go back to work very quickly within the next six months. Therefore, if they have those savings and you say that because they are over £16,000 they will get not a penny of JSA, in real terms what net savings do you expect to garner? I would like to press the Minister on a further point, if I may.

[Lord Freud]

My Lords, I have to confess to the noble Baroness that I do not have my hands on that particular figure. I am not sure that I can find it out. We have other figures around the costs, but I am not convinced that I have that particular figure readily to hand. Can I leave it that I will try to find it out and supply it in the fullness of time?

[Baroness Hollis of Heigham]

My Lords, I do not want “the fullness of time”; I want very soon, just as with childcare—the day after, if the Minister would be so kind. This is the key figure. The key stat is the real net cost of going for the more generous alignment with tax credits rather than bringing people down to the harsher alignment with JSA. That is the pivotal figure. I am surprised that this has not been brought into play in the Minister’s response. People coming out of work on to JSA are desperate to get back into work. Anything we do to make it difficult for them to get back into work is counterproductive. Anything that runs down their savings and that they are worried about, or anything that risks them when they go from work to benefit as opposed to from benefit to work is surely to be deplored. I suggest to the Minister that this is very unwise social policy.

[Lord Freud]

My Lords, I withdraw my previous reluctance to provide a figure. In much less time than I thought, I am now in a position to let noble Lords know that if we removed the cap limit entirely, the cost would be £500 million per annum.

[Baroness Hollis of Heigham]

Forgive me, but that is the net cost. If you removed the cap entirely and instead took into account notional income from those savings, given the stat of 13 per cent being over £16,000, as the noble Lord said, as well as people being in a range of between £6,000 and £16,000, and taking into account that they will have their benefit cut by virtue of their notional income, I take it that the £500 million includes that figure. It seems unlikely on the face of it, but it may well be the case. I suspect that it is a gross figure, not a net figure. I could be wrong, but we need to know the cost in effect of substituting one system over the other, not simply the cost of not having any savings rules at all.

[Lord Freud]

My Lords, I can clarify. That is a gross figure. Behavioural changes, clearly—

[Baroness Hollis of Heigham]

No, they are not behavioural.

[The Deputy Chairman of Committees]

My Lords, I hesitate to interrupt but noble Lords will see that there is a Division in the Chamber, so the Committee will adjourn now and resume in 10 minutes.

15:53

Sitting suspended for a Division in the House.

16:05

[Lord Freud]

My Lords, I will complete my response to the questions. If we were to take a £50,000 limit with the tariff rules—in other words, starting at £6,000 and moving up on the tariff rules from £1 for every £250—the cost would be £90 million; so if we were to take the cap off completely, it would be a little, but probably not a lot, more. The £16,000 cap that we propose will affect 200,000 people in total. However, currently only 100,000 are on tax credits. That is the universe that we are talking about. I point out the political choices that we are making. We are designing universal credit to be for the poorest people and putting constraints higher up the income scale. That is entirely deliberate.

[Baroness Hollis of Heigham]

I am grateful to the Minister for giving us the figures. Perhaps he could make it clear that embedded in them is the scatter of JSA claimants who will return to work at different intervals. The first six months will be contributory. Thereafter, most of those coming on to JSA for the first time in that year will be back to work within three months or so on average after their contributory benefit has ended. Has the distributional factor of how long people stay on JSA been taken into account? I am talking not about existing JSA claimants but new claimants. What will the implications be?

[Lord Freud]

Yes, my Lords, a careful assessment has been done of how it will work in practice, which incorporates those kinds of effects.

[The Earl of Listowel]

My Lords, I hope that the Minister will forgive me if I ask his help on a point of detail. It may come up during fine-tuning, but it might be helpful to flag it up now. I refer to young people who leave the local authority care system and win an award against their authority because in their time in care they were not properly cared for. Therefore, they have a capital sum that they might need to use for education, therapy or something else. What circumstance will they find themselves in under these arrangements?

[Lord Freud]

My Lords, I will have to write to the noble Earl, Lord Listowel, with precise information on that.

[Baroness Drake]

My Lords, on the point about people who sell their houses and have capital from that, current rules allow the discretion to extend to 12 months. The provision is already there, so I do not see why one could not have efficiencies in the system since the cost of applying discretion is reduced to the difference between six and 12 months and people are given greater clarity in what is a complicated market for buying and selling houses. Also, the rules are being applied to a population that would not previously have been subjected to them. Millions of people will be impacted over time, and this is not a difficult alteration to make in the rules.

On the definitive set of rules setting out what capital or earned and unearned income is or is not going to be taken into account, the exchange with my noble friends has indicated why people are concerned to see and understand the list as soon as possible—again, particularly the application of those rules to the in-work population. For the moment, however, I beg leave to withdraw the amendment.

Amendment 22A withdrawn.

Amendment 22B

Moved by

[Baroness Drake]

22B: Clause 5, page 3, line 7, after “it” insert “excluding amounts in an Individual Savings Account or other prescribed saving account up to a prescribed maximum of no less than £50,000, where the claimant is in work or was in work in the last 12 months”

[Baroness Drake]

My Lords, in moving Amendment 22B, I shall also speak to Amendment 22F, which seeks to exclude amounts in individual savings accounts or other prescribed savings accounts as identified by the Secretary of State up to a value of £50,000 from the capital of claimants for the purposes of entitlement to universal credit for those in work or those who have been in work within the past 12 months. The issue of the application of the capital rules to those either in work or trying to get back into work causes me great concern. A Government in today’s world have to have a set of compatible policies that seek simultaneously to achieve a series of outcomes: a welfare system that is fair and incentivises work, a desirable level and distribution of savings that sustains personal responsibility, and effective support for ordinary hard-working people in order to manage their experience of today’s flexible labour market. I fear that the manner in which the tax credit system is to be integrated into universal credit will create inconsistencies in the delivery of those desirable outcomes. The application of the tariffed income and capital limit rules under universal credit that do not currently apply under tax credit to those in work is an important instance that will give rise to inconsistencies.

Universal credit is changing the capital rules for those in work. There are no capital cut-offs in tax credit, although taxable income from savings and other assets is taken into account, subject to a disregard of £300 a year. Under universal credit, as the Minister has said, there will be a £16,000 capital cut-off with a harsher regime of an assumed tariffed income on savings above £6,000. I acknowledge that under the current rules, capital limits of £6,000 to £16,000 apply to jobseeker’s allowance, and a tariffed income is assumed for capital within those limits, but the Government have chosen to opt for a harsher anti-savings regime and to apply it to everyone, including those in work. It really is quite a harsh anti-savings regime. The simple mantra of, “If you are in work and you have savings, you should not look to the taxpayer for support”, which is the explanation given in the departmental briefing notes, ignores the complexities of what is being managed here.

It is important to have a benefits system that works for the poor, but the tax credit system was also set up to enable people in work to better themselves and to improve their position. If work, responsibility, control and aspiration are to be encouraged, those in work should find it possible to save and to build up a reasonable level of financial assets. They should not be in the position where, if they have been responsible, that support is suddenly taken away from them. This penalises those who save and undermines responsible behaviour. Families on modest incomes with modest savings will be hit by the proposed new rules, but not only families with higher levels of savings will be hit; those with savings above £6,000 will be impacted by tariff rules that assume 21 per cent rates of return— 21 per cent times the typical rate of return in an ordinary savings account.

16:15

As the Minister said, in the briefing it is estimated that, in steady state, there will be 200,000 to 300,000 households with savings of between £6,000 and £16,000, and in 2014 a tax credit population of 100,000 households with capital over £16,000. However, the people in those populations will change from time to time, so the total community that will experience the impact of these capital rules will be significant over time. I can see from the briefing that some transitional protection is intended for those on tax credits, but it is clear that a moderate change in working circumstances could trigger the sudden loss of the disregard of their savings, with a consequent loss of income, so sending out a very clear and quite shocking message that it does not pay or has not paid to save.

The Minister, through the design of the universal credit system, wants to de-risk the move from benefit into work, and I give him full recognition for that, but should he not also de-risk the inevitable move from work into benefit, allowing responsible hard-working people to spring back, stay resilient and deal more easily with difficult labour markets? In today’s labour market, what constitutes an insecure job has a much broader definition than has historically been the case. Do we not want people operating in a flexible labour market to save to smooth their circumstances, especially if they have children or commitments that they cannot duck? However, under the capital rules of universal credit, why should they bother? They will be penalised if they do.

If I could press the point, surely it is desirable to reduce the risk that people face when they move from work to benefits. The capital changes for people in work now actually increase that risk, and there is no incentive to save in order to manage yourself through that risk. That is the danger that the Centre for Social Justice so powerfully spelled out in its report, Dynamic Benefits, on page 121, and in its executive summary on page 8, and in evidence to the Commons committee on 22 March this year. It was an interesting exchange. Stephen Timms commented to the gentleman from the Centre for Social Justice who was giving evidence that in its report,

“the Centre for Social Justice was critical of the effect of the savings cap in means-tested benefits currently. The Government decided to reject your advice on this and to extend the cap into in-work benefits”.

Mr Ghelani, on behalf of the Centre for Social Justice, replied:

“It is fundamentally a disincentive to save. I think that the savings limit for people who are not working and are on benefits has been £16,000 for I am not sure how many years, but certainly rather a lot. The limit has not been uprated for at least a decade I would say, and possibly a lot longer. By extending that to people who are working, people who get close to that threshold might suddenly realise that it does not pay to save and that there are perhaps other things that they should be doing with the money, whereas saving is in itself a protection against dependency”.—[Official Report, Commons, Welfare Reform Bill Committee, 22/3/11; col.18.]

The Centre for Social Justice makes the point with a fluency that I would struggle to replicate.

In other arenas, discussions are taking place about incentives to raising saving levels by ordinary people: ISAs as feeders to pension saving; and other measures designed to promote asset accumulation and responsible behaviour, particularly for those on low to moderate incomes. However, the application of these proposed capital limits to in-work benefits will just close down those discussions because they will simply undermine any future initiatives. It is therefore a kiss of death to asset accumulation strategies for low to moderate-income earners at certain income levels.

This amendment seeks to have ISA savings up to a maximum of £50,000 disregarded for the purposes of the universal credit for those in work and those in work in the past 12 months. ISA is a tax-incentivised product the cash element of which was targeted particularly at ordinary people. The £50,000 allows for those, including joint claimants, who have been responsible over a very long time and who may be older than some other younger claimants, because persistency of saving over a lifetime is an important part of taking responsibility. However, once that ISA saving is drawn down, that tax-advantaged element is lost for ever, because under the ISA rules there is no way of restoring that saving that had to be drawn down and of reclaiming the accrued tax advantage. It is gone, and you are disadvantaged in that sense.

It strikes me as rather unfortunate that well-off people and non-working members of their families and spouses can continue to enjoy the accruing benefits of various forms of tax-incentivised savings, often at 40 or 50 per cent tax relief, whereas hard-working, moderate or low-income families who behave responsibly can find their incomes reduced. This is unfair. We have had quotes of the order of £70 million to £90 million, because the noble Lord anticipated this amendment. I have to say in response that if there is a requirement to deliver £70 million to £90 million, the incentivised savings for the better off and the levels and the tax relief on those incentivised savings are a better area in which to seek to find that money than that of hard-working people who will suddenly find themselves up against a set of rules that take away their money and inhibit their ability to get back into work fairly quickly when they are trying to juggle being out of work.

Universal credit has to embrace both those who are in sustained and long-term unemployment and those hard-working people who are managing periods of difficulty or unemployment that has been imposed on them. An efficient welfare system does not suddenly remove support from such responsible people and families who are managing themselves through problems such as redundancy into another job. Again, I am supported by the Centre for Social Justice in the view that it is not desirable to be so harsh on people who have savings when those people are out of work or trying to manage not becoming dependent.

To address this problem, this amendment would allow ISA savings or such other prescribed savings products to be disregarded for a period of up to 12 months after losing a job. The fairness to the taxpayer argument has to be weighed against the danger of a design of the universal system that appears punitive for responsible working people who were saving and will actually increase dependency and undermine the incentive to save. I beg to move.

[Lord McKenzie of Luton]

My Lords, I have little to add to what my noble friend said about her amendment, which she moved comprehensively and quite brilliantly. Will the Minister confirm that ISA income is disregarded under existing arrangements for tax credits whereby the income, not the tariff, is looked at? If that is right, what is the read across to the new regime? Does that not reinforce my noble friend’s amendment?

[The Earl of Listowel]

My Lords, I was most grateful to the Minister for his previous reply and for the offer of detailed information on the question I asked him. Now I would like to ask him about child trust funds, and I hope I have the right hook on which to put this question. There has been some toing and froing about child trust funds, but thanks to the work of Paul Goggins MP and support cross-party, they have been reinstated for children in local authority care. The local authority will put in a sum, supported by the Government, for each year that a child is in care, I think. I am interested to know how that will be treated in this context. The Government have also moved away from providing money to parents for trust funds, but they are looking to find vehicles to encourage parents to put money for their children into these child trust funds. Again, I am interested to know how that particular vehicle will be treated in this context. I hope that is clear.

[Baroness Campbell of Surbiton]

My Lords, I would like briefly to support this amendment by reminding Members of what happened when there was an assault on savings of disabled people who are reliant on social care. Over the past 10 years, one who is in receipt of social care support has significantly not been able to retain savings above and beyond £14,000. The consequence is that these people have not been able to develop their careers, buy a house, buy a car, save for a family and feel an equal member of society to a non-disabled member. I think we sometimes forget how the inability to save beyond £14,000 can erode one’s sense of self and of equality. I therefore support this amendment; I think it is admirable, and I will continue to raise the issue in the area of social care. Andrew Dilnot raised this in his recent commission report as being one of the greatest barriers to the life chances of people who rely on benefits, especially social care benefits and support, so I am very pleased that this has been raised by the noble Baroness, Lady Drake, and I support it.

[Baroness Hollis of Heigham]

My Lords, I, too, support my noble friend’s amendment, which was so impressively and eloquently moved. I thought she had an unarguable case, but we will see in a moment whether the Minister thinks differently. The Minister has been very responsive, rightly in my view, not only to the issue of rewarding the move into work but to the issue of reducing the risk of moving into work. One thing I must welcome about universal credit is precisely that it takes into account the risk for people on very low and narrow incomes. I do not doubt we shall come back to the very high risks that people on very low incomes face when trying to manage on a frankly very tiny budget when we discuss an amendment on payment methods tabled by my noble friend Lady Lister.

There is another risk. You are in work, you may be receiving tax credits or may be self-employed, and you try to build up savings, through ISAs or whatever, because you need to replace a white van for your business to move things or because you are a self-employed carpenter with tools because you can no longer get a job as an employee, or because you are associated with a garden centre and are taking stuff around; or you might need a car, particularly one that is big enough to take your elderly parents out from their residential care, and that will cost you substantial savings; or, as my noble friend mentioned, you might be an older person in your 40s or 50s, with children approaching university age, who has been saving hard to make it possible for them to go to university without facing a massive fear of subsequent debt.

All these are expenditures which I am sure the Minister would regard as reasonable, and all require saving—in some cases, if possible, beyond the £16,000 figure. You may have several demands. A rollercoaster of demands might hit you, and you have over the years providently built up your savings to £20,000, £25,000, or whatever, so that you can lay off that risk. I know the Minister understands the point about risk if one is going from benefit to work.

16:30

There are also real risks facing people who are in work, who currently enjoy tax credits and who may now find under the regime described by my noble friend that their savings are now expected to replace their JSA income. As a result, they will have none of that resource that allows them to smooth the perfectly legitimate, proper and desirable expenditure they face. If they go back into work subsequently or perhaps are lifted off tax credits, they will think to themselves, “What is the point of my trying to build up ISAs in future? What is the point of my having some rainy day money? What is the point of my doing what another bit of government tells me to do, which is to save? As soon as I do, I am penalised and I am not able to meet my other responsibilities towards my family members or my efforts to keep myself afloat as a self-employed person because you have run down my savings. You have reduced my resilience to cope. You have increased my risk; you have increased my difficulty in getting back to work, because I now have a clapped-out van I cannot rely on”. I know the Minister does not want that scenario; and if he does not want it, I very much hope he will agree to take back the amendments moved by my noble friend on various aspects of savings and think through them again.

[The Earl of Listowel]

My Lords, I am afraid my last comments were probably not very clear, for which I apologise. The question I really wanted to ask was about a young person leaving care who has a sum of capital in a child trust fund. Will that sum be exempt if he needs to draw on universal credit?

[Baroness Howe of Idlicote]

My Lords, having listened to the detailed arguments, which were extremely well put, if I may say so, the message to me is definitely that all this looks as though it is going to discourage people from saving. If the Minister cannot reply to what we have heard, that is a very worrying message to be sending out.

[Baroness Sherlock]

My Lords, I would like to add one final word. Could the Minister reflect for us briefly on one of the wider consequences of this move? When tax credits were set up, they were, as he will know, designed to replicate work in many ways and to replicate the tax system, so it is not the case that having savings is not taken into account at all. Under tax credits, genuine income from savings is taken into account, and that is the way it should be, but under this new system it is not just the very richest who are affected. Once people reach £6,000 worth of savings, they will face, as my noble friend Lady Drake described, a heavily punitive rate of effective taxation on that. I wonder what the effect of that is on the marginal deduction rates as they move into work.

I ask the noble Lord to do two things. One is to comment on how he has factored that into the effective incentives to move into work in a whole variety of situations. Secondly, could he say whether he is not worried at all that it might push people back into an approach of dependency on the state as opposed to their trying to share that responsibility between themselves and the state, which the tax credits system encourages them to do?

[Lord Freud]

My Lords, Amendments 22B and 22F would exclude from the calculation of capital any savings placed into an individual savings account or other prescribed accounts of a claimant who is in work, or who has been in work in the past 12 months, up to a maximum limit to be set no lower than £50,000. It begs a really very simple question: should the taxpayer support someone who has savings of £50,000? That is the question that is being asked here, and I think it is a question about amounts. The figures we are using were taken over from the existing benefits system, and they were raised a little over five years ago in April 2006. Those figures were doubled from £8,000 at the top to £16,000, and the starting rate from £3,000 to £6,000, so those figures do move around. I accept that determining what the right figure is here is not an exact science. Indeed, one of the things I am keen to have is a responsive system that starts to get research and understand judgments such as what the right figure is here.

I understand exactly the motivation of the two amendments, which is to encourage low-income workers to save. The argument comes down to how much we and the taxpayer can afford. I gave some figures when we debated the previous group of amendments. I will remind noble Lords that if we had an upper capital limit of £50,000, it would cost £90 million a year, which we simply do not have. Under our proposals, only when a claimant, or joint claimants, has £16,000 or more will the entitlement to universal credit cease; and only 13 per cent of households have this much in savings. That is why the figure is not as arbitrary as some noble Lords indicated.

I was asked a series of questions. I will have to add to my letter to the noble Earl, Lord Listowel, to get right the position of children leaving care. Clearly, a child's income and capital are wholly disregarded in the system. The noble Lord, Lord McKenzie, asked about the treatment of ISA interest. Universal credit will replicate the capital rules for means-tested benefits by using a tariff income. It is not possible to read across from the tax credit system. As noble Lords know, tariff income is not—and is not meant to be—the equivalent of the actual income that you might earn on that amount of capital. The figure includes an estimate of how much you should be prepared to run down your capital while you look for support from the state.

[Lord McKenzie of Luton]

Will the Minister confirm that tax credits and ISA income are not included but are exempt? Is that right or not?

[Lord Freud]

I will have to write to the noble Lord on ISA income in tax credits. I do not know the exact position. I hope that that explains why we cannot support Amendments 22B and 22F. I ask the noble Lord to withdraw his amendment.

[Baroness Hollis of Heigham]

My Lords, the noble Lord started off with a question that I suspect was meant to be rhetorical, but I think he is entitled to an answer. Is it right for the taxpayer to support someone who has £50,000 in savings? That was the noble Lord’s opening sentence. I agree with him that that is the key question. However, given the responses that he has heard today, the answer should be, “Yes, in certain circumstances”. The key question is, “What are the circumstances?”. There is no absolute yes or no answer.

The circumstances mentioned so far include whether this will help sustain savings and the savings habit. The answer is yes. Would it help people get back to work earlier than they otherwise would, and therefore depend less on benefits? Possibly, yes. Would it help families avoid falling into debt and thus lose even the tariff income that they would otherwise expect to enjoy between £6,000 and £16,000? Possibly. Should it be for a limited time so that it is not an unending commitment? Certainly. That is surely the way in which we should approach the question. It should not be, “£50K or not?”, but, “What are the circumstances in which it is reasonable to support people?”. Otherwise, we will make short-term savings at the expense of longer-term losses, which will come from keeping people on benefits longer than they need to be because they have gone into debt by having run down their savings. Surely that is the right question to ask rather than the bald one that does not take into account the very different situation of people who are marginal, who are in and out of the labour market but who hope to stay there with the help of savings to smooth out these movements.

[Baroness Drake]

The Minister opened by asking whether the taxpayer should support someone with £50,000 in savings. My initial reaction to that is that the taxpayer supports people on £500,000 because there is 40 per cent to 50 per cent tax relief up to the value of £1.8 million and £50,000 per annum for pension savings. Actually, the taxpayer supports people on much higher levels of income, and we can think of lots of other incentivised examples. There is no limit on the ability to use the advantageous tax opportunities of ISAs year on year depending on what capital is held in other places. I am not sure that that would withstand the test of rigorous intellectual analysis.

[Lord Freud]

I am sorry, but I cannot not respond to that because there is a difference. I think everyone in the Room will appreciate the difference between not taking someone’s own money away from them and giving them money from the taxpayer, which is the comparison that the noble Baroness has just made.

[Baroness Drake]

I do not accept that defence because tax relief on pension savings is not taking money away from people; it is giving them their tax back.

The other point is that even on ISAs, those who are well off can take every member of their family, their spouse and children, and give them ISAs, thus taking taxpayers’ money for the incentivised advantage that that brings. So the taxpayer supports all sorts of people, some of whom are more worthy than others. On that basis, if the exam question is whether the taxpayer should support someone who has £50,000, I should like to get the whole list of incentivised savings and do some comparative analysis.

The effect of this policy is that people in hard-working families will be disincentivised to save and will face greater risk in managing a labour market that the Government themselves want to deregulate further but do not want to support people in managing that deregulated labour market. As my noble friend Lady Sherlock has said, there is not just the issue of the £16,000. For all those low and moderate-income people who have more than £6,000—

[The Deputy Chairman of Committees]

I am sorry to interrupt the noble Baroness again, but a Division has been called in the Chamber. The Committee will now adjourn, and resume in 10 minutes.

16:42

Sitting suspended for a Division in the House.

16:52

[Baroness Drake]

I will just complete what I was saying. I think I made the point about those who are better off and are saving, and the impact on hard-working families who are now disincentivised to save and who will be more exposed to risk in managing difficult circumstances because they will have had to have drawn down on their savings, so will be less well positioned if they face difficulty.

The tariff rules are going to hit, very aggressively, those who have savings of between £6,000 and £16,000. A 21 per cent assumed rate of return is just extraordinary for people who are trying to save at the most modest level in that situation. Thanks to the forensic help of my noble friends Lady Hollis and Lady Sherlock, under the current rules interest from any individual savings account is currently disregarded. Under the new rules, people on in-work benefits will find that to no longer be the case. We had a lot of discussion in the debate about the impact on risk, responsibility and dependency from such a disincentive to save.

I appreciate that the Minister is arguing the Government’s position, but there was no great defence of the principle that people on benefits should not be able to save without it being drawn back under the capital rules; it was much more an argument about the level of savings that would be made by this change to ISA savings. If I may say so without introducing new business, a similar argument was used by Mr Grayling in Committee in the other place. Therefore, if the primary driver is one of reducing expenditure rather than the defence of the principle, because I do not think the principle stands up—that people on benefits should not be able to save above a certain level—I argue that the taxpayer should look to other richer incentivised savers to find their £70 million or £90 million. I beg leave to withdraw the amendment.

Amendment 22B withdrawn.

Amendment 22C

Moved by

[Baroness Drake]

22C: Clause 5, page 3, line 7, after “it” insert “excluding such prescribed amounts saved for a deposit on the purchase of accommodation for personal use, where the claimant is in work or was in work within the last 12 months”

[Baroness Drake]

My Lords, in moving Amendment 22C, I also wish to speak to Amendment 22D, which seeks to exclude amounts saved for a deposit on the purchase of accommodation from a single claimant’s or joint claimants’ entitlement to universal credit.

These amendments are tabled as a consequence of aggressive capital rules being applied to in-work benefit, which is now the characteristic of universal credit. I have rehearsed in previous amendments the impact of integrating tax credits into universal credit and applying the proposed capital rules. We now have a situation in which an individual or a couple who are acting responsibly and trying to accumulate money for a deposit with which to purchase accommodation will find that that act of saving will be taken into account when calculating their entitlement to universal credit, so being responsible and prudent and saving for a deposit could now lead to a loss of income for some, which strikes me again as somewhat perverse. These ordinary hard-working people will face a combination of forces coming into play. Deposits for the purchase of accommodation will now need to be much higher to qualify for a mortgage. They will have to save in an environment in which private rents are rising due to increased demand and limited housing stock, and if they do try to save for a deposit this could result in a reduction in their income from universal credit. If ever I had an intergenerational empathy compared with my generation’s experience, it is in this area.

We are putting barriers in front of hard-working lower and moderate-income families because of the approach to their accumulation of savings that the well-off simply will not face. If I may anticipate the noble Lord’s remarks, I have no doubt that he will respond that there are no ring-fenced deposit savings accounts for house purchase and there is no way of confirming the future intentions of claimants, to which I would respond that I do not believe it is beyond the imagination of government to facilitate such products or to create a process to identify such savings. Controls could be applied to ensure that any withdrawals from those deposit savings other than for accommodation purchase could trigger their treatment as capital that is not disregarded. I am sure the noble Lord will argue that the income of those in receipt of universal credit is unlikely to support a mortgage application in today’s world, but that rather dismisses the motivation of some hard-working people to save and own their own place. It sets a low aspiration for all those in receipt of universal credit, which is not justified. It ignores the possibility of change in peaceful circumstances. They may go on to lower earnings for a period in response to the labour market, but their earnings may improve over time. Nevertheless, they will have had to draw down on their deposit savings because of the capital rules. The purpose of the amendment is to say that a way should be found such that savings ring-fenced for the purchase of accommodation should not count as capital under the rules of entitlement to universal credit.

17:00

[Lord Wigley]

My Lords, I support this amendment very warmly indeed, and put to the Minister circumstances that arose frequently in the area that I used to represent in the other place and that still arise in rural areas, not only in Wales but also in areas such as the Lake District and Cornwall, where it is very difficult for young people to buy a first home. Indeed, it is so difficult that unless a parent is in a position to make some contribution towards a deposit, it is next to impossible to buy a first home. The question that goes through my mind is: if a parent has money allocated for this purpose, is he or she going to pass it to their offspring to buy a house, knowing that if it stands in their offspring’s name in a bank it may prevent that person from getting benefits?

In areas such as those to which I have referred, the major industry is often tourism, which is highly seasonal. This means that people are moving in and out of work frequently. If one takes the combination of ultra-high property values, which have often arisen because of the pressure of second homes, the relatively low income levels that obtain within the economy, and the seasonal nature of the employment available, particularly for young people looking for their first job—and one wants to encourage them to take every job opportunity there is—one surely has to make sure that the rules and regulations do not militate against them getting their foot on the first rung of the ladder in order to be the owner of their home. I put it to the Minister that somehow or other that has to be safeguarded within the system.

[Baroness Sherlock]

I would like to make one brief point about the sums of money that are increasingly needed to save for a house. It was reported in the Guardian on 17 September this year that the average deposit has gone up tenfold in the last 20 years, from £6,793 in 1990 to over £65,000 now. The same article went on to quote a banker from First Direct, which I presume must know these things, who said:

“The average deposit … has actually risen more than twice as fast as house prices and almost four times as fast as income”.

Could the Minister therefore think for a moment about whether the inflation in the savings limit properly takes account of the specific house-related inflation, and within that the specific deposit-related inflation, that we are seeing?

[Lord Freud]

My Lords, Amendments 22C and 22D would exclude from the calculation of capital prescribed amounts saved for a deposit on the purchase of accommodation for personal use where the claimant is in work or has been in work in the previous 12 months. I can of course see the benefits of encouraging low-earning families to become homeowners, but at present these amendments would be difficult if not impossible to implement efficiently in practice. As the noble Baroness, Lady Drake, pre-empted my argumentation, I will not go into this in depth, but I must say that one would need both the provision of a savings vehicle, which would in effect be exclusively for the purchase of a house, as well as adequate numbers of people wanting to save in this particular way, for that market to work. I do not think there is any necessary block on creating a vehicle like that at some stage in the future, and it would be up to a Government to look at that in the future. Right now, given our constraints, I do not think we are in a position to do it. As noble Lords have heard and as the noble Baroness suggested, these are not necessarily issues of principle; they are issues of affordability and the envelope that we have to introduce universal credit. I remind noble Lords that we have obtained an envelope of £4 billion per annum to give to people in receipt of universal credit. I am not netting it off against other changes, but that is what the universal credit does. Finding extra money for this, that and the other cannot be done just by a wave of the hand. It will be tough to get extra money for desirable things.

It is essential that we get the architecture of a structure that we can use to help and motivate people. If we cannot afford particular things or it would be desirable to develop particular processes, that is fine and we can do it, but right now we do not have those resources. For that core reason, I hope noble Lords will appreciate why we do not support these amendments, and I ask the noble Baroness to withdraw her amendment.

[Lord McKenzie of Luton]

The noble Lord may need to write to us to flesh out some detail about the £4 billion, a figure that he has used on several occasions. I accept that it is probably a gross figure and that there are some nettings off. Presumably the baseline for that is after taking account of the previous two Budgets and the spending review, and all the hits that occurred there.

[Lord Freud]

My Lords, I need not write to the noble Lord on this matter because I am trustful that the impact assessment that holds these figures will be on its way—

[Baroness Hollis of Heigham]

Very soon?

[Lord Freud]

I was going to say today. In fact, I can say more. I have copies in the Room. I can do better; I can ceremoniously deliver the impact assessment to the noble Lord with that figure explained.

[Baroness Drake]

In response to the Minister, I am able to pre-empt his arguments because the quality of the DWP briefings is so good that I can see where he is likely to be coming from. The fact that I can anticipate is an indirect compliment. On the substance of his comments, he argues that it is important to get the architecture in. The problem is that the architecture has opted for a very harsh and anti-savings regime, and for applying it to those in work. I am not sure that I would want that element of the architecture to be in, but at least some of my amendments seek to say not, “Oh, let’s find bits of money”, but that if one chooses to take that harsh anti-savings regime—quite clearly, as I have quoted, I am supported in that view by the CSJ—some of the consequences are so perverse that you have to address them not as bits of money but as perverse outcomes of that choice of architecture.

We have dealt with one of the outcomes, but another is that when this comes in a population of people who are currently in work, who may be in work in the future, and who have got savings, are going to find that those hard-earned savings for a deposit on a house are now going to result in an adjustment of their benefit entitlement. That strikes me as unfair and perverse. If one is looking for fairness, one needs to have intergenerational sympathy for the combination of factors that young people face in the current market, which I have tried to spell out one by one. This, to me, becomes an even more compelling argument for saying, “Are you going to put this on their shoulders as well?”.

I accept that there may be process or product design challenges around this, but I have every faith in the creative ability of the Minister and the DWP team to find a process route through this and still urge them to allow all these people who are saving for their houses not to suddenly find that they have to draw down on their savings or lose benefit. I withdraw my amendment.

Amendment 22C withdrawn.

Amendments 22D to 22F not moved.

Clause 5 agreed.

Clause 6 : Restrictions on entitlement

Amendment 23

Moved by

[Lord McKenzie of Luton]

23: Clause 6, page 3, line 20, leave out paragraph (a)

[Lord McKenzie of Luton]

My Lords, this is a straightforward and, I hope, brief probing amendment to Clause 6. This clause is concerned with restrictions on entitlement. There are three types of restrictions, two of which are time-related.

Clause 6(1)(c) deals with periods at the beginning of a period of claim, which presumably are supposed to reflect the waiting days applicable to some benefits. Of course, waiting days do not apply to housing benefit or generally to tax credits. Question one for the Minister is therefore how the waiting-day rules are to be applied under universal credit. Application to the universal credit would, as my noble friend Lady Hollis said, be adopting the lowest common denominator. You need, for example, to take account of the fact that rent has to be paid from day one if there are going to be waiting days before the claim becomes payable.

My second question is whether the same sort of exemptions from waiting days that operate currently—for example, in JSA, within 12 weeks of the cessation of another benefit claim—will apply to universal credit. Question three is what linking rules will apply so that the waiting days do not apply where universal credit is in operation previously. Perhaps we can understand the likely period involved in that. Of course, there are various back-dating rules that operate with a range of current benefits. How are these to be dealt with under universal credit?

My next question is: where waiting days are applicable under current arrangements—typically three days—are there any that are seven days, and how is this going to operate in the new world? Clause 6(1)(b) envisages entitlement being denied for up to seven days other than at the start of a period of claim. Perhaps we can have some examples of what the Minister has in mind.

It is understood that Clause 6(1)(a) may be used to exclude certain groups that remain the responsibility of the local authority: for example, prisoners and children leaving care. Can the Minister please confirm—or let us have a note if he is unable to do so today—that the type of exclusions contemplated for universal credit exclude access to all components of the benefits that are to be subsumed into the universal credit? I also draw the noble Lord’s attention to the Delegated Powers and Regulatory Reform Committee’s report on this issue, which says:

“Clause 6 provides for restrictions on entitlement that are left largely to negative regulations. The power in subsection (1)(a), which is subject to no constraint in the Bill, could affect entitlement very significantly. We draw it to the attention of the House so that the Minister may be invited to satisfy the House that the negative procedure affords adequate control over the exercise of the power. Unless the House is satisfied with the Minister's response, we recommend that the affirmative procedure should apply”.

I should be grateful if the noble Lord could also deal with that point. I beg to move.

17:13

[Lord Freud]

My Lords, I will speak to Amendments 23 and 24. Amendment 23 removes the power to make regulations for there to be no entitlement to universal credit in prescribed circumstances. Amendment 24 removes a power for regulations to be made for there to be exceptions to any limited entitlement or waiting day rules. It might be helpful if I indicate the types of circumstances in which we envisage these powers being used.

The regulation-making power in subsection 1(a) will provide that there is no entitlement to universal credit in certain cases where the usual conditions of entitlement are otherwise satisfied. As is the case now, a number of specified groups will not be able to access universal credit. These may include certain prisoners and children leaving full-time care who remain the responsibility of the local authority, where payment of universal credit would lead to duplication of provision. This may include people involved in trade disputes. Amendment 23 would prevent us being able to restrict entitlement to people in these circumstances. This would result in duplication of provision in some cases, which I am sure is not the intention.

I will address the questions of the noble Lord, Lord McKenzie, about waiting days, which constituted the main thrust of his comments. Housing benefit is dependent on entitlement to means-tested benefit, which involves waiting days—for example, jobseeker’s allowance or employment and support allowance. There is also a waiting period in practice for housing benefits. In addition, where benefits such as housing benefit are paid for in complete weeks, there is no provision for short claims of a few days. In practice, when we move from the application of waiting days in the reality of the universal credit world, there will be far fewer instances of this start-up arrangement because people will go on to universal credit for their entire application and will stay on it.

The noble Lord asked about linking rules. Our intention is that people will work their way off the system—that would be a very good outcome—but would remain effectively known to the system for another two years. So that is effectively how the linking rules would work: you would come back onto your taper on an automatic basis. I have not actually thought this through. I imagine—I will check carefully now—that waiting days will not apply when you are on the system and it will be a kind of run-on effective link. I will double-check that waiting days will not apply in those circumstances because my understanding currently is that there is a run-on and that is the same effective claim. So the whole concern around waiting days would be very much diminished. In fact, I am reassured almost instantly that the intention is not to have waiting days as people move on and off the system in those circumstances. As to the question of when Clause 6(1)(b) would apply if not at the start of the claim, it would apply to the entire claim if it covered less than seven days.

Amendment 24 would prevent us having exceptions if we make provision for waiting days or to prevent very short periods of entitlement. We envisage that regulations under Clause 6(3) might be used in a claimant’s favour: for example, where there is only a short break between periods of entitlement, a claimant may not have to serve waiting days before becoming entitled again. I am sorry that I am repeating that point. Although we have made several changes moving from negative to affirmative resolutions, on this one we propose to stay with negative ones. Given this explanation, I hope that noble Lords will not press their amendments.

[Lord McKenzie of Luton]

I am grateful to the Minister for that response on the issue of negative or affirmative, to which we may wish to return. In order to be clear, perhaps I may use the trade disputes issue as an example. Under current arrangements, there are certain trade disputes under which benefits can be withheld. Under the universal credit, there is an amalgam of benefits, including housing. As regards the sort of exemption that it is envisaged would apply under Clause 6, does it cover all the separate benefits that could give rise to similar exclusions now? For example, would housing being included in the universal credit still be subject to the same trade dispute rules, or will separate rules apply to that? That is not a very elegant way of phrasing the question.

[Lord Freud]

My Lords, our intention is to have it broadly the same. We have to work through the exact detail of the regulations but our intention is not to change the main thrust of that set of regulations.

[Lord McKenzie of Luton]

Specifically, if housing benefit were not currently subject to those rules, how would that be unpicked? Perhaps the answer is that it is.

[Lord Freud]

We would wrap them together in the universal credit but maintain the same regime for trading disputes. That would be the intention. Clearly, we have not written this regulation in detail and we will have a chance to look at it in some detail before we do.

[Lord McKenzie of Luton]

I am grateful again to the Minister. We should like to reflect and read the record on that issue, and it is something to which we may wish to return. In the mean time, I beg leave to withdraw the amendment.

Amendment 23 withdrawn.

Amendment 24 not moved.

Clause 6 agreed.

Clause 7 : Basis of awards

Amendment 25

Moved by

[Baroness Lister of Burtersett]

25: Clause 7, page 3, line 35, leave out from “payable” to end of line 36 and insert “twice per month”

[Baroness Lister of Burtersett]

My Lords, this is the first time I have moved an amendment, so I hope your Lordships will be gentle with me if I make any mistakes.. First, I shall make a couple of apologies. I am sorry that I was not here last week. I was one of those caught out by the change in recess dates. I apologise, too, for the length of my opening remarks, but this is an issue on which I feel strongly, as do a number of organisations, such as the Women’s Budget Group and the Child Poverty Action Group, both of which I am very involved with.

The amendments are variations on a theme. The aim is not to get frequency of payment written into primary legislation, as that clearly is not appropriate, but to try to persuade the Minister to think again about the decision to make payments of universal credit monthly. In the other place, the Minister said that the Government are sufficiently open-minded to recognise the issues that monthly payments generate and that they are not ruling any option in or out.

Given that presumably this decision is being made on the balance of the argument and does not affect the fundamental architecture of universal credit, I hope that the spirit of open-mindedness will prevail today. I believe that the balance of evidence does not support monthly payments and will argue that they could undermine the universal credit architecture, the importance of which the Minister has emphasised.

The rationale for monthly payments has been set out helpfully in the second universal credit policy briefing note. There appear to be two main elements to this rationale. The first is that universal credit should mimic work and receipt of a salary so that families are able to manage their financial affairs in the manner that best reflects the demands of modern life, whether they are in or out of work, so that they will be better prepared for the reality of working life. The second is that it fits well with the overarching universal credit narrative of simplicity and preserving work incentives.

Let us consider the realities of working life. The departmental briefing note states that 75 per cent of all those in employment are paid monthly. Of course, the obverse of that is that one-quarter are not. Estimates given to me suggest that at least one in five are still paid weekly or fortnightly. According to the briefing note, as many as half those earning less than £10,000 per year are not paid monthly. I think we can safely assume that they are paid more frequently. So for many, the reality of working life is still weekly or fortnightly wages.

Moreover, where universal credit is paid on top of a monthly wage, it is not clear why it has to mimic it, nor why it has to do so for those who are not expected to seek paid work. At present, in-work tax credit recipients are able to choose between weekly and four-weekly payments—or perhaps it is two-weekly. Those who receive child tax credit above the family element—those on lower incomes—are more likely to receive it weekly.

Another reality of modern working life—I am very grateful to Richard Greenwood, who wrote to me after Second Reading, for drawing this to my attention—is payday loans. Mr Greenwood points out that a whole credit industry called payday loans has risen up on the back of predominantly low-income earners who get paid monthly. They find it hard to budget properly, so often obtain expensive, short-term credit on the pseudo-security of their next monthly income day. Mr Greenwood informs me that in 2010, Consumer Focus published a report that suggested that payday lending in the UK had quadrupled in the preceding four years, with an estimated 4.1 million loans being made in 2009-10. The report was called, Keeping the Plates Spinning. I fear that monthly payments will mean either many more plates being smashed to smithereens or—as Mr Greenwood warns—many more low-income families taking out expensive, short-term credit. Even worse, they could turn to loan sharks.

The point was made in a committee of the other place that similar concerns were raised when benefit payments were changed from weekly to fortnightly, but that the expressed fears did not materialise. In response, I point out that moving from fortnightly to monthly payments is a much greater leap. Also, according to Fran Bennett of the Women’s Budget Group, recent findings from qualitative research with low-income families carried out by Oxford University and funded by the Economic and Social Research Council and the Department for International Development suggest that we should not be too complacent about the impact of the earlier move to fortnightly payments. One respondent, a woman with a partner and four children, said:

“Before the switch to fortnightly payments I didn't have to struggle with anything … with all these changes I’m just struggling … before I never struggled … like, never”.

Another respondent, a lone mother, said that,

“two weeks is a long time … now they have put that fortnightly and all … it’s just wrong”.

More generally, the Women's Budget Group cites the 2008 Families and Children Study that states that one in four families with children runs out of money always, most often or more often than not before the end of the week or month. Among the lowest-income one-fifth, the figure is 37 per cent—nearly two in five.

This is not an exceptional problem affecting only a small minority of supposedly inadequate budgeters. Research evidence points to how well most people on low incomes manage their budgets. However, numerous studies also reveal the stress caused by budgeting on a low income, particularly for women, who still tend to have responsibility for day-to-day budgeting in low-income families and who thus act as the shock absorbers of poverty. Even if most people eventually adapt to monthly budgeting, the long-term consequences of the difficulties created in the shorter term could be immense and could undermine work incentives if people are saddled with debt. The Minister has already told us that the typical family in receipt of universal credit will have virtually no savings on which to fall back.

I am afraid that it is not good enough to make vague promises of appropriate budgeting support for those who cannot manage monthly repayments. This, we are told, might be financial advice—will the Minister please explain who will provide this advice about budgeting?—or it might be interim and bridging loans or possibly more frequent payments in exceptional circumstances. Does this panoply of special assistance, which implies that the problem lies with the claimant rather than the system, not strike noble Lords as rather sullying the narrative of simplicity that monthly payments are supposed to exemplify? Indeed, according to the Financial Times, officials have admitted that this special assistance could cost extra money but that the plans have not yet been fully worked out or costed. I ask that a fully costed plan is presented to your Lordships’ House before monthly payments are finally agreed.

17:30

I know that some housing providers are also worried about the possible implications of monthly payments for arrears where housing costs are paid as part of the universal credit. I return to Mr Greenwood, whom I quoted earlier. He is a responsible credit provider who is very concerned about monthly payments—even if irresponsible providers, particularly loan sharks, could, I suspect, be rubbing their hands in glee. Mr Greenwood has kindly given me permission to quote from his e-mailed letter, which makes a case against monthly payments very eloquently. He states:

“At this stage I need to tell you my own perspective ... UK Homemaker (my business) extends small amounts of credit (on basic household items like fitted carpets and washing machines etc) to low income households across Scotland and N. England. We consider ourselves (not least through self-interest) to be ‘responsible lenders’ and as such have developed a set of credit rules based on ‘knowing our customers’ and ‘reasonable affordability’. To this end we go to massive ends to establish not just income levels but also frequency and dates of income in order to help customers micro-manage their usually scarce cash. Most of our customers are on benefits whether this be solely on benefits or a combination of low earnings plus benefits. I have over 30 years experience in this type of activity and the notion that ‘monthlyising’ (excuse the Dylan Thomasism) a low overall family income somehow prepares a family for work is complete anathema to me. The only thing monthly pay will prepare many low income families for is a week with a full belly followed by three weeks of hunger! When I started out in this business (mid 70s) the pattern then was Friday payday, so full bellies Friday, Saturday, Sunday but then the empty bellies thereafter could be withstood because another Friday was soon coming. The situation improved over three decades as different benefits were paid on different days and particularly where mixed with low earnings, low income at least became very frequent. Waiting a week for the next low income was bad enough then (and now) … for many though the prospect of waiting a month will be unbearable! (Simple analogy: if you were thirsty and in an arid place would you prefer a survival size bottle of water each day or a barrel once per month on the hope it lasts? This intended action will be bad enough for many families but the justification used by IDS”—

the Secretary of State—

“(most people in work are paid monthly) is plainly ludicrous ... my experience is that when low income families do manage to obtain work this is rarely the idyllic ‘monthly paid’ work IDS refers to … at this level of the economy most people going into work are weekly paid ... I know this not just because I observe closely our customers’ income patterns but also as an employer we offer all staff (other than management) choice of weekly or monthly income and weekly is the choice of nearly all entry level job takers (and despite a scheme to ease them into monthly pay) ... Finally I am a Conservative (I even stood for Parliament once) and I broadly support many aspects of the intended welfare reform (particularly simplifying its mind-boggling complexity etc) but this concept of ‘monthlyising’ low incomes is clearly and totally the most out of touch proposal imaginable”.

I am tempted to say at this point that I rest my case, but I am afraid that I have some more points to make.

According to the Women’s Budget Group, advisers on debt and welfare benefits in Oxfordshire recently asked some clients their views on monthly payments. They expressed real fears about not being able to manage and getting into debt. One new claimant of employment and support allowance said that,

“it is very difficult to budget with two-weekly payments; impossible with monthly”.

A client with mental health problems said that he was still finding it difficult to adjust to the change to fortnightly payments because he felt that he was not very good at managing money or at adapting to change. Of course he might qualify for the promised budgeting support, but, as the Women’s Budget Group points out,

“this would mean having to label himself as failing.”

These worries are reflected in departmental research into perceptions of welfare reform and universal credit among claimants and others published last week. If noble Lords will indulge me, I will read from it. The report states:

“The prospect of a monthly payment was highly contentious in this research. In particular, those on low incomes anticipated that they would have great difficulty in budgeting as they are used to more frequent payments and do not tend to have much of a financial buffer to fall back on. Some of those working were more receptive, but these tended to be people who were earning more and already being paid on a monthly basis. Many low paid workers reported being paid more frequently and they reacted in a similarly negative way to this proposition to those currently receiving benefits ... Only a small minority spontaneously appreciated that monthly payments could prepare those claimants not currently in the workforce for working life. Overall, there was a strong feeling that there should be options, or at least an opt-out from the default offered where required”.

There is a contradiction at the heart of this proposal. As part of the policy rationale, the departmental briefing paper states:

“Making decisions over household finances and budgeting in the most appropriate way to meet family needs is best done by the family itself”.

Yet the Government are imposing their own views about one of the most crucial factors in budgeting: the frequency of payment. I suggest that the reason is that the desire to create,

“the conditions for attitudinal and behavioural change”,—[Official Report, 13/10/11; col. 628.]

emphasised by the Minister at Second Reading, in line with nudge theory, has blinded the Government to the reality of living on a low income.

In its recent report on means testing, in an otherwise pretty clean bill of health for the impact assessment on universal credit, the National Audit Office observed its failure to address the question of claimant burden. I do not know if the briefing that arrived today does this, but certainly the original one did not. However, this claimant burden does not derive from the nature of the universal credit means test itself. I fear that the Government are creating a big burden for claimants that could corrode the universal credit architecture and undermine its credibility with claimants. It smacks of the kind of social engineering that Conservatives have traditionally been suspicious of.

In a recent Parliamentary Answer the Minister stated that:

“The department has adopted the principles of user-centred design for universal credit ... This places customers at the heart of the design process to ensure their needs are reflected in the way policies are delivered”.—[Official Report, 3/10/11; col. WA 156.]

Yet the department’s own research that I have just cited indicates that this is simply not the case with regard to frequency of payment. Moreover, the researchers warn that monthly payment is one of a number of potential risks that could jeopardise the successful delivery of universal credit. They advise the department to consider mitigating action. We are offering the Minister a number of courses of mitigating action in these amendments. I should say that the noble Baroness, Lady Meacher, gives her apologies for not being here and says that she strongly supports the amendments and will pursue them on Report if necessary.

I hope first and foremost that the Minister will reconsider the decision to pay universal credit monthly—or, at the very least, will allow the claimants to choose between fortnightly and monthly payments in line with the Government’s own philosophy of choice. As a fallback, a third amendment would allow a claimant proactively to choose fortnightly payments while retaining monthly payments as the default, and the fourth would require a review of the impact of monthly payments should they go ahead. I beg to move.

[Lord Kirkwood of Kirkhope]

My Lords, I am privileged enough to share the billing on the amendment with the noble Baroness, Lady Lister of Burtersett. She has made a very powerful and comprehensive case, and there is not an awful lot left to say, except one or two things. This is a significant change. In my previous incarnation, as a member of the Select Committee in the other place, I was always surprised at the extent to which weekly budgeting is a feature of life that is qualitatively different. If you do not live under those circumstances, it is hard to appreciate how difficult it is. A change to monthly payments would be extremely significant. I feel that it is part of my duty to protect the Minister of State from his normal missionary zeal in many of these cultural attempts to change the way people behave. They are perfectly logical, but potentially really quite dangerous if we take them too far and too fast.

The first thing I hope that the Minister will do for the Committee is put some flesh on the Government’s proposed mitigation factors which talk about exceptions and budget support. The noble Baroness, Lady Lister, correctly asked for those to be made clearer. She is right that if this is to be done properly and the system is to be equal to the task, it might cost more than the department currently thinks. That has the potential to wreck some of the elegance of the simplicity around universal credit, which would be a bad thing. However, before the Committee can make a judgment on the Government’s position, we need to listen carefully to what is planned.

Secondly, this is a significant change because there is no appeal on frequency of payment. As colleagues know, throughout the benefits system there is a highly developed set of circumstances for people who feel that they are being short-changed or not being properly served. There are means of recourse through systems that are well known, well used and well supported by the legal advice community, pressure groups and the like. There is no right of appeal here, so if we get it wrong, people will have nowhere else to go.

There is an issue too about monthly payments. Monthly is not the same as 12 times a year. People pay their bills monthly because that is how often the bills come in. So it is not just a simple question of weekly payments or not, it is actually that people being paid on a weekly basis know when the utility bills will come in and know where savings have to be made in order to meet them. It is not an easy thing to move from weekly payments to 12 times a year.

I absolutely agree with the noble Baroness, Lady Lister, about the payday loans issue, and I think that it will become seriously significant. I would draw attention to what I am sure colleagues already know intellectually, which is that discretionary payments made under the Social Fund are flying up under the changes we are making now. The Government say that we need not worry too much about it because there are local circumstances—400 of them in England, not to mention Scotland and Wales—and they will fill the gap. I remain to be convinced of that. We need to be careful that we are not creating a loan shark’s charter at the expense of lower income households in our communities.

We need an impact assessment, and many noble Lords were right to draw attention to that. I look forward to seeing the document that was magicked to some effect out of the Minister’s top hat earlier today, and long may that continue. If we have one of those every time the Committee sits, we will make some serious progress. In the end, however, this is a question of choice. For me, Amendment 27 does it perfectly. It states,

“so that it is payable twice per month where requested by the claimant”.

I understand the driver to replicate the monthly situation. Obviously everyone in this Committee has a natural rhythm of payments constructed around monthly bills, direct debit payments and all the rest of it. The ability for the claimant to request that this is the way that they work and to do otherwise would cause them serious distress would still leave them with a default position where they would largely get what they want, and the people who are nearer the labour market would be perfectly happy to accept the discipline that they need to make this work successfully.

17:45

The noble Baroness, Lady Lister, also made the point that this will create pressure on women because women are predominantly the week-to- week managers—we have to be careful about this characterisation because it is gender-typing of the worst kind—but by and large in my experience the males pay the utility monthly bills and the week-to-week household budgets for food and dietary provision are mainly carried by the women. It is the week-to-week budgets that will be put under particular pressure if we move in this direction without thinking about it.

Finally, there was some experience of a change of this kind in 2009 when we went from weekly to fortnightly benefits, as some colleagues may recall, and I think the Government are founding this on the fact that that was easy. I do not think that it was as easy as people imagine. I would like to see the evidence for saying that the change was easy—I think it was quite difficult. However, there is a world of difference between moving from weekly to fortnightly and moving to monthly, and we underestimate that at our peril.

These are significant amendments. I do not think we are asking for much. Unless the Government are prepared to say that they are offering a really in-depth, face-to-face, money-upfront support system for those who fall foul of these new proposed monthly payments—I will listen with great interest to whether or not that is the case—we risk causing additional hardship to the financial limits that people are going to be faced with in future. I am delighted to support my noble friend of many years’ standing in the work that she has done. She is an academic, she is an expert—she knows what she is doing. She is right and I support her.

[Lord Northbourne]

My Lords, I do not want to delay the Committee. I am sure there are many people in this room who have more experience of these issues than I do. However, during 16 years chairing the youth department of Toynbee Hall down in Tower Hamlets we came across quite a lot of problems with moneylenders in particular. I strongly support fortnightly payment. Monthly payment will give much more opportunity for unscrupulous traders to profit from budgeters who are perhaps not very experienced.

[Baroness Sherlock]

My Lords, I have little to add to the rather remarkable contribution made by my noble friend Lady Lister, but I want to address a couple of points.

First, I was delighted to see the DWP research report, Perceptions of Welfare Reform and Universal Credit, and I commend the Minister and the department for taking this kind of research so seriously. The foreword to that report says:

“The Department for Work and Pensions … is committed to involving users throughout the development of Universal Credit, from setting out the criteria for a good experience to detailed design decisions. This user involvement helps ensure issues are known, understood and mitigated as the Universal Credit system is being built”.

I want to commend that. I thought it was a very good decision. However, it means that if you ask people and they give you answers, it really is wise to listen to them. Having sought the opinion of those who are going to be using the system, and having been told so clearly that only a small minority appreciated monthly payments as a route and the majority clearly felt it was a problem, is the Minister at all persuaded by that?

I have two other points to add. I am particularly concerned about the impact on those who are in that territory between work and out of work. The most compelling argument made today was the fact that if only half those people are paid monthly at the moment, the whole idea that moving to monthly payments mimics work simply falls flat. If people are currently paid weekly or fortnightly, they could be in the bizarre position of having their wages paid weekly or monthly and their universal credit paid monthly, which seems ridiculous. At the moment with tax credits people can opt to be paid weekly.

I declare an interest as having been involved in advising Ministers on the design of tax credits, as noble Lords will know. I can understand the desire of the centre to want to simplify this. I really understand why having everybody on monthly payments would be an awful lot easier for the process, as well as the design problems in terms of processing capacity of having people opt into a variety of options. However, this feels so important that if the noble Lord is so committed—and I know he is—to the aims of universal credit in supporting people in work and to getting the architecture right, it would seem that this is a fairly fundamental piece of the architecture, and we get it wrong at our peril.

I have one final point. I spent some years working with single parents. Most of them had come out of relationships or marriages. One of the things that they always said they liked about being single—there were many things they did not like that were very hard—was that they could control the money. I heard many of them describe the struggles that they had had to protect the money coming into the household and to have it spent on the children. They described a whole range of situations that I am not in any way suggesting are typical, but they are none the less not invisible or irrelevant either. Some said that they quite often had a situation where their partners would periodically go out on a binge and spend the money. There were people who had quite a bit of money who would say: “I fed the children on child benefit till they got back”.

One thing about credits being paid directly to them and coming in weekly was that at least they knew there was another payment coming along soon. If in this situation one partner spends the money unwisely, it is an awful long wait until the next payment comes in. Would the Minister consider that alongside some of the later issues we are going to discuss about the Social Fund and single payments being made only to one partner or to a joint account? This is an area of which the Minister would be well advised to take careful consideration.

[Baroness Campbell of Surbiton]

My Lords, I would also like to support the amendment of the noble Baroness, Lady Lister, and congratulate her on her first amendment. What a good first amendment. Disability charities, including the full membership of the Disability Benefits Consortium, have expressed grave concerns to me that many disabled claimants, particularly those with mental health problems or learning disabilities, will struggle to manage their budgeting over monthly intervals. With the proposed replacement of the discretionary Social Fund and by confusing an unpredictable plethora of local schemes, accessing crisis payment when budgeting problems arise will be very hard for this group of people also.

I support a man with mild learning and behavioural difficulties. He can just about manage his two-weekly payments and often, at the end of the two weeks, it is up to his friends—normally me—to sub him until the end of that two-week period. I have no idea how he will manage on a monthly basis. He falls under the radar of most help and I know that he would not seek it anywhere but me. So it also puts a burden on families, friends and other poor relatives who are often in the same situation to make up the shortfall. I support the noble Baroness and would like to know what the Minister has in mind for this particular group of people to cope with a monthly payment.

[Lord Skelmersdale]

My Lords, at Second Reading I think all of us supported the idea of simplicity for universal credit. Of course, simplicity works both ways: it works in favour of the beneficiary and in favour of the department. If you offer people a choice, you are mucking up that simplicity as far as the department is concerned and, inevitably—and I am sure my noble friend will tell me—there will be a cost in so doing. He may even be able to quantify that cost.

As most of the Committee will know, my wife runs a small business which for part of the year depends entirely on attracting extra casual staff. Two years ago, she went to them and said, “It would make life a lot easier for me if we could pay your wages monthly rather than weekly”. Some of them immediately were very happy to say yes; others to say no. Eventually, without undue coercion or persuasion—except from their colleagues—they decided they would all go on a monthly wages basis. That is fine, but what I find difficulty with in the amendments is the proposal to offer people a choice and for the department to have to stick to that choice. For me, payments should be either fortnightly or monthly. We have heard very good arguments against monthly payments, which I accept. However, the second amendment in this group—the either/or amendment—is just plain loopy.

[The Earl of Listowel]

My Lords, I, too, thank the noble Baroness, Lady Lister of Burtersett, for tabling these amendments and speaking to them so persuasively. I was very concerned to hear what she had to say. Three issues came to my mind. First, I thought of the children of alcoholic parents and of parents who misuse substances. If these individuals have a large sum of money in their hand, they can go on a bender and spend huge sums on alcohol, crack and other substances. If there is no hope of getting money fairly shortly for their children, the children will be in a very difficult position.

My second concern is more general. I was reminded of it at lunchtime today, at a meeting of the Associate Parliamentary Group for Parents and Families, which my noble friend Lord Northbourne chairs. There was an intervention from the noble Baroness, Lady Tyler, the chief executive of Relate. She referred to the 120,000 most chaotic families about whom the Prime Minister is particularly concerned, and for whom he has given specific responsibility to the Department for Communities and Local Government. I would be very interested to learn what assessment has been made of the impact of these changes on those chaotic families. Perhaps the Minister will consult the Department for Communities and Local Government about what the change might mean for them.

Thirdly, in my capacity as vice-chair of the All-Party Parliamentary Group for Looked after Children and Care Leavers, it seems to me that this change might contribute to more children coming into care because their parents, who are somewhat chaotic, will be put under additional stress as they try to make ends meet. This might be an additional burden on them that will lead to family breakdown. I hope that that is not overstating the case, but what I heard troubled me, and I would like to know more about the impact from moving from weekly to fortnightly payments. There seems to be some questioning of the evidence that that was been done without much harm. I look forward to the Minister's reassurance on these issues.

[Lord Boswell of Aynho]

My Lords, I will speak briefly. Points have been made very eloquently by the noble Baroness, Lady Lister, and others. There is a common concern that this should be got right. Perhaps there is a slight subtext that if this is the nail in the shoe that gets the whole thing discredited because it does not work or gives rise to disturbing social consequences, we will have lost the great prize of universal credit that many of us want.

For the reasons that my noble friend just enunciated, there is an argument against complexity and having a double system. We have heard about the difficulties of having weekly, two-weekly and monthly payments. It could make things difficult and give rise to error and potential arrears, for example. We do not really know what will happen before we undertake this. One has to judge whether to go ahead and see what happens. If the Minister can explain with sensitivity how he intends to introduce safeguards, I am with him.

The most important point is picked up in Amendment 28. We need to have a mechanism, as I suggested at Second Reading, for assessing after the event whether this works—and, if it does not work, which we hope it will, for applying the brakes and changing it without loss of face. It is worth looking at this. There may be good reasons for doing it, but if it puts undue pressure on some of the most vulnerable people and their families, we should recognise that. In a wider context, it would not be worth saving small sums if we found that we could not deliver our intended objectives.

18:00

[Lord McAvoy]

My Lords, although I did not intend to speak after the amendment was moved so excellently by my noble friend Lady Lister of Burtersett, she holds to the hope that the Minister’s attitude is not set in stone, so I have decided to contribute a point of view. One thing about the other place along the Corridor is that its Members come from various backgrounds, especially from working people. That House achieves a balance and gets a view that perhaps individuals over here do not have. When people over there hear a view, it may influence how they vote on legislation.

My noble friend Lord Kirkwood of Kirkhope said that he does not have much experience of this, but I sure that if he thinks back to where he comes from—Cranhill, a housing estate in Glasgow—he will remember that when the family allowance of eight shillings was paid on every week on Tuesday, it was a lifesaver. He was also correct to point out that it is being sexist against women to say that they carried the burden of budgeting. They were responsible for making sure that the family budget and the household were run properly. Certainly that was the case in my family, one with a very matriarchal mother. Without her, I think our family would have been lost. I can assure colleagues that the certainty of a weekly payment, not a monthly payment, is still very important to a certain sector of society.

The amendments offer choice. I know that the noble Lord, Lord Skelmersdale, criticised that as perhaps being confusing, but the noble Lord, Lord Boswell of Aynho, in very reasonable tones defended and advocated it. I certainly believe in the choice outlined in these amendments. In addition, other amendments would provide the certainty of knowing that these decisions, which will impact on so many people’s lives, will be covered by a review. We can look at the evidence to see the effect of different types of payment periods.

I am encouraged by the Minister’s attitude and I hope that my noble friend Lady Lister has read it right. I want to bring to the debate the point of view of someone from a family for whom, when we were growing up, that payment of eight shillings of family allowance was worth a lot. I am sure that quite a lot of people remember the family allowance, although I had better be quiet about age. I can assure the Minister and my colleagues that that eight shillings a week in family allowance, paid every Tuesday to the mother, the person who actually ran the household and looked after the children, was absolutely essential. I hope therefore that the Minister can see his way at least to considering some movement on that.

[Lord Skelmersdale]

My Lords, before the debate continues, I have to say that I am afraid that the noble Lord, Lord McAvoy, has somewhat misunderstood what I said. I came down firmly in favour of fortnightly payments. What I did not say, if for no other reason, was that the move from weekly to fortnightly payments is so recent. I do not believe that it has yet bedded down.

[Baroness Howe of Idlicote]

My Lords, I congratulate the noble Baroness, Lady Lister, on her excellent exposition of the case and the passion with which she presented it to us. Like my noble friend Lord Northbourne, for many years I have been and still am involved with the Peckham Settlement charity. I know that there was considerable concern when the money that the women had charge of ran out for one reason or another.

I am very impressed by the range of options here, but I would really like to support the one identified by the noble Lord, Lord Kirkwood of Kirkhope, because I think that really said it all. It is a question of choice, and that should be what we give individuals in this situation. We know the number of times families have gone hungry when women have not had control of the money, for all the reasons that have been explained previously. This particular option is the one that we should all consolidate behind. More than anything else, I say this because the more people who speak in favour not just of this amendment but of what is being said in all these amendments, the more likely we are to persuade the Minister to have another look at this, and above all to take it back to his colleagues, who may have rather different views, and to try and persuade them.

[Baroness Hollis of Heigham]

My Lords, I support the amendment of my noble friend Lady Lister, which she moved so powerfully, and I certainly hope it will cause the Minister to reflect on the issues she has raised. I want to speak to a related issue that could be raised under Clause 29, but I raise it now because I think it will make worse the situation that my noble friend has described, and I am fearful. This issue is the payment methods for housing benefits—not to whom they are paid, which we will come on to later, but how they are paid. I hope the Minister can give us reassurances on that, and if not, that we can follow this up in the discussion afterwards.

Your Lordships will know that HB is very complicated to assess and to administer. Local authorities will often not allow a member of staff to fly solo on handling HB claims until they have had some six months—I repeat six months—training and chaperoning. This is almost as much as a police officer. The reason, of course, is that it involves checking entitlement, rents, family size, the non-dependence in the home, property size, the landlord’s veracity, any disability, backdating, separating out service charges—including fuel, water rates and energy bills—and careful checking against fraud, because it is a big-ticket item. It takes a good local authority with intimate knowledge of its locality an average of between seven and 10 days to process a housing benefit claim. Crawley Borough Council, for example, which is a very high performer, processes about 40 per cent of new claims in one day and the rest in under 10. None the less, do we think that universal credit staff can deliver a benefit as complicated as HB?

In future, this will be done online by a family in Exeter, with queries, I understand, to a call centre in Warrington. That call centre will be handling over 30,000 new HB claims a week: nearly 7,000 a day. Families competent in financial management may be able to cope; we calculate that perhaps 40 per cent of families are ready to use the online process. Those who are most dependent on HB are the same group who are most dependent upon and in need of weekly and fortnightly payments: people with, say, mental health problems or learning difficulties, or other people who for whatever reason lead chaotic lives. These are the people who find that their paperwork is lost, that landlords are unhelpful, that call backs go missing, that deadlines pass. I understand that there is a 63-page form to fill in: one mistake, and no money gets paid. I hope the call centre line is free. Is it? The lines will be jammed, callers will have to call back repeatedly, and they will have to hang on for long periods of time while their call is transferred to someone who knows something about HB—that is, if the call has not been cut off in the mean time through the handing-on process and they have to start all over again.

All that is handled now with skill, patience, good will and huge experience by local authority and housing authority offices. Local government officers find that 66 per cent of all those on housing benefit need the face-to-face service they offer. The Government are assuming that only 10 per cent will do so, and that that 10 per cent will be serviced by Jobcentre Plus offices, whose staff are not only not experienced in housing matters but in physical terms are often inconveniently located. For example, one district in Kent with 100,000 people has no Jobcentre Plus in its area. Claimants needing a face-to-face service in the north of the district have a £9 bus ride to get to and from the Jobcentre Plus offices, while those in the south have a £7 bus ride—a day’s allowance for the claimant gone on a day’s travelling costs.

At the moment, the only experience that DWP staff have of housing issues is from 200,000 home owners nationwide, less than 5 per cent of the jobseeker’s allowance caseload. Housing cost assessments will go up from 200,000 to 4.83 million. So I have some questions for the Minister, and I apologise for not giving him advance warning of them, but they are absolutely integral to the whole issue of how payments are made.

Will claimants get an itemised statement of the elements making up their universal credit so that they can see what they should get in housing benefit and thus, what is often the trickiest and most difficult to compute, be able to compare it with previous awards? Will claims get slowed down to the slowest part of the process? If there is delay over housing benefit, will the claimant know that that is where the difficulty lies, and will they none the less receive the rest of their universal credit, which may be more open to real-time assessment? At the moment, if a claimant gets their jobseeker’s allowance paid, the landlord can be pretty confident that they will get their housing benefit. Will that happen in the future?

If a claim has to be investigated further, perhaps because the family needs an extra bedroom because of disability, and it takes a fortnight or more to get the required information back from GPs, will the entire universal credit payment be held up until it is resolved? What, as my noble friend so eloquently argued, will the family live on in the meanwhile? What plan B does the Minister have in mind for the individual living on the breadline, especially since that same individual may want the housing benefit to be paid directly to the landlord? However, the Minister wants it paid directly to the tenant, who will now be far more exposed to the vagaries of administration as well as to the temptation of fraud.

Perhaps I can suggest a plan B to him: get local authority staff who are highly experienced, skilled and swift to do the housing benefit calculation for the DWP and—given that central and local government computers already communicate with each other on these issues and the whole system is online—get them to feed their data into the central universal credit processing centre. After all, the ATLAS project means that local authorities have a direct link into JSA, ESA and IS. On top of that, they can access electoral records, they can verify residency, they have knowledge of local HMOs, and they have street knowledge. No call centre 200 miles away can identify a contrived tenancy, or whether too many individuals all appear to be claiming housing benefit for a shared property, or whether rent arrears are beginning to mount up and intervention is necessary. Local housing benefit staff can and do, and they act on it. Having a local contact point would also stop the phones being jammed by worried landlords wanting to know whether their tenant is going to get housing benefit, which is essential if we assume that most tenants will in future get their housing benefit paid direct to them. Landlords want the security of a paid rent, and hence their demand that rents be paid directly to them, but they also rely on cash flow. Cumbersome administration that makes the timing of their payment from the tenant unpredictable is at least as significant.

Claimants who have steady circumstances and basic competence will cope with an online system supported by a call centre and may very well be able to cope with monthly payments. However, the claimants about whom so many of us around this Table, as well as local authorities and housing associations, are most worried, are vulnerable, chaotic and prone to error. They may have literacy difficulties, they are in constant flux and they will not cope. Many of the most vulnerable are also clients of other statutory services. No call centre can deal with them or will interface with them. The local HB office does this each and every day.

Tax credits are relatively easy because they are based on the previous year's income, with fixed periods of claim. Yet even here, as I know to my pain, the computer nearly toppled over and the backlogs were huge because no one had appreciated the rollercoaster nature of the lives of so many lone parents. Half of them had more than a dozen changes of circumstance per year, many connected to childcare. The computer was often three changes behind. HB is far more complicated than tax credit. It exposes the tenant to the much greater risk of homelessness, and no unemployed tenant facing homelessness will concern himself with looking for a job rather than trying to secure his home, which is the outcome that we want him to seek.

We will strengthen UC and protect some of the clients of UC most at risk by developing a partnership with local authorities, particularly as they will be holding and distributing the discretionary housing allowance to soften the difficulties that will follow from the tough new HB changes that we will no doubt debate in a later session. For the Government, local authorities represent a back-up resource that it would be foolish to squander. I realise that I have sprung some questions on the Minister. I hope that, if necessary, we can follow this up with a meeting. They were triggered by the concerns raised by my noble friend’s amendment, and by the additional difficulties inherent in the complexity of the nature of HB, which the system as presently constructed cannot begin to address.

18:15

[Lord McKenzie of Luton]

My Lords, I support the amendment of my noble friend Lady Lister and congratulate her on an incredibly impressive first amendment. We look forward to many more. I hope that the Minister can see that we are here to help. He has heard not only the voice of experience today but particular proposals from my noble friend Lady Hollis to help him on housing benefit issues. I hope that this well of experience and good will will enable us to move forward on universal credit.

One thing that came across very clearly in the debate was the almost universal voice of experience, whether it was people’s own household experience or that of people such as my noble friend Lord McAvoy who worked with poor people and helped them claim their benefits in the existing maze of complexity. We have heard powerful voices warning of the risks of imposing on everyone the monthly payment basis, for all the reasons that have been heard.

There are particular issues for women. My noble friend Lady Lister said that it is largely mothers who manage poverty in the household. The noble Lord, Lord Kirkwood, was on the same page on that. Studies show that by and large the male member of the household is more likely to be responsible for monthly bills, whereas women tend to do the weekly shop. Therefore, women are potentially particularly disadvantaged by these proposals.

A lot of work has gone into producing real-time data from HMRC. That is at the heart of delivering the universal credit project. Obviously, that is predicated on the formula of monthly payments. As a practical matter, how difficult would it be either to flex on to fortnightly payments or for people to have a choice? I am surprised by those who argue against choice. We all accept the benefits of simplicity, for the reasons that we have debated and will continue to debate. However, a balance must be struck. Simplicity can shut out fairness in a range of circumstances. That is perhaps the dilemma that the Minister faces today.

I think it was the noble Lord, Lord Boswell, who said that it would be a pity if we got this wrong and in doing so undermined the prize of the universal credit, and I very much agree with that. I hope that the Minister will listen to all those who have spoken. The noble Earl, Lord Listowel, spoke about his particular experience of dealing with poor and disadvantaged, chaotic families, as did the noble Lord, Lord Kirkwood, and my noble friend Lady Sherlock. What would happen if one partner spent unwisely in that relationship? What would be the outcome, particularly for children? I hope that the Minister has heard a powerful message today and that it will genuinely influence him in looking at this again. If we want universal credit to work, this could be the key stumbling block.

[Lord Freud]

My Lords, I start by congratulating the noble Baroness, Lady Lister, on her first amendment, and I hope that she does not have too many like it. I was very impressed when she said that she was a conservative, which was obviously supported because my noble friend Lord Kirkwood called her his noble friend. Clearly we have some cross-dressing going on.

In the policy briefing note published on 12 September, we confirmed that the universal credit will be paid monthly. However, we do not intend to specify the payment frequency in primary legislation. As with all existing benefits, this will be dealt with in regulations made under the existing powers in the Social Security Administration Act 1992. That approach gave us the flexibility, for example, to increase payment periods from weekly to two-weekly for most out-of-work benefits. The amended provision would require the Government to pay universal credit more frequently than monthly. Amendment 27, for instance, goes on to provide that in some cases payments would be made twice monthly.

I need to make the point about the difference between assessment periods and payment periods, which is important to bear in mind. Currently, existing out-of-work benefits are made on an assessment period of a week, with a fortnightly payment cycle. That is fairly typical. The universal credit benefit represents a new approach focused clearly on work, which encourages out-of-work households to budget on a monthly rather than a fortnightly basis in the belief that it will better prepare people for the reality of working life. The figures have already been used. Currently, 75 per cent of all those in employment and 51 per cent of those earning less than £10,000 a year receive earnings monthly. In addition, monthly direct debits for household bills are often cheaper than more frequent billing options.

Many noble Lords raised the evidence base. As noble Lords know, we are conducting qualitative and quantitative research with claimants on many issues but particularly on the payment frequency issue. As some noble Lords have pointed out, on 7 October we published a report, Perceptions of welfare reform and Universal Credit. This outlines findings from research we conducted with claimants, the public, employers and staff in December 2010 and January 2011. There were critical findings in that piece of research that we are looking at with great attention.

I understand that many people on low incomes will be used to managing the fortnightly payment of benefits, and I am determined to ensure that there will be appropriate budgeting support to meet the needs of claimants. We want families to be able to manage their financial affairs in a manner that best reflects the demands of modern life, whether they are in work or out of work, and we are working with stakeholders and benefit experts to that end. We are setting up a series of demonstrator projects, as they are called, with housing associations and local authorities to look at how to structure the payment of rents to landlords. These demonstrator projects will look at a wide range of budgeting support. We need to make sure that budgeting advice and support is available for those who need it in order to help them manage the change.

We also need to consider those exceptional circumstances where more frequent payments will be required. To pick up the point made by the noble Baroness, Lady Campbell, people with mental health problems are an example of a group that may need an exceptional service. To pick up the point made by the noble Earl, Lord Listowel, where there is proven abuse or risk to other members of the family, one would have to look at the payment arrangements.

If you separate assessment from payment, the monthly assessment is intended to reduce the burden on claimants and reduce the risk of overpayments compared with a system where benefits are reassessed on a weekly basis, so there is a separation between the assessment period and the payment period. To pick up a question from my noble friend Lord Kirkwood on the impact assessment—

[Baroness Hayter of Kentish Town]

My Lords, the Minister suggested that payments for those with mental health problems, for example, could be looked at. Could he address how that might stigmatise a certain group; that is, when not everyone can choose to be paid fortnightly, just those with mental health problems?

18:30

[Lord Freud]

My Lords, I was coming to this issue. The universal credit is a rather differently structured benefit system. We have talked in the past about much greater flexibility with earlier draw-downs and an automatic repayment system. We are looking at these kinds of structures. When I talk about budgeting support, I am not just talking about education, advisers and that kind of support, I am also talking about a degree of flexibility in the system that simply does not and cannot exist now. I do not think there would be any stigmatisation at all in how people use this system. We have not worked out all the detail of this, and noble Lords have given me personally quite a bit of food for thought. How we develop these regulations and get them right so that we do not run into the kind of problems which noble Lords have so powerfully raised today is something that we will look at very closely. On the stigmatisation point, my intention would be that it would be invisible, and within the universal credit system, it can be invisible.

Let me revert to the question put by my noble friend Lord Kirkwood about the impact assessment. I have to tell him that payment frequency is not one of the issues in the impact assessment. It was referred to in the equality impact assessment where we said we were carefully considering the claimant welfare implications of the options, so that is where it is.

[Lord Kirkwood of Kirkhope]

May I clarify the point for the avoidance of doubt? Is there a technical issue about frequency of payments? I understand and am listening carefully to what he is saying about assessment periods versus payment periods. Are his new computers going to be agile enough to pay fortnightly rather than monthly?

[Lord Freud]

I think the noble Lord, with his normal subtlety in his amendment, has made a distinction between bi-monthly and fortnightly. This is one of those issues, to be honest, where if you start delving into it, you will end up with daily rates because of the arbitrariness of both weeks and months. It is not a straightforward thing to do. Clearly, at one level all the utility systems are driven on a monthly basis, while other areas are driven on a weekly basis. With this system, we are one of the drivers of the way people behave and of social change. We should not forget that; how we do this will shape the norm, so it is not just a question of saying, “This is what everyone does. We must adapt to it”. There is an element of saying, “If we do it like this, we will shape the way people arrange their lives”.

Lord McAvoy: The system has a degree of flexibility if you alter the way benefits are paid. For instance, when it is a holiday Monday, the whole thing seems to change and payments can be altered then.

[Lord Freud]

My Lords, in the spirit of developing a system together, which we seem to have moved into, we can look at a greater amount of flexibility. Some things are not that expensive to do, but others are. Payment systems are not necessarily hugely difficult. I do not have my computer gurus sitting around me whispering how much things cost, but my feeling is that there are areas of flexibility here which we are going to explore in great detail in the next year or so in order to get this right. We can be flexible and make changes if we feel that things are not right.

I turn now to the series of questions raised by the noble Baroness, Lady Hollis, on the relationship with housing benefit. I will try to deal with them one by one. The universal credit will be an itemised statement. It is being developed and at the moment comprises three layers. You will see the summary on the top sheet, so to speak, and a somewhat more elaborated thing when you hit the button for the next level, and then you see pages of the stuff at the third level, which we do not think a lot of people will go to. However, we give them the option to do that. The statement is simple; it itemises the intention. The structure that we have arrived at has been the subject of a lot of toing and froing with the customer insight people. A couple of weeks ago I sat on one side of a piece of glass watching how people were using the system. That is where we have ended up in that particular bit.

I was asked whether this process would be slowed down to the rate of the slowest element. Where you have some decided elements, the JSA rate and so on, we should be able to get that going straight away without tying it up. We will be able to separate out elements with new claims involving big new changes rather than the whole claim waiting for the last little bit of evidence on, say, housing to come through. We are looking at tackling this matter much more flexibly.

[Baroness Hollis of Heigham]

I am very grateful for the care and attention that the Minister has given to the questions. However, oddly enough, if you can fragment that way, you can certainly fragment in terms of payment rhythms.

[Lord Freud]

My Lords, I thought I had delicately hinted that there could be some flexibility around that. In future, I will be less delicate in making my points.

We have discussed the other elements. The noble Baroness, Lady Hollis, directed a bit of abuse at the Warrington call centre. We are developing the system in Warrington, but that does not mean that the call centre in Warrington will do it all. We will have a much more sophisticated system. Indeed, the noble Baroness’s thoughts on using ATLAS, and the experience of housing benefit staff around the country in that regard, are very good. We are talking to local authorities to get the detail of this right. It would not make sense to lose the expertise of housing benefit staff, so we are involving them as we develop the process. It is too early to describe the system because it is not yet developed. However, the noble Baroness’s advice chimes with the way we are going about this, and we are grateful for it.

Amendment 28 would require the Secretary of State to conduct an annual review into the impact on claimants of monthly payments. I have already set out our firm commitment to safeguards, such as providing budgeting support and the facility to make more frequent payments where necessary or appropriate. I can assure noble Lords that in addition to this we will continue to monitor the impact of these policies after they are introduced. I urge noble Lords not to press these amendments.

[Baroness Lister of Burtersett]

My Lords, I am very grateful to my noble friends and noble Lords for their support. I am struck by the extent to which noble Lords throughout the Committee share my concerns and have made important points in support of these amendments. There is perhaps a slight disagreement over whether we should be pushing for fortnightly payments or for choice. My preference would be for fortnightly payments, as argued for by the noble Lord, Lord Skelmersdale. However, I tabled a menu of amendments thinking that choice would probably be more acceptable to the department than what I prefer, which is the status quo. Perhaps that is the one way in which I am a conservative. But as I have argued, and according to the Financial Times, the panoply of flexibility and special assistance which the Minister talked about will bring in complexity if we go down the route of monthly payments, and we have not heard what the costs will be. I am very disappointed with the Minister's response because he has not really engaged with the arguments that I put. Therefore, my supposed flirtation with conservatism has been very short-lived indeed.

The Minister made great play of the distinction between the assessment period and the payment period, and I understand that. However, the argument seems to support my position rather than his because paying a benefit more frequently does not affect proposals to assess it on a monthly basis. One could have a monthly payment that is paid in two tranches, which would make it easier for people to manage. The only hope that I got from the Minister was the statement that we had given him food for thought. I hope that it will not be too indigestible for him—actually, I hope that it will be indigestible, because he will then think seriously about it.

He has not answered some of the most basic questions. I know that the special assistance will not only be budgeting advice. The papers have said that it will “include” budgeting advice. However, it is still not clear who is going to provide this. Will it be officials? If I were a claimant, I am not sure that I would want officials advising me on how to budget. Or will it be the poor old voluntary sector/big society, which will be on its knees anyway because of cuts, the effects of the legal aid Bill and so forth? I am not at all reassured by vague talk about flexibility and budgeting support.

The Minister said that the Government would look at areas of flexibility after the next year or so. I am sorry, but I want to know what the position is by the Report stage. While I have made clear that I realise it is not appropriate to write into the Bill itself the frequency of payments, given the strength of feeling that has been expressed on all sides, it is not good enough that we should have to wait a year; the Bill will be an Act by then. We want to know before the Bill goes back to the other place what is going to be done to ensure that the kind of problems that I and other noble Lords have raised will be adequately addressed. One of these amendments must be the way to do it.

[Lord Newton of Braintree]

I apologise for intervening: I probably should not, as I was not here earlier. However, if the House authorities schedule at the same time on one day on the Floor of the House and in this Committee three Bills in all of which I have an interest, it presents a difficulty. The Minister should know that had I been here, I would have been rebellious. I endorse in particular the noble Baroness’s point about needing to know, not at some vague time in the future but before the Report stage, what the Government have in mind. Perhaps I might also say to the noble Baroness—craving the indulgence of the Committee—that I thought the Minister went as far as Ministers can go under these circumstances towards saying that he would think again, and that this is not the last word. I think that she should be pleased with that.

18:45

[Baroness Lister of Burtersett]

I am very grateful to the noble Lord, who perhaps I could call a noble friend from the past. Being new to this House, I perhaps do not understand the nuances of ministerial speech as well as some of my noble friends. I hope that the noble Lord, Lord Newton, is correct, but it does not change the point that people outside who are watching our proceedings also do not understand these nuances, so we need to have something much firmer before Report if we are to accept the Minister’s assurances. That said, I will withdraw the amendment.

Amendment 25 withdrawn.

Amendments 26 to 28 not moved.

Clause 7 agreed.

[Lord De Mauley]

My Lords, this might be an appropriate moment to have a 10-minute comfort break.

[The Deputy Chairman of Committees (Lord Haskel)]

The Committee stands adjourned for 10 minutes.

18:45

Sitting suspended for a Division in the House.

18:56

Clause 8 : Calculation of awards

Amendment 29

Moved by

[Baroness Hayter of Kentish Town]

29: Clause 8, page 4, line 12, at end insert—
“( ) an amount in respect of prescribed unearned income calculated as in paragraph (a),”

[Baroness Hayter of Kentish Town]

My Lords, depending on how the Minister responds, Amendment 29 is, I hope, a probing amendment. It deals with the treatment of income in universal credit. As drafted, paragraph (a) of subsection (3) deals with earned income, while paragraph (b) deals with unearned income. Amendment 29 would insert a new category of income; that is, unearned income which is to be treated as earned income. It seeks to replicate existing provisions within tax credit legislation whereby certain types of unearned income are treated in the same way as wages, including sick pay and maternity pay. We welcome the DWP briefing note on universal credit, which states that:

“The powers in the Bill permit us to make regulations to treat unearned income in the same way as earnings. These powers may be used, for example, in the case of Statutory Sick Pay”—

I have emphasised the word “may”—I hope that it is more of a “shall” than a “may”. However, perhaps we could have some clarification on that. Statutory payments such as statutory sick pay and statutory maternity pay are paid through wages and it would therefore be difficult not to treat them as earnings. We welcome that indication, but again, some clarification of the word “may” would be a nice assurance.

However, although there is no policy reason why those who receive maternity allowance or ESA during the first six months of illness should be treated differently, we seek an assurance from the Minister that these benefits will be treated in the same way; that is, as earnings. By way of example, the Minister will know what I am referring to when I speak of two groups of people who get ESA in the first six months of sick leave rather than SSP. These two groups are those who have been working until they become ill, but are likely to receive ESA rather than SSP. One group is the self-employed, who will have to claim ESA as they have no entitlement to SSP, and the second group is that of people who work for a small employer and become so ill or disabled that it is clear they will be unable to return to their current job. People in this group often give in their notice because they feel it is unfair that their employer is unable to replace them while they are claiming SSP. In monetary terms the difference is fairly obvious. For example, in the case of a home owner during the first three months of sickness, under the current scheme they get in addition to their ESA of £65 a week a payment of up to £52 working tax credit provided that they were working for at least 30 hours a week. That gives them a total of £117. They would have to pay their mortgage out of this because they would not have help with the mortgage repayment.

19:00

Under universal credit, if the ESA is not treated as earnings, they would have just £65 a week out of which they would still have to pay the mortgage. However, if ESA is treated as earnings, a single person with no disregard would keep an extra £23 in addition to the ESA, which would at least give them £88, and if they qualified for a disability disregard, they would get a total of £130. It is an important difference, not least because people who suddenly have to stop work because of a stroke, accident or serious illness such as cancer face a sudden and rather dramatic drop in their earnings.

At the moment the money they get from tax credits for the first six months helps enormously in the adjustment to a drop in their income at the same time as they often have an increase in their outgoings. Despite that, even at the moment many are pulled into debt just when they are also trying to deal with the onset of an illness. Indeed, Citizens Advice found that illness is a very significant cause of debt in a quarter of the clients they advise on debt issues, with about one in 10 clients attending a county court hearing for a possession because of mortgage arrears reporting that illness was a major factor in falling into those arrears. We know that not just the loss of income with a serious illness but all the extra travel to hospitals and taxis and all that goes with it can increase outgoings at that time, so it could be much worse under universal credit should ESA not be treated the same way as statutory sick pay.

The second group about whom we are seeking information from the Minister under this first amendment is mothers who will be receiving maternity allowance rather than statutory maternity pay. These are mostly women who have been working right up to when they go on to maternity leave but because they changed jobs about the time they became pregnant, they will be receiving maternity allowance rather than statutory maternity pay. At present they are eligible for working tax credit. Again, perhaps the Minister could clarify that maternity allowance will similarly be treated as earned income within universal credit.

The difference in monetary amounts is significant. At the moment a lone person on maternity leave with one child who had been working at least 30 hours a week would get £125 maternity allowance, £20 child benefit and £55 child tax credit, as well as up to £88 working tax credit. Even after paying rent of about £70, she would have about £218 left. However, under universal credit, if maternity allowance is not to be treated as earnings, she would have a personal allowance of £190 from which her maternity allowance would be subtracted pound for pound, so she would be left with about £140 after rent, which of course is below the poverty line.

However—I hope that we get this assurance—if maternity allowance is treated as earnings, the first £40 of her maternity allowance would be disregarded and she would keep £30 of the rest, leaving her £70 better off than in my earlier calculation. It would obviously be pretty unfair not to treat maternity allowance as earnings. There is no policy justification for any difference but clearly it is immensely important to women, particularly in the first year of their child’s life. We are pleased that the DWP has indicated that statutory payments may be treated as earnings—I hope they will be treated as earnings—but we would like some reassurance that when the person is getting maternity allowance or ESA instead these will similarly be treated as earnings.

Amendment 30 in the same group requests that the Secretary of State conducts,

“a review into the impact of a taper rate on claimants and work incentives”,

to conclude after one year and to be published. The taper is a key element of the new universal credit. One part of the whole edifice architecture is obviously bringing in-work and out-of-work benefits together in one system. But moving from a cliff edge to a taper is also intrinsic to making work pay in that people can keep a significant proportion of any increased earnings. That objective is shared by the Opposition. However, everyone, not least the Minister, knows that the original taper as envisaged by the Centre for Social Justice in its report on dynamic benefits was 55 per cent.

The Bill does not set a taper rate but the White Paper, Universal Credit: welfare that works, suggests that the taper rate will be 65 per cent, which is a big difference from 55 per cent. The Government describe this as the most generous taper affordable at present. But the Minister will acknowledge that the 65 per cent taper will leave some families worse off than now, with work incentives less under universal credit than under today’s system. It would take a more generous taper to increase work incentives and to help tackle child poverty by boosting household income. Save the Children has shown that a lone parent with two children working full time would be £25 a week better off under a 55 per cent rather than a 65 per cent taper.

Our request to the Government is twofold. First, they should clarify the intended taper rate. Secondly, under this amendment, they should commit to reviewing the taper rate annually with the aim of moving to the recommended 55 per cent as soon as possible and allowed by HMT. We accept that at present the 55 per cent would cost £2.8 billion. Will the Minister set out the conditions under which the Government would move towards the other taper and indicate whether it is proposed to move incrementally towards it?

I recognise that the Government will want to review the effect of the 65 per cent rate on incentivising work and how it impacts on the behaviour of claimants. They would not want the whole edifice being created to be put in jeopardy by an ineffective rate. We therefore ask the Minister to commit to an annual review of the taper with a view to introducing the more generous rate of 55 per cent to ensure that work pays for all. In particular, we would ask that any such annual review pays particular attention to the needs and aspirations of second earners, given that nearly a million will face reduced incentives to work compared with the present system. Furthermore, it would be useful if the Minister would set out the economic and financial conditions required to achieve a 55 per cent taper. I beg to move.

[Lord Freud]

My Lords, Amendment 29 specifies that deductions from the claimant’s maximum amount of universal credit should include an amount in respect of prescribed types of unearned income calculated in the same way as the deductions made in respect of earnings. As drafted, Clause 8 allows for a reduction in respect of unearned income to be calculated “in the prescribed manner”. The Bill therefore already allows for the manner of such reductions to be specified in regulations. This could include, where appropriate, the same calculation as for earnings.

As we set out in the White Paper, claimants will have their universal credit withdrawn according to a single taper rate after appropriate disregards. The latest assumptions on the earnings disregard have been set out in a new policy briefing note which was published today. Further analysis is provided in an updated version of the impact assessment for universal credit, which was published not very soon, but this afternoon.

With regard to income other than earnings, we have today released a new policy briefing note which confirms that statutory sick pay and statutory maternity, paternity and adoption pay will be treated as earnings. We do not intend to treat either ESA—or ESA equivalent—or maternity allowance as earnings. They are not treated as earnings in the current system; they are benefits and are treated as such. Nor do we propose to alter the current treatment of maternity allowance in the benefits system, where it is taken into account in full. This is because maternity allowance is one of a number of benefits which exist to replace income for people who are out of work. It therefore addresses the same need as universal credit for mothers who cannot work because they are giving birth to their children. We do not believe it is right for the Government to pay twice to meet the same need.

The income briefing note also explains our wider approach. In general, where a claimant has income at their disposal to meet their living costs, such as spousal maintenance or payouts from an occupational pension, these payments will be taken fully into account. However, we need to make exceptions to this general rule while ensuring that the system is kept as simple as possible. We will therefore disregard certain income types in full where they are paid due to additional costs or expenses that a claimant has. This would apply to additional payments due to being disabled, such as DLA or various local authority payments, or for looking after children, including child benefit and fostering allowances. We will also disregard in full certain payments which would be disproportionately costly to take into account. These will include the value of payments in kind or charitable payments.

I turn now to the proposed subsections in Amendment 30 which would require the Secretary of State to carry out and publish a review of the impact of a taper rate on universal credit claimants and their work incentives one year after the Act comes into force. As the revised impact assessment sets out, we expect the single taper together with the earnings disregards to improve work incentives significantly. With regard to the participation tax rate, the number of households who lose between 70 per cent and all their earnings through taxation and benefit withdrawal on moving into 10 hours of work will fall by 1.2 million under universal credit. Under the current system, around half a million individuals in low-paid work would lose more than 80 per cent of an increase in their earnings because of higher tax or withdrawn benefits. Virtually no households would lose 80 per cent under universal credit. On reasonable assumptions, the combined impact of take-up and entitlements will lift around 900,000 individuals out of poverty, including more than 350,000 children and 550,000 working-age adults.

These are significant outcomes and we will be monitoring and evaluating universal credit to confirm that they are achieved. However, this is an ongoing process and we expect that it will take longer than a year to develop a sufficient body of evidence on which to draw firm conclusions. As a result, we do not think it appropriate—

[Baroness Sherlock]

I thank the Minister. I am trying to look through the revised impact assessment, as I am sure will other noble Lords. I hope he has had the opportunity to read it before I have; I would be very disappointed if he had not. I wonder, therefore, if he would give us the benefit of that experience. Regarding the figure he has just cited of 200,000 children being lifted out of poverty by entitlement alone—and I see he has had to resort to modelling take-up which he has always previously refused to do on the grounds that it was not necessary—could he remind us what the previous estimate was of the number of children being lifted out of poverty?

[Lord Freud]

Yes, I can help noble Lords. There is a small decline for adults in this impact assessment compared with the last one. It is down from 600,000 to 550,000. However, the figure for children is unchanged at 350,000.

[Baroness Sherlock]

Is it unchanged?

19:15

[Lord Freud]

Yes, for children lifted out of poverty, the figure 350,000 is unchanged. I am sorry; I can only tell noble Lords what is in the document, which I confirm that I did read over the weekend. Let me nail down the reason why I do not want a formal annual review process. I do not think that that is the right way to go when we have something as sophisticated as the universal credit, given the impact of the different delivery mechanisms, taper rates, disregards and conditionality. I will be talking to the Committee quite soon about how we could assess the system most effectively. I accept assessment and regular assessment, and I am looking for support from this Committee in that process.

[Baroness Sherlock]

I thank the Minister. I wanted to phrase my question more precisely because I think I may have confused him. The improvised impact assessment says on page 18 that changes in modelled entitlements will lift approximately 200,000 children out of poverty. The figure of 350,000 children that he quoted included take-up modelling. My understanding is that previously he has given us figures that did not include take-up modelling. I am trying to contrast the current steady state figure without any assumed change in take-up compared to the previous steady state figure.

[Lord Freud]

I can absolutely confirm that the figures included take-up and are the same figures, so there is no change there.

[Baroness Sherlock]

I am so sorry. What was the previous figure, not including take-up modelling?

[Lord Freud]

They are exactly the same—200,000 and 400,000 adults. Those figures have not changed. Let me come back to the issue raised by the noble Baroness, Lady Hayter, on the target rate of the taper. I do not think it is right to have a target rate of what the optimum figure is, and I will not talk about the iron triangle today. I will spare the Committee. A lot of factors are involved in what the optimum rate will be. We do not know, so it would be foolish to set a target, whether it is 55 or 65 per cent. If noble Lords want my opinion, I think 65 per cent is too high and a future Government—when they have some money—would be smart to lower it. But by then I would hope that we would know exactly what the optimum figures were. When we know that, a smart Government would move to it. It would be wrong to set a target when we do not know what the optimum figure is. I agree that we need to be very sophisticated in our understanding of how people behave and the impacts of universal credit. I take on board the spirit of this amendment in the sense that we do need to assess it. I do not think this is the right way and I hope to be able to discuss with this Committee better ways of assessing it. I am hoping for some real enthusiasm behind those ways as well.

I hope that these answers have helped to clarify our intentions in these areas. They are really important areas, and I urge noble Lords not to press their amendments.

[Lord Skelmersdale]

My Lords, my noble friend will no doubt remember that many years ago I was the Minister for War Pensions in the days when war pensions were looked after by the then Department of Personal Health and Social Security, and then Social Security, since when they have been transferred to the MoD. Many local authorities provide a war pensioner’s discount on housing benefit. I wonder whether this will be added to his list of discounts, because he did not mention it.

[Lord Freud]

I did not mention it for a very good reason. I am currently consulting across government on how best to recognise war pensions and other payments to veterans, war widows and dependants. The reason this is not straightforward is because the practice across all the different benefits varies wildly. When you create one single clean system, you have to go nap on one approach. What I am looking at doing is getting the right approach which recognises that someone in receipt of a war pension is owed an extra reward for that experience. We have to work out the optimum way of doing that. As I say, I am consulting on that.

[Lord Skelmersdale]

My Lords, I am very grateful.

[Lord Newton of Braintree]

Before my noble friend sits down, since this seems to be the time for Tory interventions, and his remarks just now seemed to lead straight into this one, if variation between local authorities in what they do in respect of Armed Forces pensions is a problem in the way that he described, although we are all no doubt very supportive, what will happen if we have 400 different council tax rebate social security systems all varying wildly between 400 local authorities? I have a lot of sympathy with his line of argument. He may even be sad to know—I hope that he will be pleased to know this—that I think he is right to resist these amendments. He is right to put the emphasis on assessing what happens once all this is in place. However, we will need to take into account the effect of what is happening as regards council tax benefit as well as all the other things.

[Lord Freud]

My Lords, I will just have to take that point on board. After our previous session, I know that—

[Lord Newton of Braintree]

It is all right; I am not going to say any more.

[Baroness Hollis of Heigham]

I think that “um” would be a very good response from the Minister.

[Baroness Hayter of Kentish Town]

Some of my comments will not be appreciated but I thank the Minister for his response. Clearly, I have not received the same response as did my noble friend Lady Lister. I will take it back and think about it. She does not know when she is ahead. However, I am afraid that I have to express some regret. A lot of us have done a lot of work in preparing for the Bill although I am sure that we have done much less than the Minister. I blame my noble friend Lady Sherlock in that when I asked her what I should do she advised me to read everything that was said in the Commons. I thank her for that. What I found again and again were promises from Ministers in the other House that by the time the Bill reached Committee stage there the relevant information would be available. Again and again I am afraid I read that our friends in the other place found that that was not the case. They nevertheless were given absolute assurances that the relevant information would be available before the Bill reached Committee stage in this place. To have something published today concerning a debate that is taking place today is simply not good enough. We cannot work that way; “before” ought to mean before. Anything that is relevant to what we are talking about should be with us in time to enable us to read it and think about it.

I welcome the remarks about our being involved in the debates about how this process is going to work. I think that those remarks were probably genuine. However, that means that we have to have the relevant information available, especially as we are trying to discuss the Bill without a wonderful array of staff to help us.

I also regret the remarks about ESA, maternity allowance and earnings. The women who will be getting this who have been in work may simply not qualify for a statutory payment because they have changed employers. However, they could well have been working full time before that. In that sense it is not a benefit but something that they earned and are entitled to. Therefore, to treat it as unearned income—as if a sugar daddy had given it to them—would not be the right approach. It has been earned, albeit in a different way.

Similarly, the Minister did not respond to the question of whether ESA affected the self-employed. They are another group of people who have paid contributions into a system. If they then discover that what they get when they are possibly very seriously ill with cancer is seen not as something that they have earned but something from a very kindly Government, that will not be the right way to ensure that people see the system as enabling them to get something for what they have put in, which is what many of us want. I am sorry about that and I hope that, even if the Minister does not respond orally now, he will think about those groups of people, and in particular about women whose circumstances may have changed and who may have moved to a better job. On the whole it is young women who get pregnant. They may be moving up in a career and may have moved to a different employer and therefore may not qualify.

I have two further brief points. We are obviously delighted about any monitoring and assessment. If there is to be no formal review, I will have to accept that that is the best way of doing it. Nevertheless, it would be very nice if the Minister or his successor will bring those reports to the House, where they can be debated in the same way as we are able to now.

Finally, I accept that the Minister may not want to set a target rate for a taper. He said that perhaps 65 per cent was too high but that a future Government could perhaps do something about it. I look forward to sitting next to my noble friend Lord McKenzie when he is the Minister in a future Government—

[Lord McKenzie of Luton]

Do not wish that on me.

[Baroness Hayter of Kentish Town]

—and can announce a different taper rate. With those comments, I beg leave to withdraw the amendment.

Amendment 29 withdrawn.

Amendment 30 not moved.

[Lord De Mauley]

I suggest that this would be a convenient moment to adjourn the Committee until Thursday at 2 pm.

Committee adjourned at 7.26 pm.

House of Lords

Monday 10th October 2011 Lords Chamber

Monday, 10 October 2011.

14:30

Prayers—read by the Lord Bishop of Wakefield.

Media: Ownership

Monday 10th October 2011 Lords Chamber

Question

14:36

Asked By

[Lord Fowler]

To ask Her Majesty’s Government whether they have plans for changing the media ownership rules in the United Kingdom.

[Baroness Rawlings]

My Lords, we need a full and thorough consideration of all aspects of media ownership legislation. The Secretary of State has asked Ofcom to examine what are the best options for measuring media plurality and to recommend the appropriate approach. We will of course be taking into account the recommendations of the Leveson inquiry before any final decision is taken on media ownership.

[Lord Fowler]

I thank my noble friend for that reply, but is it not the case that too often in the past decisions on media ownership have been influenced by political considerations? Given that, does my noble friend agree that it is totally wrong that, as at present, politicians should have the final say on who owns the media, and that if we want to prevent too much power resting in the hands of one company that system should be changed—and changed as quickly as possible?

[Baroness Rawlings]

My Lords, I would like to be able to give a more positive answer to my noble friend Lord Fowler but, as he and many noble Lords know only too well, we are at present having sensitive discussions. He is aware, too, that there is new legislation in the pipeline and we will be receiving a new communications Bill during this Parliament. However, I agree with him, as does the Secretary of State, that too much political consideration has been taken, and as a result the Secretary of State said on 14 September at the Royal Television Society conference that he was looking at whether we should have the same approach for media plurality law as we do for competition law. It could be better for these decisions not to be taken by politicians, as my noble friend so rightly said, and we are exploring this option. These are early days and no decisions have been taken. As I said, we will consider the recommendations on this.

[Baroness Scotland of Asthal]

My Lords, why have Her Majesty’s Government refused to use Section 58(4) of the Enterprise Act to fill the gaps that were clearly identified during the BSkyB bid?

[Baroness Rawlings]

My Lords, I am afraid that I cannot remember which section the noble and learned Baroness was talking about, but we are fully aware of what she asked. The point was made by Ofcom that media plurality public interest tests can be triggered only by merger and therefore do not cover growth, which is the area that she was talking about.

[Lord Ryder of Wensum]

My Lords, in view of the fact that the ownership of websites has been excluded from previous legislation, what steps have the Government taken, and will they be taking, to rectify this serious oversight?

[Baroness Rawlings]

My Lords, my noble friend Lord Ryder asks a fascinating and important question. In determining the appropriate size of media ownership, we will be considering the extent to which websites should be included. The current rules are outdated and do not even acknowledge the existence of websites, yet websites could conceivably have an important role in controlling access to new sources and have implications for plurality. That is why the Secretary of State has asked Ofcom to look into this matter, and we will consider carefully the recommendations that Lord Justice Leveson makes in this area.

[Baroness O'Neill of Bengarve]

My Lords, will the noble Baroness tell the House whether, in considering issues of plurality, the Government will also consider issues of diversity, as these are not the same? Plurality does not always guarantee diversity, which is what citizens need.

[Baroness Rawlings]

My Lords, plurality in the context of media ownership refers to the number of owners and size of ownership of different media outlets and does not cover diversity, as the noble Baroness mentioned. I am sure all noble Lords agree that a healthy democracy needs correct information, and, in general, to be able to participate effectively in a political process, access is needed to all sides of the debate. However, this is unlikely to happen if the media are under the control of a too tightly restricted number of owners.

[Lord Kinnock]

My Lords, as the monopoly of opinion is the most fearful of all monopolies, is it not the case that the accretion of power in the media should at least be subject to the same tests of competition as all other forms of enterprise?

[Baroness Rawlings]

The noble Lord, Lord Kinnock, makes a very valid point. In most cases, competition rules will prevent unacceptable levels of media concentration. However, there is no guarantee of that, because competition rules address only the abuse of market power. It is possible for an organisation to have a very large share of the market but not abuse its position for unfair competitive advantage. This would be acceptable in competition terms but it could still cause very real worries from the point of view of media influence, as the noble Lord said.

[Baroness Bonham-Carter of Yarnbury]

My Lords, I have just come from sitting on the Joint Committee on Privacy and Injunctions. Can the Minister reassure the House that the furore over the behaviour of certain sections of the Murdoch press will not result in a detrimental encroachment on press freedom? We do not want hacking, but we do not want our press not being able to investigate. Perhaps I may remind noble Lords that it was not politicians or the police but the Guardian newspaper that exposed the hacking scandal.

[Baroness Rawlings]

My Lords, if there is a renewed bid, it will have to be looked at on its merits. As with any other bid, on another occasion it could be possible to include additional grounds for intervention, such as a genuine commitment to broadcasting standards. However, we are not proposing to frame legislation with the aim of blocking any specific deal. If or when we come forward with proposals, they will have to protect plurality in all circumstances.

[Baroness Jones of Whitchurch]

My Lords, does the Minister agree that, in the light of all that has occurred, it would be unwise for the Prime Minister or the Secretary of State to meet members of the Murdoch family privately? Can she give an assurance that it is now the policy that any such meetings will be attended by civil servants and properly minuted?

[Baroness Rawlings]

My Lords, I am sure that the noble Baroness knows that no meetings are allowed to take place without civil servants being present.

[Noble Lords]

Oh!

Economy: Tourism

Monday 10th October 2011 Lords Chamber

Question

14:45

Asked By

[Lord Lee of Trafford]

To ask Her Majesty’s Government what is their current assessment of tourism’s contribution to the United Kingdom economy.

[Lord Lee of Trafford]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as chairman of the Association of Leading Visitor Attractions.

[Baroness Garden of Frognal]

My Lords, tourism directly supports 1.7 million jobs, with visitor spend of £90 billion each year. Deloitte estimates a direct and indirect value to the UK economy of £115 billion, and suggests that tourism could indirectly and directly support a total of nearly 3 million jobs by 2020. The Government’s tourism policy launched in March includes a range of proposals to help tourism achieve its potential as a central part of Britain’s growth strategy.

[Lord Lee of Trafford]

Following the very happy and successful royal wedding, visitor numbers at Buckingham Palace have risen by 30 per cent, and at Westminster Abbey by 60 per cent. Given the obvious popularity of the monarchy, will my noble friend tell the House what plans the Government have to promote the Queen’s diamond jubilee next year? Also, does she now agree that tourism is the probably the number one industry in more parliamentary constituencies than any other private sector industry?

[Baroness Garden of Frognal]

Certainly my Lords. Visit Britain has created the You’re Invited programme to showcase Britain to the world and to attract more overseas visitors, and that is backed by a £100 million marketing fund, funded by the Government and the private sector. Certainly that will be used to make the most of the international interest in the royal wedding, and to build on that for the major events, marketing and PR activity that will focus on the diamond jubilee celebrations as well as the London Games themselves. As regards the noble Lord’s second question, tourism is vital to the nation, but in particular parts of the country it is a major form of employment.

[Lord Harrison]

Will the Government acknowledge that inward tourism is the major export industry, and a successful one, in the United Kingdom? When will the Government get rid of the pernicious air passenger duty which so inhibits visitors coming to this country and spending their money here?

[Baroness Garden of Frognal]

My Lords, we constantly look at the different factors which might inhibit people from coming here. On air passenger duty, the noble Lord may not agree, but aviation is relatively lightly taxed in comparison to other forms of taxation. There is a consultation out for this which we will be looking at closely, and will be hoping to come back before the end of the year to see whether there are factors which might cause a need to look again at air passenger duty.

[Lord Cormack]

My Lords, does my noble friend agree that the millions of tourists who come to enjoy our great heritage assets and our beautiful countryside do not, as a rule, come to admire burgeoning wind farms? In view of the very questionable benefit to our energy supplies that these monstrosities produce, will my noble friend talk to her colleagues in the appropriate departments to ensure that tourism is not killed off by turbines?

[Baroness Garden of Frognal]

My Lords, burgeoning wind farms are slightly outside my remit for this Question, and there are those who think they are rather beautiful in particular circumstances. I will leave that question for another day.

Baroness Billingham: My Lords, given the importance of tourism to our economy, what possible explanation can the Minister give for ignoring the potential of a 10 per cent increase in tourism at no cost whatever just by stopping putting the clocks back in this ridiculous way, which we do year after year. It is madness. Can she tell us why she is doing it?

[Baroness Garden of Frognal]

Once again, I really cannot claim sole responsibility for daylight saving. This issue comes up on various occasions in different contexts. A Private Member’s Bill going through the other place is looking at this. The issue will not go away and is under constant discussion. The one thing the Government have made clear is that they would not wish the four countries of the UK to be on different timescales. We wish all four countries to agree if we make the change.

[Lord Storey]

My Lords, we have heard that the Government have identified tourism as one of the five industries which will drive the UK economy. Given that next year we join the EU Emissions Trading Scheme, which will see taxation for travellers to the UK increase, and given that many of our European competitors are doing away with aviation taxation to stimulate tourism, what is our response to protecting our own tourism industry, also given that, in terms of tourism taxation disadvantage, the UK is 134th out of 139?

[Baroness Garden of Frognal]

My noble friend raises a very important issue. We are fully aware that tourism is a very competitive industry, so the UK must always ensure that it is not being outgunned on different fronts by other countries, that the unique assets in our countries, which tourists might want to visit, make it worth while and that the finances do not discourage people from coming here rather than going elsewhere. All these matters are currently under consideration to try to ensure that we make the most of people coming to our country and that they get a warm welcome here.

[Lord Stevenson of Balmacara]

My Lords, tourism is clearly one of the most important potential growth sectors in the economy. Can the Minister explain what the Government have done to ameliorate the damage caused to the tourism industry by the riots last August?

[Baroness Garden of Frognal]

My Lords, that is obviously a very concerning issue on all sorts of fronts, one of which is tourism. The pictures that went around the world were not such as would attract people to come to this country. We hope that more positive messages have gone out since then. The causes of the riots are obviously being looked at, tackled and addressed, but we hope that we will send out positive messages about the parts of the country which were not subjected to riots so that people are not deterred from coming to visit this country.

[Lord Tanlaw]

My Lords, will the noble Baroness agree that, as a matter of information, all timescales are not the same, as she said in her reply, because Scotland and Wales have to rely on Westminster for theirs whereas Northern Ireland and the Isle of Man are able to choose their own? There was an amendment to the Scotland Bill which allows the Scots to choose their own timescale and so increase their tourism by having lighter evenings if they so wish.

[Baroness Garden of Frognal]

My Lords, I cannot really add to my previous Answer. It is for the Government to consider that they wish the four countries of the UK to be on the same timescale. My understanding is that most of the resistance comes from Scotland, rather than Northern Ireland, for very valid reasons in which some people there believe. We shall just have to wait to see how this discussion unfolds.

Banking: Quantitative Easing

Monday 10th October 2011 Lords Chamber

Question

14:52

Asked By

[Lord Barnett]

To ask Her Majesty’s Government what recent discussions have been held by the Chancellor of the Exchequer regarding the sale of government-held shares in Royal Bank of Scotland and Lloyds TSB, and regarding the effect of additional quantitative easing on that sale.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, Treasury Ministers and officials have meetings with a wide range of organisations. It is not the Government's practice to provide details of all such meetings

UK Financial Investments—UKFI—manages the Government’s shareholdings in the banks. UKFI aims to dispose of the shares in an orderly manner and it continues to monitor market developments and to look at the range of alternatives. The ultimate decision to proceed with any transaction will rest with HM Treasury.

[Lord Barnett]

My Lords, I am glad to hear that. However, last week it was reported that the Governor of the Bank of England told the Chancellor that he would not use QE to help the banks, including presumably the Royal Bank of Scotland and Lloyds, but, in fact, the quarterly review said that the Government authorised the Bank to pursue a number of activities targeted to improve the facilities of banks. Who is making decisions here: the governor or the Chancellor?

[Lord Sassoon]

My Lords, I think we risk straying from the Question. I know that, in a masterly wheeze, words about QE were added to this Question late in the day by the noble Lord, Lord Barnett. I think that quantitative easing is one of many questions relevant to the sale of bank shares but a relatively small consideration in present circumstances. Given that the Question is about the sale of bank shares, this is one of many factors that is relevant.

[Lord Lawson of Blaby]

My Lords, although privatisation of RBS and the Lloyds Banking Group—ideally after separating completely the retail and investment operations of the two groups—is clearly some way off, does my noble friend recognise that the immediate need is for the Government to adopt a much more hands-on relationship with them than hitherto to ensure an adequate flow of lending to small businesses?

[Lord Sassoon]

I very much agree with my noble friend that the immediate priority is not so much consideration of the sale of the banks—UKFI will continue to monitor that closely—but to keep credit flowing. In relation to that, the Merlin agreement is critical. We treat the management of RBS and Lloyds on an arm’s-length basis, but we will ensure, as we have, that we have an agreement with all the major banks to increase lending on what it was last year and what it otherwise would have been. The third quarterly numbers will be released under the Merlin agreement shortly.

[Lord Myners]

My Lords, given that the Governor of the Bank of England has said that we are in the worst financial crisis since the 1930s and, conceivably, ever, how can it possibly be sensible for the Government to be actively seeking to sell the taxpayers’ interest in Northern Rock to City financial institutions?

[Lord Sassoon]

My Lords, we have a portfolio of banks which the Government either wholly or partly own. The Question was about Lloyds and RBS, but we also, as the noble Lord well knows, own Northern Rock and Bradford and Bingley. It is within the mandate of UKFI, which was set down by the previous Government, of whom the noble Lord was a member, to have responsibility to seek over time to realise value from the banks. That is precisely what it is exploring in the context of Northern Rock. It is following the noble Lord’s policy.

[Lord Newby]

My Lords, given the downgrading by Moody's last week of the credit rating of a number of British banks, do the Government think that they will have to recapitalise RBS and Lloyds?

[Lord Sassoon]

My Lords, the downgrading by Moody's last week was long expected by the markets. It is largely a reflection of the fact that under the Vickers proposals—the independent commission's proposals—there will be a different relationship between the banks and the taxpayer: the taxpayer will not be on the hook for the banking system in the way that it was. As a result, as expected, Moody's changed the ratings on a number of banks. Equally, it made it clear that that was not a reflection on the well capitalised state of the UK banking system. The UK banks continue, as Moody's and others have said, to be in a more robust state to withstand shocks from the eurozone than banks on the continent of Europe.

[Lord Peston]

My Lords, I am not sure that I understood one of the noble Lord’s earlier answers. Does the Treasury expect to get back all the money it has put into the two banks mentioned in the Question? If so, when can we expect to see that money?

[Lord Sassoon]

My Lords, I do not think that I touched on that point in a previous answer at all. UKFI has a responsibility, on behalf of the Government, to look, over time, at ways to create value out of the shareholdings, and that is what it will do. There is no question of any particular benchmark; we need to ensure that the taxpayer gets maximum value, subject to questions of competition and financial stability, over time, from the holdings in the banks. That is the mandate that UKFI has.

[Lord Brooke of Sutton Mandeville]

My Lords, when the moment comes for the disposal of the bank shares, can my noble friend give an assurance that the Government will make a more responsible decision than was contained in the sale of gold by the previous Administration?

[Lord Sassoon]

Yes, my Lords, I can absolutely give that assurance.

[Lord Davies of Oldham]

My Lords, the Minister will have appreciated the fact that two of the more challenging questions have come from his own side, from the noble Lords, Lord Lawson and Lord Newby, about the future of RBS. What preparations are the Government making for recapitalisation of RBS if that proves to be necessary?

[Lord Sassoon]

My Lords, it would be completely wrong in any circumstances to speculate on individual banks. The FSA, the Bank of England and the Treasury look at all sorts of scenarios in relation to banks and other systemically important parts of the financial system. As a result of the recapitalisation of the banks and the stringent stress tests which the FSA has conducted repeatedly, the UK banking system is well recognised by the credit rating agencies and by many other commentators and is in a relatively good situation. We now want to see stress tests carried out right across the European banking system as a matter of urgency to proper standards.

Death Penalty

Monday 10th October 2011 Lords Chamber

Question

15:00

Asked By

[Baroness Stern]

To ask Her Majesty’s Government what progress they have made with their Strategy for the Abolition of the Death Penalty, published by the Foreign and Commonwealth Office in October 2010.

[Baroness Stern]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing I declare an interest as I chair the All-Party Group on the Abolition of the Death Penalty.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the Government’s Strategy for the Abolition of the Death Penalty was indeed launched in October 2010. We have made considerable progress and today the updated strategy has been laid in Parliament and published on the Foreign and Commonwealth Office website. We have raised the issue of the death penalty at all levels bilaterally and through the European Union, including in specific cases of British nationals and others. We continue to fund a range of projects, including in China, Nigeria and the Middle East as well as in Commonwealth countries in the Caribbean and Africa.

[Baroness Stern]

I thank the Minister for that positive reply and for the excellent efforts that the Government are making on this subject. Can he confirm that 21 out of 58 Commonwealth countries are still using the death penalty and that there are over 11,000 people on death row in the Commonwealth? Does he expect any progress to be made at the Commonwealth Heads of Government Meeting in Perth this month on raising the question of abolition or, failing that, the question of minimum standards, so that people are not condemned to death without a fair trial?

[Lord Howell of Guildford]

I am grateful to the noble Baroness for chairing the All-Party Group and for her thanks. I have to be realistic about the prospective pattern at the Commonwealth Heads of Government Meeting in Perth. It is going to be difficult to get this issue on to the agenda and it would be silly to pretend otherwise. HMG’s focus is going to be on pressing for the introduction of a commissioner for democracy, the rule of law and human rights, as recommended by the Eminent Persons Group and supported by a number of Commonwealth countries, as a force who would be in a good position to promote this cause. If I promised anything more than that, I would be misleading the noble Baroness.

[Lord Thomas of Gresford]

My Lords, I declare an interest as representing a number of people on death row in Trinidad and Tobago. Is the Minister aware of the Government of that country’s attempt to amend the constitution to reintroduce hanging earlier this year and of the concerns expressed by Amnesty International? What steps are this Government taking to monitor any deterioration in human rights in Trinidad and Tobago since the declaration of the state of emergency in August 2010?

[Lord Howell of Guildford]

My Lords, Trinidad and Tobago has just been through the UN universal periodic review process, looking at human rights across the board. It has also announced the abolition of the death penalty for felony murders, although that does not meet the problem that my noble friend rightly raised. The United Kingdom raised the issue of the death penalty during that UN review process. I observe that the debate over the death penalty in Trinidad and Tobago is closely linked to problems of serious crime and a related state of emergency, as my noble friend indicated. The UK has seconded a criminal justice adviser to work alongside the Trinidad and Tobago Government. That is all I can tell my noble friend at the moment.

[Baroness Symons of Vernham Dean]

My Lords, one of the most repellent aspects of this issue is when the death penalty is used against young people under the age of 18. The Minister spoke of progress in his initial answer. Can he tell us whether any progress has been made in respect of approaches to Iran over its use of the death penalty for crimes of a so-called moral nature, particularly for young women under the age of 18?

[Lord Howell of Guildford]

I must confess to the noble Baroness that I find it difficult almost to find the words to express my disgust and contempt at the news coming out of Iran, in this case relating to the execution not of a young girl but of a young boy. I was appalled to hear of that execution, which was conducted in the most revolting way. He was subjected to the worst form of execution—suspension and strangulation—in front of a public crowd. The president of Iran has said that Iran does not execute children under the age of 18, but that appears to be contradicted by that horrific event, which contravenes the international obligations to which Iran has signed up. We have of course raised this case with the Iranian authorities and will work extremely hard to secure a strong resolution on human rights in Iran at the UN, which will include language on the use of the death penalty in Iran. However, I feel that the words that I am uttering are hardly adequate to express the horror that we all feel.

[The Lord Bishop of Wakefield]

My Lords, I was grateful for the Written Ministerial Statement that we received today from the Government on the death penalty. Will the Government also give particular attention to the death penalty being used in Iran in cases of blasphemy and apostasy? I bear in mind the case of Youcef Nadarkhani, the Iranian pastor who faces execution for failing to renounce his Christian faith.

[Lord Howell of Guildford]

The right reverend Prelate is quite right to raise this case. We are deeply concerned for the fate of Pastor Nadarkhani. In a statement on 28 September, my right honourable friend the Foreign Secretary deplored reports that the pastor was being forced to recant his faith or face the death penalty. Alongside my right honourable friend, I pay tribute to Pastor Nadarkhani’s bravery in the face of such threats. We will continue to work closely with our EU partners to try to ensure that the pastor’s legitimate rights to freedom of religion and belief are met.

Business of the House

Monday 10th October 2011 Lords Chamber

Motion on Standing Orders

15:07

Moved By

[Baroness Anelay]

That Standing Order 40(1) (Arrangement of the Order Paper) be dispensed with on Tuesday 11 October and Wednesday 12 October to enable proceedings on the Health and Social Care Bill to take place before oral questions.

Motion agreed.

Live Music Bill [HL]

Monday 10th October 2011 Lords Chamber

Report

Report received.

Armed Forces Bill

Monday 10th October 2011 Lords Chamber

Third Reading

15:08

[Baroness Anelay of St Johns]

My Lords, I invite noble Lords to leave the Chamber as quietly and quickly as possible so that we may hear from the noble and gallant Lord, Lord Craig of Radley.

Amendment 1

Moved by

[Lord Craig of Radley]

1: Clause 2, page 2, line 3, leave out from “section” to “Armed” in line 4 and insert “343 of AFA 2006 insert—
“PART 16AArmed forces covenant report343A””

[Lord Craig of Radley]

My Lords, the amendment is in the names also of the noble Lords, Lord Astor of Hever, Lord Wallace of Saltaire and Lord Ramsbotham.

I am much obliged to the noble Lord, Lord Astor of Hever, for inviting me to lead on this amendment. The issue is one that I first raised at Second Reading last July. I felt strongly that Clause 2, dealing with the military covenant, was not getting the visibility and treatment that its importance to all service personnel, to veterans and to their families—a very large constituency—deserved.

The Prime Minister and other senior Ministers have repeatedly stressed the high esteem in which they hold the Armed Forces and said that they were determined to give formal recognition to this as part of the law of the land. However, the Bill before the House inserts a single clause giving meaning to those sentiments at the tail end of ad hoc and miscellaneous provisions of the Armed Forces Act 2006. Regrettably, it will follow immediately after Section 359, which deals with pardons for servicemen executed for disciplinary offences in World War I.

There was a stark mismatch between the fine sentiments of the Ministers and the derisory legislative approach intended. I argued for a special part of its own for the covenant in the Act to emphasise and reflect the importance of this government initiative.

The collusion of noble Lords who support me in this amendment demonstrates that a very satisfactory outcome has been reached—albeit after some hesitation by the Government. This amendment inserts Clause 2 as a new stand-alone Part 16A of the 2006 Act. This far more adequately reflects the importance of this new legislative initiative of the Government.

I am most grateful for the way that both the noble Lords, Lord Astor and Lord Wallace of Saltaire, have helped in achieving this satisfactory outcome. I pay tribute to their efforts in support of an amendment that, from the time that I first raised it, has engaged their personal interest and sympathy. I am also very impressed by the strenuous efforts of all the officials involved, working in very shortened timeframes, to get this amendment, and Amendments 5, 6 and 7, into shape and through all the necessary hoops of government. They have done us all proud. I thank and congratulate them. Thanks to all these efforts, Amendment 1 has, I believe, the Government’s full support. I beg to move.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, I am very grateful to the noble and gallant Lord, Lord Craig, for his kind words. He first mentioned his concern during the Bill’s Second Reading. He made reference to the unfortunate juxtaposition that would result from the Armed Forces covenant clause being inserted into the Armed Forces Act 2006 directly after Section 359, which deals with pardons for soldiers executed during the First World War. Since then, he and I have had several exchanges. We have discussed the possibility of a printing change that would remove the need for a formal amendment, and considered the possibility of adding provision to the next Armed Forces Bill. At each stage, as the noble and gallant Lord has said, I have made clear my sympathy for the point that he raised. I am therefore pleased to be able to support his amendment, which will have the effect of moving the clause to a different position in a new Part 16A of the Armed Forces Act 2006. The new part will be entitled “Armed Forces Covenant Report”. So, in the future, the covenant report will have its own part within the legislation.

This is a good outcome. Once again, I am grateful to the noble and gallant Lord for his helpful and constructive approach. I pay tribute to his resolve in pursuing this matter and I am pleased that we have been able to meet his concern.

I should now like to speak to the government amendments in this group. Further to discussions at the Bill’s Report stage, these amendments clarify the role that Ministers and departments other than the Ministry of Defence will have in contributing to the annual report. If the amendments are approved, the Defence Secretary would be under an obligation to obtain the views of the relevant government departments on the matters covered in the annual report, and to seek those of the relevant devolved Administrations. He will be required to set out those views in full, or to summarise them in the annual report. In the case of a summary, he will need to obtain the department’s agreement to any summary.

We have accordingly responded to requests from several noble Lords to bring forward proposals of our own on the subject. I am very grateful to officials in the department and elsewhere who have been able to get the amendments ready in time for the House to consider them this afternoon. When we come to the amendments later, I hope that the noble Baroness, Lady Taylor, and her colleagues and the noble Lord, Lord Empey, will accept that the three amendments in my name and that of my noble friend Lord Wallace meet the aims of their own amendments. I also hope that they will accept that the formulation that we have adopted fits better into Clause 2 and reflects the legislative conventions by avoiding references to other Secretaries of State.

During the passage of the Bill I have sought to make it clear to noble Lords that the Government are committed to an open and inclusive approach in preparing the annual report in order to maximise its value to Parliament. The statements that I placed on the record at Report taken together with the amendments that we are now considering lay a strong foundation for the future. I accordingly invite your Lordships to approve the government amendments.

15:15

[Baroness Taylor of Bolton]

My Lords, perhaps I may say a few words about the government amendments that we have now seen and thank the Minister for his co-operation in listening to the voices of several Members of this House on all sides who raised the issue at Second Reading, in Committee and on Report. It has perhaps taken a little longer than we would have liked to have reached this position, which is very much a last-minute position, but very real progress has been made. Those of us who have been involved in the passage of the Bill will want to acknowledge and thank both Ministers and officials for the level of co-operation and the constructive outcome that we have.

I particularly mention Amendment 7, which is important in making it clear to those entitled to be covered by these provisions exactly what their positions are. They are named in different categories so no one who is entitled should have any doubt that the Armed Forces covenant will apply to them.

We have had a good level of co-operation. We have proved the usefulness of this House for those who have any doubt and I am sure that in another place these changes will be widely welcomed. I appreciate the work and co-operation on all sides of the House. We should all be very pleased with the conclusions and the final drafting that we have.

[Lord Ramsbotham]

My Lords, I first speak to Amendment 1, which is in my name as well as that of the noble and gallant Lord, Lord Craig. I repeat his thanks to the Minister and his officials and to the officials in this House who came in for some criticism the other day for possibly being slow over this matter.

In Committee and at Second Reading a number of us made comments about how the veterans part of this covenant would be overseen. I am enormously grateful for the way that the Government have moved and for the amendments now before us. However, thinking through how this might happen, I still think that in the years to come the Government may well find that they will have to have somebody outside the Ministry of Defence responsible for overseeing the delivery of the veterans part of the covenant. A number of us have suggested in the past that that would be better done by having a Minister for veteran affairs in the Cabinet Office. I suggest that whoever is given that appointment will also need someone like a commissioner responsible for the 24/7 oversight of the work being done for veterans in response to whatever is presented by the various Ministers in each of the annual reports.

[Lord Empey]

My Lords, I, too, speak to Amendments 5, 6 and 7. I, too, am grateful to the Minister for his attention to these matters. I recall when I first went to see him in July that his officials were somewhat sceptical about the need for some of these changes. But if these amendments are accepted, the Bill will leave the Chamber a better and stronger piece of legislation than when it came in. The military covenant is gradually being defined to the extent that it will mean things to people. I was anxious to avoid some potential political slip-ups in the future, particularly with regard to devolved regions, and to try to ensure a degree of compatibility and comparison in terms of the treatment available to people in different parts of the country so that over time we did not see disparities developing.

I thank the Minister for communicating with us and making himself and his officials available, which I think has contributed to the comments that have just been made. I believe that we can now move forward in a much stronger position with the concerns raised on all sides of the House addressed. I certainly will be supporting these amendments.

[Lord Boyce]

My Lords, I would just like to associate myself with the words of the noble Baroness, Lady Taylor, and others about the co-operation and adaptability shown by the Minister.

[Lord Rosser]

My Lords, we, too, welcome the amendments moved by the Minister in response, I think, to Amendments 6 and 7 moved on Report and also Amendment 1 moved by the noble and gallant Lord, Lord Craig of Radley, just now with government support. We appreciate the work of the Minister and his officials, first, in listening to the points being made since the Bill was first debated in your Lordships’ House and, secondly, in bringing forward the Government’s own amendments to address those points—amendments which I am sure have support from all sides of the House.

Amendment 1 agreed.

Amendment 2

Moved by

[Baroness Finlay of Llandaff]

2: Clause 2, page 2, line 11, after “housing;” insert—
“( ) in the operation of inquests;”

[Baroness Finlay of Llandaff]

My Lords, I am most grateful to the Minister and officials for the time they have spent looking at all aspects of the Bill and the amendments we have just debated are most welcome. I now want to return to the question of including the operation of inquests in the annual report on the Armed Forces covenant. This would be incorporated into the new wording of the Bill.

It is important to consider that in this part of the Bill “service people” means,

“members of the regular forces and the reserve forces … members of British overseas territory forces who are subject to service law … former members of any of Her Majesty’s forces who are ordinarily resident in the United Kingdom … and relevant family members”.

I welcome the Minister’s comments that the report must be open and inclusive and I would hope that the operation of inquests could therefore also be included. The covenant report is to be about the effects of membership or former membership of the Armed Forces on service people. The reference group would steer and guide the detailed content of the report in relation to healthcare, education and housing and in such other fields as the Secretary of State may determine.

Why do we need the operation of inquests in the Bill? I suggest it is needed because the quality of civilian inquests is very variable and there is no office of chief coroner to address that. This amendment would complement such a post whenever it comes into being. Currently, the narrative verdict is used differently by different coroners and the information in the narrative verdict is not collated. However, it is important data, particularly in relation to former members of Her Majesty’s forces. For example, self-harming behaviours that are fatal may be linked to previous trauma. The long-term effects of emergency resuscitation techniques in the battlefield or from the use of equipment may as yet be unknown but they will emerge with time. Of course, many ex-service personnel die and there is no inquest—they die in civilian life and die of diseases like everybody else.

However, sometimes there is an inquest. I take asbestos as a specific example from history. The family of someone with mesothelioma may develop it from inhaling asbestos fragments that were on the clothing of the person exposed. As asbestos-related death has to be related to a coroner, such data were picked up. A current example that may be pertinent is those with Gulf War syndrome. I know that these personnel are being followed, but when they die, inquest data will become important.

The long-term sequelae of battlefield injuries may result in early deaths in civilian life. Cataloguing these can provide information for trauma management in future and the information will not be captured unless inquests into deaths of ex-service personnel are specifically catalogued. I am aware that many do not want to be followed up when they return to civilian life. They want to get on with their lives and put the past behind them. That makes health follow-up particularly difficult and is precisely why unnatural and untimely deaths, as would be referred to a civilian coroner, may represent the only point at which long-term sequelae of active service could be picked up.

I return to the operation of the inquests themselves. Those who die on active service are subject to support from the Defence Inquest Unit of the Ministry of Defence. It provides coroners in the civilian world with a summary of the incidents in which people have died on active service and suggests who to call as witnesses. The unit meets the pledge in the covenant to support the bereaved, but it is involved in the inquests only on those on active service, including those who die in training. Sadly, year on year, there are deaths in training; one man died very recently. The tragedy is that the number of deaths in training really does not seem to be falling year on year; it seems almost to be flat-lined.

The Armed Forces covenant document requires that help and support are given to the bereaved families, as is done by the Defence Inquest Unit, but it does not specifically state that the operation of inquests themselves will be monitored. Yet some bereaved report experiences at these inquests that were unexpected and deeply traumatic. The waiting time for inquests has only recently fallen and has not yet reached the target time of nine months. Bereaved families often feel unable to grieve properly awaiting the inquest, and my concern is that unless we maintain a spotlight on inquests themselves the timing may slip. In civilian life we know that some people are waiting up to seven years for an inquest.

Currently, the quarterly reports to Parliament are a very important catalogue of deaths, but the reports will cease when we are no longer in the theatres of war. The reference group for the report on the covenant will include the Royal British Legion, which has been very active in campaigning for a chief coroner. Despite all the discussions since the Public Bodies Bill, no development has obviated that need. To have the operation of inquests on the face of the Bill will complement such an office; it will not replace it.

This amendment will not incur expenditure; it will ensure joined-up government between the Ministry of Defence and the Ministry of Justice, the latter having responsibility for inquests. The report can incorporate the current quarterly reports on military deaths and any other reports that get laid before Parliament. But when the frequency goes down, it will ensure that military deaths continue to be monitored, reported and catalogued. It will ensure that there is a record of inquests held on those actively serving, respecting their memory, and will allow collation of deaths of those who died after leaving the forces and whose deaths, for whatever reason, were the subject of an inquest, thereby providing important epidemiological data in the long term.

These annual reports, as they are proposed and as I hope they become, will be a historic document of our forces’ health and welfare. I suggest that we must also record their sacrifices of life through active service. I beg to move.

[Lord Ramsbotham]

My Lords, I support my noble friend Lady Finlay in this amendment, having also supported her in the campaign to get the chief coroner into post as part of the Public Bodies Bill. She has already mentioned that. I mention this because it has been 149 years since the coroners legislation was last updated, and it is now not fit for purpose. Those constituents who are finding it so are the families of those armed servicemen who are killed overseas. They have to wait an inordinately long time now for the inquest. This adds to their distress and is the very antithesis of everything that the Armed Forces covenant is all about. Therefore I hope that by putting this in the Bill and having it included in the annual report on the covenant, we will put pressure on those who ought to see that the coroners regulations and way of operating is updated and made fit for purpose, particularly for our servicemen and their families.

[The Lord Bishop of Wakefield]

My Lords, I, too, support this amendment. Once again, I thank the Minister for all that he has done in helping us forward on the covenant. I have seen all too often in the see city of Wakefield recently the tragic sight of funerals at the cathedral of people who have lost their lives in Afghanistan. The clergy often finds itself at the sharp end of this, as it were, because it is trying to minister to families who are feeling particularly raw through the normal outcome of war and the sadness that that brings.

I support the amendment for two reasons. First, the delays that we have heard about reinforce that rawness and sense of loss that families find so difficult to cope with, particularly having lost loved ones in these tragic and, in some ways, unforeseen circumstances. Although people realise that they are taking a risk when they join the military forces, somehow one always thinks that it will be someone else who actually dies in battle.

Secondly, there should be proper monitoring of what is going on, as the noble Baroness said. It seems to me that remembering people who have lost their lives and having them recorded is essential in this process. The fact that it is not going to cost anything ought to encourage us to go with this amendment. I realise how much the Minister and the Government have worked to improve the Bill, but if we do not include this amendment, I think that ultimately it will not capture the proper operation of inquests. For that reason, I ask noble Lords to support this amendment.

[Baroness Dean of Thornton-le-Fylde]

My Lords, I, too, support this amendment. Although I did not take part in the debate last week, I listened very carefully to it. Arrangements had been made so that we did not vote last week; I expect that we will today on this amendment.

Following the Bill closely, I feel somewhat incredulous that the Government have not conceded in this area. This proposal is very much diluted from where we originally started. About three years ago I was privileged to sit in on a consultation, conducted by the Ministry of Defence, with the bereaved families of members of the Armed Forces. It was somewhat humbling to sit there and listen to them talk very constructively about how things could be changed. It would not help them, since they had already been in that situation, but it would help bereaved families of service men and women in the future and ease their lives with regard to delays in inquests. I gather that there is still a backlog of inquests.

I regard this as quite a simple amendment. It is about our duty of care to our service men and women. The covenant covers active service personnel and veterans, but what about service people who lose their lives and pay the ultimate price? What about the families they have left behind? This is a very small, light amendment. It does not call for huge expenditure. In my view, it meets what the whole ethos and spirit of the covenant to our Armed Forces personnel is really all about.

A number of colleagues have thanked the Minister for the changes in the Bill, which will leave the House very different from how it arrived. I give much of the credit for that to the Minister, to the noble Lord, Lord Wallace, and to the civil servants who have worked hard on this; I am not sure that these changes would have been achieved in another place. I ask why, on this last small request, which is really about the duty of care, the Government will not concede.

The amendment would not cost money and it certainly would not cost a lot of time. It would help the families and it would prevent us going back to the situation that we were in three years ago. It looks likely that multiple deaths will still be dealt with in Wiltshire, but inquests on single deaths in the Armed Forces look like going to a coroner who has probably never dealt with one before, which cannot be right. I give this amendment my wholehearted support, and hope that, if not through the Government conceding, then through a vote, we can get this into the Bill.

[Lord Rosser]

My Lords, the amendment would provide that the annual Armed Forces covenant would cover the operation of inquests as well as the subjects of healthcare, housing and education.

I do not wish to repeat the arguments already advanced in support of the amendment about why it is essential that there should be a specific reference in the Bill to the report covering the operation of inquests. Suffice to say that the decision not to proceed with the creation of the office of the chief coroner has strengthened the case. One of the roles of the chief coroner accepted on all sides of the House was the monitoring of investigations into service deaths and ensuring that coroners are trained to conduct investigations into military deaths. The chief coroner would also have had the responsibility to transfer inquests into military deaths to coroners in different jurisdictions to ensure that an inquest would be held by a coroner trained in military matters. The position now, as I understand it, is that investigations into single fatalities will still be transferred to the coroner closest to the next of kin. Inconsistency in quality of service and in quality of investigations for military families will therefore remain.

The amendment would not reverse or amend the Government’s decision in respect of the office of the chief coroner, but it would ensure that the issue of the operation of inquests—which, as has been said, remains a matter of considerable concern—is one that the Secretary of State has to report on each year in the Armed Forces covenant report, and thus is guaranteed to be the subject of continuing parliamentary and public scrutiny, challenge and debate.

In his responses in Grand Committee and on Report, the Minister—I think that he will accept this—has accepted that the operation of inquests is a subject that would be required to be covered by the Secretary of State in the Armed Forces covenant report at present but, his view is, not necessarily in future. The Minister argues that we currently have forces deployed overseas in military action—obviously, for example, in Afghanistan—which, sadly, continues to result in fatalities and consequential inquests, but that, hopefully, this will not be a permanent situation and thus there is no need, as there is with healthcare, housing and education, to have the operation of inquests included in the Bill as a required subject matter to be covered in the annual report.

I am sure that we all share his hope that the situation regarding fatalities will be transformed, but under current policy the current operations in Afghanistan will be continuing for just over another three years, and inquests are not always resolved and finalised quickly, as has been pointed out. Further, the anticipated position could well not materialise and we just do not know when or where our Armed Forces might be deployed overseas in the future. It is also the case that not all fatalities on active service occur overseas, as has been said, and there are fatalities in this country, including, in some years, some high-profile ones. It seems unrealistic to claim that, even though a highly sensitive issue such as the operation of inquests is one that the Secretary of State would almost certainly be expected to address for the next few years in an Armed Forces covenant report, such is our apparent certainty over what is going to happen in the highly uncertain and volatile arena of world affairs in the medium and longer term that we should decide now that it is not necessary to include any reference to the operation of inquests, along with healthcare, housing, and education in the Bill.

We have an Armed Forces Bill every five years—it is the one piece of guaranteed legislation that emanates from the Ministry of Defence, which is a department that generates very little new legislation. As a result, legislative changes and amendments that are required tend to be left until the next Armed Forces Bill. It may well be that experience of the processes and procedures provided for in this Bill for the annual Armed Forces covenant report will lead to some amendments being put forward by the then Government in the next Bill in just the same way as other parts of this, or previous Armed Forces Bills, may necessitate revision or amendment. There is nothing wrong with that, and there is likewise nothing wrong with the reference to the operation of inquests being included in this Bill as a subject matter that will be addressed in the annual Armed Forces covenant report, when we know it is an important and sensitive issue, because in what many might feel is the less than likely event of its ceasing to be an issue of importance and concern, it can be removed from the Bill by an amendment to a future Armed Forces Bill.

If the noble Baroness does not feel able to accept the Minister’s reply, and is minded to seek the opinion of the House, we will be supporting the amendment.

[Lord Astor of Hever]

My Lords, during both Grand Committee and Report stages, the noble Baroness gave a detailed and moving account of problems which had been encountered by bereaved service families in the course of a coroner’s inquest. I have considered carefully what the noble Baroness said on Report; it seems to me that she has three main areas of concern, and I shall try to deal with each in turn.

The first is the process and quality of inquests. In the past decade, more than 500 inquests have been held into the deaths of service personnel who have lost their lives in military operations, including 12 service personnel who died in the UK of their injuries. Sixty-three of these inquests were held this year alone. Several years ago, bereaved families could have waited around two years for an inquest. Last year we completed 131 inquests into operational death, for which the average date was 15 months, and only 11 and a half months for those where there did not have to be a service inquiry. For those who died last year the average wait is currently eight months, although this will increase, as a small number of inquests have yet to be held.

These improvements are a direct result of changes we have made, including the setting up of a dedicated defence inquest unit. But we are not complacent. The Ministry of Defence will continue to support coroners to ensure that they are able to hear inquests into service deaths promptly. This we hope will go some way to ease the burden on families at such a difficult and distressing time.

The defence inquest unit deals generally with around 20 to 25 coroners, and as the noble Baroness said on Report, the Ministry of Defence has held training events for them. I note, too, that the noble Baroness also raised concerns over the wide variation in the standards and performance of coroners. At present there are 99 coroners in 114 coronial districts. She will be interested to know that the Government propose to take forward a package of measures aimed at improving the standard of service provided by coroners, including statutory provision set out in the Coroners and Justice Act 2009, such as training regulations for coroners, and powers to make new rules, regulations and guidance. In the mean time, the Government will also publish a new charter for the current coroner service in early 2012. This will set out the minimum standards of service that those coming into contact with the system can expect and establish a new bereaved organisations committee for the important role of monitoring the impact of the charter.

15:45

Moreover, as the noble Baroness has acknowledged, quarterly ministerial statements on military inquests are already provided to Parliament and have been since 2006. They are accompanied by detailed tables, outlining the status of each operational death in Iraq and Afghanistan. I am sure that information of this kind will continue to be presented to Parliament for as long as there is public concern about how the inquest system works in relation to service personnel.

I also refer the noble Baroness to the commitments that I made on Report. The Secretary of State will have regard to a whole range of subjects included in the scope of the Armed Forces covenant, as set out in the guidance document published on 16 May. That includes the operation of the inquest system for bereaved service families. Again, I draw the attention of the noble Baroness to the membership of the covenant reference group. Both the Royal British Legion, which the noble Baroness mentioned, and the War Widows Association of Great Britain are there to ensure that the Secretary of State receives very clear advice.

Noble Lords are well aware that the Ministry of Defence does not and cannot have total control of the process. Inquests and coroners are independent of government. In so far as the Government provide a legislative framework for inquests, that is a matter for the Ministry of Justice. Of course the Ministry of Defence has an interest in ensuring that inquests are effective and that they understand the military context. However, it would be wrong in principle for the Ministry of Defence to take on a general legislative responsibility to report every year on the operation of the inquest process.

The second main issue concerns the information about the health of members of the Armed Forces that can be obtained from inquests. It is true that valuable epidemiological information can sometimes be obtained from inquests into the deaths of those who die in service. However, the noble Baroness expresses concern not only about those who die in service but those who have left the services. The difficulties of tracking what happens to all former members of the Armed Forces until their deaths are well known. Whether their deaths are the subject of an inquest will, moreover, depend on whether the death is violent or unnatural, the cause of death is unknown, or the death occurs in detention. Therefore, for those veterans whose deaths are from illness or plainly from the long-term effects of injury, there will be no inquest. The focus of the inquest is on the cause of death. For example, if a veteran is killed in a car accident, the effect on his health of military service or injury is very unlikely to be looked at in the inquest. If he or she dies of, say, cancer or heart disease, there will generally be no inquest at all. As a result, tracking veterans and then examining the inquest, where one is held, is unlikely to be a major source of information.

I accept the noble Baroness’s point that inquests can yield information about the long-term effects suffered by those who have been in a theatre of war and been injured. However, it seems that the point here is not that there should be a legal obligation to cover inquests in every report, but that we should ensure that we use the information that comes from inquests in our analysis of healthcare problems. In this respect, inquests should be a recognised source of information for those healthcare issues that the reports address. However, only where there is an Armed Forces issue about them should inquests be the focus of a covenant report themselves.

The third point made by the noble Baroness on Report was that:

“The problem often is that the service personnel who are at highest risk are those who are emotionally isolated and who present to clinical services that do not understand the long-term sequelae of what has happened previously”.—[Official Report, 4/10/11; col. 1045.]

This indeed is an important area of concern. However, if I may be blunt, I do not see how a duty to report on inquests would help in this area at all. What the noble Baroness refers to here is an issue of long-term healthcare for veterans, which comes squarely under the existing requirement of the clause to address healthcare for serving personnel, for veterans, and for Armed Forces families.

The noble Baroness mentioned deaths in training. It is very important that deaths in training are carefully monitored, and that, if there are indications of underlying failures, they are the subject of government action. A report might be the right way to take that action; but it could not be a report on the effects of service in the operation of inquests—the inquest would be a source of information for the report, not the subject of the report.

I believe that, for the reasons I have set out, there is no need for the legislation to refer to the operation of inquests. Moreover, if I have understood the noble Baroness correctly, its aims in respect of veterans would not be realised. I therefore ask her to withdraw her amendment.

[Baroness Finlay of Llandaff]

I am grateful to the Minister for his very detailed response to the points I have made at previous stages of this Bill. I am well aware that we are at Third Reading, and will therefore be very brief.

I fully understand the package of measures that are going to be introduced to improve the inquest system in general, and that the system will be evaluated and monitored. I suggest that reporting on how that affects military deaths would be particularly useful, so those measures do not remove the need for my amendment.

In terms of tracking, and the information that is obtained from inquests, of course many deaths occur in civilian life. However, to take an example such as a death in a car accident, it is precisely the question of whether there are more alcohol-fuelled deaths in road accidents among ex-service personnel, and if there is a link to trauma that they have experienced previously, that makes such information highly important.

I accept that some of the points will be covered by the health requirement. However, they will not all be covered by it, and we will miss an important opportunity if we do not incorporate inquests, particularly because there has been so much concern over military inquests in recent years. For that reason, I wish to test the opinion of the House.

15:53

Division 1

Ayes: 210

---

Labour: 137
Crossbench: 58
Ulster Unionist Party: 2
Independent: 2
Democratic Unionist Party: 1
Conservative: 1

Noes: 186

---

Conservative: 115
Liberal Democrat: 62
Crossbench: 4
Ulster Unionist Party: 1

16:05

Amendments 3 and 4 not moved.

Amendments 5 to 7

Moved by

[Lord Astor of Hever]

5: Clause 2, page 2, line 22, at end insert—
“(3A) For the purposes of preparing an armed forces covenant report, the Secretary of State must obtain the views of any relevant government department, and seek the views of any relevant devolved administration, in relation to the effects to be covered by the report.
(3B) An armed forces covenant report must—
(a) set out in full or summarise the views of a relevant government department or relevant devolved administration obtained pursuant to subsection (3A); and(b) where the views of a relevant devolved administration have been sought but not obtained, state that fact.(3C) The Secretary of State may not include in an armed forces covenant report a summary under subsection (3B)(a) unless the relevant government department or relevant devolved administration has approved the summary.”

6: Clause 2, page 2, line 40, leave out subsections (7) to (9)

7: Clause 2, page 3, line 26, at end insert—
“343B Interpretation of Part
(1) In section 343A “service people” means—
(a) members of the regular forces and the reserve forces;(b) members of British overseas territory forces who are subject to service law;(c) former members of any of Her Majesty’s forces who are ordinarily resident in the United Kingdom; and(d) relevant family members.(2) In section 343A “relevant government department”, in relation to an effect to be covered by an armed forces covenant report, means a department of the Government of the United Kingdom (apart from the Ministry of Defence) which the Secretary of State considers has functions relevant to that effect.
(3) In section 343A “relevant devolved administration”, in relation to an effect to be covered by an armed forces covenant report, means whichever of the following the Secretary of State considers to have functions relevant to that effect—
(a) the Scottish Executive;(b) the Northern Ireland departments;(c) the Welsh Assembly Government.(4) In this Part—
“British overseas territory force” means any of Her Majesty’s forces that is raised under the law of a British overseas territory;
“membership or former membership” of a force, in relation to a person, includes any service in that force that that person is undertaking, undertook or may be expected to be called on to undertake;
“relevant family members” means such descriptions of persons connected with service members, or with persons who were service members, as the Secretary of State considers should be covered by a report or part of a report;
“service member” means a person who falls within any of paragraphs (a) to (c) of subsection (1).
(5) Any reference in this Part to membership or former membership of the armed forces is to be read, in relation to a person who is—
(a) a service member, or(b) a relevant family member by reason of connection with a person who is or was a service member,as a reference to the service member’s membership or former membership of a force mentioned in subsection (1).”

Amendments 5 to 7 agreed.

Amendment 8

Moved by

[Lord Craig of Radley]

8: After Clause 23, insert the following new Clause—
“Commonwealth medals
After section 339 of AFA 2006 insert—“339A Commonwealth medalsMedals awarded by Commonwealth governments, including the Pingat Jasa Malaysia Medal, to present or former members of Her Majesty’s armed forces and other Crown servants may be worn without restriction.””

[Lord Craig of Radley]

My Lords, I beg to move Amendment 8 in my name and that of the noble Lords, Lord Ramsbotham and Lord Touhig. I am grateful for their support. As I made clear in my remarks at Report and Committee stages, the current arrangements are not satisfactory. This is not so much a criticism of individuals but of a process that is no longer—to use that popular phrase—fit for purpose.

I propose to respond to the points made by the Minister when he resisted this amendment in his letter of 23 September and at Report stage. In that letter to me and to other noble Lords who have spoken on this topic, the Minister said that when exceptions to the long-standing rule of no double medalling and the five-year moratorium are allowed, the results are then seen to be anomalous and unfair.

This is surely the wrong conclusion. The problem arises because the rules are out of date, and are no longer suitable for dealing with the donor countries and international organisations of today and the variety of involvements of many individual recipients. I am glad the Minister has put a review in hand. However, it must address the matter of what guidance there should be on accepting—or refusing to accept—foreign awards. The no double medal and the five-year moratorium have been breached at least since the time of the Korean War in the early 1950s and, in one way or another, in almost every year since. It is simply not tenable to claim that they are the right benchmark. I suspect that the mindset—or default position—is to try to deter an offer first, rather than have to deal with the much trickier problem of refusing or prevaricating over one once made. That is why these rules are still prayed in aid. However, they have lost their validity with the passage of time.

Secondly, in his reply to my earlier amendment, the Minister claimed that the HD committee was non-political, being made up of senior Crown servants, and was the source of advice to the Queen on the acceptance and wearing of foreign medals. However it defies belief that an award proposed by a foreign head of state or Government to one or more British subjects would not be considered by Ministers at some stage. Surely the interplay of diplomatic and cultural, economic and security interests and so on between a donor and this country must be taken into account on how best to respond to a generous gesture by a putative donor.

Lacking the speed of modern communication, those considerations may not have been uppermost 70 years ago, but surely they cannot be ignored today. Ministers must have some part to play, particularly if a refusal is mooted. Moreover, as is clear from my remarks at Report about the Minister’s letter of 23 September, and in the Written Statements that I quoted about the rules and government policy, the Queen, as is normal, will on this topic act on the advice of Ministers. The Minister says so himself. I assume that this advice is couched to deal with agreements to restricted or unrestricted acceptance. I doubt that any submission put to Her Majesty seeks formal approval to refuse an award.

The Minister, in answering my points at Report, said that the effect of my then amendment would be to end the broadly consistent approach across government. The words “other Crown servants” in the current amendment deal with that objection.

The Minister’s next point was that a problem would be created by establishing a separate principle that applied to medals offered by the Governments of Commonwealth nations, as opposed to those offered by other allies. He said that it would not be easy to justify to non-Commonwealth allies or members of our Armed Forces why we would generally decline the offer of a medal from them, while readily accepting a medal offered by a Commonwealth nation. Surely, that misunderstands this amendment, and I note too the mindset or default opinion which is expressed in the words “would generally decline the offer”.

On the one hand, my amendment would facilitate, without recourse to any archaic HD committee rules, the acceptance and wearing of Commonwealth medals. That would be set down in statute. Until the rules are changed, as I believe that they should be, the treatment of other friendly nations or international organisations would be, as now, unchanged, apart from explaining to them that the new Commonwealth arrangement was approved by Parliament and had received Royal Assent. I do not see that causing any greater diplomatic difficulty than already exists, as the Minister asserted, and almost certainly a good deal less, even without any changes to the HD committee rules. Those rules, or the way in which they are applied by officials, seem designed to deter as far as possible any foreign offer. That approach must surely merit thorough re-examination.

As I mentioned at Report, there is renewed interest in Government to strengthen the Commonwealth heritage—in short, to put the C back in FCO. It would be timely to adopt this amendment so that the Prime Minister, at the forthcoming CHOGM in Perth at the end of this month, could mention it then as a gesture of the Government’s determination to strengthen their Commonwealth ties.

I now turn to the vexed question of a particular Commonwealth medal, the Pingat Jasa Malaysia medal, which is mentioned in the amendment. UK subjects have Her Majesty’s approval to accept that medal but not to wear it. The Minister, who has one, says that he keeps it hidden in his top drawer. However, I welcome the statement at Report saying that the Minister would,

“write to ministerial colleagues in the FCO emphasising the strength of feeling that continues to exist, both in this House and elsewhere, specifically about the Pingat Jasa Malaysia medal … I will propose that they look again at whether they can advise the HD committee to recommend to Her Majesty that those who were awarded the medal should also be permitted to wear it”.—[Official Report, 4/10/11; col. 1074.]

Can the Minister confirm that he has written? Has he any indication when he will receive a response? Indeed, does this not also confirm the involvement of Ministers and that this is a topic not solely left to the HD Committee, as has been claimed?

16:15

I do not wish to detain the House by going over in full all the arguments brought to the Minister's attention that favour removing the restriction on wearing the PJM by British subjects, but let me give him just one further example of what is happening and is wrong, sent to me by another recipient of the PJM, one of many who have contacted me to express their outrage at the way that they have been treated by our system.

This individual, an RAF veteran of Malaya and North Borneo, describes his experience on ANZAC Day. He says that when marching with Malaysian and North Borneo veterans of the Australian Defence Force, he is unable to wear his PJM medal, although all the ADF veterans have royal approval to do so. It appears, he says, that the Queen of Australia rejoices in them wearing the PJM, but the Queen of the United Kingdom does not. As he and others have pointed out, that appears to be an insult to the people of Malaysia. He personally concludes, regretfully, that he can but agree.

It is time that that ridiculous anomaly was righted forthwith. Will the Minister accept my amendment? He does not automatically have to resist now that the Bill is to return to another place. The amendment would give great pleasure to numerous veterans—a gesture to their loyalty and valour worthy of the military covenant—and smooth the HD committee's work with Commonwealth countries pleased to make a national award to UK Crown servants. Agreement now would allow holders to wear their PJM on Remembrance Sunday this year, and wear it with pride.

I urge the Minister to accept the strength of those arguments and those of other noble Lords and to let the revised Bill complete its passage through both Houses with the amendment to gain Royal Assent. I beg to move.

[Lord Ramsbotham]

I put my name to the amendment, as I did in Committee and at Report. I declare an interest as a holder of the Pingat Jasa Malaysia. I shall not repeat all the arguments made so well by my noble and gallant friend, which have been put forward on numerous occasions. I should just like to mention three points.

First, as my noble and gallant friend said, the existing rules are utterly discredited. It was mentioned in the previous amendment that the coroners’ regulations are 149 years old; some of the regulations for these medals go back to the Crimean War.

Secondly, it is all very well saying that it is a committee of civil servants who will draw this up, but it is actually Ministers who should give advice. I am concerned that Ministers do not appear to have given the ruling on this issue that they might have done.

I mention that in coming to my third point, because we are all abundantly clear—it has been made clear by the Secretary of State for Foreign Affairs and by the Minister in this House—that the Foreign Office is trying to put back the C into the FCO. There is an emphasis on the Commonwealth. This is a Commonwealth medal. To my mind, it is discourteous not to accept something from the Commonwealth when the people who were awarded it went out honouring a treaty obligation to help a fellow Commonwealth member in trouble. This really ought to be put right as soon as possible.

[Lord Touhig]

My Lords, I support the amendment moved by the noble and gallant Lord, Lord Craig—in particular, his remarks about the Pingat Jasa Malaysia medal. This has been a running sore for far too long, and it is about time that we sought to heal it. I have been a long-time critic of the Committee on Honours, Decorations and Medals, the so-called HD committee, which advises Her Majesty the Queen on these matters. As has been said, the committee advised Her Majesty that the veterans of the Malaysian campaign should accept the medal but must not wear it. Over the years, like others, I have tabled Parliamentary Questions. When I sat in the other place, I obtained an adjournment debate and tabled EDMs, all to no avail: the rule still stands.

If any of us were to walk down any high street in Britain today and stop a complete stranger and say, “Do you know that this country has allowed veterans who fought in the jungles of Malaysia to accept a medal from the King of Malaysia but they must not wear it?”, they would think you were “dwp”—a Welsh word meaning daft in the head. British soldiers gave their lives in this campaign. We are told that this cannot be changed because of the five-year rule and the double medalling rule. We now discover that these are not rules at all but merely conventions which the HD committee operates. We are here this afternoon in the glorious surroundings of this magnificent Chamber of the House of Lords and yet only halfway round the world in Afghanistan somebody’s husband, son or father is risking his life for us as a country in defending British interests. What sort of message do we send to these brave young men when we say that someone who fought for our country over 50 years ago should be treated so dishonourably?

I recognise that the HD committee has a difficult task. I have done my best to understand how it reached its decision. I have attempted through freedom of information requests to discover how this has happened, but I have been totally thwarted by the Cabinet Office. However, we have a chance to do something about this today. This is the Parliament of the United Kingdom. It is a privilege to sit here, whether in the elected House down the corridor or in this House. People in this country still expect Parliament to do something about righting a wrong or ending an injustice. I believe this should be a free vote in both Houses. If your Lordships’ House was to carry this amendment today, I have no doubt that on a free vote down the corridor it would be passed overwhelmingly by Members there. If ever there was a case for parliamentarians to be allowed to use their conscience, this is one. This is about how we respect and treat those who have served our country. The Minister is a good and decent man and well thought of all around the Chamber. We know he has worked hard to try and resolve this matter and we certainly wish him well. But this is a case when the Executive should stand aside and Parliament, unfettered by the Executive, should speak for the people of Britain.

[Lord Newton of Braintree]

My Lords, I declare an interest in that I chair one of the honours committees within the mainline honours system, although happily it has nothing to do with this. However, because of my familiarity with that system and some of the problems that can arise between us and Commonwealth countries, I feel at least entitled to express the view that I cannot see a single good reason for allowing somebody to accept a medal and not be able to wear it. I can see circumstances in which you might refuse to allow them to accept a medal for whatever reason, but I cannot see how you can say, “You can have this medal but you must never put it on”. I think this needs looking at.

[Lord Cormack]

My Lords, I am afraid I have disobeyed my late great friend Lord Weatherill who said, “If you are at all in doubt do not listen to the debate”. I have listened to the debate and I entirely agree with my noble friend Lord Newton. It really is nonsense. I am actually standing before your Lordships wearing a decoration—Commander of the Order of the Lion of Finland. When I received it for services which do not begin to compare with the bravery that the people we are talking of displayed in the Malaysian jungles, I received a letter from the Queen’s private secretary giving me unrestricted permission to wear it whenever I wished to. It seems a total nonsense to give permission to these brave people to accept this medal and then to say, “But you cannot wear it”. There is no logic in that argument whatever and I hope that my noble friend who will be replying to this debate—for whom I, too, have very real regard and respect—if he cannot give the logical answer will say that we ought to let Parliament make up its mind to allow these brave veterans, most of whom are very old people now, to enjoy at least one Remembrance Day where they can wear this decoration of which they are rightly proud.

[Lord Palmer of Childs Hill]

My Lords, I rise as someone with no military medals, though my late father had some. I find it incomprehensible that we are not proud that service people fighting for this country were awarded medals by one of our Commonwealth nations. If we are proud that they should be awarded such medals, why should they not be allowed to wear them? It seems incomprehensible that they are not. We talk in your Lordships' House about the cost of this and the cost of that—I was told that the cost of national defence medals would be higher than I imagined—but the cost of doing this is nothing other than perhaps a dent in some civil servant’s pride. There is no reason why this House should not encourage the Government to allow people to wear medals such as the PJM medal.

Having been awarded a medal from a Commonwealth country, the recipient does not have to wear it. There is no saying that if you have received a medal from a Commonwealth country of which you might, for current reasons, disapprove you have to wear it, but the idea that you cannot wear it seems anathema.

The Bill has to go to the other place. It is not on this one amendment that it may ping-pong. Therefore, contrary to my normal loyalties to the coalition, I will vote with the noble, valiant Lords in favour of the amendment.

[Lord Tunnicliffe]

My Lords, I listened to the debate on medals in Grand Committee. I said at the end of it that our position was neutral but that I had found many of the arguments very persuasive. I have read the letter from the Minister of 23 September and welcome it as far as it goes. It is good that there is to be a review, and I am pleased that it will be relatively rapid. I apologise for not being present on Report, but I have carefully read the debate in Hansard. As a consequence, I assume that, arising out of those debates and that letter, the noble and gallant Lord, Lord Craig of Radley, and his colleagues have produced what is now a very narrow amendment about a particular anomaly.

We have taken enough time on this; I shall not repeat the arguments except to say that I unknowingly applied the test described by the noble Lord, Lord Touhig, to a peculiar group of people called the opposition Whips. I tried to explain to them that we were going to debate how the King of Malaysia had presented a medal to British soldiers, how the Queen through Her Majesty's Government had agreed that they could accept it, and how they were not then allowed to wear it. It took me 10 minutes to convince them that I was being serious, especially, as I recollect from Committee, there is one day or one week when the soldiers are allowed to wear the medal.

We will support Amendment 8. I take this opportunity to say how flexible and how positive the Minister, his fellow Ministers and their team have been throughout the Bill. I earnestly invite him to maintain that theme and accept the amendment. Unfortunately, if he is unable to do so and there is a Division on it, we will join the noble and gallant Lord, Lord Craig of Radley, and his colleagues in the Lobby.

[Lord Morgan]

My Lords, does my noble friend not think that we should also point to how these actions will be seen in Malaysia, which is a very important country that is deeply attached to ours? We have very strong links in higher education and business. It seems to me needlessly insulting of the people of Malaysia to do this.

[Lord Tunnicliffe]

I concur with that comment.

16:30

[Lord Astor of Hever]

My Lords, the debates that we have already had on the subject of medals can have left no doubt about how important this matter is, and I am very grateful for the opportunity to address it again today.

The debate has had a number of strands: the process and rules for deciding on the acceptance and wearing of awards given by foreign and Commonwealth nations; the position within this process of Her Majesty as the fount of honour and the person to whom loyalty is owed; and the desire—shared, I believe, by all noble Lords—to recognise and support the Commonwealth. The amendment put down by the noble and gallant Lord, Lord Craig, relates to all these strands.

The position of the Government on the fundamentals of how the system should work remains the same as that of the last Government, when in 2007 the HD committee considered for a second time the Pingat Jasa Malaysia medal. It is the same position as has been held by every previous Government since King George VI established the HD committee.

The foundations of this position are quite simple. First, when British citizens, whether civilian or military, carry out their duties to the sovereign and their country, it is for the sovereign to decide on the award of honours for that service.

Secondly, the advice given to the sovereign about the grant of honours should be consistent across government—expert and, so far as is possible, dispassionate. Decisions on whether to reward service should not be made in the glare of public debate or potential party political argument about the wider political context in which that service was given.

Lastly, there should be consistency in our response to the wishes of all states, foreign or Commonwealth. In particular, our response to all our allies and friends should be consistent. I do not pretend that absolute consistency has been, or can always be, maintained. Sometimes exceptions are, and no doubt will be, made. But it is nearly always when exceptions are made that unfairness or anomalies are likely to occur.

The amendment would have two direct effects. First, it would lay down for the future a new rule about medals—that those awarded a Commonwealth medal shall be entitled in all circumstances to wear it. Secondly, it would apply this rule to Commonwealth medals awarded in the past. These include, as the amendment specifies, the PJM medal.

In doing so, the amendment would also have a number of indirect effects. By overturning past decisions that have been made on Commonwealth medals, it would establish the precedent that Parliament may overturn—and after any length of time—any decision of the sovereign as the fount of honour. Her decision is needed on the full details of what is proposed, as to both the acceptance and the wearing of medals. The amendment would overturn, specifically, past decisions on Commonwealth cases. I need hardly say that it is Her Majesty who is Head of the Commonwealth, not Parliament.

It would establish a further precedent that Parliament is able to lay down and change the rules which are to be applied to decisions on the acceptance of honours from foreign and Commonwealth states. It would assert that Parliament can do so in a way which alters the fundamentals that I have described of the existing arrangements, such as the need for a basically consistent approach to awards by all friendly and allied states.

Equally profound in its implications is the argument that must underlie this amendment—that decisions on the award of honours, and whether to change decisions previously made, are better made in the emotive and often party political atmosphere of parliamentary consideration, than with the detached and largely non-party political approach envisaged in the arrangements set up by King George VI. I believe that it would be wrong in principle for this House to lead the way towards such a new approach to the award of honours. As to the particular new rule that the amendment would put in place, I simply point out that it would create a different principle for the wearing of medals awarded by Commonwealth nations from that which applies to those awarded by other allies.

The operations in which our Armed Forces are involved are increasingly international, with British units regularly working alongside UN, NATO or EU partners. It would not be easy to justify to non-Commonwealth allies, or to those individuals whom they wish to reward, why the United Kingdom had decided to treat their awards on a fundamentally different basis from those offered by a Commonwealth nation.

That does not mean that I do not attach a special value to our membership of the Commonwealth and to our connections with its members. They are of the greatest importance, historically, culturally and constitutionally. But I do not believe that the creation of the distinction which this amendment would make between our Commonwealth and other friends is the way to reflect our respect for the Commonwealth.

Neither does it mean that I do not understand the force of the points that have been made in these debates about particular cases, and about the way that the process works, or is perceived to work. I have therefore instructed Ministry of Defence officials to consider the process by which advice about the institution of medals and the acceptance of foreign awards in respect of military service is put together, considered and submitted to Her Majesty.

As I explained on Report, this work will also consider the way that decisions are promulgated. My officials will ensure that they have the benefit of the views of the current chiefs of staff and they will discuss the issue with HD committee members. They will then consider whether any advice should be given to Her Majesty about the need to review the process and to make changes. Once my officials have reported back to me, I shall report the outcome to Parliament through a Written Ministerial Statement. I aim to do so before the end of the year.

I have been particularly struck with the force of the points made about the decision on the PJM medal. We have heard about how it is seen in Malaysia and about the continued importance and awareness of the issue not only in Malaysia and among those working for or representing the United Kingdom in Malaysia but among all those who were awarded the PJM medal. I shall put in hand, through my officials, representations to members of the HD committee about these issues, with a request that their advice to Her Majesty is to consider again whether those who have been awarded the medal should be permitted to wear it. Again I shall report the outcome to Parliament through a Written Ministerial Statement, and I aim to do so before the end of the year. However, for the reasons that I have explained, I do not believe that it would be right, in order to improve the system, for Parliament to overturn Her Majesty's decisions or to establish a precedent for laying new rules. Such an approach would not in my view support the essential merits and aims of the existing system, or support Her Majesty in carrying out her role as the fount of honour.

For those reasons, I cannot support the noble and gallant Lord's proposed amendment, and I would urge noble Lords to reflect extremely carefully before starting down the road it represents.

[Lord Newton of Braintree]

My Lords, before my noble friend sits down, I hope he will be pleased if I simply say that I, at any rate, in what I acknowledge is an extremely difficult area, found his reply entirely acceptable, bearing in mind the pressures that he will exert for a review and the fact that he will come back to us before the end of the year.

[Lord Craig of Radley]

My Lords, I raised this particular question in my earlier comments. The Minister has said:

“I propose to write to ministerial colleagues in the FCO emphasising the strength of feeling that continues to exist, both in this House and elsewhere, specifically about the Pingat Jasa Malaysia medal … I will propose that they look again at whether they can advise the HD committee to recommend to Her Majesty that those who were awarded the medal should also be permitted to wear it”.—[Official Report, 4/10/11; col. 1074.]

Has the noble Lord written, and when does he expect a reply?

[Lord Astor of Hever]

I have not as yet written but I will do so very soon, and I would anticipate a pretty quick response to my letter.

[Lord Craig of Radley]

I thank the noble Lord for that assurance. There is a fundamental disconnect, I feel, between the approach that I and my colleagues are taking and the one that the Minister has taken. It is all to do, fundamentally, with whether the HD committee rules to which we keep referring are still fit for purpose. My contention is that they not fit for purpose. On that basis, I propose to ask for the view of the House.

16:41

Division 2

Ayes: 208

---

Labour: 142
Crossbench: 49
Ulster Unionist Party: 3
Liberal Democrat: 2
Independent: 2
Democratic Unionist Party: 1
Plaid Cymru: 1

Noes: 194

---

Conservative: 119
Liberal Democrat: 62
Crossbench: 8
Labour: 1

16:53

Motion

Moved by

[Lord Astor of Hever]

That the Bill do now pass.

[Lord Astor of Hever]

My Lords, I gather that it is traditional at this point for the Minister guiding the Bill to say a few words of thanks. More than 30 noble Lords and noble and gallant Lords spoke during the debate at Second Reading in July. That is testament to the deep and abiding interest in the Armed Forces that exists in this House. In our exchanges since then, we have at times taken different views on some issues. However, I have been impressed, as I always am, by the courtesy and helpfulness that have been shown to me by noble Lords on all sides of the House. It is difficult to single out individuals, but I should like to pay tribute to the noble and gallant Lord, Lord Craig, for his hard work on the Bill and for his tenacity in pursuing issues that he thought were wrong. I also pay tribute to the noble Baroness, Lady Finlay, who is not in her place now. I should also like to thank the many people behind the scenes, in the House and elsewhere, who have supported us during the Bill’s passage. Finally, I should like to pay tribute to the Armed Forces. This Bill is for them. We owe them our best efforts at all times, and I believe that we have a Bill that meets the high standard that they set for us.

[Lord Rosser]

My Lords, I will be brief, but I would like to thank the Minister and his team for all the considerable help that they have given on this Bill. The Minister has been prepared to listen with an open mind to the points made during our discussions. Where he has felt able to make changes in the Bill to address some of the concerns that have been raised, he has done so. We wish to express our thanks to the Minister for all the work that he has done on the Bill and for his major contribution to the fact that our debates have been constructive and conducted without rancour, and conducted with the interests of our Armed Forces in our minds.

Bill passed and returned to the Commons with amendments.

Localism Bill

Monday 10th October 2011 Lords Chamber

Report (5th Day)

16:56

Clause 22 : Pay policy statements

Amendment 190

Tabled by

[Lord Beecham]

190: Clause 22, page 26, line 13, at end insert—
“( ) The statement may include the approach that the relevant authority has adopted for selecting information on pay policy from a provider, including any potential provider, of goods and services.”

[Lord Beecham]

My Lords, I do not intend to move the amendment but I urge the Government, in considering issues of procurement and the like, to bear in mind the need to ensure that reasonable conditions, in terms of pay and other conditions of service, are applicable not only to those employed within the public sector but to those with whom it contracts, and to seek to encourage the concept of the living wage, which has been adopted in London by successive mayors and which other local authorities are seeking to promote. I do not wish to detain the House further so the amendment is not moved.

Amendment 190 not moved.

Clause 27 : Interpretation

Amendment 191 not moved.

Amendment 191A

Moved by

[Baroness Hanham]

191A: After Clause 27, insert the following new Clause—
“CHAPTER 6ACommission for Local Administration in EnglandArrangements for provision of services and discharge of functions
(1) After section 33ZA of the Local Government Act 1974 insert—
“33ZB Arrangements for provision of administrative and other services
(1) Arrangements involving the Commission may be entered into by persons within subsection (4) for the provision of administrative, professional or technical services by any one or more of the parties for any one or more of the parties, whether for consideration or otherwise.
(2) For the purposes of subsection (1), arrangements for the provision of services involve the Commission if the Commission is one of the parties to the arrangements and at least one of the following conditions is met—
(a) the Commission is the party, or one of the parties, by whom the services are to be provided;(b) the Commission is the party, or one of the parties, to whom the services are to be provided.(3) The arrangements that may be entered into under subsection (1) include arrangements for—
(a) the Commission, or(b) the Commission jointly with any one or more of the parties,to have the function of discharging, on behalf of a party, any function of that party which is of an administrative, professional or technical nature.(4) The persons within this subsection are—
(a) the Commission,(b) the Parliamentary Commissioner, (c) the Health Service Commissioner for England, and(d) the person administering a scheme approved under Schedule 2 to the Housing Act 1996 (scheme for enabling complaints to be investigated by a housing ombudsman).”(2) In paragraph 13 of Schedule 4 to the Local Government Act 1974 (delegation by Local Commissioners) after sub-paragraph (2) insert—
“(3) Any function of the Commission may be discharged on the Commission’s behalf—
(a) by any person authorised by the Commission to do so, and(b) to the extent so authorised.(4) Sub-paragraph (3) does not affect the responsibility of the Commission for the discharge of the function.””

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Hanham)]

My Lords, the three government amendments in this group give the Local Government Ombudsman the power to operate shared services with other public sector ombudsmen and clarifies the organisation’s ability to delegate functions to its staff.

Making provision for our public sector ombudsmen to share back-office functions makes sound, practical sense, providing as it does scope for better, efficient working. Moreover, making provision for public sector ombudsmen to share services, like a single point of contact for complaints from the public about public sector service failures such as social housing, has clear advantages for the public.

The amendment provides assurance that the Commission for Local Administration in England, as a corporate body, has the power to delegate functions to its officers—for instance, the ability for a member of staff to negotiate and let a contract for cleaning the office. This in no way relates to the delegation powers of the commissioners themselves, who have clear powers of delegation that allow officers of the commission to investigate cases.

The other two amendments in this group, first, make provision for the commencement of the provision that I have just described and, secondly, amend the title of the Bill to give the Commission for Local Administration in England its proper title.

[Lord Beecham]

All of us on the opposition Benches are happy to concur with the amendment moved by the Minister.

Amendment 191A agreed.

17:00

Amendment 192

Moved by

[Baroness Gardner of Parkes]

192: After Clause 30, insert the following new Clause—
“Power to require property to be maintained to appropriate standard
A local authority may by byelaws make provision requiring that, on receipt by the local authority of a petition from residents of a particular street or other residential area to the effect that one or more properties in their street or area are not being maintained to the standard appropriate to properties in that street or area, the owners of the property carry out such reasonable repairs and maintenance as are necessary to keep the property up to the average standard of repair of the other properties in the street or area.”

[Baroness Gardner of Parkes]

My Lords, I am so pleased that we have actually reached one of my amendments. I flew back from Sydney yesterday specifically to be here for it but I felt sure that another 25 would have popped in ahead of me again. Fortunately, that has not happened.

This amendment comes about because at the moment, councils have no authority to do anything to maintain standards of appearance—and buildings at all—and this can be very bad for other residents adjoining. The home that I sold in 1977 to very rich people, who now have vast resources in this country, was done up at that time and has not been touched since. It is really quite sad to go past and see the gutters falling off and the stucco all in pieces. People in that street told me that they have repeatedly asked if something could be done about it, and the council has said that no, it has no powers to even request this. These people have taken petitions up to the owners of that house, but nothing has happened. When I asked the council, it said that it has powers if something is unsafe and going to fall down, or if it is a listed building—although even if it is a listed building, it cannot ask for it to be maintained; it can only prevent it from actually falling down when it gets to that point. I was surprised that the council says that it has no powers in this respect.

It should not be a case of demanding that people keep a place in immaculate condition. I know of a similar case in Montpelier Square, where local residents get very distressed by this. It is worth thinking about having an enabling power for councils. I hope that it would be needed. I beg to move.

[Lord Beecham]

My Lords, I have some sympathy with the noble Baroness, and welcome her on her return from her homeland. I trust she has not been suffering from jet lag; I will not detain her too long.

I am not sure that the amendment is necessarily the right way to deal with this. My understanding is that in conservation areas there are provisions under the Town and Country Planning Acts for steps to be taken to maintain properties of this kind. It is not without interest that in Edinburgh recently there have apparently been problems with requirements being imposed on local residents by the local authority—who appear to have powers similar to those advanced in this amendment—which have caused some controversy. Apparently large sums of money have had to be laid out on improving or maintaining properties, and some of those who are benefiting from those expenditures have been connected with the decision-making process. That would not be applicable if the amendment were carried, and one would hope that it would not occur. Nevertheless, it is difficult to define exactly what standards would be required.

There is, however, a more general point which applies to this and the other amendments in the name of the noble Baroness, and that is the general by-law-making powers of local government. This is something I took up with the previous Administration, and some modifications were made about that issue. It might be worth the Government looking at the extent to which councils are free to make by-laws as opposed to having to have everything approved by individual departments. Alongside that, perhaps the Government could look at the question of consent regimes generally, which is something again that I have been attempting to pursue for a number of years, including in some recent Written Questions.

The noble Baroness has touched on an issue, perhaps almost inadvertently, that is worth considering: the capacity of local authorities to make particular provisions for their areas without necessarily having to have everything approved by central government. I do not know how the Minister will respond; I suspect that he will acknowledge the good intentions but say that perhaps it is not appropriate for this Bill, and I certainly would not press him to go further than that. However, I ask the Government to take back the issues of by-law-making powers and consent regimes generally, not for the purposes of this Bill, but as part of a localist agenda.

[Lord Shutt of Greetland]

My Lords, I thank the noble Baroness, Lady Gardner of Parkes, for introducing her amendment and welcome her back to Britain. Local authorities already have extensive powers to take action where a property is dangerous or having an adverse impact on the amenity of the neighbourhood. I see no need for additional powers. Under the Housing Act 2004, local authorities can tackle poor conditions across all residential properties. If a property is found to contain serious hazards, the local authority can instruct its owner to undertake any works necessary to ensure that it is safe. Inspections and any subsequent enforcement to address the disrepair can be triggered by complaints to the local authority.

Local authorities have a key role to play in identifying empty properties in their areas, and in developing strategies to bring them back into effective use. We encourage local authorities to work with owners to persuade them of the benefits of bringing their property back into use. However, where it is clear that owners are not prepared to co-operate with efforts to get their property occupied through agreement, local authorities have enforcement powers to deal with them. Further powers available to local authorities to tackle disrepair and poor maintenance include those in the Town and Country Planning Act 1990. Where properties have an adverse impact on the amenity of the area, local authorities can require that they are tidied up, repainted and, where necessary, rebuilt. I hope this will satisfy the noble Baroness and that those who are concerned will have more luck in getting their local authorities to pursue the powers that they have.

I take on board the points made by the noble Lord, Lord Beecham, on the by-law issue. I confirm that the Government will look into that further.

[Baroness Gardner of Parkes]

I thank the Minister for his reply on this matter, which he went into in detail. I am even more grateful to the noble Lord, Lord Beecham, who understood the sort of point that I was getting at. I hope we will see the day when special items of need for particular councils can be dealt with more directly in that way. I beg leave to withdraw the amendment.

Amendment 192 withdrawn.

Amendment 193

Moved by

[Baroness Gardner of Parkes]

193: After Clause 30, insert the following new Clause—
“Power to make byelaws about smoke-free places
(1) A local authority may make byelaws designating as smoke-free any place or description of place that is not smoke-free under section 2 of the Health Act 2006.
(2) The place, or places falling within the description, need not be enclosed or substantially enclosed.
(3) The byelaws may provide for such places, or places falling within the description, to be smoke-free only—
(a) in specified circumstances,(b) at specified times,(c) if specified conditions are satisfied,(d) in specified areas,or any combination of those.(4) Terms used in this section have the same meanings as in the Health Act 2006.”

[Baroness Gardner of Parkes]

My Lords, this amendment came to me because someone who lives near me in central London phoned me and said, “I don’t know what to do. I can’t open the windows on this swelteringly hot day because all the people who are working on the local building site are sitting along the garages below my residence, and the smoke is so intense that I can’t open the window. I am going to die of the heat”. She did not die of the heat; nevertheless, I rang the local council. It was not something I had ever thought about before. I said, “What can you do about it?”. The council said, “We can do nothing. We get these issues all the time, particularly with restaurants and bars. Lots of people now congregate outside them because they can’t smoke inside”. If anyone happens to live within reach of the smoke, it is absolutely deadly for them. It would be helpful if the council could make this a planning issue.

Last month, I read in the paper that Australia proposes to bring in completely smoke-free streets. I did not hear anything about that while I was there; no one mentioned it. It is obviously of more interest to the press here than it is to people there. That is a bit extreme. My amendment is fairly short and simple but I have had the most intolerant e-mails and letters from people, saying that I am a fascist who is trying to ruin their lives and take away their right to a bit of healthy smoking whenever they feel like it. It is obviously a very emotive issue—quite unnecessarily so. I am not suggesting anything wholesale. However, I am suggesting that people should have the right to live in their homes and open their windows without finding themselves so adversely affected. I beg to move.

[Lord Beecham]

My Lords, again, one sympathises with the motivation behind this amendment. Quite apart from the particular case to which the noble Baroness referred, it is not a particularly attractive sight to see people hanging about smoking in the street. However, the only grounds on which orders could be made would relate to the impact of that smoking on health.

Enclosed areas are of course covered by the existing legislation, and, as I understand it, there is power to designate areas other than enclosed areas, if, in the authority’s opinion, there is significant risk that without designation persons in the area would be exposed to significant quantities of smoke—areas where, although they are outdoors, there is a concentration of people or of prevailing structures around the area that might lead to people being exposed to the smoke. If that is indeed the case, as it appears to be under the Health Act 2006, there does not appear to be any need for the amendment. I would encourage local authorities to look at that Act. No doubt the Minister in replying will have more information about that.

[Lord Shutt of Greetland]

My Lords, again I thank the noble Baroness and the noble Lord for their comments. Indeed, I have great sympathy for the amendment as it seems to me that the place immediately after the no-smoke zone ends is the problem territory, whether it is outside a public building, or wherever it may be.

The amendment would give local authorities an explicit power to make by-laws designating areas as smoke-free. The Health Act 2006 makes provision for the prohibition of smoking in enclosed public places and workspaces. It came into force in England on 1 July 2007. Section 4 of the Act provides regulation-making powers for the Secretary of State for Health to make further regulations—for England—designating as smoke-free any place or description of place that is not smoke-free under the Act. This could cover outdoor places. Therefore, if the evidence on the harms of exposure to second-hand smoke becomes more robust, and the Government’s preference for voluntary local action to extend smoke-free places where there is a clear need is shown not to be working, the Government can consider using Section 4 of the Health Act 2006 at a later date. I would say that, at the moment, the Government do not intend to make use of these powers. However, I know that colleagues in the Department of Health welcome the debate on this important issue and will continue to monitor developments and the evidence.

While we are sympathetic to local authorities making by-laws that preserve public health, our preference is to see local authorities promote the benefits of environments free from second-hand smoke on a voluntary basis. Creating smoke-free areas through legislation gives rise to complex issues, which I know that colleagues at the Department of Health would want time to consider carefully, and I do not think this is something we should be dealing with at this late stage of this Bill. As such, I am afraid that I cannot support the amendment and trust that the noble Baroness will be able to withdraw it.

[Baroness Gardner of Parkes]

I thank the Minister and the spokesman from the Opposition for their very good and sound comments. I did not mention earlier that in the particular case I referred to one person left a cigarette burning which set fire to one of the garages so there is obviously a bit more of a risk in that regard too. However, I thought that was a red herring and should not be brought up.

This is a serious issue. I do not know what will happen in the future. I appreciate the points made about this being perhaps more of a health issue and therefore I am pleased to have aired it today—what a silly remark, to say “I have aired it” when we are talking about smoking. I have taken on board the comments that have been made and thank noble Lords very much. I beg leave to withdraw the amendment.

Amendment 193 withdrawn.

Amendment 194

Moved by

[Baroness Gardner of Parkes]

194: After Clause 30, insert the following new Clause—
“Licensing of pedicabs
(1) A local authority may by byelaws establish a scheme for the licensing of pedicabs in its area.
(2) Such a licensing scheme may make provision about—
(a) the compliance of pedicabs with road traffic legislation;(b) where pedicabs may be stationary whilst seeking business;(c) the playing of music in pedicabs;(d) the roadworthiness and appearance of pedicabs; and(e) such other matters as the local authority may determine.(3) In this section “pedicab” means a cycle constructed or adapted—
(a) to seat one or more passengers; and(b) for the purpose of being made available with a driver in the course of a business for the purpose of carrying passengers.”

[Baroness Gardner of Parkes]

My Lords, it is rather an overdose of me today, but it does make up for all the times I have sat here quietly. I have mixed views about this amendment myself, particularly as yesterday I came back from Heathrow by cab and the taxi driver was very strongly opposed it. I thought that that was interesting. He said, “The moment you license them, you are legitimising them. They are so dangerous”. He had seen people injured. I find that this happens all the time when I am driving home in the evening. I will see a pedicab suddenly move from the left hand side of the traffic, without any signal, cut right across the traffic and possibly even do a U-turn. They really are a danger. In the central London area they are also a danger when they park on footpaths. People cannot walk past them and sometimes have to go out into the street to do so. It is a genuine problem.

I was interested in the cab driver’s remark asking whether you are legitimising pedicabs if you licence them, particularly as there is a Bill before the House or perhaps some other technical measure. However, this issue is being considered in a wider context. My points about loud music and so on are all perfectly legitimate, although I am not sure that this is the opportunity to consider them. Meanwhile, so that we can hear the Minister’s reply, I beg to move.

17:15

[Lord Jenkin of Roding]

My Lords, perhaps I may add to what my noble friend said. In fact, I introduced the London Local Authorities Bill which originally included a clause to provide for the licensing of pedicabs. It went through a long process of petitions that were heard. In the end, the promoter of the Bill, which at that stage was the City of London, decided that it was wiser to drop the pedicabs provision in order to get the Bill through. However, it was perfectly clear that the proposal aroused a lot of opposition. There is quite a lot of financial interest in this pedicabs business. I am talking primarily of London—I do not know about the situation outside London—but it is possible for those employed to drive pedicabs to make quite a lot of money if they are prepared to work hard, late into the night and in the small hours of the morning. The amendment is obviously not without some merit because there are members of the public who will use pedicabs in preference to hanging around for buses or going down to the Tube.

Therefore, I hope my noble friend can say something on this. There is a problem that needs to be dealt with, but perhaps not so much by amending this Bill but through a local authority private Bill. The issue should eventually be picked up by the Government and some form of regulation should be imposed.

[Lord Berkeley]

My Lords, as a cyclist in London, I have come to know the London Pedicabs Operators Association quite well. Yes, pedicabs irritate taxi drivers—and they irritate me because they are wider than my bicycle and I cannot always get past them. However, taxis, cars and white vans irritate people. At some stage, we all have to live together and hope that it all works well for the benefit of the community and for people who want to go somewhere late at night. Of course, tourists love pedicabs.

However, I agree with the noble Baroness that there is something wrong with the current situation. The noble Lord, Lord Jenkin, mentioned the private Bill debated here in, I think, 2009. My understanding is that there was a voluntary registration scheme that the pedicab association was prepared to sign, given that Westminster City Council apparently made specific undertakings in Committee to provide pedicab ranks around Westminster. That has not happened and the whole idea seems to have evaporated.

Perhaps I may move on to early this year, when a new plan came from the mayor’s office, Transport for London, the Metropolitan Police, Westminster City Council and the London Pedicabs Operators Association. They were asked to draw up a framework mechanism, documentation and software to satisfy the requirements of a formal licensing scheme that would include a partnership agreement, and to write a code of conduct—which is important—and a memorandum of understanding between those parties. However, again, nothing seems to have happened on this.

The pedicab association says that many of the issues listed in the noble Baroness’s amendment would in fact be in some of the agreements that it was setting out to achieve. The one thing that it says would be very difficult—and I agree—is to have, as suggested in the amendment, a separate agreement for each borough in and outside London. Most pedicabs operate in Westminster but I live in Camden during the week and they certainly move into Camden. Therefore, I believe that any such registration has to be London-wide and I am not sure why Transport for London is not picking this up and running with it, so to speak.

There is an issue here but I believe that licensing by TfL on a reasonable basis would work well. I know that taxi drivers do not like pedicabs because they see them taking away business, but we are not really here to preserve the monopoly of taxis in taking people around London. There is also the TfL cycle hire scheme, which seems to be doing quite well.

I believe that some of the issues that the noble Baroness lists in her amendment should be in some kind of agreement, but someone has to take that forward and I think that it should be TfL with everyone else’s agreement. However, every time there seems to be a step forward, something stops it. Perhaps, as the noble Baroness has suggested, people do not want a registration system because that would legalise pedicabs.

I think that pedicabs are here to stay. They are good fun. If they are registered, there will be some control over them, and I hope that that will get rid of those who do not comply with the regulations and that it will allow a good service to be properly enforced, with vehicles that have back red lights and front white lights, which are important. The noble Baroness makes a very good point with this amendment but it is probably not the right way to go forward at this stage.

[Lord Kennedy of Southwark]

My Lords, first, I think I should make it clear to the House that my father was a licensed London taxi driver and that both my brothers are licensed London taxi drivers. In fact, one or two noble Lords have mentioned to me that they have been picked up by them and taken home after a busy day in your Lordships’ House.

[Lord Jenkin of Roding]

If the noble Lord would give way, I have suddenly realised that my eldest grandson was for a time a pedicab driver and I should have declared that.

[Lord Kennedy of Southwark]

As far as it goes, I support the amendment moved by the noble Baroness, Lady Gardner of Parkes. Pedicabs, and the way in which they operate, can be a nuisance, and it is only by licensing them that we can get some control over them. It would therefore be good if local authorities could establish local by-laws for the licensing of pedicabs in their area. If people are going to travel in them, we should make sure that they are roadworthy, that there is proper insurance cover for passengers, that there are rules about where they can stand when waiting for business, that the people peddling them comply with traffic legislation and that, where breaches occur, there is provision to get them off the road.

I accept that at present they seem to operate only in central London, so Westminster council faces the biggest problem. However, like my noble friend Lord Berkeley, I would have preferred to see London-wide licensing of pedicabs. They will no doubt move elsewhere, with Camden, Islington, Kensington and Chelsea, Southwark and Lambeth all likely to have them in parts of their boroughs. By-laws that differ from borough to borough just risk confusion and it would be better to have a London-wide option. However, as I said, the Opposition support the thrust of the amendment and I hope that the Government can indicate what they will do to deal with this problem.

[Earl Attlee]

My Lords, I can understand why my noble friend Lady Gardner of Parkes has moved this amendment. She has explained the problem and other noble Lords have made sensible and balanced contributions. However, Transport for London and ultimately the mayor are responsible for pedicabs in London. The Government take the view that issues surrounding pedicabs in London should be dealt with at a local level, which this amendment would provide for. After all, this issue only really affects London. However, the mayor, Transport for London and the London local authorities are already taking the initiative to address the matter with straightforward measures that avoid the trap of overregulation. Noble Lords will be aware that Westminster City Council is currently working up a voluntary—

[Lord Berkeley]

I am sorry to interrupt the Minister but I believe that they operate in Oxford, and there is a similar problem there. But I do not know what the solution is.

[Earl Attlee]

My Lords, I skilfully avoided saying that this problem was unique to London, because I thought this issue might arise, and I might get challenged by someone like the noble Lord.

Westminster City Council is currently working up a voluntary registration scheme for pedicabs, with registration being incentivised by providing parking bays and pedicab ranks for members. Those operators and riders subscribing to the scheme will sign up to a code of practice, and the noble Lord, Lord Berkeley, has already alluded to these developments. This registration scheme would then tie in with the provisions relating to the enforcement of road traffic offences in relation to pedicabs, which are included in the London Local Authorities and Transport for London (No. 2) Bill, currently before Parliament. Effective implementation of the provisions in the Bill relies on a system of licensing or registration being in place. The relevant clause could not come into force until a registration scheme for owners and riders has been approved by the Mayor of London.

[Baroness Gardner of Parkes]

I thank the noble Earl and the noble Lords who have contributed to the debate. It has been much wider and more interesting than I had expected. However it is an issue, and I would like to respond on a couple of points.

The noble Lord, Lord Berkeley said that it should apply to the whole of London. I draw attention to the fact that traffic varies tremendously in London. For example, on the subject of disabled parking, the blue badge scheme does not apply in any of the three central London boroughs. You have to have a blue badge and a local badge as well to take full advantage of disabled parking. If you have a blue badge, there are blue-badge places you can use, but you cannot use any other parking places. Each of the three central London boroughs said it would make it impossible for them, because they would be flooded by people coming from outside the boroughs. So this is a long-standing arrangement just for central London.

I do not agree with the noble Lord that you need to have licensing for pedicabs out in Havering, for example, which I represented at one time. I do not believe there are any pedicabs running around Havering. I think they are a fun thing in central London. However my concern is not the fun element, which I agree with my noble friend Lord Jenkin, is absolutely wonderful. In Bangkok it was great fun to travel around in them. However it is not a fun element if you are at risk of being injured due to their ignoring road behaviour. That is what worries me.

This is an issue that needs to be tackled. I accept that it might be better tackled somewhere else and in some other way. Perhaps LRT could deal with it selectively, but it has to be done selectively, because many boroughs will have no problem at all. If—as the noble Lord, Lord Berkeley has said—Oxford already has pedicabs then there are other places which need this issue to be addressed now. But again, the areas will need to be limited.

I have listened to the debate and I think it is valuable to have it on record for when this issue comes up again as it surely will in some other capacity. Meanwhile I beg leave to withdraw the amendment.

Amendment 194 withdrawn.

Amendment 195

Moved by

[Lord Clement-Jones]

195: After Clause 30, insert the following new Clause—
“CHAPTER 8Powers in relation to casino premises licenceVariation of licences: abolition of permitted areas
(1) A relevant local authority may consider and, if thought fit, grant an application to vary a converted casino premises licence so that it relates to premises to which it did not previously relate and may do so regardless of whether or not—
(a) the premises to which the application relates are situated in the area of the relevant local authority which issued the licence; and(b) the area of the relevant local authority in which those premises are situated was a permitted area when the converted casino premises licence was originally issued.(2) Subsection (1) shall not require a relevant local authority to consider any application to vary a converted casino premises licence if that local authority has passed a resolution under section 166 of the Gambling Act 2005 (resolution not to issue casino licences) and that resolution is in effect at the time the application is made.
(3) In Schedule 4 to the Gambling Act 2005 (Commencement No. 6 and Transitional Provisions) (Amendment) Order 2006 (transitional provisions), for sub-paragraph (13) of paragraph 65 (application of the Gambling Act 2005 to casino premises licences granted on a conversion application) substitute—
“(13) An application to vary a converted casino premises licence so that it relates to premises to which it did not previously relate shall be made—
(a) in the case of premises wholly or partly situated in the area of the licensing authority which issued the licence, to that licencing authority; or (b) in the case of premises wholly or partly situated in the area of another licensing authority, to that other licensing authority, and section 213(f) (definition of licensing authority) shall apply to such an application as if the licensing authority considering such an application under paragraph (b) was the authority which issued that licence.(14) Nothing in paragraph (13)(b) shall require a licensing authority to consider or grant an application to vary a converted casino premises licence so that it relates to premises to which it did not previously relate if—
(a) the premises are wholly or partly situated in the area of a licensing authority which did not issue the licence; and(b) the licensing authority has resolved under section 166 not to issue casino premises licences and that resolution is in effect at the time the application is made.”.(4) In this section—
“converted casino premises licence” has the same meaning as in the Gambling Act 2005 (Commencement No. 6 and Transitional Provisions) (Amendment) Order 2006;
“permitted area” means the area of a local authority which was a permitted area for the purposes of the Gaming Act 1968;
“relevant local authority” means a local authority in England, Wales or Scotland which is a licensing authority under the Gambling Act 2005.”

[Lord Clement-Jones]

My Lords, I shall speak also to Amendment 249A. This proposed new clause originates from a well researched report by Ernst & Young in July 2010, commissioned by the National Casino Industry Forum. It was designed to show the impact of a number of regulatory reforms, which would improve the economics of the gaming industry, benefit the public, and the public purse.

The current situation is totally illogical and, in the long run, unsustainable. There are currently 53 permitted areas where casinos regulated under the Gaming Act 1968 are allowed. The system of permitted areas was introduced principally to reduce the number of casinos to a manageable number. The areas were chosen on a subjective basis. The 1971 regulations included a formula under which any county borough outside Greater London with a population of 125,000 people became a permitted area.

When county boroughs were abolished in 1974, the formula was altered so as to bring in those former county boroughs which had a population of 125,000 or more at any time between 1 December 1970 and 1 October 1973. The list has remained frozen ever since. That is almost 40 years ago. In that time, demographics and economic conditions in these areas have changed enormously and 187 licences have been issued under the Gaming Act 1968. I should emphasise that this number is finite, which means that no more can be granted, but the number can be reduced. Of the 187 licences currently in force, 149 are trading; the balance have either closed down as commercially not viable or have not been opened, many for the same reason. Compare that to the 8,800 betting shops in existence, which are not similarly constrained.

Currently, a casino can relocate only within the permitted area in which it is located; so it cannot locate to another permitted area or to a town that is not in a permitted area. Hence, if the permitted area is overcrowded and the casino is commercially unviable it has no option but to close. Yet some 60 local authorities applied for a 2005 licence and were disappointed. This has led to a number of consequences. There are too many casinos within existing permitted areas; there has been a closing down of casinos with resultant loss of jobs; and the Exchequer is losing money from gaming tax lost as a consequence.

What is the solution? We need to be able to permit a casino to move to anywhere in the UK where the local authority is prepared to have one of the existing casino licences. Local authorities would consider whether they wish to have a licensing policy that states they can have a casino within their area. Many local authorities do, as can be seen from the number who applied to have a 2005 Act casino in their area, but were unsuccessful, as I stated earlier.

A casino operator with a non-operating licence—for example, where it has closed down because there were too many casinos in the current permitted area—could apply to transfer the licence to a local authority that wishes to have a casino. No local authority can be forced to have a casino. Under Section 166 of the Gambling Act 2005, it can resolve on a licensing policy stating that no casino licence will be granted. A local authority which has a no-casino policy currently in place will be excluded, unless it decides to change its licensing policy.

Even if a local authority passes a policy stating that a casino can be located in its area, the public has to be consulted. Before a new casino can open there will still need to be separate planning and premises licence applications where the public and any other interested party will be able to make representations. Only if these two things happen will the casino be able to move to a new location.

What are the consequences? The impact of this amendment, if accepted, will be to create new leisure facilities in a locality, new capital expenditure, new jobs—the NCIF calculates that 2,400 to 3,000 new jobs could be created in consequence—and increased revenue for the Exchequer. The Ernst & Young analysis confirms that up to £12 million in additional gaming duty would be levied if just 20 casinos relocated.

This proposal does not increase problem gambling as there is no increase in the overall permitted number of casino licences. Therefore, this is a genuine win-win solution. By way of explanation, Amendment 249A will extend the benefit of these provisions to Scotland. I beg to move.

[Lord Beecham]

My Lords, it is almost refreshing to move from the constant headlines about the casino economy, which the world has enjoyed for the past few years, to something as substantive and reasonable as the noble Lord has brought to the House today in terms of the limited number of premises to which this amendment would apply. The key to the argument of the noble Lord is that this should be a matter for local decision within the overall context of that limited number. It seems to be entirely consistent with the approach of localism—it should be a matter for local determination—with the benefits that the noble Lord has referred to being realised in a number of places that wish to see that kind of development augmenting their current offer to residents and visitors. I hope that the Government will look sympathetically on the amendment and facilitate its passage.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken on this amendment. I am aware that this amendment would make changes that some elements of the British casino industry have been seeking for some time. I can sympathise with the sentiments behind it, but this is not the right time to discuss the issues that the noble Lord raises. It is not an uncontroversial proposal and it would be wrong to assume that there is unanimous support for it either inside or outside the industry.

Seventeen new licenses were provided for by the Gaming Act 2005 aimed at contributing to economic development and regeneration in carefully selected locations. We do not know what sort of impact this proposal could have on the eight competitions to award the new licenses which are currently under way. All of those have yet to launch their processes. It would not be right to bring forward measures at this stage which could undermine these competitions and adversely affect the benefits that these new casinos could bring to local communities.

Nor should we assume that the casino industry in Britain is united behind this proposal. I understand that the industry is split over the idea. The National Casino Industry Forum supports it, but the Casino Operators Association is thoroughly opposed. That is not to say that the Government reject outright the principle behind the amendment, but there is some way to go before we could consider offering our support and we would need to look at some issues. For example, the amendment as proposed does not require the 40 or 50 currently dormant casino licences to be handed back as a quid pro quo. That might be an important gesture to ensure that any new flexibility did not lead to a substantial increase in the number of casinos.

The relevant Minister, the Minister for Tourism, who is responsible for gambling policy has met with representatives of the industry a number of times and they are fully aware of his views. I am sure that he would be prepared to consider this matter in the future in the terms that I have just outlined. With those reassurances, I hope that the noble Lord is willing to withdraw the amendment.

[Lord Clement-Jones]

My Lords, I thank the Minister for that reply. If those are reassurances, I wonder what a negative response would be. I thank the noble Lord, Lord Beecham, for his very positive response and I am grateful for his support. This is an anomaly and it should be covered by localism, the very word in the title of the Bill. On the other hand, I understand that the industry is not completely united on this. There is some wisdom in what the Minister has to say about waiting to see the outcome of the second round of the 2005 licences.

I take some comfort from the Minister’s comments that this will be kept under review. I have an awful feeling that it is never the right time and that it is easy to say that it is not the right time now. The NCIF, myself and others will be entering the lists again just as soon as the 2005 round is over and the impact of those new casinos is known because I think the good sense of this proposal is self-evident. In the mean time, I beg leave to withdraw the amendment.

Amendment 195 withdrawn.

Amendment 195ZA

Moved by

[Lord Marlesford]

195ZA: After Clause 30, insert the following new Clause—
“Litter deposited from motor vehicles
(1) Local authorities may make byelaws about litter deposited from motor vehicles.
(2) Such byelaws may include provisions about—
(a) the application of section 87 of the Environmental Protection Act 1990 (offence of leaving litter) to litter deposited from motor vehicles;(b) the procedures for identifying the person in charge of a motor vehicle; and(c) the information which the registered keeper of a vehicle may be required to provide the local authority.”

[Lord Marlesford]

My Lords, I seek to include a provision to support local authorities in reducing the level of litter from vehicles. The Minister will know that an amendment was tabled in the other place, new Clause 23, on Report. I also tabled an amendment to raise the issue in Committee, but I withdrew it on the understanding that it could be revisited on Report.

A minor change to the law in this area is supported by the Campaign to Protect Rural England and its president, Bill Bryson, the Keep Britain Tidy group and the Local Government Group. More than 100 councils have requested that change so that they can take action against those who litter from vehicles. I should perhaps declare an interest, having previously been for five years the chairman of CPRE and currently being the president of the Suffolk Preservation Society.

I am sorry—indeed, ashamed—to say that Britain is a very dirty nation. It is one of the dirtiest nations on a world scale but would be pretty close to the top of dirty nations on a European scale, which is very shaming. Litter is something on which we can take action. Many years ago, when I was young in the 1960s, I sat for a while at the feet of Ernest Marples. Ernest Marples was one of the most remarkable Ministers I was ever able to observe. He had a maxim in politics: “It is not what you say that matters; it is what you do”. I want to say something about what we can do about litter on roads.

I have followed the issue for a while. There are two basic reasons why there is so much litter on roads. The first, of course, is that it is thrown on to the roads; but secondly, a real problem, is that contractors or subcontractors whom the local authorities designate to clean up roads fail to do their job. I have frequently followed that up, because when I go along a really dirty road, I am inclined to put down a Question for Written Answer to ask the Government when they intend to have it cleared up. Almost always, I get the Answer that it will be cleared up shortly; and almost always it is, but I do not think that that is necessarily the best way to go about it.

We are in no doubt that littering from cars is a serious problem. It is estimated that seven out of 10 pieces of litter which blight in the countryside are dropped from cars. In 2009, the AA found in an online poll of more than 8,000 drivers that 75 per cent of them thought that littering was a serious problem and that 94 per cent of them thought that it damaged their community.

It is clear that Ministers in Defra share our concerns. In December, my noble friend Lord Henley—who has now, of course, moved to greater and even more important things—reported at the first National Litter Convention that the Secretary of State, my right honourable friend Caroline Spelman, had asked him to look at the roadside litter issue. At the launch of the Waste Review in June, I understand that my right honourable friend referred to littering from cars as a perennial bugbear and suggested that there might be a need for a roadside litter summit. Given that the issue is clearly being taken seriously by the Government, I suggest that the Bill is the ideal place to do something, rather than just to talk.

Existing law already allows for people who throw litter from cars to be fined. The problem is that, in practice, councils have found it very difficult to use the power, as it is often impossible to prove who within the car was responsible for throwing the litter. The change in the law that I advocate would correct that problem very simply and allow councils to issue fines to the registered owner of the vehicle, who would be responsible for paying the fine concerned unless another person was nominated by the driver to pay it. That is a standard feature which currently applies to speeding fines, seatbelt offences and fly-tipping. The change is not about more regulation, it is about better and more effective regulation. It is something that we know that local councils are asking for.

More than 1,000 CPRE supporters have written to their MPs to request that the amendment be made. I gather that the Labour Party made a pre-election pledge to make this legislative change, so there is clearly widespread support for making existing powers to tackle roadside littering more effective.

The amendment tabled in another place proposed that the Bill should be amended in the way that I outlined. Amendment 195ZA is very similar, but it would give local councils the power to make by-laws to address the problem. I am not saying that Amendment 195ZA is entirely practical as it stands, but I look forward to the Minister's response because, in the other place, the Minister did not provide the honourable Member for Gateshead, Ian Mearns, with a substantive reply. I hope that the Minister will commit to introducing a government amendment to tackle this problem at Third Reading. We are all on the same side in this, but it is a matter of actually doing something. I beg to move.

17:45

[Lord Reay]

My Lords, I have put my name to my noble friend's amendment. Litter thrown from motor cars is a scourge of the countryside. It is a regular practice for people to discard litter from moving vehicles—in particular, drink containers and food wrappings. I am sure that to try to reduce the incidence of that habit is a goal worth pursuing. It is surely one test of how well a country is governed how tidy it is. I remember, when I visited Libya in the last years of Gaddafi's regime, how staggered and disgusted I was to see the quantity of litter to be found on the road between the airport and the centre of Tripoli. It was knee-deep in plastic. Of course, that was under a dictatorship, where regulating such things should be easier.

I also understand that the present situation here, where responsibility must be pinned on the person who has thrown the litter, is unsatisfactory. It is difficult enough to trace a car from which litter has been thrown. To then require the prosecuting authority to identify the culprits in the car is surely asking too much. It seems to me quite reasonable to hold the registered keeper of the vehicle responsible. As my noble friend explained, that is the idea behind the amendment. Whether such a change in the law would be successful in reducing the amount of litter thrown, we would have to see. I can certainly imagine that it would have a deterrent effect, with vehicle keepers not wanting to be exposed to legal penalties as a result of the actions of other people, whether members of their family or not, and therefore to some extent themselves acting as policemen.

Unfortunately, the amendment, for a reason which I do not entirely understand, does not propose creating a new national offence. As I understand it, the Bill was thought to be an unsuitable vehicle, although the amendment in another place proposed exactly that. This amendment would simply enable local authorities to adopt by-laws along the lines my noble friend described. As he said, there are grounds for believing that many local authorities might be interested in doing that. On that basis, I recommend the amendment to the House. I very much hope that the Minister will indicate that the Government now intend to do something about this problem.

[Lord Jenkin of Roding]

My Lords, I have huge sympathy with my noble friend’s amendment. Before he left the Chamber, my noble friend Lord Newton, who is taking part in the Welfare Reform Bill Committee, said that he was sorry not to be able to add his voice because he feels very strongly about this.

For nearly 30 years I lived in rural Essex within reach of my former constituency, and one of the disadvantages of the road we lived in was that it was perennially the subject of littering. There was a corner at the bottom of the hill with a bit of spare ground on the left-hand side and my children very quickly christened it “Mattress Corner”. It had become a place where people could dump their unwanted mattresses, which then had to be cleared up by the local authority. It was not only that. We lived a mile and a half outside the village where there was a fish and chip shop. We discovered that we were almost exactly the distance away that it took people to eat a bag of chips. I found myself as the riparian householder having to go out at fairly regular intervals with a plastic sack and one of those nice machines with which you can pick up things and pop them in the sack, simply to clear up the litter on both sides of the road that had been deposited by passing vehicles. Even if you saw a car with litter being thrown out of the window as it went past, there was nothing you could do. You did not know who the driver was or who had thrown it out. There was no point in taking down the number because nobody would do anything about it. You had to prove who it was. So I have every sympathy with this.

My noble friend Lord Marlesford said that it is not enough just to talk; you have to do. I have previously declared an interest as the joint president of London Councils and I am happy to say that London Councils is engaged at the moment in tackling this problem in London. It does this on behalf of the London boroughs and I think it is now ahead of the game. The London Local Authorities Act 2007 contains a provision to decriminalise the dumping of litter from cars and to impose a liability for penalty charges on the keeper of the vehicle. That is slightly different from the proposal put forward in my noble friend’s amendment but it is clear that we all have the same objectives in mind. A London Local Authorities Bill is currently awaiting its final stages in the other place. It will make a small drafting correction to that provision which will allow it to come into force.

Other steps are necessary. Discussions have taken place and progress is being made with the Ministry of Justice in relation to the making of regulations which will enable London borough councils to enforce their penalty charges under the civil regime in the courts. Officials are also co-operating on the necessary alterations to the Civil Procedure Rules and London borough councils understand that these changes and regulations will be made very shortly. I hope my noble friend on the Front Bench will be able to confirm that the provisions will be implemented very soon and the system can start to work in London. That is doing and not just talking. I believe London will show that this solution is perfectly feasible and can be addressed by local authorities. Other authorities may wish to copy what London Councils is doing and it will not be the first time that has happened. I support my noble friend’s amendment.

[Lord Beecham]

My Lords, I am very taken with the image of the noble Lord, Lord Jenkin, patrolling the highways and byways of rural Essex as a sort of unpaid litter warden. It is a charming thought and I am sure he did a very good job, but he should not have to. That is the message of the amendment tabled by the noble Lord, Lord Marlesford, and I congratulate him on bringing this matter to the attention of the House and hope that the Government will be able to respond. As the noble Lord said, the matter was debated in another place on an amendment moved by the Member for Gateshead, Ian Mearns, with whom I was discussing this on the train from Newcastle this morning. He received what seemed to be a sympathetic response from the Minister, Andrew Stunell, who said:

“We will certainly look carefully at the matters that have been raised”.—[Official Report, Commons, 18/5/11; col. 441.]

Time has passed so I hope that the consideration has taken place. I think it is preferable to have this in national legislation rather than leave it to by-laws. There seems to be no reason why this amendment should not be proceeded with on this Bill or at least a clear indication given that it will have some priority in other legislation. But this is really too good an opportunity to miss and I hope that the Minister in replying, even if he cannot say today that the amendment will be accepted, will indicate that by Third Reading there will be a clear position and the Government will feel able to adopt it.

Of course, as the noble Lord pointed out, this is essentially a matter of enforcement. There is little point in having regulations without the capacity to enforce them. But, as the Essex police have found out in another context, enforcing measures concerning the driving of vehicles is not necessarily straightforward. This would certainly obviate the kind of difficulties that have arisen in another case and one would hope that the Government would see the logic of that and accept the thrust of the noble Lord’s amendment, and see to it one way or another that the objective which most of your Lordships share is carried into being.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have taken part in this debate and pay tribute to the noble Lord, Lord Marlesford, and his tenacity in pursuing this issue. It is always said that this is a House of experts. I had not appreciated the expertise that we had between us about the distance from the fish and chip shop to the home. I am also an expert on this. The home where I was brought up and lived until I was 23 was the exact same distance from the fish and chip shop. It was our garden that caught the recycled newspapers which in those days were used for wrapping up fish and chips, and we had to keep shifting them, so I understand the concern that people have about litter.

This amendment would give local authorities an explicit power to make by-laws about littering from cars. Throwing litter from vehicles on to public land is a littering offence under Section 87 of the Environmental Protection Act 1990. Indeed, some local authorities successfully tackle litter louts, issuing them with fixed penalty notices. I fully acknowledge that taking enforcement action against those who litter from vehicles can often represent a practical problem. However, extending the scope of the littering offence, as was also suggested by the Local Government Group in its amendment rejected in Committee in the Commons, raises issues of fairness and proportionality. A registered keeper may be open to prosecution even though they did not commit the offence and were not present to prevent it. It may not always be a ready solution for the registered keeper to avoid prosecution by identifying who was the actual offender.

However, as has been mentioned by the noble Lord, Lord Jenkin of Roding, powers will shortly become available to London boroughs following enactment of the latest London Local Authorities Bill, currently before Parliament, which will allow them to issue a civil penalty to registered keepers where enforcement officers witness littering from a vehicle. It makes sense to learn the lessons from the application of that approach in London before moving to wider legislation—and legislation is not the only approach. Changing littering behaviour is key. That is why the Government are supporting Keep Britain Tidy in developing the Love Where You Live campaign. That work with businesses, local authorities and civil society partners will make an important contribution to changing behaviour on littering in all its forms. The Defra Secretary of State is calling together later this year representatives of vehicle hirers, motoring associations, manufacturers, service stations, et cetera, with a view to agreeing a voluntary commitment to tackle littering from vehicles.

It is one of the guiding principles of making a by-law that no by-law should reproduce national legislation, which is what this amendment would achieve. That being the case, and although I certainly support the intention behind the amendment, which is that the anti-social practice of littering should be a criminal offence, I cannot support it and trust that the noble Lord will feel able to withdraw it.

18:00

[Lord Marlesford]

My Lords, I am afraid that that was a real example of talk rather than action. Frankly, it was a very disappointing answer. My noble friend said that we should wait and see how the new penalty worked in London. He spoke of changing behaviour and said that the offence might be disproportionate or unfair. It is a thoroughly unsatisfactory answer. I did not get the feeling that my noble friend was indicating that any action on the Bill would be taken at Third Reading. I will of course withdraw the amendment today, but we may well have to press it at Third Reading. The Minister’s answer really was disappointing. If this Government cannot steel themselves to do something about litter, what can they achieve?

Amendment 195ZA withdrawn.

Clause 31 : Power to require local or public authorities to make payments in respect of certain EU financial sanctions

Amendment 195ZAA

Moved by

[Earl Attlee]

195ZAA: Clause 31, page 29, line 22, leave out subsections (1) to (5) and insert—
“(1) A Minister of the Crown may, in accordance with the provisions of this Part, require public authorities to make payments of amounts determined by a Minister of the Crown in respect of an EU financial sanction to which this Part applies.
(2) A requirement to make a payment under this Part—
(a) may only be imposed on a public authority if— (i) the authority has been designated under section (Designation of public authorities); and(ii) the EU financial sanction concerned is one to which the designation applies; and(b) must be imposed by a notice given to the authority under section 33 (referred to in this Part as a final notice).”

[Earl Attlee]

My Lords, I shall speak to a necessarily long list of amendments, starting with Amendment 195ZAA. The amendments deal with EU fines. I thank noble Lords for the constructive suggestions made during and since Committee. As a direct result, I am able to move some substantial amendments and therefore intend to take a little time explaining them.

To start, it would be helpful to reaffirm the basic principles here: this is about encouraging authorities not to incur fines for the UK in the first place. In the unprecedented circumstance that the UK is fined in relation to an infraction, it is about achieving compliance quickly, using a process which is fair, proportionate, reasonable and holds no surprises. We do not want to pay escalating fines to Europe. We have never incurred fines regarding an infraction and do not see these provisions as a prelude to being more relaxed about infraction proceedings or fines.

All this is reflected in the policy statement of the Local Government Group, which has been placed in the House Library and updates the one previously put forward by the Greater London Authority. I strongly welcome the statement, which is very helpful. I thank both the Local Government Group and the Greater London Authority for working with us so closely on this, and for their help and support. This paper will form the basis of a government policy statement on which we will consult more fully in due course.

The noble Lords, Lord Tope and Lord McKenzie of Luton, each provided convincing proposals on designation in Committee. I have combined these and taken them further so that the Minister would need to designate each authority by order, using the affirmative procedure and specifying the infraction case and related activities of the authority, before the Localism Bill’s provisions could be used. The activities described must take place after the order comes into force and will relate to the authority’s functions and obligations.

This means that authorities can be designated only for something which is their responsibility. Only actions or failures to act following designation would be taken into account when deciding whether to pass on a fine, and only in relation to the specific infraction case. The designation order would cease to have effect when the infraction case was closed. This responds to concerns on retrospectivity raised previously and highlighted in Committee by my noble friend Lord Newton of Braintree. It puts in place a mechanism which will give authorities an early opportunity to put things right, to solve the problem, before any fine. It also means that this House and the other place will have the ability to test the rationale for the proposed designation in debate. If this does not provide sufficient incentive, and in the unprecedented circumstance that the UK is fined for failing to comply with EU law, we will establish an independent advisory panel before seeking to recover any fines.

I am grateful to my noble friend Lady Gardner of Parkes and the noble Lord, Lord Best, for suggesting how an independent advisory panel could provide sufficient checks and balances to ensure that the Minister could not act, at the same time, as prosecutor, judge, jury and co-defendant on these matters. As I made clear in Committee, we remain committed to the principles of transparency, fairness, reasonableness and proportionality. This amendment will enhance all these qualities.

Such a panel would be formed at the point of need, with relevant legal, topical and sectoral expertise for the specific case. The Minister would consult the panel on the procedure and timetable. The panel would receive representations directly from the Minister and from the authorities involved. It would carry out fact-finding and make published recommendations to the Minister, including on the fair apportionment of culpability.

I remain strongly of the opinion that decision-making should remain with the Minister as an elected member of the Government with responsibility to make such decisions on resources. Any Minister acting against recommendations would need strong reasons for doing so should there be a subsequent judicial review.

The amendments on the process reflect the new role of an independent panel and will enable the authority better to plan its finances by covering all possible payments up front: lump-sum, accrued and ongoing periodic fines. This transparency could be a big help, allowing the authority to weigh the costs of fines against the costs of speedy compliance.

Any ongoing liability to pay towards a fine from the EU would end at the point where the authority demonstrated that it had taken all reasonable steps to comply. There is also provision for liability to be reduced—but not increased—if there is a change of circumstances.

We are extending the provisions to cover reserved matters in devolved areas. I am grateful to the noble Lords, Lord Wigley and Lord Empey, who spoke on this, with others, in Committee. I can confirm to the House that the extension of the provisions to cover reserved matters, without prejudicing the performance of any devolved functions, has the full agreement of all the devolved Administrations. On the request of the Welsh Government, we are also providing a mirror power for Welsh Ministers to pass on EU fines to responsible public authorities exercising devolved functions in Wales. This replicates the UK provisions in their entirety, including designation by order.

The rest of my amendments make changes to ensure that the clauses as a whole work together.

Finally, I should like to respond to the amendment proposed by the noble Lord, Lord Berkeley—in advance of him moving it—which would ensure that the Government could not designate any rail or inland waterway provider. I agree that we should not penalise companies for their private services and functions, but where a company is performing a public function, and only for that public function, it needs to be encouraged to comply with EU law in order to avoid significant fines being picked up by the British taxpayer. Where a private company has responsibility under statute to carry out public functions, the default position would be to use any existing regulatory framework to resolve the issue. A Minister would seek to designate a private company only if it was carrying out a public function, if it had caused or contributed to an active infraction case, and if any regulatory body had not been able effectively to incentivise compliance. This would of course be tested by this House and the other place should a Minister seek to designate in such circumstances.

I hope that this demonstrates that I have taken on board the points raised in Committee, and that these provisions are stronger and better as a result. With these amendments there is a very clear emphasis on incentivising avoidance of fines. We are radically devolving power, but that needs to go hand in hand with responsibility. Therefore, I strongly believe that these provisions will help to protect UK taxpayers. I beg to move the government amendment, and hope that the noble Lord, Lord Berkeley, will be willing to withdraw his amendments at the appropriate point after he has spoken to them.

[Lord Tope]

My Lords, as I think I was the first to complain about the original provisions of the Bill when we considered it in Committee, it is only right that I should now be the first to rise to congratulate the Minister on what he has achieved since we were in Committee. I said at that time, with great regret, that the first that local government knew of the Government’s intentions on EU fines was when they read it in the Bill, which was most unsatisfactory. That is not the responsibility of the noble Earl, Lord Attlee, at all. His responsibility is the leadership that he has shown since that time in retrieving this situation. None of us would have wished to start from there, but that is where we found ourselves. The noble Earl has worked tirelessly since that time to achieve a compromise that is fully and wholly accepted by the Local Government Group, the Greater London Authority and, as far as I am aware, all others involved in this. It is still their position that it would be better if this were not in the Bill at all, but that is not too surprising—most people would rather not have provisions to fine them in legislation. Given that it is the Government’s intention, for the reasons given, that this will be in the Bill when it is enacted, then—thanks to the noble Earl and, as I think he would be the first to acknowledge, thanks to his officials—we have achieved a satisfactory outcome.

The only point that I would like to add is to welcome—as I also said in Committee—the statement of policy. It is a very good intention that the Government will discuss with local government those areas of concern in upcoming proposed EU legislation that has a significant effect upon local government. That is a very welcome good intention but I want to be sure that it happens. I have no doubt whatever that, as far as the noble Earl’s department is concerned, that has always been the case. I have been for many years a member of the Local Government Association’s European and international board and its predecessor’s bodies, right back to the days of the Local Government International Bureau. For some time in the early days of the new Labour Government we had regular meetings not only with CLG but also with the FCO and the Europe Minister to discuss issues of concern. They fell into abeyance some years ago and do not happen any longer. My plea to the noble Earl, and through him to the Government, is to ensure that this very welcome statement of policy does not just remain a statement of good intent but is actually put into practice. I am sure that this sort of meaningful dialogue between representatives of local government and representatives of central Government—not just CLG but also the FCO and other departments dealing with these issues, as appropriate—can only be to mutual benefit and will, we all hope, ensure that the provisions that we will shortly pass will never need to be used.

18:15

[Lord Jenkin of Roding]

My Lords, I raised this issue at Second Reading, as did a number of other noble Lords. I would like to join my noble friend Lord Tope in expressing gratitude to my noble friend Lord Attlee for the immense amount of work that he and his officials have done to produce this substantial body of amendments, which to my mind now make this provision acceptable. I particularly welcome his efforts to produce what probably would be called a “Keeling schedule”, showing what these clauses will look like in toto if the amendments are passed. It is rather difficult otherwise to fit them into the Bill. However, that was an immensely helpful document which I hope my noble friend’s other colleagues on the Front Bench might be persuaded to imitate from time to time. For those of us who have to grapple with these things ourselves, it can be much more helpful to know what the whole thing is going to look like, rather than just looking at a whole series of amendments. This is a very helpful precedent which I hope will be followed in the future.

I have only one question to my noble friend. It is a point that I have made on previous occasions, and it concerns retrospective operation. My noble friend has assured me that nothing in these amendments will make the powers retrospective so that a penalty may be imposed on a local authority for something that has already happened. I would be most grateful if he could give us an assurance on this when he winds up the debate.

I understand that this cannot apply to fines that have already been imposed on the Government, but you could have a directive which imposed obligations on a local authority where that local authority was previously in breach and subsequently a fine was imposed on central Government. I would welcome an assurance that under no circumstances could that fine refer to anything that has happened before the date of the process introduced by these amendments. Nothing could be done before these amendments have taken effect—they must not be retrospective or retroactive. I take encouragement from my noble friend saying that one of his principles is that there will be no surprises. That, to my mind, is immensely valuable. If he could say that that rules out any retroactive effect of these amendments, that would be very helpful indeed.

I thank my noble friend for his enormous efforts. He explained to me that he had to get the assent of every other government department in Whitehall. He is a magician to have achieved that. One understands the difficulties that he has faced and I thank him very much.

[Lord Berkeley]

My Lords, I join the noble Lords, Lord Tope and Lord Jenkin, in congratulating the Minister. I raised one or two issues in relation to this matter in Committee and I think that the noble Earl has done a fantastic job in a short space of time to come up with a process that few can fault, if one is going to have fines at all, and they do arise. I warmly congratulate him and join others in hoping that this happens more often with other legislation that comes before your Lordships’ House.

Before I speak to my own amendments, I would like to follow up on a point that the noble Lord, Lord Jenkin, made about the retrospective nature. There will be a time when these clauses come into effect, but there is also a time when the European process moves forward from infraction proceedings and reasoned opinions to the court summons and finally the court decision. That can take several years. The UK Government have a good record in complying with EU regulations. I am involved in railway issues, and in the first railway package there are 13 member states with infraction proceedings against them. We are not one of them, except for a new one relating to the Channel Tunnel. On the whole, we have quite a good record, but quite often the cause of the eventual fine could be something that was created several years beforehand. The local authority may not have been able to do something, or something may have gone wrong and it is grinding on with the Government refusing to give way, and three or four years later it gets to the European Court. I hope that the Minister will look at the retrospective nature of this not only from the UK side but also from the European side as to where the so-called potential offence has been committed and when.

My amendment was of course a probing one. I am very grateful to the Minister for his answer, which he gave before I had the chance to speak to it. That enables me to ask another question to clarify things. The Minister said that the provision would apply to a private company carrying out or performing “public functions”. I assume that “public functions” in this respect means operating rail or inland waterway infrastructure, although that could be carried out by a private company. I am not convinced that the Rail Regulator has powers to enforce fines on Network Rail—I do not think that there is a regulator for inland waterways yet—when something contravenes European regulations. I am sure that there will be an answer to this but perhaps when he responds the Minister could agree to look at this matter further so that there is some clarity within Network Rail and eventually the British Waterways charity about the circumstances under which they might be liable for a fine. I conclude by congratulating Minister very strongly on a really good piece of legislation.

[Baroness Gardner of Parkes]

I am delighted by the policy statement but I have one question that I hope the Minister will be able to answer. In relation to panel membership, I notice that the statement of policy specifies:

“The relevant representative body will put forward nominations in respect of its members”,

of persons with sectoral experience, to the Minister. What opportunities will there be for bodies such as the Greater London Authority which are not part of a representative organisation to make nominations to the Minister in respect of panel membership? I would be grateful if he could answer that question, which probably relates to Amendment 195ZAJ but I find it so difficult when I look at all those amendments to know exactly which one it relates to.

[Lord Beecham]

I join other noble Lords in warmly congratulating the noble Earl on the manner in which this matter has now been put back on track. The noble Lord, Lord Tope, said that most of us would not have wished to have started from here, but where we are ending owes very much to the thoroughness, attention to detail and decisiveness of the noble Earl—qualities in which he emulates his distinguished grandfather. It is some 49 years since I had the pleasure of meeting the noble Earl’s grandfather and he made a significant impression on me, young as I was at that time. The noble Earl is doing so again today, not merely on me but on all Members of your Lordships' House.

[Lord Jenkin of Roding]

My noble friend's grandfather lived in my constituency.

[Lord Beecham]

He was none the worse for that. I do not think that his wife, who used to drive him around, would have been guilty of depositing fish and chip papers anywhere near the noble Lord’s house.

The position that we have reached is one that the Local Government Association has worked very hard with the Minister and colleagues from all sides of the House to achieve. In particular, the outcomes around the designation and the opportunity to correct a situation that perhaps led to a fine—the provision of an effective appeals system—have all been significant. I am encouraged that the statement of policy that has been produced by the Local Government Group is one that I understand the Government are minded to adopt. Perhaps when he replies the noble Earl will indicate how far their consideration of the document has gone and whether there are likely to be any issues of significance that might not accord with the proposals that have been made. I understand that effectively an agreed position has been reached around four main areas: working in partnership; that there should be no surprises; that there should be a fair and proportionate process; and that consideration should be given to the ability to pay.

One of the crucial issues first voiced in the debate to the Committee by the LGA was the lack of an opportunity for local government to be involved in the legislation from which proceedings ultimately might flow in terms of infringement of European law. It is welcome that the Government have now indicated that local government will be identified specifically as a key sector for consultation when the Government enter into negotiations on EU legislation that could ultimately lead to fines coming down to local authorities. That is an extremely important extension of the consultative role that should ensure that the legislation is right in the first place, which would be a distinct improvement on the position hitherto.

The Minister has made it clear that there will be no surprises in future. No local authority will be taken by surprise because of the designation process, which is a reasonable one in which Parliament will be involved. Equally, the process will be broadly based in terms of those involved in deciding a number of matters—for example, whether the UK Government themselves have contributed to the infraction. I take it that that will also apply to any infraction that might have been contributed to by the devolved Administrations where their activities impinged on European legislation. I assume that that is taken care of in the arrangements that the Government have come to with the devolved Administrations.

My final point is crucially important. The panel will determine these matters and the Minister will consider the authority's ability to pay a fine and provide for possible alternatives in the event that the ability to pay is not present. It is conceivable that a small district council might find it impossible to pay a significant fine in respect of some infraction of environmental legislation within its competence. It is extremely welcome that the Government have acknowledged that that is a risk and that they will not be seeking to extort from such an authority a contribution to a financial penalty that would seriously impede the activities of that local authority.

Thanks very largely to the Minister, we have reached a satisfactory position on this. It has been a good example of the way in which local government and the Government can work together and in which Ministers can listen to proceedings in your Lordships' House, take back concerns and proposals and work with them. I hope that the noble Earl will feel able, metaphorically at least, to bite one or two of his ministerial colleagues in the hope that this becomes a habit across government and not confined to the noble Earl.

[Earl Attlee]

My Lords, I thank my noble friend Lord Tope and other noble Lords for their kind comments. First, I plead not guilty for all the work: it was my officials what done it.

My noble friend Lord Tope talked about consultation on the EU legislation and the fact that we are committed to consulting with local authorities. I am confident that the LGG will hold our feet to the fire on this issue.

My noble friend Lord Jenkin mentioned Keeling schedules. They are useful in certain circumstances but the decision to use them is decided on a case-by-case basis.

My noble friend also asked me to give an assurance that under no circumstances could fines refer to activities, errors and omissions made before the Bill passes. I am very happy to give an absolute assurance that under no circumstances can the provisions be used retrospectively. Subsection (5)(b) of the clause proposed by Amendment 195ZAH means that only actions or inactions after designation can be taken into account. This is extremely important because it allows all those affected to concentrate on solving the problem rather than listening to the lawyers and doing nothing other than arguing. It is a very important point.

16:44

Similarly on retrospectivity, the noble Lord, Lord Berkeley, talked about something that could have gone wrong several years before. The point about designation covers that point. Previous actions and inactions do not count; only actions after the point of designation count. Therefore, it does not matter if effectively the EU legislation was retrospective in some way because it is only after designation that an authority is in difficulties.

My noble friend Lady Gardner of Parkes asked whether authorities that do not have a representative body can make nominations for the independent panel. I anticipated this question and have given it careful consideration. It is inconceivable that the Minister would not speak with affected parties when setting up an independent panel. We will need the panel to be visibly independent and robust. A Minister would have no desire to face a legal challenge about fixing the composition of the panel in his favour.

The noble Lord, Lord Beecham, asked about the statement of policy of the Local Government Group. Most of the heavy lifting has already been done in order to secure agreement to move forwards. The Local Government Group, the Greater London Authority and devolved Administrations will all be invited to input as we adopt the Local Government Group statement into one that applies more broadly across the country and to a wider range of public authorities. I am hopeful that there will not be significant rewrites and we will reaffirm all its key principles: no surprises; proportionality and reasonableness; and working together.

[Lord Beecham]

And ability to pay?

[Earl Attlee]

And ability to pay—a very important point. The fines can only be set at a level that will not effectively bankrupt the authority. That is one of the principles in the legislation.

Amendment 195ZAA agreed.

Amendments 195ZAB to 195ZAD

Moved by

[Earl Attlee]

195ZAB: Clause 31, page 30, line 5, leave out “an EU financial sanction” and insert “a final”

195ZAC: Clause 31, page 30, line 8, leave out “local or”

195ZAD: Clause 31, page 30, line 9, at end insert—
“(8) In this Part—
(a) “EU financial sanction” means a sanction consisting of a lump sum or penalty payment (or both) imposed by the Court of Justice in Article 260(2) proceedings for an infraction of EU law;(b) “infraction of EU law”, in relation to an EU financial sanction, means the failure to comply with a judgment of the Court of Justice given in proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union; and(c) “Article 260(2) proceedings” means proceedings under Article 260(2) of that Treaty.”

Amendments 195ZAB to 195ZAD agreed.

Amendments 195ZAE to 195ZAG

195ZAE: After Clause 31, insert the following new Clause—
“Duty of the Secretary of State to issue a policy statement
(1) The Secretary of State must publish a statement of policy with respect to—
(a) the designation of public authorities under section (Designation of public authorities); (b) the imposition and variation of requirements to make payments under this Part; and(c) such other matters relating to the operation of the provisions of this Part as the Secretary of State may think appropriate to include in the statement. (2) The Secretary of State may from time to time revise and republish the statement of policy required by this section.
(3) A revised statement of policy may include saving or transitional provisions relating to the continued application for any purpose of any provisions of an earlier published version of the statement.
(4) The Secretary of State must consult such persons as the Secretary of State considers appropriate before publishing, or revising and republishing, the statement of policy required by this section.
(5) In exercising functions under this Part in relation to an EU financial sanction which has been or may be imposed on the United Kingdom—
(a) a Minister of the Crown, and(b) a panel established under section (Establishment of independent panel),must have regard to the statement of policy most recently published under this section.”

195ZAF: After Clause 31, insert the following new Clause—
“The EU financial sanctions to which Part 2 applies
(1) This Part applies to any EU financial sanction imposed on the United Kingdom after the commencement of this Part, subject to subsection (2).
(2) If a Minister of the Crown gives a certificate—
(a) specifying a part of an EU financial sanction, and(b) stating that this Part is not to apply to that part of the sanction, this Part applies to that EU financial sanction as if it did not include that part.(3) A certificate under subsection (2)—
(a) may make specific provision about the application of this Part to any of the following—(i) the lump sum (if any) paid by the United Kingdom;(ii) any periodic payment due from the United Kingdom under the terms of the EU financial sanction before the certificate is given; and(iii) any subsequent periodic payment that may fall due from the United Kingdom under those terms; and(b) must be given in such form and published in such manner as the Minister of the Crown giving it thinks fit.(4) Any provision under subsection (3)(a)(iii) that is made in a certificate under subsection (2) may be varied (including in relation to its effect in relation to any periodic payment that has become due from the United Kingdom since the earlier certificate) by a further certificate under subsection (2).”

195ZAG: After Clause 31, insert the following new Clause—
“Meaning of “public authority” and related terms
(1) This section defines various terms used in this Part.
(2) “Public authority” means—
(a) a local authority to which subsection (3) applies; or (b) any other person or body which has any non-devolved functions.(3) This subsection applies to—
(a) any of the following in England—(i) a county council, district council or London borough council;(ii) the Common Council of the City of London (in its capacity as a local authority);(iii) the Greater London Authority; and(iv) the Council of the Isles of Scilly;(b) a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994;(c) a district council within the meaning of the Local Government Act (Northern Ireland) 1972;(d) a council of a county or county borough in Wales. (4) References to functions are to functions of a public nature.
(5) References to non-devolved functions are to functions which are not devolved functions.
(6) References to devolved functions are to—
(a) Scottish devolved functions, that is to say functions the exercise of which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998);(b) Northern Ireland devolved functions, that is to say functions which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998); or(c) Welsh devolved functions, that is to say functions which are exercisable in relation to Wales and could be conferred by provision falling within the legislative competence of the National Assembly for Wales as defined in section 108 of the Government of Wales Act 2006.(7) References to a public authority with mixed functions are to a public authority which has both non-devolved and devolved functions.
(8) The “appropriate national authority”, in relation to a public authority with mixed functions, means the following national authority or authorities (according to whichever one or more of the following paragraphs apply to that public authority)—
(a) the Scottish Ministers, if the public authority has any Scottish devolved functions;(b) the relevant Northern Ireland department, if the public authority has any Northern Ireland devolved functions; and(c) the Welsh Ministers, if the public authority has any Welsh devolved functions.”

Amendments 195ZAE to 195ZAG agreed.

Amendment 195ZAH

Moved by

[Earl Attlee]

195ZAH: After Clause 31, insert the following new Clause—
“Designation of public authorities
(1) A Minister of the Crown may by order designate a public authority for the purposes of this Part.
(2) The order must—
(a) specify the public authority by name;(b) identify any EU financial sanction to which the designation applies; and (c) describe the activities of the authority which are covered by the designation.(3) The order may identify an EU financial sanction for the purposes of subsection (2)(b) by—
(a) specifying an EU financial sanction that has been imposed on the United Kingdom;(b) specifying any Article 260(2) proceedings that have been commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom in those proceedings;(c) specifying a judgment of the Court of Justice finding that the United Kingdom has failed to comply with an EU obligation and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with that judgment; or(d) specifying or describing any proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union that have been or may be commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with a judgment of the Court of Justice given in those proceedings. (4) The order may, for the purposes of subsection (3)(d), describe any proceedings under Article 258 or 259 that may be commenced by reference to the subject-matter of—
(a) a Reasoned Opinion addressed to the United Kingdom under Article 258 or 259 (as the case may be); or(b) any other document sent to the Government of the United Kingdom by the Commission of the European Union or by another member State which gives notice to the Government of the possibility of proceedings being commenced against the United Kingdom.(5) The activities described for the purposes of subsection (2)(c) must be activities of the public authority which—
(a) are carried out in the exercise of non-devolved functions of the public authority; and(b) take place after the provisions of the order describing the activities come into force.(6) The following may not be designated under this section—
(a) the House of Commons, the House of Lords, the Scottish Parliament, the Northern Ireland Assembly or the National Assembly for Wales; (b) a Minister of the Crown or a United Kingdom government department;(c) a member of the Scottish Executive;(d) the First Minister or the deputy First Minister for Northern Ireland, a Northern Ireland Minister or a Northern Ireland Department;(e) a member of the Welsh Assembly Government;(f) a court or tribunal.(7) Before making an order designating a public authority a Minister of the Crown must consult—
(a) the public authority concerned; and(b) if it is a public authority with mixed functions, the appropriate national authority.(8) In sections 32 to 33 references to “acts”, in relation to a public authority which has been designated under this section, are to acts within a description of activities covered by the designation.”

Amendment 195ZAHA (to Amendment 195ZAH) not moved.

Amendment 195ZAH agreed.

Amendment 195ZAJ

Moved by

[Earl Attlee]

195ZAJ: After Clause 31, insert the following new Clause—
“Establishment of independent panel
(1) This section applies where—
(a) an EU financial sanction to which this Part applies has been imposed by the Court of Justice; and(b) at least one public authority has been designated under section (Designation of public authorities) and the EU financial sanction is one to which the designation applies.(2) A Minister of the Crown must establish a panel for the purpose of carrying out any functions it may be given by or under any provision of this Part in relation to that EU financial sanction.
(3) The panel must be established before any warning notice is given to a public authority in relation to that EU financial sanction.
(4) The panel is to consist of one or more individuals appointed by a Minister of the Crown who appear to a Minister of the Crown to have suitable qualifications, expertise or experience to carry out their duties.
(5) A Minister of the Crown may invite nominations for appointment to the panel from such organisations as a Minister of the Crown considers appropriate.
(6) The validity of any acts of the panel are not affected by a vacancy among its members.
(7) A Minister of the Crown may pay to a member of the panel such fees, allowances or expenses as a Minister of the Crown may determine.
(8) A Minister of the Crown may provide such staff, accommodation or other facilities as a Minister of the Crown may consider necessary to enable the panel to carry out its functions.”

Amendment 195ZAJ agreed.

Amendment 195ZAK had been withdrawn from the Marshalled List.

Clause 32 : Warning notices

Amendments 195ZAL to 195ZAZC

Moved by

[Earl Attlee]

195ZAL: Clause 32, page 30, line 11, leave out subsection (1) and insert—
“(1) Before a public authority which has been designated under section (Designation of public authorities) can be required to make any payment under this Part in respect of an EU financial sanction to which the designation applies—
(a) a Minister of the Crown must give a warning notice under this section to the public authority;(b) the procedures set out in the warning notice (with any changes made under subsection (7)) must be followed; and(c) a Minister of the Crown must determine the matters mentioned in section (Matters to be determined before a final notice is given)(4).”

195ZAM: Clause 32, page 30, line 16, leave out “the Minister” and insert “a Minister of the Crown”

195ZAN: Clause 32, page 30, line 17, leave out from “Justice” to “financial” in line 18 and insert “imposing the EU”

195ZAP: Clause 32, page 30, line 24, leave out “a payment under this Part” and insert “payments under this Part (which may be or include ongoing payments)”

195ZAQ: Clause 32, page 30, line 25, leave out subsections (3) to (5) and insert—
“(3) The warning notice must also—
(a) identify the EU financial sanction to which the notice relates;(b) specify the total amount of that sanction (see subsection (6C));(c) if that sanction is or includes a penalty payment, specify the amount and frequency of any periodic payments that fall due from the United Kingdom under the terms of the penalty payment (see subsection (6D));(d) set out the reasons for making the statement required by subsection (2);(e) set out the proposed procedures and arrangements for determining the matters mentioned in section (Matters to be determined before a final notice is given)(4) (which may include arrangements for securing that matters arising under the notice are dealt together with matters arising under other warning notices given to other public authorities in respect of the same EU financial sanction);(f) propose a timetable for those procedures and for any steps to be taken by the panel or a Minister of the Crown before any requirement to make a payment can be imposed on the authority;(g) invite the authority to make representations to a Minister of the Crown about the matters mentioned in paragraphs (e) and (f); (h) invite the authority to make representations to the panel (with any supporting evidence) about anything the authority considers relevant to the matters mentioned in section (Matters to be determined before a final notice is given)(4), including its response to any representations made (and any supporting evidence submitted) to the panel —(i) by a Minister of the Crown or a government department (whether in relation to matters arising from the notice or matters arising from any other warning notice given to another public authority in relation to the same EU financial sanction);(ii) by another public authority which has been given a warning notice in relation to the same EU financial sanction; or(iii) by the appropriate national authority in response to an invitation under paragraph (j) included in the notice; and(j) if the authority has mixed functions, invite the appropriate national authority to make representations about anything contained in or arising from the notice.”

195ZAR: Clause 32, page 31, line 14, at end insert “of the Crown giving it”

195ZAS: Clause 32, page 31, line 15, at end insert—
“(6A) Before a Minister of the Crown gives a warning notice to the authority, the Minister of the Crown must consult the panel as to the contents of the notice (including in particular the proposed procedures and timetable mentioned in subsection (3)(e) and (f)).
(6B) If the authority has mixed functions, a Minister of the Crown must—
(a) consult the appropriate national authority before deciding to give a warning notice to the authority; and(b) give the appropriate national authority a copy of any warning notice the Minister of the Crown decides to give.(6C) In subsection (3)(b) the “total amount of the sanction” means the sum of the following—
(a) the amount of the lump sum (if any) due from the United Kingdom under the terms of the EU financial sanction (disregarding any amount that falls to be excluded from the lump sum by virtue of section (The EU financial sanctions to which Part 2 applies)(2)); and(b) the total amount of the periodic payments (if any) which have fallen due from the United Kingdom on or before a day specified in the notice (disregarding any amount that falls to be excluded from any of those payments by virtue of section (The EU financial sanctions to which Part 2 applies)(2);and the day specified for the purposes of paragraph (b) must be no later than the day on which the warning notice is given to the authority.(6D) The periodic payments to be taken into account for the purposes of subsection (3)(c) do not include—
(a) any periodic payment taken into account in calculating the total amount of the sanction for the purposes of subsection (3)(b); or(b) any periodic payment, or any part of a periodic payment, that falls to be excluded from the EU financial sanction by virtue of section (The EU financial sanctions to which Part 2 applies)(2).”

195ZAT: Clause 32, page 31, line 16, leave out “The Minister” and insert “A Minister of the Crown”

195ZAU: Clause 32, page 31, line 17, leave out “(3)(d)(ii)” and insert “(3)(g)”

195ZAV: Clause 32, page 31, line 17, leave out “subsection (3)(b)” and insert “section (Matters to be determined before a final notice is given)(4)”

195ZAX: Clause 32, page 31, line 18, after “authority” insert “—
(a) ”

195ZAY: Clause 32, page 31, line 19, leave out “criteria,”

195ZAZ: Clause 32, page 31, line 20, leave out “(3)(b), (c) or (e).” and insert “(3)(e) and (f); and
(b) a copy of the warning notice incorporating those changes.(7A) A Minister of the Crown must consult the panel before making any changes under subsection (7).”

195ZAZA: Clause 32, Page 31, line 21, leave out “local or”

195ZAZB: Clause 32, Page 31, line 22, leave out “subsection (3)(b)” and insert “section (Matters to be determined before a final notice is given)(4)”

195ZAZC: Clause 32, Page 31, line 24, at end insert—
“(9) In this section and section (Matters to be determined before a final notice is given) “the panel” means the panel established under section (Establishment of independent panel) to deal with the EU financial sanction to which the notice relates.”

Amendments 195ZAL to 195ZAZC agreed.

Amendment 195ZAZD

Moved by

[Earl Attlee]

195ZAZD: After Clause 32, Insert the following new Clause—
“Matters to be determined before a final notice is given
(1) This section applies where—
(a) a warning notice has been given to a public authority; and(b) the panel has considered all representations made to it under the procedures set out in that notice. (2) The panel must make, to a Minister of the Crown, a report on the matters to which the representations made to the panel relate.
(3) The report—
(a) may be published by the panel in such manner as the panel thinks fit and, if not published by the panel, must be published by the Minister of the Crown to whom it is made in such manner as the Minister of the Crown thinks fit;(b) must include recommendations as to the determination of the matters mentioned in subsection (4)(a) and (b);(c) if the authority has made representations to the panel about anything the authority considers relevant to any of the matters mentioned in paragraphs (c) to (e) of subsection (4), must include recommendations as to the determination of the matters mentioned in those paragraphs; and(d) must include the panel’s reasons for any recommendations included in the report.(4) After having had regard to the report, a Minister of the Crown must determine the following matters—
(a) whether any acts of the authority did cause or contribute to the infraction of EU law concerned and, in relation to any periodic payments mentioned in subsection (3)(c) of section 32, whether those acts have continued and will continue to do so;(b) the proportion of—(i) the total amount of the sanction (as specified under subsection (3)(b) of that section), and(ii) any periodic payments (as specified under subsection (3)(c) of that section),that, in the light of the acts of the authority which are determined to have had or to be having an effect mentioned in paragraph (a), is to be regarded as reflecting the authority’s share of the responsibility for the infraction of EU law concerned or, in relation to any such periodic payments, the continuing infraction of EU law concerned; (c) whether the authority should be required to make any payment or payments in respect of the EU financial sanction;(d) if so, what payment or payments the authority should make towards—(i) the total amount of the sanction specified under subsection (3)(b) of that section; and(ii) any periodic payments specified under subsection (3)(c) of that section; and(e) when any such payment or payments should be made.(5) In determining the matters mentioned in subsection (4)(c), (d) and (e) the Minister of the Crown must have regard to—
(a) the effect on the authority’s finances of any amount it may be required to pay and in particular, if the authority has mixed functions, the need to avoid any prejudicial effect on the performance by the authority of its devolved functions;(b) the determination under subsection (4)(b); and(c) any other relevant considerations.(6) Before making a final decision on the matters mentioned in subsection (4)(c), (d) and (e), the Minister of the Crown must invite—
(a) representations from the authority about the potential effect on its finances and, if it has mixed functions, the effect on its devolved functions of any amount it may be required to pay; and(b) if the authority has mixed functions, representations from the appropriate national authority.”

Amendment 195ZAZD agreed.

Clause 33 : EU financial sanction notices

Amendments 195ZAZE and 195ZAZF

Moved by

[Earl Attlee]

195ZAZE: Clause 33, Page 31, line 26, leave out from “give” to end of line 30 and insert “a final notice to a public authority only if a Minister of the Crown has decided in accordance with section (Matters to be determined before a final notice is given) to impose a requirement under this Part on the authority.”

195ZAZF: Clause 33, Page 31, line 31, leave out subsections (2) to (6) and insert—
“(2) The final notice must—
(a) identify the EU financial sanction to which the notice relates;(b) specify the total amount of the sanction (see subsection (3)) and, where relevant, the amount and frequency of any future periodic payments (see subsection (4));(c) describe the acts of the authority that a Minister of the Crown has under section (Matters to be determined before a final notice is given)(4) determined—(i) caused or contributed to the infraction of EU law concerned, in relation to the total amount of the sanction; or(ii) are causing or contributing to the continuing infraction of EU law concerned, in relation to any other periodic payments due from the United Kingdom;and set out the reasons for that determination;(d) summarise the other determinations made by a Minister of the Crown under section (Matters to be determined before a final notice is given)(4) and set out the reasons for making them;(e) specify the amount required to be paid by the authority towards the total amount of the sanction and when it is to be paid (and if it is to be paid in instalments, the instalments and the date on which they become payable); (f) specify the amount to be paid towards any periodic payment that falls due from the United Kingdom and the time when that amount is to be paid (or, if the notice so provides the time when two or more such amounts are to be paid);(g) specify how and to whom payments are to be made.(3) In subsection (2)(b), (c) and (e) the “total amount of the sanction” means the sum of the following—
(a) the amount of the lump sum (if any) due from the United Kingdom under the terms of the EU financial sanction (disregarding any amount that falls to be excluded from the lump sum by virtue of section (The EU financial sanctions to which Part 2 applies)(2)); and(b) the total amount of the periodic payments (if any) which have fallen due from the United Kingdom on or before a day specified in the final notice (disregarding any amount that falls to be excluded from any of those payments by virtue of section (The EU financial sanctions to which Part 2 applies)(2));and the day specified for the purposes of paragraph (b) must be no later than the day on which the final notice is given to the authority.(4) In subsection (2)(b) “future periodic payments” means periodic payments other than—
(a) any periodic payment taken into account in calculating the total amount of the sanction; or(b) any periodic payment, or any part of a periodic payment, that falls to be excluded from the EU financial sanction by virtue of section (The EU financial sanctions to which Part 2 applies)(2). (5) The requirement to make payments towards periodic payments falling due from the United Kingdom after the notice is given continues so long as those periodic payments continue to fall due, unless a Minister of the Crown gives the authority a notice under this subsection terminating the requirement or varying it so as to make it less onerous for the authority.
(6) A notice under subsection (5) may be given, either on the application of the authority or without such an application, where a Minister of the Crown considers it appropriate in the light of a change in the circumstances which applied when the final notice was given or when it was last varied (as the case may be).
(7) A Minister of the Crown may—
(a) consult the panel, or refer any matter relating to the possible termination or variation of the requirement for its advice or recommendations;(b) invite the authority to make representations; and(c) if the authority has mixed functions, invite the appropriate national authority to make representations,before deciding whether to terminate or vary the requirement mentioned in subsection (5).(8) If the authority makes an application under subsection (6) a Minister of the Crown may by notice to the authority suspend the requirement until further notice (but this does not affect the liability to make any payment once the suspension is ended, unless the final notice is varied to have that effect).”

Amendments 195ZAZE and 195ZAZF agreed.

Clause 34 : Further warning notices

Amendment 195ZAZG

Moved by

[Earl Attlee]

195ZAZG: Clause 34, Leave out Clause 34

Amendment 195ZAZG agreed.

Clause 35 : Further EU financial sanction notices

Amendment 195ZAZH

Moved by

[Earl Attlee]

195ZAZH: Clause 35, Leave out Clause 35

Amendment 195ZAZH agreed.

Clause 36 : Meaning of “local or public authority”

Amendment 195ZAZJ

Moved by

[Earl Attlee]

195ZAZJ: Clause 36, Leave out Clause 36

Amendment 195ZAZJ agreed.

Clause 37 : Interpretation of Part: general

Amendments 195ZAZK to 195ZAZM

Moved by

[Earl Attlee]

195ZAZK: Clause 37, Page 34, leave out lines 16 to 23 and insert—
““the appropriate national authority”, in relation to a public authority with mixed functions, has the meaning given by section (Meaning of “public authority” and related terms)(8);
“Article 260(2) proceedings” has the meaning given by section 31(8)(c);
“Court of Justice” means the Court of Justice of the European Union;
“EU financial sanction” has the meaning given by section 31(8)(a);
“final notice” means a notice under section 33;
“functions”, “non-devolved functions” and “devolved functions” are to be construed in accordance with section (Meaning of “public authority” and related terms);
“infraction of EU law”, in relation to an EU financial sanction, has the meaning given by section 31(8)(b);”

195ZAZL: Clause 37, Page 34, line 25, at end insert—
““periodic payment”, in relation to an EU financial sanction that is or includes a penalty payment, means a payment due under the terms of the penalty payment;
“public authority” has the meaning given in section (Meaning of “public authority” and related terms)(2);
“public authority with mixed functions” has the meaning given by section (Meaning of “public authority” and related terms)(7).”

195ZAZLA: Clause 37, Page 34, line 25, at end insert—
““warning notice” means a notice under section 32.”

195ZAZM: Clause 37, Page 34, line 26, leave out subsection (2)

Amendments 195ZAZK to 195ZAZM agreed.

Amendments 195ZAZMZA to 195ZAZMZK

Moved by

[Earl Attlee]

195ZAZMZA: After Clause 37, insert the following new Clause—
“PARTEU fines: WalesPower to require Welsh public authorities to make payments in respect of certain EU financial sanctions
(1) The Welsh Ministers may, in accordance with the provisions of this Part, require Welsh public authorities to make payments of amounts determined by the Welsh Ministers in respect of an EU financial sanction to which this Part applies.
(2) A requirement to make a payment under this Part—
(a) may only be imposed on a Welsh public authority if— (i) the authority has been designated under section (Designation of Welsh public authorities); and(ii) the EU financial sanction concerned is one to which the designation applies; and(b) must be imposed by a notice given to the authority under section (Final notices) (referred to in this Part as a final notice).(3) If a final notice is registered in accordance with rules of court or any practice direction, it is enforceable in the same manner as an order of the High Court.
(4) Any sums paid by a Welsh public authority under this Part are to be paid into the Welsh Consolidated Fund.
(5) In this Part—
(a) “EU financial sanction” means a sanction consisting of a lump sum or penalty payment (or both) imposed by the Court of Justice in Article 260(2) proceedings for an infraction of EU law;(b) “infraction of EU law”, in relation to an EU financial sanction, means the failure to comply with a judgment of the Court of Justice given in proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union; and(c) “Article 260(2) proceedings” means proceedings under Article 260(2) of that Treaty.”

195ZAZMZB: After Clause 37, insert the following new Clause—
“Duty of the Welsh Ministers to issue a policy statement
(1) The Welsh Ministers must publish a statement of policy with respect to—
(a) the designation of Welsh public authorities under section (Designation of Welsh public authorities); (b) the imposition and variation of requirements to make payments under this Part; and(c) such other matters relating to the operation of the provisions of this Part as the Welsh Ministers may think appropriate to include in the statement.(2) The Welsh Ministers may from time to time revise and republish the statement of policy required by this section.
(3) A revised statement of policy may include saving or transitional provisions relating to the continued application for any purpose of any provisions of an earlier published version of the statement.
(4) The Welsh Ministers must consult such persons as the Welsh Ministers consider appropriate before publishing, or revising and republishing, the statement of policy required by this section.
(5) In exercising functions under this Part in relation to an EU financial sanction which has been or may be imposed on the United Kingdom—
(a) the Welsh Ministers, and(b) a panel established under section (Establishment of independent panel (No.2)),must have regard to the statement of policy most recently published under this section.”

195ZAZMZC: After Clause 37, insert the following new Clause—
“The EU financial sanctions to which Part (EU fines: Wales) applies
(1) This Part applies to an EU financial sanction imposed on the United Kingdom if—
(a) the sanction is imposed after the commencement of this Part, and(b) the Welsh Ministers certify that this Part applies to the sanction.(2) If a certificate under subsection (1)—
(a) specifies a part or parts of the EU financial sanction concerned, and(b) states that this Part applies only to that part, or those parts, of the sanction,this Part applies to the sanction as if it included only that part or those parts.(3) A certificate under subsection (1)—
(a) may make specific provision about the application of this Part to any of the following—(i) the lump sum (if any) paid by the United Kingdom;(ii) any periodic payment due from the United Kingdom under the terms of the EU financial sanction before the certificate is given; and(iii) any future periodic payment that may fall due from the United Kingdom under those terms; and(b) must be given in such form and published in such manner as the Welsh Ministers think fit.(4) Any provision under subsection (3)(a)(iii) that is made in a certificate under subsection (1) may be varied (including in relation to its effect in relation to any periodic payment that has become due from the United Kingdom since the earlier certificate) by a further certificate under subsection (1).”

195ZAZMZD: After Clause 37, insert the following new Clause—
“Meaning of “Welsh public authority” and related terms
(1) Subsections (2) to (5) define various terms used in this Part.
(2) “Welsh public authority” means—
(a) a council of a county or county borough in Wales; or(b) any other person or body which has any Welsh devolved functions.(3) References to functions are to functions of a public nature.
(4) References to Welsh devolved functions are to functions which are exercisable in relation to Wales and could be conferred by provision falling within the legislative competence of the National Assembly for Wales as defined in section 108 of the Government of Wales Act 2006.
(5) The “appropriate national authority”, in relation to a Welsh public authority with any functions other than Welsh devolved functions, means the following national authority or authorities (according to whichever one or more of the following paragraphs apply to that Welsh public authority)—
(a) a Minister of the Crown, if the Welsh public authority has any functions which are not devolved functions;(b) the Scottish Ministers, if the Welsh public authority has any Scottish devolved functions; and(c) the relevant Northern Ireland Department, if the Welsh public authority has any Northern Ireland devolved functions.(6) In subsection (5)(a) “devolved functions” means—
(a) Welsh devolved functions;(b) Scottish devolved functions; or(c) Northern Ireland devolved functions.(7) In subsections (5) and (6)—
“Northern Ireland devolved functions” means functions which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998);
“Scottish devolved functions” means functions the exercise of which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998).”

195ZAZMZE: After Clause 37, insert the following new Clause—
“Designation of Welsh public authorities
(1) The Welsh Ministers may by order designate a Welsh public authority for the purposes of this Part.
(2) The order must—
(a) specify the Welsh public authority by name;(b) identify any EU financial sanction to which the designation applies; and(c) describe the activities of the authority which are covered by the designation.(3) The order may identify an EU financial sanction for the purposes of subsection (2)(b) by—
(a) specifying an EU financial sanction that has been imposed on the United Kingdom;(b) specifying any Article 260(2) proceedings that have been commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom in those proceedings;(c) specifying a judgment of the Court of Justice finding that the United Kingdom has failed to comply with an EU obligation and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with that judgment; or(d) specifying or describing any proceedings under Article 258 or 259 of the Treaty on the Functioning of the European Union that have been or may be commenced and providing that the designation is to apply to any EU financial sanction that may be imposed on the United Kingdom for failing to comply with a judgment of the Court of Justice given in those proceedings.(4) The order may, for the purposes of subsection (3)(d), describe any proceedings under Article 258 or 259 that may be commenced by reference to the subject-matter of—
(a) a Reasoned Opinion addressed to the United Kingdom under Article 258 or 259 (as the case may be); or(b) any other document sent to the Government of the United Kingdom by the Commission of the European Union or by another member State which gives notice to the Government of the possibility of proceedings being commenced against the United Kingdom.(5) The activities described for the purposes of subsection (2)(c) must be activities of the Welsh public authority which—
(a) are carried out in the exercise of Welsh devolved functions of the authority; and(b) take place after the provisions of the order describing the activities come into force.(6) The following may not be designated under this section—
(a) the National Assembly for Wales;(b) a Minister of the Crown or a United Kingdom government department;(c) a member of the Welsh Assembly Government;(d) a court or tribunal.(7) Before making an order designating a Welsh public authority the Welsh Ministers must consult—
(a) the authority concerned; and(b) if the authority concerned has any functions other than Welsh devolved functions, the appropriate national authority.(8) In sections (Warning notices) to (Final notices) references to “acts”, in relation to a Welsh public authority which has been designated under this section, are to acts within a description of activities covered by the designation.”

195ZAZMZF: After Clause 37, insert the following new Clause—
“Establishment of independent panel (No. 2)
(1) This section applies where—
(a) an EU financial sanction to which this Part applies has been imposed by the Court of Justice; and(b) at least one Welsh public authority has been designated under section (Designation of Welsh public authorities) and the EU financial sanction is one to which the designation applies. (2) The Welsh Ministers must establish a panel for the purpose of carrying out any functions it may be given by or under any provision of this Part in relation to that EU financial sanction.
(3) The panel must be established before any warning notice is given to a Welsh public authority in relation to that EU financial sanction.
(4) The panel is to consist of one or more individuals appointed by the Welsh Ministers who appear to the Welsh Ministers to have suitable qualifications, expertise or experience to carry out their duties.
(5) The Welsh Ministers may invite nominations for appointment to the panel from such organisations as the Welsh Ministers consider appropriate.
(6) The validity of any acts of the panel are not affected by a vacancy among its members.
(7) The Welsh Ministers may pay to a member of the panel such fees, allowances or expenses as the Welsh Ministers may determine.
(8) The Welsh Ministers may provide such staff, accommodation or other facilities as the Welsh Ministers may consider necessary to enable the panel to carry out its functions.”

195ZAZMZG: After Clause 37, insert the following new Clause—
“Warning notices
(1) Before a Welsh public authority which has been designated under section (Designation of Welsh public authorities) can be required to make any payment under this Part in respect of an EU financial sanction to which the designation applies—
(a) the Welsh Ministers must give a warning notice under this section to the authority;(b) the procedures set out in the warning notice (with any changes made under subsection (9)) must be followed; and(c) the Welsh Ministers must determine the matters mentioned in section (Matters to be determined before a final notice is given (No. 2))(4).(2) A warning notice is a notice stating that the Welsh Ministers, having regard to the judgment of the Court of Justice imposing the EU financial sanction, believe—
(a) that acts of the authority may have caused or contributed to the infraction of EU law for which the EU financial sanction was imposed; and(b) that, if acts of the authority did cause or contribute to that infraction of EU law, it would be appropriate to consider requiring the authority to make payments under this Part (which may be or include ongoing payments) in respect of that financial sanction.(3) The warning notice must also—
(a) identify the EU financial sanction to which the notice relates;(b) specify the total amount of that sanction (see subsection (7));(c) if that sanction is or includes a penalty payment, specify the amount and frequency of any periodic payments that fall due from the United Kingdom under the terms of the penalty payment (see subsection (8));(d) set out the reasons for making the statement required by subsection (2);(e) set out the proposed procedures and arrangements for determining the matters mentioned in section (Matters to be determined before a final notice is given (No. 2))(4) (which may include arrangements for securing that matters arising under the notice are dealt together with matters arising under other warning notices given to other Welsh public authorities in respect of the same EU financial sanction);(f) propose a timetable for those procedures and for any steps to be taken by the panel or the Welsh Ministers before any requirement to make a payment can be imposed on the authority; (g) invite the authority to make representations to the Welsh Ministers about the matters mentioned in paragraphs (e) and (f);(h) invite the authority to make representations to the panel (with any supporting evidence) about anything the authority considers relevant to the matters mentioned in section (Matters to be determined before a final notice is given (No. 2))(4), including its response to any representations made (and any supporting evidence submitted) to the panel —(i) by the Welsh Ministers (whether in relation to matters arising from the notice or matters arising from any other warning notice given to another Welsh public authority in relation to the same EU financial sanction);(ii) by another Welsh public authority which has been given a warning notice in relation to the same EU financial sanction; or(iii) by the appropriate national authority in response to an invitation under paragraph (j) included in the notice; and(j) if the authority has any functions other than Welsh devolved functions, invite the appropriate national authority to make representations about anything contained in or arising from the notice.(4) The warning notice may contain such other information as the Welsh Ministers consider appropriate.
(5) Before giving a warning notice to the authority, the Welsh Ministers must consult the panel as to the contents of the notice (including in particular the proposed procedures and timetable mentioned in subsection (3)(e) and (f)).
(6) If the authority has any functions other than Welsh devolved functions, the Welsh Ministers must—
(a) consult the appropriate national authority before deciding to give a warning notice to the authority; and(b) give the appropriate national authority a copy of any warning notice the Welsh Ministers decide to give.(7) In subsection (3)(b) the “total amount of the sanction” means the sum of the following—
(a) the amount of the lump sum (if any) due from the United Kingdom under the terms of the EU financial sanction (disregarding any amount that falls to be excluded from the lump sum by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2)); and(b) the total amount of the periodic payments (if any) which have fallen due from the United Kingdom on or before a day specified in the notice (disregarding any amount that falls to be excluded from any of those payments by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2));and the day specified for the purposes of paragraph (b) must be no later than the day on which the warning notice is given to the authority.(8) The periodic payments to be taken into account for the purposes of subsection (3)(c) do not include—
(a) any periodic payment taken into account in calculating the total amount of the sanction for the purposes of subsection (3)(b); or(b) any periodic payment, or any part of a periodic payment, that falls to be excluded from the EU financial sanction by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2).(9) The Welsh Ministers may, after considering any representations made by the authority under subsection (3)(g) but before the matters mentioned in section (Matters to be determined before a final notice is given (No. 2))(4) are determined, give the authority—
(a) a notice stating any changes that the Welsh Ministers have decided to make to the procedures or timetable as originally set out in the warning notice under subsection (3)(e) and (f); and (b) a copy of the warning notice incorporating those changes.(10) The Welsh Ministers must consult the panel before making any changes under subsection (9).
(11) A warning notice given to a Welsh public authority may be withdrawn at any time before the matters mentioned in section (Matters to be determined before a final notice is given (No.2))(4) are determined, but this does not prevent another warning notice being given to the authority in relation to the same EU financial sanction.
(12) In this section and section (Matters to be determined before a final notice is given (No.2)) “the panel” means the panel established under section (Establishment of independent panel (No.2)) to deal with the EU financial sanction to which the notice relates.”

195ZAZMZH: After Clause 37, insert the following new Clause—
“Matters to be determined before a final notice is given (No. 2)
(1) This section applies where—
(a) a warning notice has been given to a Welsh public authority; and(b) the panel has considered all representations made to it under the procedures set out in that notice.(2) The panel must make a report to the Welsh Ministers on the matters to which the representations made to the panel relate.
(3) The report—
(a) may be published by the panel in such manner as the panel thinks fit and, if not published by the panel, must be published by the Welsh Ministers in such manner as they think fit;(b) must include recommendations as to the determination of the matters mentioned in subsection (4)(a) and (b);(c) if the authority has made representations to the panel about anything the authority considers relevant to any of the matters mentioned in paragraphs (c) to (e) of subsection (4), must include recommendations as to the determination of the matters mentioned in those paragraphs; and(d) must include the panel’s reasons for any recommendations included in the report.(4) After having had regard to the report, the Welsh Ministers must determine the following matters—
(a) whether any acts of the authority did cause or contribute to the infraction of EU law concerned and, in relation to any periodic payments mentioned in subsection (3)(c) of section (Warning notices), whether those acts have continued and will continue to do so;(b) the proportion of—(i) the total amount of the sanction (as specified under subsection (3)(b) of that section), and(ii) any periodic payments (as specified under subsection (3)(c) of that section),that, in the light of the acts of the authority which are determined to have had or to be having an effect mentioned in paragraph (a), is to be regarded as reflecting the authority’s share of the responsibility for the infraction of EU law concerned or, in relation to any such periodic payments, the continuing infraction of EU law concerned;(c) whether the authority should be required to make any payment or payments in respect of the EU financial sanction; (d) if so, what payment or payments the authority should make towards—(i) the total amount of the sanction specified under subsection (3)(b) of that section; and(ii) any periodic payments specified under subsection (3)(c) of that section; and (e) when any such payment or payments should be made.(5) In determining the matters mentioned in subsection (4)(c), (d) and (e) the Welsh Ministers must have regard to—
(a) the effect on the authority’s finances of any amount it may be required to pay and in particular, if the authority has any functions other than Welsh devolved functions, the need to avoid any prejudicial effect on the performance by the authority of those other functions;(b) the determination under subsection (4)(b); and (c) any other relevant considerations.(6) Before making a final decision on the matters mentioned in subsection (4)(c), (d) and (e), the Welsh Ministers must invite—
(a) representations from the authority about the potential effect on its finances and, if it has any functions other than Welsh devolved functions, the effect on those other functions of any amount it may be required to pay; and(b) if the authority has any functions other than Welsh devolved functions, representations from the appropriate national authority.”

195ZAZMZJ: After Clause 37, insert the following new Clause—
“Final notices
(1) The Welsh Ministers may give a final notice to a Welsh public authority only if they have decided in accordance with section (Matters to be determined before a final notice is given (No.2)) to impose a requirement under this Part on the authority.
(2) The final notice must—
(a) identify the EU financial sanction to which the notice relates;(b) specify the total amount of the sanction (see subsection (3)) and, where relevant, the amount and frequency of any future periodic payments (see subsection (4));(c) describe the acts of the authority that the Welsh Ministers have under section (Matters to be determined before a final notice is given (No.2))(4) determined—(i) caused or contributed to the infraction of EU law concerned, in relation to the total amount of the sanction; or(ii) are causing or contributing to the continuing infraction of EU law concerned, in relation to any other periodic payments due from the United Kingdom;and set out the reasons for that determination;(d) summarise the other determinations made by the Welsh Ministers under section (Matters to be determined before a final notice is given (No.2))(4) and set out the reasons for making them;(e) specify the amount required to be paid by the authority towards the total amount of the sanction and when it is to be paid (and if it is to be paid in instalments, the instalments and the date on which they become payable);(f) specify the amount to be paid towards any periodic payment that falls due from the United Kingdom and the time when that amount is to be paid (or, if the notice so provides, the time when two or more such amounts are to be paid);(g) specify how and to whom payments are to be made.(3) In subsection (2)(b), (c) and (e) the “total amount of the sanction” means the sum of the following—
(a) the amount of the lump sum (if any) due from the United Kingdom under the terms of the EU financial sanction (disregarding any amount that falls to be excluded from the lump sum by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2)); and(b) the total amount of the periodic payments (if any) which have fallen due from the United Kingdom on or before a day specified in the final notice (disregarding any amount that falls to be excluded from any of those payments by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2)); and the day specified for the purposes of paragraph (b) must be no later than the day on which the final notice is given to the authority.(4) In subsection (2)(b) “future periodic payments” means periodic payments other than—
(a) any periodic payment taken into account in calculating the total amount of the sanction; or(b) any periodic payment, or any part of a periodic payment, that falls to be excluded from the EU financial sanction by virtue of section (The EU financial sanctions to which Part (EU fines: Wales) applies)(2).(5) The requirement to make payments towards periodic payments falling due from the United Kingdom after the notice is given continues so long as those periodic payments continue to fall due, unless the Welsh Ministers give the authority a notice under this subsection terminating the requirement or varying it so as to make it less onerous for the authority.
(6) A notice under subsection (5) may be given, either on the application of the authority or without such an application, where the Welsh Ministers consider it appropriate in the light of a change in the circumstances which applied when the final notice was given or when it was last varied (as the case may be).
(7) The Welsh Ministers may—
(a) consult the panel, or refer any matter relating to the possible termination or variation of the requirement for its advice or recommendations;(b) invite the authority to make representations; and(c) if the authority has any functions other than Welsh devolved functions, invite the appropriate national authority to make representations,before deciding whether to terminate or vary the requirement mentioned in subsection (5).(8) If the authority makes an application under subsection (6) the Welsh Ministers may by notice to the authority suspend the requirement until further notice (but this does not affect the liability to make any payment once the suspension is ended, unless the final notice is varied to have that effect).”

195ZAZMZK: After Clause 37, insert the following new Clause—
“Interpretation of Part: general
In this Part—“act” includes omission;
“the appropriate national authority”, in relation to a Welsh public authority with any functions other than Welsh devolved functions, has the meaning given by section (Meaning of “Welsh public authority” and related terms)(5);
“Article 260(2) proceedings” has the meaning given by section (Power to require Welsh public authorities to make payments in respect of certain EU financial sanctions)(5)(c);
“Court of Justice” means the Court of Justice of the European Union;
“EU financial sanction” has the meaning given by section (Power to require Welsh public authorities to make payments in respect of certain EU financial sanctions)(5)(a);
“final notice” means a notice under section (Final notices);
“functions” and “Welsh devolved functions” are to be construed in accordance with section (Meaning of “Welsh public authority” and related terms)(3) and (4);
“infraction of EU law”, in relation to an EU financial sanction, has the meaning given by section (Power to require Welsh public authorities to make payments in respect of certain EU financial sanctions)(5)(b);
“Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975;
“periodic payment”, in relation to an EU financial sanction that is or includes a penalty payment, means a payment due under the terms of the penalty payment;
“warning notice” means a notice under section (Warning notices);
“Welsh public authority” has the meaning given in section (Meaning of “Welsh public authority” and related terms)(2).”

Amendments 195ZAZMZA to 195ZAZMZK agreed.

Amendment 195ZAZMA

Moved by

[Lord Lucas]

195ZAZMA: After Clause 41, Insert the following new Clause—
“Empty rates
In section 45 of the Local Government and Finance Act 1988 (unoccupied hereditaments: liability) in subsection 4A for “one” substitute “or equal to one fifth”, and for “prescribed” substitute “chosen in each particular case by the Local Authority”.”

[Lord Lucas]

My Lords, I am not at all sure that this is the right solution to the problem but I am sure the problem is there and I very much hope this Bill will deal with it. When one is looking at the application of localism to urban environments and to giving local communities some degree of control and influence over what is happening, one of the great problems—certainly a problem in the bit of London I lodge in during the week which is Lavender Hill—is empty properties. They are principally retail properties where the owners appear to have decided that they would rather they went empty than accept a lower rent and have some kind of commercial activity within them.

My view is that these owners should pay the full cost they are inflicting on the community by following that course of action. By allowing the street to appear derelict and empty they reduce the trade for other businesses. They reduce the prosperity of the area. They reduce the opportunity for jobs for people who live in the area. It is a thoroughly delinquent behaviour. It is something that costs the rest of the community dear. I do not believe that the current arrangements that merely allow for an ordinary empty rate are at all satisfactory. If we are going to have in the future the opportunity to create a neighbourhood in Lavender Hill, one of the first things we will wish to tackle is all the empty shops. We will not wish to do it by trying to persuade people to pay the vast rents which the street used to be able to command in the days when it was prosperous which was now some long while ago—it was 10 or 15 years ago. Some of these properties have stood empty since then. We will need some way of battening on to these landlords and making them realise that although it is their property and theirs to do what they do with it, if they choose to leave it empty and derelict they should pay the community something in respect of the costs they are causing it by their actions. I beg to move.

[Lord Beecham]

My Lords, the noble Lord has drawn attention to a significant problem with commercial property but the same principle can apply to residential property, particularly in the private rented sector. There are a significant number of homes left empty—it runs into some hundreds of thousands. In urban areas in particular it is very often private rented properties that are left unoccupied. They are as much a blight on the local neighbourhood as empty commercial properties and of course the demand for accommodation is considerable. Just recently walking around the ward I represent I noticed a number of properties that have been empty for some years. They are not in particularly good condition but not sufficiently dangerous to allow the local authority to take steps. It would certainly be an incentive for landlords to let those properties and bring them into use for the benefit of the whole area if a similar principle were adopted for residential properties as the noble Lord proposes for commercial properties. I hope the Government will look sympathetically on that aspect of it and endorse the noble Lord’s amendment.

[Baroness Gardner of Parkes]

My Lords, I am slightly concerned by this amendment as I think there is an international problem occurring of people buying things online to such an extent—I heard this in Australia while I was there and I believe it is the same everywhere—that people are closing up small shops because there is simply no way they can afford to compete with online purchases. I do not know what will happen in these instances. What will local authorities do? Will the people who own the shops be encouraged to convert them into residential accommodation or would it be considered very damaging to the whole high street suddenly to find that instead of shops in continuity in a row suddenly two or three were houses? In the past there were lots of little shops that were once houses. Would we be prepared to see the reverse of that happening?

I think it is a very complicated issue, and, if the landlord simply cannot get a tenant now, what does he do? Does he allow the property to fall down? I do not know what the answer is, particularly with the shop premises.

[Lord Kennedy of Southwark]

The amendment moved by the noble Lord, Lord Lucas, raises a significant issue. I can clearly see the point that he is making. If the Government are not minded to accept it, I hope that the noble Lord will be able to give us some insight into the Government’s thinking on how they intend to deal with this problem. My noble friend Lord Beecham raised a significant point about residential property, which is probably just as important as the point about commercial property.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have spoken on this amendment, particularly the noble Lord, Lord Lucas, who moved it. The amendment would give authorities the power to reduce the liability for empty property rates. Our ability to take action on empty property rates needs to be balanced against the costs involved, the targeted support that we already provide on business rates and the overriding need to reduce public expenditure and support the economy generally by reducing the deficit. This Government have already doubled small business rate relief for two years, which will benefit about half a million rate payers, with about one-third of a million paying no rates at all for that period. We are also taking powers through this Bill to waive £175 million of backdated business rates demands levied on businesses, including some in ports.

Unfortunately, in taking these matters into consideration, support for empty property rate measures is currently simply unaffordable. While the Government have no immediate plans for reform, we are certainly keeping this matter under review. However, the Bill does give local authorities powers to provide discounts on business rates bills as they see fit, provided they fund the relief themselves. So authorities will be able to reduce bills in the way suggested by the amendment.

I hope that the noble Lord is willing to withdraw the amendment, but I assure him that the matter is under review. It is quite interesting, because I have within the papers here a note about the reliefs. In 2007-08, 2008-09, 2009-10 and 2010-11, changes were made.

[Lord Lucas]

My Lords, can I just point out to my noble friend that the effect of my amendment is not to reduce business rates but to multiply them by five times, resulting in greatly increased revenue to the local authority and the Exchequer. I am afraid that in some way his briefing is somewhat wide of the mark. I should be delighted if he would write to me when his officials have been able to revise their mathematics. As the noble Lord, Lord Beecham, clearly understands, this is about increasing the rates and increasing government revenue. I would hate it to be thought that I was in any way undermining the stalwart efforts of my right honourable friend the Chancellor to reduce the deficit.

[Lord Shutt of Greetland]

My Lords, I am delighted that the noble Lord has made those comments. I think that the officials had difficulties with this, and quite frankly so did I. I sought out the Local Government Finance Act 1998, but I am afraid that it has been amended, because the reference that he makes is not there. Immediately before speaking, I tried to check this myself, because I had some doubt about this. The whole area is under review, as it seems to have been for four years on the trot, because Chancellors and local government people have changed the position. So it is still the fact that the area is under review, but it is one that does impact on the economy. Having heard what the noble Lord said in his latter remarks, clearly, we will need to reflect further. But I cannot make any commitments at this stage. Perhaps a few tender words here and there might help us to understand exactly what he is about.

[Lord Kennedy of Southwark]

Can the Minister give the House an indication that he will come back before Third Reading? I would not want the noble Lord, Lucas, to have to come back again on Third Reading on this matter.

[Lord Shutt of Greetland]

I will certainly use my best endeavours to see that we can write to the noble Lord and that copies are placed in the Library so that other noble Lords with an interest can see the results of that.

[Lord Beecham]

Can the Minister also consider the points that I made in addition to those made by the noble Lord, Lord Lucas, for Third Reading?

[Lord Shutt of Greetland]

I will endeavour to look at them, although I believe that they were on a different matter. Nevertheless, in the interests of moving forward, I am sure that we will be able to look at that too.

18:45

[Lord Lucas]

My Lords, I am very grateful to my noble friend. I apologise for being so confusing in the preparation of my amendment. I say this as an aside, in case anyone from the House authorities is listening in, it is high time that statutes in force were made easily available to Peers who wish to table amendments. They are in the Library, but that is no use if you happen to be working from outside. I imagine that I picked up the statute as it was on the internet and have been tripped up by that and have confused my noble friend and his officials. I apologise for that. But to have a proper set of statutes in force available over the internet would be a bonus.

As the noble Lord, Lord Beecham, understood, this amendment is clearly about trying to allow neighbourhoods through referenda to encourage their local councils as part of a plan to regenerate a neighbourhood to put a squeeze on landlords to bring empty properties back into use. I entirely agree with what the noble Lord, Lord Beecham, said. Flats over shops are certainly a significant problem round where we are; there are just empty properties at a time when accommodation is short. There has to be some way in which to encourage these properties back into use, some backstop that allows a local authority to get tough if a landlord will not be reasonable about these things. To my mind, that particularly applies to street frontage property, when the fact that it is empty is apparent to everybody and it becomes a blight on the other people trying to do business. To answer the point made by my noble friend, they can be converted into offices, or starter units for young businesses, which again are in short supply in Lavender Hill, and would be most welcome if we went down that route.

I know that this is a complicated area and I am not at all sure that empty rates is the way in which to attack it, but I would be very grateful for a letter from my noble friend to say how the Government intend to enable neighbourhoods to tackle this problem under the general heading of localism. But for now, I beg leave to withdraw the amendment.

Amendment 195ZAZMA withdrawn.

Amendment 195ZAZMAA

Moved by

[Baroness Royall of Blaisdon]

195ZAZMAA: Before Clause 42, Insert the following new Clause—
“Youth councils
(1) Every local authority must establish a council representing the interests of young people within the authority’s area, to be known as a “youth council”.
(2) A local authority must—
(a) consult the relevant youth council of any authority proposal that may affect the youth council or young people in the community;(b) provide an opportunity for the youth council to respond to the proposal; and (c) take the views of the youth council into account when making a decision about the proposal. (3) Subsection (2) does not affect the ability of the youth council to make a properly constituted petition to the local authority.
(4) At least 60 per cent of the members of the youth council must be under the age of 18 years.”

[Baroness Royall of Blaisdon]

My Lords, I rise to move and speak to Amendment 195ZAZMAA.

I am doing some work at the moment on political engagement of young people and this amendment is the result of meetings that I have had with hundreds of young people up and down the country and with people who are working or have been working in youth services—that is to say, statutory youth services, which are fast diminishing, charities, and organisations such as Girlguiding UK, of which I am a very proud member. What happens to young people and the services that they receive is, of course, crucial to the well-being of this country and the future well-being of individuals and our society. We have the most fantastic young people in our country, who often get a very bad press thanks to a very small minority of them. Most young people in this country are full of energy and have real determination and a real desire to contribute to their communities. Sometimes, however, they need a bit of help. At the moment, rather than being helped, a lot of young people in our society are suffering disproportionately from the cuts, which we believe are too fast and too deep. In my part of the country, in Gloucestershire, the area that I know best, youth services have been decimated. While volunteers are doing an extraordinary job, volunteers are not enough. Young people in our country cannot just depend on volunteers. They need properly trained youth workers as well. The Minister may well say that it is up to local authorities how they spend their money. I think that is a bit of a smokescreen, but that is by the by.

We talk about rights and responsibilities of young people and the fact that they need to get that balance right from a very young age. We all talk about the need to engage our young people more in our communities, and we want to nurture democracy by ensuring that more and more young people vote and perhaps even become councillors or MPs. One of the best ways to engage young people is to include them and to make them part of the democratic processes in which we engage, including the decision-making process. At the moment young people, if they are under the age of 18, are excluded from the decision-making processes of councils despite the fact that so many decisions taken by local councils are extremely important for those young people and have a huge impact on their lives. I am not just talking about youth services. For example, when a decision is taken to cut bus services—sometimes for good reasons and sometimes I would question the reasons—it has a huge impact on the ability of young people to go to college or to sixth form college, and indeed to have a social life. Consequently those young people cannot reach their full potential.

I have tabled my amendment because I think it is very important that young people should have some means of engaging in the decision-making process. This is just one suggestion, on which I hope the Government will look favourably. However, if they cannot accept the amendment, I should be very grateful for an opportunity to discuss with the Minister and her officials how we can better include young people in the decision-making process in the future. Of course I understand that at the moment the voting age is 18. Personally, I would argue on other occasions that that should be reduced to 16.

[Lord Greaves]

Hear, hear.

[Baroness Royall of Blaisdon]

My Lords, we will have that discussion at a later date. For the moment, we have a voting age of 18. Notwithstanding that fact, I think that it is very important that young people who are younger than 18 should have their views properly assessed and that they should have an opportunity to have proper discussions with the people who are taking the important decisions in councils and other bodies that so profoundly affect their lives.

There is another amendment in this group that relates to petitions, but I understand that there may be some other movement from the Government on petitions and referendums. If, however, the current proposals from the Government stand, I would argue that young people themselves should have an opportunity to petition the Government as outlined in Amendment 195ZAZNZA. I beg to move.

[Lord Tope]

My Lords, if the purpose of this amendment was to enable a short debate on the political engagement of young people, I have no hesitation whatever in supporting that intention. If it is the intention to prescribe how local authorities should do it—and I do not think that it is—it has no place at all in a localism Bill. However, I am assuming it is the former, and indeed I think that the noble Baroness, in moving the amendment, said it was a suggestion—in fact, a very good suggestion. I want briefly to echo the importance of the political engagement of young people in the community. I can only speak with direct experience of my own local authority, where our youth parliament plays a very active role, and which in its elections last year had almost the highest turnout in the whole of London. That is in a relatively small London borough where young people play an active part. Similarly, we have young ambassadors who play a very active part not in matters particularly for young people but in the whole life of the borough, in issues that are of importance to people of all ages.

Therefore I wholly support and encourage the intention of this debate. It is important not just that young people are listened to but that what they are saying is heard and acted on. I can give another example of a project in which I am involved with a new building. We had the young ambassadors round to carry out a very detailed and thorough inspection of it. They raised a whole load of points, both about the physical nature of the building and particularly about the programmes that were being run there. They made a report to us, I ensured that the management board gave them a full written response and they came back six months later to ensure that it was being acted on. That is the sort of engagement that we want, not the rather patronising one where we say, “Yes, of course, that’s very good”, and then do nothing whatever about it. Real engagement means not that we are listening but that we are hearing and that we are acting on their suggestions. To enable me to make that point, I am grateful to the noble Baroness for the amendment. I hope very much that she will not press it, because I do not think that it is for us, in a localism Bill, to be prescribing to local authorities how they should act on this issue; rather it is for us to encourage all local authorities to act on it and to do it effectively.

[Lord Lucas]

My Lords, in contrast to some of my noble friends, I am very much in favour of the involvement of young people in democracy and in giving them a formal role in it.

[Lord Cormack]

I hope my noble friend will not mind my pointing out that one can be wholly in favour of young people being involved in democracy without necessarily believing that the age of 16 should be the voting age.

[Lord Lucas]

My Lords, of course I believe always in the wisdom of my noble friend, even if my own views differ. I note that the Government, in their wisdom, always intend to legislate that people of any age may be members of a neighbourhood forum; so young people may well take part in the formation of policy for their area. I regret that the age at which they may vote on it remains 18. As noble Lords may remember from Committee, I would like to see it a good deal lower. I think that when you get down to a very small area, young people have a much more active and early understanding of what needs to be done in a locality than perhaps they do when you are trying to balance the affairs of a whole local authority, let alone a country. However, I celebrate the wisdom of the noble Baroness in not putting an age limit on participation in neighbourhood forums, and I very much hope that she will encourage other ways of allowing young people to participate in neighbourhood referenda and other aspects of localism.

[Lord Cormack]

My Lords, I am provoked into making a few remarks. I entirely agree with the noble Lord, Lord Tope, that this amendment does not have a place in the Localism Bill. However, like him, I am grateful to the noble Baroness, Lady Royall, for raising this issue. I think we must all accept that we have not engaged our young people sufficiently. When we came back for one day after those dreadful riots, I made the point that perhaps we should consider some form of citizenship ceremony for all young people—I believe at the age of 18, although perhaps it could be 16—where they proclaim recognition of their role, their responsibilities and their allegiance. It would demand reciprocation on our part that they have a greater opportunity to participate.

I do not believe and never have believed that the age of 16 is the right age to vote, but that does not invalidate the general point that I am seeking to make and indeed that the noble Baroness was seeking to make in her brief remarks. I will make my remarks equally brief. I hope that when my noble friend the Minister comes to reply, she will at least be able to indicate a general sympathy, just as I hope—when the noble Baroness withdraws her amendment, as I trust she will—that we will be able to recognise that this is not actually part of a mandate from the Government in a localism Bill, as the noble Lord, Lord Tope, said. It is merely an opportunity for us to encourage local authorities throughout the country to address the issue of young people perhaps a little more imaginatively than some of them have done—although by no means all.

19:00

[Baroness Hanham]

My Lords, I thank the noble Baroness for introducing that interesting short debate on this matter. I have a lot of sympathy with what she has to say about the importance of engaging young people in what is going on. If she will forgive me saying so, though, her amendments are not necessary, and I will tell her why.

The amendment would ask all local authorities to establish a youth council and prescribe in some detail how that youth council should be engaged with. As my noble friend Lord Tope has said, there are already youth councils and youth parliaments in many local authorities. Indeed, I recall that the former Lord Speaker—maybe the current Lord Speaker will do the same—has welcomed young people into this Chamber for a youth parliament to debate things about democracy. It is understood across Government that it is vital to engage young people in what is going to be their future. I do not think that there will be any disagreement about that.

The Government are already committed to these issues. The Department for Education has recently awarded grant funding of £850,000 to the British Youth Council for 2011-13 to provide support for young people’s voice and involvement in decision-making at both local and national level in England. In addition, there is already a statutory duty on local authorities to provide sufficient educational and recreational activities for 13 to 19 year-olds, which includes a duty to take steps to ascertain the views of young persons on services and facilities and to secure that the views of qualifying young persons in the authority’s area are taken into account.

The Department for Education will be consulting shortly with a view to producing new strategic guidance on this duty, which will reflect the findings of the recent Ofsted report on the commissioning of youth services, so there is a great commitment not only to the provision of these services but to young people’s voice being heard. Those findings include the recommendation that rather than prescribing from the centre which services should be provided and to what level, the Government should look to local authorities to publish their own local offer of services to young people.

It is for that reason that, while I agree with much of what the noble Baroness has said, I am not able or minded to accept the amendment. As other noble Lords have said, it does not fit neatly into this legislation at this rather late stage. We do not want to be prescriptive about how local authorities provide services for young people, nor about how local authorities engage them in decision-making or how they create space for young people to have a collective voice. I reiterate that I know that a great many authorities already do this and value the views that they get.

[Lord Phillips of Sudbury]

I apologise for interrupting the Minister’s flow but, as she enumerates what the Government are doing to support citizenship, I cannot resist asking her whether she will make powerful representations to her colleagues in government not to take citizenship out of the compulsory secondary curriculum, as is now being anticipated.

[Baroness Hanham]

My Lords, I think I hear what my noble friend has to say. I will note that what he says is recorded. It is not a matter for my department, unfortunately, but I am sure that his views will be well received.

Regarding petitions, it is not right to make young people a special case in the way that has been proposed. If young people, then why not retired people, people from ethnic minorities or those with disabilities? It is difficult to group people and say that they can apply for a referendum. Young people and youth councils will, rightly, have every right to campaign and get involved in local democracy, as any other individual or group does.

The noble Lord, Lord Lucas, rightly drew attention to the fact that, while they would not be able to vote in a referendum on a neighbourhood plan, young people will be encouraged to be involved in the formation of what will affect their lives from what is happening round about.

I hope that, with that, the noble Baroness will be content to withdraw her amendment, on the understanding that there is a real commitment to understanding and engaging young people not only at national level but across the local authorities.

[Baroness Royall of Blaisdon]

My Lords, I am grateful to the Minister for her response and to all noble Lords who have participated in this short but important debate.

I have two or three responses. With regard to petitions, there is a specific reason why I tabled the amendment. I understand that the Minister would not wish to have separate sets of rules for elderly people, disabled people or whoever. The rules pertaining to petitions are for electors—therefore, people over 18. I am suggesting that there should be some means for people younger than 18 to be able to petition.

On youth councils, I was delighted to hear what the noble Lord, Lord Tope, said about what is happening in his council, and clearly there are things happening up and down the land. The fact is, though, that this is good practice but it is not everywhere. The Minister on behalf of the Government, we as the Opposition and indeed society should be doing more to ensure that young people are aware of what is happening. So often it is the same young people who participate in youth parliaments as participate in youth councils. I do not denigrate what they are doing—it is fantastic—but there are many other young people who we need to draw into this magic circle. We need to look together at innovative ways to do that. I trust that the Minister might go away and ask her officials to think about how we can ensure that there is a wider store of people whom we can enthuse about democratic engagement and engagement in our society.

The noble Lord, Lord Tope, was right that so often we claim that we are going to listen to what people say, especially young people, but do not act upon it. We have to exhort decision-makers at every level, including at local council level, to take into account what young people are saying.

I am afraid that I have to return to a political point. I realise that the Government want to do their utmost to consult young people about the services that they want in their local areas, but the fact is that the cuts are such that there is no longer any money for this to be carried out by local authorities. Young people have needs that they can and do identify, but the answer that comes from local councils is, “We’re afraid we can’t do this because the money simply isn’t there”. As I said earlier, quite often local councils turn to charities and volunteers. I salute the fantastic work done by charities and volunteers, but we cannot rely on them alone. We have to have a proper youth service, properly financed up and down the country.

I plead with the Minister to go back to her officials and try to ensure that local authorities take youth services into account when they are looking at their budgets for next year. Youth services are too easily cut. At the moment, young people in our society are often not heard when they are making their arguments to people in authority, and I plead with the Minister to try to ensure that local authorities listen both to the arguments put by young people and to their needs in our society. With that, I beg leave to withdraw the amendment.

Amendment 195ZAZMAA withdrawn.

Clause 42 : Duty to hold local referendum

Amendment 195ZAZMB

Tabled by

[Lord Beecham]

195ZAZMB: Clause 42, Page 38, line 17, leave out “one or more” and insert “at least one-third of the”

[Lord Beecham]

My Lords, I understand that this amendment, like many others, would become superfluous, if, as I apprehend, the Government are to accede to amendments to be moved by the noble Lord, Lord Greaves, effectively to remove from the Bill the provisions for local referendums except in respect of council tax increases deemed to be excessive. In the circumstances that I apprehend are about to occur, there is not much point in my moving this amendment, and therefore I will not do so.

Amendment 195ZAZMB not moved.

Amendment 195ZAZN

Moved by

[Lord Greaves]

195ZAZN: Clause 42, leave out Clause 42

[Lord Greaves]

My Lords, in moving Amendment 195ZAZN, a relatively short number compared with some we have just had, I shall speak to 17 others in this group, some of which are even shorter. The purpose of these amendments is to make the Bill itself even shorter, which I think would benefit the people of this country generally.

The first amendment removes Clause 42, which is the duty to hold local referendums—a duty to hold a local referendum under ordinary local election rules if a petition received by a council signed by at least 5 per cent of the electors in a ward, a county division, or the whole authority, is received. If passed, the result of the referendum would be advisory on the authority. The first amendment removes this duty from the Bill; the other 17 amendments in the group remove the remaining 17 clauses in this chapter of the Bill, which set out how the referendum procedures would operate and how the referendums would take place.

The reasons why I would like to do this were fairly fully set out when I spoke at Second Reading and described this part of the Bill as “nonsense”, and in the discussions we had in Committee. It is a provision which is over the top. It would be very expensive in relation to its value, which would simply be advisory referendums, and if combined with a local election, it has the potential to distort that election. If it is free-standing, then it carries the whole costs of a local election. It is open to abuse by extreme groups; as I said in Committee, in my own ward, in Waterside in Pendle, less than 200 names would be required, and the last time I stood for election the BNP got more than 300 votes. It would also be open to people demanding large numbers of referendums on all kinds of things that the council would find it extremely difficult to refuse to hold.

There is the question of planning: the Government removed planning applications from the scope of this chapter, but not the plan-making process, where it really is superfluous to a process which already has provisions for public participation.

Councils already have the powers to hold referendums when they want to do so, and as I have already said, if passed, the referendums would only be advisory anyway. Councils could simply ignore them, and the whole thing would be a waste of money.

The Bill retains provisions for referendums in various specific cases, such as elected mayors, what the Government call excessive council tax increases, and neighbourhood plans. While I have views on those referendums I am not trying here to remove those provisions, but merely to remove the provisions for advisory local referendums in Chapter 1 of Part 4 of the Bill. I beg to move.

19:15

[Lord Tope]

My Lords, I support my noble friend Lord Greaves in all that he has said. He has made a very persuasive case, and I would summarise it in words that we hear so often from the Dispatch Box: “My Lords, these provisions are not necessary”. As my noble friend has said, local authorities are already able to hold referendums if they so choose. The provisions elsewhere in this Bill will widen that possibility—that scope—in a number of ways.

I believe that there are better ways of testing public opinion fairly than using the very suspect means of a referendum. Perhaps in the current financial climate, even more persuasive is the fact that they are very expensive to hold. They are misleading to members of the public, who will not unnaturally think that if the local authority has gone to all the trouble of establishing a referendum using the full electoral process, then they will actually implement whatever the result is. Yet the provisions here are not binding; a local authority, if it is so minded—and brave enough—may well then decide not to abide by the outcome of the result of the referendum.

I will end where I began, in the words that I know the Minister believes to be most persuasive, because they are the words that she and her colleagues use so often to the rest of us when we are moving amendments: “My Lords, these provisions are simply not necessary”.

[Baroness Hanham]

My Lords, before we go any further it may be in the interests of the House if I indicate probably what is now the worst kept secret—that the Government will be minded to accept these amendments, and there may be further debate.

[Lord True]

My Lords, I do not wish to inject a note of dissent entirely, because noble Lords who were in Committee will know that I was one of those who was extremely critical of many of the prescriptive aspects of what was laid out in the Bill. Indeed I have laid amendments with my noble friend Lord Howard to raise the question of whether referendums might be binding in certain circumstances.

I do not fear the use of referendums; they will be possible, and I hope that in endorsing the decision of the Government, the message will not go out from the House that somehow referendums are in all circumstances undesirable or unwanted. I know that that is not the Government’s intention otherwise they would not have presented us with the Bill in the first place, but in the general maelstrom of enthusiasm that I am sure will follow this announcement, it is important for someone to place it on the record that in terms of localism and popular voice, a referendum can be a powerful and legitimate weapon of public power and authority.

One of the problems with what was drafted by the Government was not only its prescriptiveness but of course the ease with which it could be used, which led to all the problems of cost and potential abuse, and that is where we got into a number of difficulties. The noble Lord, Lord Beecham, withdrew an amendment which was effectively going to restrict the ability of one or two councillors to interfere or manipulate the process of these referendums.

Since we are going to discuss this matter late here tomorrow in relation to neighbourhood orders, Amendment 207, which gives the power to individual ward members to exercise a stopping power, is not desirable. That reason why the Government’s referendum provisions are not desirable is a good reason why I support the Government’s action in withdrawing this. It is important to state that, from my perspective as the leader of a local authority, a referendum is a weapon that can and should be used and should be accepted by those in local government.

[Lord Brooke of Sutton Mandeville]

My Lords, I shall be extremely brief. My morale has been sustained throughout the Recess by the prospect of shortly moving Amendment 195ZB, in which I see I have the support of the noble Lord, Lord Beecham. That amendment is directed at the issue that the noble Lord, Lord Greaves, has addressed. I tabled it at the request of the British Retail Consortium. If it makes any difference to any doubts in the mind of my noble friend the Minister about what she is about to say, she will have the British Retail Consortium on her side when she does so.

I am less sure that Amendments 195D and 195E to Clause 59, which are in my name, will now be unnecessary. If we are to have a break for dinner, there may be an opportunity to find out whether they need to be moved.

[Lord Lucas]

My Lords, I am significantly less well informed than the noble Lord, Lord Beecham. This has caught me by surprise, particularly since, in various discussions with my noble friend’s officials, the local referendum was used to ward off my requests for amendments in other areas. To go over some of my concerns, I have, throughout the passage of the Bill, tried to persuade the Government that they need to look at how localism will work in cities. In rural and suburban areas, planning is a great lever and generator of funds. All things will be possible if we get the planning side right. Once you have funds, you have the ability to do what you want in a neighbourhood to a certain extent. You certainly have a lever with which to negotiate with the local authority.

However, even in as gentle an urban area as Lavender Hill, planning has no function as a raiser of funds or people’s enthusiasm. The place is built out. There is very little that planning can do. You will never get a community created in Lavender Hill, let alone some of the more difficult areas of cities, on the basis of what is in the Bill. We should be turning our thoughts to how the section on allowing local initiatives to run local services might be made less formal so that neighbourhoods might group around it. We ought to turn our minds to how neighbourhoods can make representations to local councils and be listened to on subjects that they really care about, such as school catchment areas, how parking is enforced and how decisions are made about the distribution of services.

There are many ways in which we might build localism in cities. Surely the riots have shown us the importance of doing that. However, in removing this provision the Government remove the one bit of the Bill that gives a possible voice to neighbourhoods in cities in trying to persuade their local councils to do something in the way that the neighbourhood wants them to be done. I will not argue with the Minister and my other noble friends that what is in the Bill at the moment is not an expensive and bureaucratic way of doing it, but we have to find something else. The Bill is such an opportunity to improve life in cities but the Government do not seem interested in taking it. I find that enormously disappointing. I am particularly sad that—since somewhere in the great collective mind that is the department there is an awareness of my arguments—I should be kept in the dark and not given time to prepare thoughts and arguments to compensate for this loss later in the Bill. I shall apply myself to it for the rest of the evening. With luck, we shall not get so far into the Bill that I cannot find ways of putting back opportunities to argue these things. As I say, my main concern is that this great opportunity to help build communities in cities is being allowed to pass by at a time when we are all acutely aware that it should not be.

[Lord Beecham]

My Lords, I very much welcome the Government’s decision to accept the amendments of the noble Lord, Lord Greaves. We debated this at some length in Committee. The drawbacks of the system that the Government had intended to bring in were made manifest at that time. The Government, having made the egregious error—in the view of some of us—of adopting an American system for the direct election of police commissioners, were in danger of incorporating something like a Californian referendum system into local government. It has not been noticeably successful in California.

A referendum is a legitimate way of testing public opinion. That is absolutely right. It is less obvious that the proposals in the original Bill—to allow a very small minority of either elected members or the public to engender petitions on any subject under the sun, at any time and at any cost—would make a significant contribution to the kind of community engagement that the noble Lord, Lord Lucas, rightly wishes to see not only for the Lavender Hill mob but more generally. It is a perfectly legitimate and, indeed, important part of what local government and local governance must be about. However, there are other ways of involving communities and testing opinion. It is a pity that one of those ways—the petitioning procedure that was admittedly somewhat overcomplicated by the degree of regulation applied to it—has been abolished by the Bill. It required a council response to a petition from residents. It was a good measure. The noble Lord, Lord Shutt, made great play of the fact that it was extremely bureaucratic in the way that the previous Government laid out how these things should be conducted. There was some force in that but the principle was a good one. It required an authority to respond to a concern that was formally raised by petition. I hope that the Government might, even at this late stage, given that they have taken out this part on referendums, look again at whether that might be reintroduced, perhaps in some more acceptable form than previously.

There is also the councillor call for action. I do not think that the Government have disturbed that principle. Admittedly, it is up to a local councillor to make the call but, on the other hand, a councillor who declines to make a call when faced with a considerable body of opinion in his ward is unlikely to remain a councillor for long. There is also that mechanism. Generally, in recent years local government has been more inclined to establish local mechanisms for consultation and involvement. I hope that that will be reinforced. However, the substantial construction of the previous arrangements for referendum effectively constituted an invitation for people to make mischief, which would have happened, to divide communities, which would also have happened, and to involve the authority in considerable expense. It could run into hundreds of thousands of pounds for a significant-sized authority. The noble Lord, Lord True, expressed serious concerns on that basis. Therefore, we very much welcome the withdrawal of this proposition, which leaves three areas where referendums might occur, as we have heard. We shall come to one of those, namely the council tax referendum, shortly.

Under the circumstances, I am not sure that it is right at this point to raise some of the concerns of the Electoral Commission, with which some of your Lordships will be familiar, about how such referendums—now in only three categories—might be conducted. It raises a concern about expenditure in promoting referendums of that kind. Clearly, for local referendums that are being abandoned it will no longer apply. However, it will still be potentially applicable to other referendums—the three that have been referred to, on elected mayors, council tax and neighbourhood planning issues, which we will eventually come to. I raise it now so that Ministers might have an opportunity to think a little about the Electoral Commission’s concerns. They may of course have a response already; but if they have not, then those concerns will not disappear because these particular provisions are no longer to feature in the Bill.

I hope that in the course of further debate we will have an elucidation of the Government’s position in relation to what is a real concern in respect of how the remaining referendums might be conducted, and, more particularly, how they might be financed. Subject to that, I certainly support the amendment of the noble Lord, Lord Greaves, and I am pleased that the Government are, as the noble Baroness so gently puts it, minded to accept them.

19:30

[Baroness Hanham]

My Lords, I do not know that there is an awful lot more to say. It is interesting that at this stage of the proceedings we have a rather limited number of people here to debate what, in Committee and at Second Reading, was a significant and major issue, with barely a friendly voice in place for these provisions. I therefore say to a rather muted House that we have listened to the concerns and anxieties that were raised over all those aspects put forward by the noble Lords, Lord Greaves and Lord Tope, and others, about the expense. We have decided with regard to towns that the local referendums do not need to have a place within this Bill.

If I may just briefly address my noble friend Lord Lucas, who—if he will forgive me saying so—has strayed a little bit away from what these amendments would do. This is no attack on the cities. It is nothing to do with the cities. It is a general point of view and a general provision that would have allowed anybody—urban, rural, whatever—to have referendums. It has nothing to do with planning, either, as the planning referendums are not affected by this Bill, and we will be returning—probably on Wednesday—to the whole area of provisions for neighbourhood planning and neighbourhood referendums.

As other noble Lords have said—as the noble Lord, Lord Greaves, pointed out in his introduction and as the noble Lord, Lord Beecham, has said as well—there are going to be other opportunities for referendums. Not only are there the council tax referendums, there are the right-to-build referendums and the neighbourhood planning referendums. Those complement the provisions for referendums which are already open to councils to carry out on governance. Any council may carry out parish polls and informal polls which are to do with its services and functions. We believe that there is pretty good coverage of this, and that there is the chance for people to have their voice heard without these provisions.

We have accepted what has turned out to be the will of the House at a much earlier stage, namely that these provisions should be reconsidered. We have reconsidered them, and therefore I tell the House that we will accept the amendments of the noble Lords, Lord Greaves and Lord Tope.

[Lord Beecham]

Before the noble Baroness sits down, first of all I hope that she will forgive me for not thanking her, as I should have done, for responding, as she has just said, to the will of the House. It has been another very constructive contribution, and I am sure the whole House is grateful to her. Could I ask in respect of the issue raised by the Electoral Commission, which I appreciate is a slightly wider issue, whether the Government will be looking at that before we get to Third Reading, as there will be areas in which it might be relevant?

[Baroness Hanham]

My Lords, I have seen the Electoral Commission’s submissions in relation not only to the costs, but to questions and to how it should be involved. I cannot give the noble Lord a direct answer but it does seem to me to be inconceivable that we should not take quite serious note of the Electoral Commission’s representations on this. I am sure we will come back to that issue.

[Lord Brooke of Sutton Mandeville]

My Lords, if I may intervene before the noble Lord, Lord Greaves, winds up: am I to take it from what the Minister said that we will not be debating any amendments which involve the clauses up to at least Clause 59, as these are in fact going to leave the Bill? If that is so—and the Minister is nodding her head—may I say that the amendments which I was going to move arose because of the serious gap in understanding between the Common Council of the City of London and her department about the size of the Corporation of the City of London’s voting arrangements? I hope it will be possible—if she could perhaps give me a nod again—to deal with these matters in correspondence, simply in order to remove the misunderstandings which clearly still exist in the Bill.

[Baroness Hanham]

My Lords, I confirm that Clause 59 would go, along with all the other clauses, because what the amendments of the noble Lord, Lord Greaves, effectively do is to take out the whole of Part 4. If there are still areas that need clarity—and the noble Lord, Lord Brooke, has said that there are—then I will of course write to him to clarify the amendments he has tabled, although I am bound to say that I do not think that they can be of relevance any more under the circumstances.

[Lord Greaves]

My Lords, my amendments take out the whole of Chapter 1 of Part 4. I would be quite happy to take out the whole of Part 4 but I do not think I would get quite so much enthusiasm from the government Front Bench.

Like my noble friend Lord Lucas, I have some concern that localism in this Bill is very rurally orientated—village-orientated and small-town-orientated—while over half the population of this country lives in large towns and cities. We have a lot of hard work to do in working out how localism will work in those areas.

I am grateful for the very welcome support of the noble Lord, Lord Beecham. I do not agree with him, as he knows, about the petitioning procedure which has been removed. When the Bill introducing that procedure came to this House, I struggled manfully to stop it. I am delighted that it has now gone, and I am delighted that struggling manfully against this Bill has had a little more success. That does not mean to say that councils should not deal with petitions properly, expeditiously and seriously: they clearly should. However, bureaucratic procedures laid down from on high are not the way to do so.

Finally, I congratulate and thank my noble friend the Minister, and the whole Government but particularly the Communities and Local Government Ministers, on and for their support for these amendments.

Amendment 195ZAZN agreed.

Clause 43 : Petition for local referendum

Amendments 195ZAZNZA and 195ZAZNA not moved.

Amendment 195ZAZP

Moved by

[Lord Greaves]

195ZAZP: Clause 43, leave out Clause 43

Amendment 195ZAZP agreed.

Clause 44 : The required percentage

Amendment 195ZB not moved.

Amendment 195ZC

Moved by

[Lord Greaves]

195ZC: Clause 44, leave out Clause 44

Amendment 195ZC agreed.

Clause 45 : Request for referendum

Amendment 195ZCA not moved.

Amendment 195ZD

Moved by

[Lord Greaves]

195ZD: Clause 45, leave out Clause 45

Amendment 195ZD agreed.

Clause 46 : Duty to determine appropriateness of referendum

Amendment 195ZE

Moved by

[Lord Greaves]

195ZE: Clause 46, leave out Clause 46

Amendment 195ZE agreed.

Clause 47 : Grounds for determination

Amendments 195A and 195AZA not moved.

Amendment 195AA

Moved by

[Lord Greaves]

195AA: Clause 47, leave out Clause 47

Amendment 195AA agreed.

Clause 48 : Petitions: special cases in which holding of referendum is discretionary

Amendment 195B not moved.

Amendment 195BA

Moved by

[Lord Greaves]

195BA: Clause 48, leave out Clause 48

Amendment 195BA agreed.

Clause 49 : Action following determination in response to petition

Amendment 195BB

Moved by

[Lord Greaves]

195BB: Clause 49, leave out Clause 49

Amendment 195BB agreed.

Clause 50 : Action following determination in response to request

Amendment 195BC

Moved by

[Lord Greaves]

195BC: Clause 50, leave out Clause 50

Amendment 195BC agreed.

Clause 51 : Resolution for local referendum

Amendment 195BD

Moved by

[Lord Greaves]

195BD: Clause 51, leave out Clause 51

Amendment 195BD agreed.

Amendment 195BDA not moved.

Clause 52 : Question to be asked in local referendum

Amendment 195BE

Moved by

[Lord Greaves]

195BE: Clause 52, leave out Clause 52

Amendment 195BE agreed.

Clause 53 : Date of referendum

Amendment 195BF

Moved by

[Lord Greaves]

195BF: Clause 53, leave out Clause 53

Amendment 195BF agreed.

Clause 54 : Publicity for and in relation to local referendum

Amendment 195BFA not moved.

Amendment 195BG

Moved by

[Lord Greaves]

195BG: Clause 54, leave out Clause 54

Amendment 195BG agreed.

Clause 55 : Voting in and conduct of local referendums

Amendment 195BH

Moved by

[Lord Greaves]

195BH: Clause 55, leave out Clause 55

Amendment 195BH agreed.

Clause 56 : Consequences of local referendum

Amendment 195BHA not moved.

Amendment 195BJ

Moved by

[Lord Greaves]

195BJ: Clause 56, leave out Clause 56

Amendment 195BJ agreed.

Clause 57 : Application to parish councils

Amendment 195BK

Moved by

[Lord Greaves]

195BK: Clause 57, leave out Clause 57

Amendment 195BK agreed.

Clause 58 : Discharge of functions

Amendment 195BL

Moved by

[Lord Greaves]

195BL: Clause 58, leave out Clause 58

Amendment 195BL agreed.

Clause 59 : Interpretation

Amendments 195C to 195E not moved.

Amendment 195F

Moved by

[Lord Greaves]

195F: Clause 59, leave out Clause 59

Amendment 195F agreed.

Schedule 5 : New Chapter 4ZA of Part 1 of the Local Government Finance Act 1992

Amendment 195G not moved.

Amendment 195H

Moved by

[Lord McKenzie of Luton]

195H: Schedule 5, page 278, line 38, at end insert—
“( ) On application by a relevant authority, the Secretary of State may direct that the substitute calculations referred to in subsection (5) may be increased by an amount determined by the Secretary of State.”

[Lord McKenzie of Luton]

My Lords, the purpose of the amendment is to try to have a safety valve in the arrangements for referendums around council tax, and for the outcomes of those, whereby the Secretary of State, notwithstanding the early determination, may direct that a substitute calculation can be increased by an amount determined by the Secretary of State. When we debated these amendments before we instanced particular circumstances where it was perhaps difficult for a local authority to disclose fully some of the sensitivities around its budget. Those matters might be commercially confidential or there might be a dispute outstanding. To spell out the consequences, risks and costs associated with that that could fall on the local authority, which could be difficult and prejudice its position. Hence the proposition that there should be an opportunity for the Secretary of State, obviously after discussions, to increase the amount determined. It may be that the Minister will say that this could be dealt with earlier in the process when the Secretary of State designates certain categories of authority, and that there will then be scope through that discussion to itemise just a few or even one particular local authority. That would be the mechanism to allow a council tax increase which was relevant to that local authority, but which was greater than the amount generally determined. That is the purpose of the amendment. I beg to move.

[Earl Attlee]

My Lords, I fear that my response on this occasion will be fairly similar to the previous one. The amendment does not take account of the fact that the provisional principles for council tax referendums will be announced at the same time as the provisional local government finance settlement. Authorities will then have the opportunity to make the Secretary of State aware of any exceptional circumstances that they consider he should take into account when determining the principles.

The noble Lord, Lord McKenzie, suggested that there may be financial problems that the local authority is reluctant to disclose. But what about being open to the Secretary of State about its problems? Surely it would want to keep the Secretary of State informed. I do not understand how the situation could arise whereby a local authority was in severe difficulties but wanted to keep that quiet from the Secretary of State.

[Lord McKenzie of Luton]

I am sorry if I was not clear. The concern was not about being open and transparent with the Secretary of State, but about the process of a referendum laying bare some difficult situations that could prejudice the outcome of those so far as the wider public is concerned. Obviously, in due course, everything would have to be properly reported and accounted for in the public domain, but there could be some sensitivity around issues just at the point where the referendum might be undertaken. That is the issue we are seeking to safeguard.

19:45

[Earl Attlee]

I think that I can accept, as the noble Lord describes, that you might not want to make the difficulties public at the time of the referendum, should that be necessary, but I do not understand why the local authority would not make it clear to the Secretary of State that there was a problem locally. It might have been a minor disaster, or a facility could have been destroyed, for example. The Secretary of State may or may not be aware of it but the local authority could tell the Secretary of State, and if it is a matter that does not need to be fully advertised then the Secretary of State could perhaps put it in a different category. It might be common knowledge, and therefore it would not be a surprise that the local authority was put in a different category.

In addition, if an authority is faced with difficulties prior to the referendum being held, the Secretary of State may direct that the authority need not hold a referendum if he considers that it will be unable to discharge its functions effectively or unable to meet its financial obligations. It cannot be right to allow an authority to apply to set an excessive council tax after it has been rejected by the electorate, nor can it be right for the Secretary of State to set a higher level of council tax after a referendum.

I do not think that this is localist. Indeed, it would defeat the whole reason for having a council tax referendum in the first place—to let the local electorate decide. I therefore ask the noble Lord to withdraw the amendment.

[Lord McKenzie of Luton]

My Lords, I am grateful to the noble Earl for his explanation. We had this response and exchange previously. I should stress that I was not in any way suggesting that a difficulty which a local authority may be in should not be fully shared with the Secretary of State. I was simply expressing the difficulty, at that point in time, of having to expose it fully in the public domain because of the adverse consequences that it might bring, to the detriment of the taxpayers in that area. That was the issue that I was seeking to pursue.

I take the noble Earl’s point that doing this perhaps after the referendum has been lost would seem to negate that process. However, I hang on to the point that there needs to be some mechanism to deal with it. The noble Earl referred to provisions, which we will cover in a different way in Amendments 196A and 196B, whereby if the Secretary of State is of the view that an authority is unable to discharge its functions or would be unable to meet its financial obligations the Secretary of State can step in. However, when we discussed that matter last time, it emerged that that would be an in extremis situation and I am still trying to focus on an issue when that situation has not been reached but it might be a material contractual issue that the local authority is facing. The issue may have reached a critical stage in negotiations, or there may be litigation pending or under way. I am suggesting a safety valve to deal with that.

If the Minister is saying that the best way of dealing with that is to have these discussions earlier so that there can be a separate category for that authority, I would accept that as a route forward. Quite how it would be viewed by the wider public if an individual authority, which presumably would have to be named, were to be separately categorised, and the inferences that might be drawn, could give rise to some—

[Earl Attlee]

My Lords, you could have a category with a single authority or with two authorities that have some bad luck, where something went wrong, and they could be treated a little more generously than others.

[Lord McKenzie of Luton]

Again, I am grateful for that. I hold to the view that although it may help in some instances, being named separately in a category with a potential council tax increase that was greater than that of most other authorities could itself engender inquiries, concerns and speculation over what might be going on. There is no easy way round this but I am happy to accept the Minister’s assurance that this type of issue could be dealt with through the mechanism that he identifies. I am content to leave it there and beg leave to withdraw the amendment.

Amendment 195H withdrawn.

Amendment 195J not moved.

Amendment 195K

Moved by

[Lord McKenzie of Luton]

195K: Schedule 5, page 285, leave out lines 31 to 45

[Lord McKenzie of Luton]

My Lords, I beg to move Amendment 195K but shall not move Amendments 195L or 195M because this is an overlapping provision. This amendment would delete the detailed list of issues where guidance can be given by the Secretary of State in relation to a referendum. Regulations can touch upon provisions relating to: the question to be asked; the publicity to be given in connection with a referendum; the limitation of expenditure in connection with a referendum; the conduct of the authority, members of the authority and officers of the authority; when, where and how voting in a referendum is to take place; how the votes cast in a referendum are to be counted; and for disregarding alterations in a register of electors and so on. I contend that those issues should be left to the local authority to determine. If we are to be adherent to localism and want to trust local authorities, then we do not need this degree of prescription.

I am afraid that I missed all the fun over the removal of referendums earlier in the Bill as I was in the Committee on the Welfare Reform Bill. This is one area where referendums clearly remain in the Bill but I believe that the prescription should be removed.

[Earl Attlee]

My Lords, this amendment removes the power to make regulations in relation to significant issues relating to the conduct of council tax referendums. If there are to be no regulations, what are there to be? Are authorities to be left to make up their own rules on conducting council tax referendums and counting the votes?

Voters are entitled to see referendums handled in a consistent way with proper safeguards. The Government have accepted, on the recommendation of your Lordships’ Delegated Powers and Regulatory Reform Committee, that the regulations should be subject to the affirmative resolution procedure.

When I responded to similar amendments proposed in Committee, I said that the regulations would be modelled on existing regulations on the conduct of referendums on local government executive arrangements and would be subject to consultation with the Electoral Commission. Therefore, we are not suggesting a completely different system for operating a referendum; we are merely suggesting changes, where necessary, for this particular type of referendum.

Given that the regulations will be given considerable scrutiny and will be subject to the approval of both Houses, I request that the amendment be withdrawn.

[Lord McKenzie of Luton]

My Lords, I do not think that we are going to agree on this issue. We think that the Bill is unduly prescriptive and unnecessary. Clearly, the local authority has to have a referendum if it is going to deal with its council tax levels or if it wishes to go above the designated level. It cannot avoid that. If it acted spuriously or arbitrarily, it could obviously be held accountable for that.

There is also the question, which we touched on in Committee, of what happens if the referendum is found to be flawed in some respect in due course. What happens to the declared outcome of that referendum? That is an adjunct to these provisions but, on the specifics of seeking the removal of this prescription, I think that I understand the Government’s position. I do not agree with it but I do not see that there is a great point in pursuing it further this evening and I beg leave to withdraw the amendment.

Amendment 195K withdrawn.

Amendments 195L and 195M not moved.

Amendment 196

Moved by

[Earl Attlee]

196: Schedule 5, page 286, line 6, at end insert—
“(6A) No regulations under this section are to be made unless a draft of the regulations has been laid before and approved by resolution of each House of Parliament.”

[Earl Attlee]

My Lords, in its report, your Lordships’ Delegated Powers and Regulatory Reform Committee recommended that regulations made under new Section 52ZQ should be subject to the affirmative procedure.

These regulations will set out the rules for conducting council tax referendums, and I am content that the Bill should be aligned with this recommendation. To give effect to this recommendation, Amendments 196 and 197 will add new subsection (6A) to new Section 52ZQ of the Local Government Finance Act 1992, which is inserted by Schedule 5 to the Bill, and will amend Schedule 6 accordingly.

There are a number of further minor and technical amendments—Amendments 197A, 197ZA, 197ZB, 197ZC, 197ZD and 197ZE. These do not alter the policy effect of the council tax referendums provisions but they ensure that minor drafting errors are corrected and that the provisions operate appropriately in relation to Wales. If your Lordships desire, I can give more detail on these amendments, but I assure noble Lords that they are minor and technical. I beg to move.

[Lord McKenzie of Luton]

My Lords, I am content with the government amendments and have no points to raise in connection therewith. Although they are grouped together, I have not yet spoken to Amendments 196A and 196B. I do not know whether they will be called separately but I can support the government amendments as they stand.

Amendment 196 agreed.

Amendment 196A

Moved by

[Lord McKenzie of Luton]

196A: Schedule 5, page 286, line 12, at the beginning insert “Subject to subsection (1A),”

[Lord McKenzie of Luton]

My Lords, this amendment takes us back to the point that we touched on earlier this evening: whether circumstances might arise where currently the Secretary of State can determine whether an authority will be unable to discharge its functions in an effective manner or will be unable to meet its financial obligations unless it has a so-termed excessive council tax increase. Our amendment would bring to that process the right to seek an independent assessment of those same criteria, so that there is a process, other than, or in addition to, the Secretary of State’s own engagement with that decision. That may, in part, provide a route for dealing with the issue that we discussed earlier concerning one-off events arising for local authorities.

My understanding is that these tests are to be judged in the extreme—only if there is a cataclysmic situation and not one somewhere along the spectrum before that. I do not think that that is what the wording actually says or what the natural meaning would be. However, I believe that an authority should have a right to an independent assessment when it is heading towards situations which are very serious for it and which, without an excessive council tax increase, it could not see its way through.

[Earl Attlee]

My Lords, similar amendments were withdrawn in Committee. I set out the Government’s position there and my noble friend Lady Hanham followed up in significant detail in her letter to the noble Lord, Lord Beecham, dated 19 July, a copy of which has been placed in the Library of the House. I shall not repeat all those points in detail, other than to reiterate that it would be inappropriate for an unelected and unaccountable person to make the decision, which will involve a judgment about whether local taxpayers should be entirely unprotected from excessive increases for a financial year.

My noble friend’s letter made it clear that authorities will be able to make the Secretary of State aware of any special circumstances applying to them during the process when council tax principles are formulated and finally determined. We talked about the possibility of having a separate category. If my right honourable friend got this decision wrong, clearly there could be very serious consequences if it turned out that a local authority was not able to carry out its functions, and there would be political repercussions for my right honourable friend. My noble friend also said the Government would keep an open mind about the context within which this power to disapply a council tax referendum would be used. With this in mind I would ask the noble Lord to withdraw these amendments.

20:00

[Lord McKenzie of Luton]

My Lords, I am grateful again for that assurance being on the record. As with our earlier discussion, if the categorisation of authorities heading for severe difficulties is the route to deal with it, I am pleased to see that on record. I beg leave to withdraw the amendment.

Amendment 196A withdrawn.

Amendment 196B not moved.

Schedule 6 : Council tax referendums: further amendments

Amendment 197

Moved by

[Baroness Hanham]

197: Schedule 6, page 302, line 13, at end insert—
“31A In section 113(3) (orders and regulations to be subject to annulment by either House of Parliament, except in certain cases) after “except in the case of” insert “regulations under section 52ZQ above or”.”

Amendment 197 agreed.

Clause 62 : Council tax calculations by billing authorities in England

Amendment 197ZA

Moved by

[Baroness Hanham]

197ZA: Clause 62, page 50, line 14, leave out “and (e)” and insert “, (e) and (f)”

Amendment 197ZA agreed.

Clause 63 : Council tax calculations by major precepting authorities in England

Amendment 197ZB

Moved by

[Baroness Hanham]

197ZB: Clause 63, page 52, line 29, leave out second “a” and insert “the”

Amendment 197ZB agreed.

Schedule 7 : Council tax: minor and consequential amendments

Amendments 197ZC to 197A

Moved by

[Baroness Hanham]

197ZC: Schedule 7, page 307, line 26, after “(7)(a)” insert “—
(a) in sub-paragraph (i) omit “general fund or (as the case may be)”, and(b) ”

197ZD: Schedule 7, page 310, line 17, at end insert—
“(3A) In subsection (2)(a) omit the words from “, other than” to “1988 Act”.
(3B) In subsection (3)(a)—
(a) at the end of sub-paragraph (i) insert “or”, and(b) omit sub-paragraph (iii).”

197ZE: Schedule 7, page 310, line 34, at end insert—
“(3A) Omit subsection (3).
(3B) In subsection (4) omit “or subsection (3) above”.”

197A: Schedule 7, page 314, line 30, at end insert—
“Police Reform and Social Responsibility Act 201152 The Police Reform and Social Responsibility Act 2011 is amended as follows.
53 In section 19(7)(f) (function of calculating budget requirement may not be delegated by police and crime commissioner)—
(a) after “calculating a” insert “council tax requirement or a”, and(b) after “section” insert “42A or”.54 In section 23(2) (minimum budget for police and crime commissioner: amendments to section 41(1) of the Police Act 1996) for paragraph (c) substitute—
“(c) for “its” substitute “the commissioner’s”.”

Amendments 197ZC to 197A agreed.

Clause 69 : Duty to consider expression of interest

Amendment 197B

Moved by

[Lord Shutt of Greetland]

197B: Clause 69, page 60, line 20, at end insert—
“(2A) The persons or bodies who may be specified by regulations under subsection (2)(d) include a Minister of the Crown or a government department.”

[Lord Shutt of Greetland]

My Lords we now move to that part of the Bill regarding right to challenge. The first set of Government amendments—there are eight amendments in the group—seek to improve the workability of the right and to clarify certain issues that arose in response to our recent consultation exercise and indeed at the Committee stage in your Lordships’ House. Our consultation on the community right to challenge showed there is a real appetite to extend the duty to consider challenges under the right to more public authorities, including central government departments. Seventy-three per cent of respondents on this issue supported this course of action and I believe it has the support of many in this House. During our deliberations in Committee the noble Lord, Lord Jenkin, suggested several services provided by government departments to which the right could be extended.

Clause 69(2)(d) already gives the Secretary of State the power to add other persons or bodies carrying on functions of a public nature as relevant authorities. Amendment 197B ensures that these persons or bodies could include a Minister of the Crown or a government department. Amendment 197C ensures that if the duty is extended to a person or body that exercises functions outside England, the right to submit an expression of interest will apply only to services provided by that person or body in England.

Amendment 197D responds to a query raised by the noble Lord, Lord Patel, in Committee about whether a public or local authority could be a community body. This was never our intention. In line with the definition of a voluntary body in Clause 69(6), we are therefore amending Clause 69(8) to clarify that a public or local authority cannot be a community body.

Amendments 197E, 197F, 197G and 197H are about enabling relevant authorities to determine timescales. They make changes to the provisions on the timescales associated with the community right to challenge in response to concerns raised by many local authorities, and others, during our recent consultation. These concerns focused on the difficulty of setting timescales nationally that could take account of the wide variations in services and circumstances and did not interfere with timescales for existing commissioning cycles. We agree with these concerns and are therefore amending the provisions to remove the Secretary of State’s powers to set timescales in regulations and replace them with a requirement for relevant authorities to set these timescales instead. We intend to set out in guidance, to which authorities will need to have regard under Clause 73(2), the factors they should take account of in doing this.

We have outlined what we expect these factors to be in the policy statement on the community right to challenge which was recently made available to Peers. Chief among them is the need for authorities to set timescales that give relevant bodies sufficient time—whether that is to prepare and submit an expression of interest or organise themselves to bid effectively in a procurement exercise or ensure relevant bodies are notified of decisions within a reasonable time. Authorities will also be required to publish details of these timescales.

Amendment 197E therefore removes the Secretary of State’s powers to specify the minimum periods which authorities can specify for the submission of expressions of interest. Clause 70(2) already enables authorities to specify periods for the submission of expressions of interest and Clause 70(3) to publish details of these periods.

Amendment 197F removes the Secretary of State’s power to specify the minimum and maximum periods which must elapse between the acceptance of an expression of interest and the commencement of the procurement exercise. Instead authorities are required to specify and publish details of these periods, which can be different for different cases.

Finally, Amendments 197G and 197H remove the duty on authorities to make a decision on an expression of interest within a timescale specified by the Secretary of State in regulations. Instead the authority must specify and publish the maximum time this decision will take. In order to prevent delay, relevant authorities will also be required to inform the relevant body of this maximum period in writing, either within 30 days of the end of the period for receiving expressions of interest, or where none exists, within 30 days of receiving an expression of interest. It must then notify the relevant body of its decision within the timescale it has specified. I beg to move.

[Lord Lucas]

I should be very grateful if my noble friend could go into a little more detail about Amendment 197E. He has removed there the ability of the Secretary of State to set minimum timescales. I understand what he says about flexibility. But if a local authority wishes to discourage activity under this part of the Bill, then timescales are where it will squeeze most easily. As my noble friend says, community organisations will take time to get themselves organised, to get their bids in and get them up to the standard required for subsequent scrutiny and competition. It is not clear to me in all the liberalising—from the point of view of the local authority—which is going on in these amendments, how the community, or bits of the community, can effectively appeal against, or have some notice taken, of a local authority which is setting very short timescales, which make things impracticable. There is guidance there. If the local authority does not go along with guidance, there does not seem to be any set of teeth that can be sunk into the local authority.

My experience of this is mostly in terms of parking regulations. There, again, the Government issue guidance. If the local authority goes against that guidance, no one takes any action of any description at all. Here it seems to be rather more important that in order to encourage action under this part of the Bill, there is an effective policing of the actions of local authorities to make sure that they are opening themselves up to what must be in many cases an inconvenient and, in their view unnecessary, application of neighbourhood rights and interests, with a system which they have got running very nicely, thank you very much. I would very much like some comfort that there will be an effective substitute for the backstop provided by the Secretary of State in the Bill as we have it now, which is being removed by these amendments, in cases where a local authority is acting to make this part of the Bill unworkable. I hope my noble friend can give me some comfort on that.

[Lord Shutt of Greetland]

I do not know whether I can give the noble Lord any comfort. The problem is that, on the one hand, people are asking for localism and letting the locals decide and, on the other hand, the noble Lord is saying, “Let the Secretary of State be on their back”. We cannot have it both ways. We certainly hope that people will be reasonable. For example, to have an expression of interest that is open for five minutes would not be reasonable. I should have thought that there would be other ways in localities to put a stop to that. It is as a result of our earlier debates and concerns about the Secretary of State being too prescriptive in these matters that some of these amendments have been brought forward. I should have thought that that would be appreciated by the House. But we are seeing the other view, which I know exists from time to time, that there will be recalcitrant local authorities which will not get on with things as people hope they might. I think we have moved in the right direction and, if it goes wrong and the recalcitrant authorities become a multitude, clearly something would have to be done, but perhaps we ought to trust local people and local authorities.

[Lord Greaves]

I take it that that was not the Minister’s reply to the debate. I have three brief points to make. We are moving on to the community right to challenge, and some of us have found it quite difficult to understand how it will work and how some of the problems which might result will be overcome. I thank the Bill team for their time and patience in explaining exactly how they see it working and being fairly honest about some of the difficulties which might exist. This is a difficult part of the Bill and it is one which, when it is enacted, as no doubt it will be, will need a careful eye kept on it. I cannot say that we have not had an immense amount of co-operation in trying to thrash it out.

I very much support Amendments 197B and 197E to 197G on the timing issues. Those are clearly a result of responding to the public consultation, but also to the discussions in Committee. I do not share the worries of the noble Lord, Lord Lucas, about the timing issues. The way in which the timing issues are now presented in the Bill is much better and leaves a great deal of initiative to local authorities. It is much better than the existing wording which leaves it all to the Secretary of State to lay down rules and regulations. I wish that the Government had been more flexible on similar matters in the 100 or so areas in the Bill that we can point to as giving excessive powers to the Secretary of State. In this instance, the Government have listened and we welcome that.

[Lord Beecham]

My Lords, the Minister referred to the extension to Ministers of the definition of agencies which might be subject to the right to challenge. That is the burden of Amendment 197B. Perhaps in his reply the Minister might indicate whether that could also include next-step agencies of government, which might carry out functions. More particularly, when one looks at Amendment 197D in conjunction with Amendment 197B, it seems to me that something of an anomaly is being created. There would be a community right to challenge Ministers under Amendment 197B, and that would extend to parish councils, but it would not, by virtue of Amendment 197D, extend to other local authorities, assuming one defines parish councils as local authorities. So we could have the anomalous situation of a parish council being able to exercise a right to challenge a government department or Minister about a provision of a service, but not the principal authority in which it is situated.

I do not imagine that that has been deliberately constructed in that way, but I should be grateful if the Minister would undertake to look at that anomaly before Third Reading. Parish councils can be quite substantial bodies—there can be 40,000 or 50,000 people in a parish area—and they might bid for a government service, whereas the county or district in which they are situated could not. That strikes me as a situation which would be difficult to explain. Perhaps it has not been envisaged as a possibility, but it seems to arise from these amendments. Perhaps the Minister could indicate a willingness to look at that point before we get to Third Reading.

20:15

[Lord Shutt of Greetland]

I thank noble Lords who have contributed to the debate. I am able to say to the noble Lord, Lord Lucas, that we are requiring local authorities to publish the timescales, so that if there were hideous timescales they would be shown up. I cannot imagine that they would endeavour to publish timescales which looked as though they were totally impossible for people to cope with. As a matter of public law, they must act reasonably. We have to bear that in mind and I hope that gives the noble Lord some comfort.

I understand the concerns of my noble friend Lord Greaves. I know how much hard work he has put into trying to understand the issues in this area. I shall write to the noble Lord, Lord Beecham, if I am wrong, but I believe it is quite right that a parish should be in a position to exercise the right. I believe that if one were able to challenge areas of government, local authorities could then become relevant. I may have to write to him to clarify that, but that was my belief when I heard people speak on that area, although it may be that some tidying up is required. I trust that noble Lords will be able to accept these amendments.

[Lord Greaves]

Before the Minister sits down, and without wishing to pre-empt the noble Lord, Lord Beecham, is that an indication that there might be some tidying up to be done at Third Reading, and that that issue therefore could be considered then?

[Lord Shutt of Greetland]

If we can do this by writing a letter and giving comfort in that way, it will be done that way. If, ultimately, it really were needed, we would indeed have to come back to it at Third Reading.

Amendment 197B agreed.

Amendment 197C

Moved by

[Baroness Hanham]

197C: Clause 69, page 60, line 26, after “functions” insert “in relation to England”

Amendment 197C agreed.

Amendment 197CA

Moved by

[Lord Greaves]

197CA: Clause 69, page 60, line 33, leave out paragraph (d)

[Lord Greaves]

My Lords, this little group of amendments raises some important and fundamental issues relating to the community right to challenge. I shall speak also to Amendment 197DA. I think that there is also a Labour amendment in the group.

We are back in the Alice in Wonderland world of relevant bodies, relevant authorities and relevant services. Amendment 197CA would leave out the provision that two or more employees of a relevant authority—a local authority—can be specified as a relevant body, in other words, a body which can challenge to run a service. The Bill defines “relevant body” as,

“a voluntary or community body, … a body of persons or a trust which is established for charitable purposes only, … a parish council, … in relation to a relevant authority, two or more employees of that authority, or … such other person or body as may be specified by the Secretary of State”.

The term “two or more employees” of a relevant authority does not seem to fit in with that list of defined bodies. One assumes that the other bodies defined by the Secretary of State will be community bodies. Employees are different.

That is not to say that there are not circumstances in which employees can, and indeed ought to, take over responsibility for the running of services on behalf of the principal council. Many of us would like to see far more organisations such as mutuals and co-operatives, which provide what, in a long lifetime ago in the Young Liberals, we used to call worker control—my noble friend Lord Tope remembers all that. Employee bodies or groups of employees taking over the running of services in a co-operative way is a perfectly valid and desirable way in which, in appropriate circumstances, public services can be run. They may be arm’s-length or more than arm's-length bodies.

However, it is our view that if the Government are interested in that—they have given some indication that they may be—that should be addressed as a separate issue. It is not the same as allowing a couple or half a dozen employees to go off on their own initiative and to do their own thing regardless of what the rest of the staff think. The Labour amendment in this group suggests that any such initiative should have the support of at least half the employees. On the face of it, that seems sensible.

There is concern that a small number of employees could act as a proxy for commercial companies coming in on the back of the provision. In our discussion with Ministers and civil servants, we have been given many assurances that safeguards are set out in the Bill to avoid that happening. The Ministers we have talked to have been absolutely clear that they do not see that as desirable, that it ought not to happen and that it can be prevented. I am asking my noble friend today not just for a statement that the safeguards are there but for a clear explanation on the record of how local authorities will be able to prevent that possible abuse. It is possible, as Ministers have told us, that that is unlikely to happen very often, but that is not a reason for not taking action to prevent it.

As for the process in which the community right to challenge will take place, I am widening the debate slightly to avoid saying quite so much on the next group of amendments. The first process is that a relevant body has to be approved by the council. If it is a parish council, it is automatic. If it is a community or voluntary body, the principal council will have to approve it as being a relevant body. The second part of the process is that a relevant body may make an expression of interest to run a service and the principal council has to decide whether to accept that expression of interest. So long as it fits the rules and regulations, it will not be able to reasonably refuse it. The third part of the exercise is that, having accepted an expression of interest, the principal council has to carry out a procurement exercise.

The concern that a lot of us now have is not about the processes in this Bill for approving a relevant body, which are full of all kinds of safeguards, with the possible exception of the provision relating to employees. We are not too concerned about the process of accepting an expression of interest, which again seems to have a number of safeguards written into it. It is in the procurement exercise where the problems seem to lie. Once the expression of interest is accepted, the procurement exercise comes into effect automatically. It seems to us that safeguards against abuse of the process are crucial.

Amendment 197DA is a different amendment. In Clause 69(8), “community body” is defined as,

“a body that carries on activities primarily for the benefit of the community”.

This amendment would add on the end of that,

“and is actively engaged in doing so in the area in which the relevant service is being provided”.

The amendment restricts the definition of a community body to a body which is active in the community referred to. It restricts it to local bodies or to wider bodies which are already active in the area. Otherwise, it would be wide open, for example, to a large national charity that has no presence whatever in an area to move in and try to take over services. If it is about community bodies, surely it is about bodies which are already active in that community.

I look forward to the Minister’s comments on that and in particular to his explanation of how the safeguards will apply to prevent abuse, particularly of a small number of employees putting in a bid for a service. Also, in general, what safeguards will there be against large commercial companies using this operation to sweep up services, which is what Ministers are repeatedly telling us they do not intend to happen?

[Lord Lucas]

My Lords, I face in a slightly different direction from my noble friend Lord Greaves. I hope my noble friend on the Front Bench can give me some comfort that, when the regulations are set out for this, they will have in mind how desirable it is that we should encourage the creation of neighbourhood-based community organisations to take on services currently provided by the state. One of the difficulties that we face in cities is that people have become used to the comfort of state provision, although they are getting extremely grumpy in some cases with the way in which it is provided.

If a community in a city is to get together and go through the process of preparing to bid for a service which it values, it is going to need considerable comfort and assistance in the regulations to make sure that it is not going to get tripped up on technicalities and that the local council can offer advice rather than having to stand back and treat this strange creature as a competitor to any commercial interests which may come along to bid for it afterwards. We need to be equipping ourselves in this Bill to nurture local enterprises and communities in cities to give them a chance through the provision of services to generate a surplus for reinvestment in the community. That is what we are doing elsewhere in this Bill for rural communities, which will generate a comfortable surplus out of planning permission, but we are doing nothing for inner city communities. This is the bit of the Bill where we give relatively compact communities easy access to a diversity of resources. Cities exist because they have that advantage over rural communities.

We need to give the local elements of those communities a real chance to get involved in providing local services and in that way generate surpluses which they can reinvest in the community and do the things that they want to do. I should like my noble friend to give me comfort that the department has urban communities in particular in mind in this part of the Bill.

20:30

I have received much more helpful responses on this subject from my noble friend at the Department of Health. Those responses suggest that, once we get the health Bill through—as I am sure we will—we will find local GP commissioning groups who are ready, willing and able to commission services from local community groups. Looking after the elderly, for instance, or making sure that people get looked after in other ways which the massive mechanisms of the National Health Service find difficult and inconvenient but which the community of patients through their doctors none the less wish should be done, will be accommodated readily and with ease and enthusiasm. We may well find communities becoming much more active in supporting their needier members through their beneficence and redirection of funds from the National Health Service. As I said, I have found those discussions very constructive. I very much hope that the same thinking is going on in my noble friend’s department.

[Lord Beecham]

My Lords, I certainly support the amendment of the noble Lord, Lord Greaves, in respect of the proposal that two or more employees could issue a challenge to the authority, which I would much rather were not in the Bill at all. Failing that, my Amendment 197CB, would at least require a majority of the employees affected to support such a move. I really hope that the Government will take that seriously. It does not seem appropriate that two or more employees—it might be a director or deputy director; it could be people lower in the organisation—could simply take a decision which would affect a considerable number of people without their consent and outsource a whole section of the local authority. That seems wholly unreasonable and not at all compatible with the general thrust of the Bill, which looks to secure support for a range of measures on the part of communities. I hope that the Government will acknowledge that there is an issue here and will accept one or other of the amendments. My preference would be that of the noble Lord, Lord Greaves, but, failing that, I would be delighted to accept his support for the fallback position.

However, I am less persuaded by his Amendment 197DA. I quite take the thrust of his intention, but I am not sure the wording is very compelling. The amendment refers to the body concerned being required to be,

“actively engaged … in the area in which the relevant service is being provided”.

Let us take as an example a county area and services for the elderly or domiciliary care. There might be an organisation in one corner of the county carrying out that service. It would hardly meet the description of being,

“actively engaged in the area”;

that is, across the area in which the relevant service is being provided. It is difficult to define in the way that the noble Lord seeks.

I am therefore unenthusiastic about the way in which the noble Lord reaches his objective, although I am bound to say that I am not sure that I can offer a better alternative. However, in respect of the previous two amendments, the Government need to rethink their position to facilitate at the very least a majority decision by those who would be affected by a move of two of their colleagues. I cannot see any logical reason why the Government should resist that.

[Baroness Hamwee]

My Lords, I have later amendments on the same issues. In relation to Amendment 197DA, I would like to say to my noble friend that I think that experience in the particular activity that is at issue is less important than the geographical link. I take his point about wanting a connection, but I am not quite convinced that it is the particular connection that he has mentioned. However, by and large I am entirely with him on this issue.

The noble Lord, Lord Lucas, framed this in terms of urban needs, and I myself am very much an urban and suburban person. He also mentioned the comfort of state provision. Since this debate has morphed into discussion not just about two employees, but about whether two employees might, as it were, sell out to Tesco, it does remind me that there is often a very sharp divide on this issue. People do not like Tesco, but they do like being able to shop in Tesco, which creates quite a dilemma.

My question for my noble friend is whether there is any room for local variation in a local authority’s response to such an expression of interest? I will come to my other questions when we come to my amendments later.

[Lord True]

My Lords, there is a gentle sense of irony in the representative of the workers’ party, and my noble friend who is yearning for the days when his party stood for worker control, expressing so much concern at the prospect of employees, however few—less than half, I gather, is unacceptable— expressing an interest in undertaking a function. It seems to me that we are witnessing major change in communities and local government and that it is perfectly reasonable, indeed it is already happening all over the country, that groups of workers and employees are coming forward with propositions to set up social enterprises, to take on existing bodies and to take on other activities. I am sorry that I was not in the Chamber to welcome the withdrawal by my noble friend of regulation in the previous group of amendments, which I do welcome. Yet here we are being pushed to prescribe and put blocks in the way of people putting forward expressions of interest simply on the basis that they might be employees of the organisation and, still worse, that they might secretly be in cahoots with capitalism.

[Lord Beecham]

That is not what I said, nor is it what the noble Lord, Lord Greaves, said. What we object to is the idea of two people in a potentially large organisation committing the rest of the employees. Where is the democracy in that?

[Lord True]

There is nothing to say that this deals with a large organisation—some of the things that we are discussing at the moment are relatively small. It seems inconceivable to me that two employees would act against the wishes of those people that they actually want to work with in the future. For years the noble Lord endured the policy of his party being made by small, powerful executives purporting to speak in the names of millions of people—for all we know, they probably still do. I do not see any reason why a group of workers or employees should not get together and entrust their negotiations about an expression of interest to two or three of their number. I think that we should be extremely careful in framing this Bill not to put forward regulation that makes employee initiative more difficult.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords who have contributed. The noble Lord, Lord Greaves, introduced the debate and then strolled off into the area covered by my notes for the next section, so I will trespass into them and see whether that works.

Before I respond in general I will deal with the matters raised by the noble Lord, Lord Lucas, because I am aware that he was not particularly comforted on the last occasion that I responded to him. I hope that he will be now, because if he looks at Clause 74, he will see that it is headed, “Provision of advice and assistance”. I will not say that it is littered with the words “Secretary of State”, but they are there half a dozen times, which suggests that the Secretary of State may well give advice and assistance to those who want to be involved in the challenge. I understand that the department’s view is that the clause would be used to give help and advice to various organisations that may be far better able to tackle the challenge.

[Lord Lucas]

My Lords will my noble friend clarify whether that would be the case when the Secretary of State was being challenged under the amendments made earlier by my noble friend?

[Lord Shutt of Greetland]

That is a little further down the road, is it not? If the clause states that that advice is being given, then that advice is being given. Therefore, if the Secretary of State is directly giving a service that is ultimately challenged, I would have thought that that had to be, quite frankly. However, that is a little further down the road and it will not happen tomorrow. Nevertheless, it is there that advice can be given and I hope that that will be helpful to my noble friend.

I will look at these notes and respond accordingly. Amendment 197CA would remove relevant authority employees as a relevant body, meaning that they would be unable to express an interest in running a relevant service. The coalition programme for government committed to empowering public sector staff to take control of their own services in new enterprises such as mutuals. That was reinforced in the recent publication of the Open Public Services White Paper. The Cabinet Office is leading on implementing this commitment by introducing a new right to provide. The inclusion of employees of the relevant authority as relevant bodies under the right to challenge will implement the right to provide in relation to local authority services.

To accept this amendment would be a great shame. Employees are often best placed to see how services could be improved and their ideas could make a huge difference in delivering more efficient, effective and responsive services. The amendment could prevent those good ideas from seeing the light of day by forcing employees to organise themselves as a charity, voluntary or community body simply in order to express an interest. Employees may not be prepared to be in a position to undertake such a process before an expression of interest has even been accepted, although of course they will have to comply with the requirements for what must be in an expression of interest.

In addition, this could create a parallel process with employees putting their ideas to local authorities outside the procedure set out in the right. This would risk jeopardising the transparency of the process: proposals should be evaluated consistently whether they originate from existing employees, a parish council or a voluntary or community body.

It is worth noting that in the policy statement, the Community Right to Challenge, which was made available in the House Library on 8 September, we make it clear that safeguards will be in place to prevent the kind of abuse of the right that is concerning some noble Lords. For example, the policy statement states our intention to provide that expressions of interest will have to set out the relevant body’s case that they are capable of providing the service and of competing in a procurement exercise. That will work to ensure that only employees serious about running a service express an interest in running it and should discourage any abuse of the right. In addition, employees submitting an expression of interest will need to set out how they propose to engage with staff affected by the expression of interest in the development of their proposal.

Amendment 197CB, tabled by the noble Lord, Lord Beecham, deals with employee support for challenges. I understand that the intention behind the amendment is to apply a condition to Clause 69(5)(e) that employees must first obtain the support of a majority of employees affected by their expression of interest before they can be considered a relevant body. The policy statement I referred to previously also set out our intention to require employees to set out in their expression of interest their proposals for staff engagement. However, we do not want to be prescriptive about how this is to be achieved. It is best decided locally rather than centrally. The experience of the way the right to request has worked in the National Health Service shows that existing, well established communication channels are likely to play an important part in engaging staff. There is no requirement for a ballot to demonstrate staff support for a proposal under the right to request. However, the face-to-face meetings, intranet updates and staff clinics undertaken when some 1,200 staff from the Hull primary care trust used the right to transfer to a social enterprise show that good communication between the staff involved is likely to be at the heart of any successful challenge.

20:45

Requiring employees to demonstrate that the majority of staff support a proposal in order for their idea to get a fair hearing is an unnecessary burden and risks deterring employees from exercising the right. It would require employees to identify all affected members of staff, which may not be straightforward if they operate from several sites. Then they would have to spend time, and potentially money, carrying out an exercise to seek views and gather evidence of approval. Such a prescriptive and formal process is disproportionate. There are, of course, a number of issues that staff will need to consider and actions they will need to take where they wish to form an organisation to deliver a service, including engaging affected staff. That is why we are requiring authorities, in setting periods between an expression of interest being accepted and a procurement exercise starting, to have regard to factors such as allowing relevant bodies sufficient time to prepare the bid for a procurement exercise.

Amendment 197DA requires community bodies to operate in the area the service is delivered. This would amend the definition of a community body to require that the body carries on its activities in the area in which a relevant service is being provided. This is an unnecessarily restrictive requirement which could work against the interests of the communities for which services are delivered. It could deny to those within a community of interest, for example people with learning difficulties, the expertise of a national organisation experienced in delivering services geared to their needs. It would also prevent community bodies successfully delivering services elsewhere from using the right to expand that service provision into a different area. For example, Bulky Bob’s is a social enterprise based in Liverpool that collects, reuses and recycles bulky household waste. It began delivering services for Liverpool City Council, but has expanded to deliver its services in other areas.

Bulky Bob’s reuses and recycles 65 per cent of the furniture and white goods it collects, thereby reducing the impact on the environment and saving the council money in landfill tax. The commitment to recycling has helped more than 30,000 low-income families gain access to affordable, “pre-loved” furniture since 2000. It also runs training programmes that enable long-term unemployed people to gain the necessary skills and experience for a future career in logistics, recycling, warehousing and distribution, retail and administration. We want to encourage more service providers like Bulky Bob’s rather than limiting them to working only for the benefit of one community.

I am aware of the concerns that noble Lords have expressed that this well intentioned community right might get hijacked by private companies that may have the experience and the resources to win contracts that might otherwise be awarded to community groups. There is a particular concern that local authority employees may abuse the right by expressing an interest as a proxy for private sector organisations. We intend to make provisions in regulations that will help to safeguard against these risks. These are set out in the policy statement that we made available in the House Library on 8 September, which I hope noble Lords will have seen. We have sought to balance the need for safeguards with the need to allow relevant bodies to take up the right and deliver real improvements for people using public services. We do not want to put disproportionate obstacles in the way of relevant bodies and risk harming the chances of good ideas from groups that are serious about delivering services seeing the light of day.

In the policy statement that I have referred to, we were clear that we intend to provide that the relevant body must make the case in their expression of interest that they are capable of providing the service. If there is no evidence or if the evidence is not convincing, the authority will be able to reject the expression of interest. This will also be the case if the authority considers that expression of interest to be vexatious or frivolous. We also intend to provide that an expression of interest from authority employees must include details of how they plan to engage staff affected by it. Prescribing that this should be done by requiring approval from the majority of staff would be disproportionate and would fall into the trap of over-engineering the right. It could have the effect of making it harder for employees than for other relevant bodies to take up the right.

We strongly believe authority employees have a lot to contribute in their local knowledge and connection, their experience of delivering services to the community, and their capacity for innovation. It is therefore right that they should be able to challenge and we should not put disproportionate hurdles in their way. Clearly, were employees proved to have sought to subvert the purpose of the right, however, for example, by taking bribes or secret commissions which arise out of their employment, or by revealing confidential information, their employer would have legal recourse. Equally, others would risk damaging the reputation of their organisations, and possibly facing a legal challenge from trustees, members or other interested parties if they were found to have participated in such underhand activity.

It is, however, important to be very clear that the ultimate aim of the right to challenge is to see improvements in local services. Where a successful expression of interest triggers a procurement exercise, the result should be an improvement in the service. This means a better outcome for service users, whoever wins the exercise.

I trust that in the circumstances, after that lengthy explanation, the noble Lord will feel able to withdraw his amendment.

[Lord Greaves]

My Lords, I am very grateful for the long and comprehensive explanation. I am sorry—I have a cough, but I shall try to keep going until I get a drink of water. Thank you for that; I am glad that some of my elders and betters have got important things to do. I shall try not to spill water on the Bench.

I am grateful to everyone who has taken part in the debate. I shall simply say to the noble Lord, Lord Lucas, that I think that there are major problems with the whole of this Bill in urban areas, but these are matters to which we will come back time and again. To the noble Lord, Lord True, I will say that I do not think that the Liberal Party ever stood for workers control. There was a slight difference in the 1960s between the young Liberals and the party as such, as my noble friend who was in the young Liberals with me at the time will no doubt confirm.

The more explanations I hear about this, the more questions seem to come. I am extremely grateful for the efforts made to explain it all, but some of the answers that we get confirm that there are difficult questions that have not been resolved. As for the coalition programme and open public services, in a sense they confirm my concerns. Involving employees and staff in running or even handing over services to groups of staff is something quite different and requires a different approach to that of a community right to challenge. I agree entirely with the noble Lord, Lord Beecham, that employees have to be seen as a group, as a body, and not as individuals. When councils recognise relevant bodies in the community, as I read it, they are recognising voluntary groups. They are recognising community groups. They are recognising parish councils representing the community. However, when it comes to employees, any two or three or half a dozen people seem to be able to come along and ask to be recognised as a relevant body, whereas what they seem to be is a group of individuals. I think that if transferring services to staff is going to be successful, it has to be done by negotiation and agreement across the staff, not just by two or three individuals, who may be disaffected because they have not been promoted and think they ought to have been, or who may be senior members of staff who think that they can run things perfectly well but do not have the support of everybody in their departments. There are serious problems here that will come out in practice. I suspect the matter will come back to allow a better and more comprehensive view of it.

As the Government have said in all the briefings, they would have to show how they propose to engage their staff in their proposals. Surely they should have engaged them and got their views before they put the proposals in, not afterwards. We were told that this would take up a lot of time, energy and resources, but if asking the people who are going to be working in this enterprise is going to take up too much time and energy, how on earth are they going to find the time and energy to put in the sort of comprehensive bid that, we are assured, is an absolute safeguard that it is going to be a serious bid?

Bulky Bob’s gets raised quite a lot in your Lordships’ House. I suppose most of us have been there to see it at various times, and it is great. However, Bulky Bob’s has done what it did under the present system by agreement and negotiation with the councils and the communities in which it works. It did not do it by challenging them from outside. In a sense, I do not think that it is a good argument for the Bill at all.

We are grateful for all the policy statements in the briefings that have been produced, even if some of them seem to confuse more than help. In Committee my noble friend the Minister said he hoped that we would have draft regulations by this time, so that at least we could look at them rather than the much vaguer policy statement. I know that he has made strenuous efforts to try to achieve that. It has not been possible, but it is not his fault at all. However, when we see the regulations, I think that we will have a better idea of whether this is going to work and how it is going to work. In the mean time, I beg leave to withdraw the amendment.

Amendment 197CA withdrawn.

Amendment 197CB not moved.

Amendment 197D

Moved by

[Baroness Hanham]

197D: Clause 69, page 61, line 1, after second “body” insert “, other than a public or local authority,”

Amendment 197D agreed.

Amendment 197DA not moved.

Clause 70 : Timing of expressions of interest

Amendment 197E

Moved by

[Baroness Hanham]

197E: Clause 70, page 61, line 20, leave out subsection (5)

Amendment 197E agreed.

21:00

Clause 71 : Consideration of expression of interest

Amendment 197EZA

Moved by

[Lord Greaves]

197EZA: Clause 71, page 61, line 26, at end insert—
“(1A) The Secretary of State may by regulations specify an annual cost of a relevant service at or above which level a relevant authority may reject an expression of interest.
(1B) An annual cost of a service that is specified under subsection (1A) shall be set at the level at or above which a full open tendering process is required to take place by any Act or regulations.”

[Lord Greaves]

My Lords, this is the other group of key amendments in this part of the Bill. I speak to four others in the group, and there are two more in the group from my noble friend Lady Hamwee. These amendments are all about the process of procurement once an expression of interest has been accepted from the relevant body. The problem is that once the expression of interest is accepted, the procurement procedures roll forward automatically. The kind of procurement may vary according to the scale of the operation. It could be very small—for example, taking over a local pocket park. It could be modest, such as meals on wheels in a village. It could be a bit larger, such as running a village hall, an estate community centre in a town or a local library. It could be quite substantial, such as providing adult domiciliary services across a district, refuse collection and recycling across a large borough, or county library services. So the challenge, at least in theory, could apply to a wide range of services.

All these processes will have to be carried out according to basic standards such as openness, transparency, non-discrimination, equal treatment and proportionality, which, apart from anything else, are imposed by the relevant European directive, which was transposed into the public contracts regulations in 2006. As I understand it, and perhaps the Minister can confirm this, the underlying system is unchanged relating to contracts by local authorities that contract out services.

In addition, we have the standards of auditing and supervision by, at the moment, the Audit Commission, by the system that will replace it, by the councils’ own standing orders and by financial regulations. As I understand it, the community right to challenge contracts will all be bound by existing regulations in this way. The key cut-off is imposed by European rules and public contract regulations. Those regulations are set out in euros so the monetary threshold varies a bit according to how the euro goes up and down, but I am assured that it is around £156,400. That is the threshold over which the annual value of a service must be open to tender throughout the European Union.

The fear and the danger is therefore that the community right to challenge could open the way to a new and rather random form of compulsory competitive tendering and the takeover of relevant services by large commercial companies, even if that might be against the wishes of the principal council—the “relevant authority”, in the jargon of the Bill—and the community group, the parish council, the charity or whichever relevant body put forward the bid.

Again, we have had a large number of government assurances. Ministers at all levels have stated time and again that that is not their intention with this provision. If councils want to test the market, as they are able to, they should do so clearly and deliberately, not by accident under the community right to challenge. That is what Ministers in the Government assure us is their position. However, it is not clear how that can be prevented in the Bill as it stands. May we have a clear statement that the Government do not intend the community right to challenge to be a way in for large commercial companies, and that clear guidance will be given to councils on how this can be prevented? May we please know how it can be prevented?

Meanwhile, the amendments suggest two possible ways forward as safeguards. Amendment 197EZA says that the relevant authority can reject an expression of interest for a service above the annual cost at which a full tendering process is required. In other words, if it goes over that threshold, that can be a reason for saying, “No, we’re not going to put it out to tender because of the consequences”. In practice, this is the £156,000-odd threshold imposed by the public contracts regulations.

Amendments 197EB, 197EC and 197ED would allow a council, instead of going for competitive procurement by tender, to carry out a full and open public service review. New subsection (3A), which we are proposing, reads:

“A service review carried out for”,

this purpose,

“must include a consultation process with the relevant body, users of the service and any bodies representing them, employees engaged in providing the relevant service and their representatives, residents of the area and such other persons that the relevant authority considers appropriate”.

In other words it would be a very open, transparent and, one hopes, effective process, looking at how the service was provided to see whether the challenge from a particular group could in fact provide the service more effectively, economically and advantageously for the community.

These amendments may not be the best ways to provide safeguards against the problem that we have identified, but that there is a problem seems to be the case. There does not seem to be an answer to the problem that if you go for a competitive procurement you are bound by the European rules and regulations, and if it is a service that is worth more than £156,000 each year, then there is a real risk that you are putting it out to a commercial company. I beg to move.

[Baroness Hamwee]

My Lords, I have Amendments 197FA and 197FAA in this group, and I am well aware that my noble friend at the Dispatch Box will tell me that what I am proposing is not lawful. What I am proposing is that a local authority can apply its own criteria essentially in assessing the expressions of interest, and include whatever restrictions and requirements it thinks appropriate—to very much the same aim, the same end, as my noble friend. I have no expectation about the amendments being accepted but, like him, I am looking for reassurances.

My noble friend the Minister said in response to the previous group of amendments that an expression of interest by two or more employees would not be a proxy for a commercial organisation, and referred to that in terms of abuse. I wrote down what he said about that but confess that, having printed off the policy statement to which he referred some weeks ago, I have completely forgotten about it, and it is probably somewhere in a pile of papers on my desk at the moment. What he said was that those expressing an interest would have to show that they are capable of providing a service, that they had engaged with the staff, and that what they were doing was not vexatious or frivolous. I have to say that I would have thought that any commercial organisation will very easily satisfy those criteria.

A concern to which my noble friend Lord Greaves has not referred is that having set up the arrangement—and this of course is not just something that would apply to the two employees; it could apply to a community body as well—it could then sell the business or dispose of the shares in the company which it had formed to run the service. I have not seen any way in which this could be prevented. I suspect that I would be told that it would be improper to prevent it. But it concerns me that it is taking this proposal a good deal further than appears on the face of the Bill.

I turn to subsections (5) and (6) of Clause 71, the first dealing with an expression of interest, the second dealing with a procurement exercise. Both talk of the authority considering—and I will come back to that term—whether the activity would,

“promote or improve the social, economic or environmental well-being of the authority’s area”.

Well indeed, and well and good. But consider: it is not bound to apply those factors. It needs to consider them. I dare say that means that it must be able to show how it has considered them.

Turning to subsection (7), we are told that this,

“applies only so far as is consistent with the law”.

There is no particular assurance at all here, if I may say so. Subsection (7) refers to the procurement exercise but I am worried that an authority may well read this as applying to the expressions of interest as well. In general, I suspect that local authorities will need quite a lot of reassurance over how they apply these provisions.

I speak only for myself in this. I am finding it difficult to articulate some of the unease that is almost more instinctive than technical. However, general expressions of reassurance and consolation may not go quite so far, technically, as to amount to real reassurance. I have rambled enough. I hope that the House has a sense of my unease.

[Lord Kennedy of Southwark]

I shall be brief. The amendment moved by the noble Lord, Lord Greaves, raises important concerns. The other amendments in the group seek a process to deal with these concerns. Without these amendments or something else, it is all rather open to interpretation, which is not a good place for us to be. I agree with the comments of the noble Baroness, Lady Hamwee, about the sense of unease.

The amendments in the names of the noble Lords, Lord Greaves and Lord Tope, and my noble friend Lord Beecham, are absolutely right. They make provision for a consultation process with the users of a service, their representatives and residents of the area. If the noble Lord, Lord Shutt, is unable to accept these amendments, will he tell the House when he responds how he squares that with his previous remarks about localism? I genuinely feel that the Bill is confused. In some cases it gives power to the local community, in some cases it takes it back. There is a lot of regulation. It is all a bit confused here. I would be grateful if the noble Lord could address that point in particular.

[Lord Shutt of Greetland]

I thank the noble Lords who have spoken to this set of amendments. I have notes on these amendments and will do my best to deal with them. Frankly, I am not certain that there is an absolute assurance, but let us see how we go with these amendments.

Amendment 197EZA would give the Secretary of State a power to specify in regulations a service value threshold above which an expression of interest may be rejected. It further provides that this threshold will be set at or above the level at which a full, open tendering process is required to take place by any Act or regulations. I understand that the intention here is to focus the right on those contracts where it is perceived that community groups might have a greater advantage in the procurement process. However, it is worth being clear that while only contracts valued at more than £156,000 must currently comply fully with processes set out in the public procurement regulations, procurement below this level will still be subject to requirements of openness, transparency, freedom to provide services and non-discrimination.

Furthermore, it is not right to limit the range of services open to challenge in this way. It is not true that the voluntary sector delivers only small-value services. The right ensures that good ideas for improving any services get a fair hearing and gives those groups the opportunity to go for it. A threshold that prevents consideration of ideas for better or more innovative delivery of higher-cost service contracts seems unnecessary, given the safeguards that I have already mentioned, and a shame.

This amendment also risks discouraging growth and partnership. For example, a consortium of Holy Cross Centre Trust, Mind and Camden Volunteer Centre won a £2 million contract to deliver mental health daycare services. Would this consortium not be able to challenge? Or take the example of Hackney Community Trust, which started off as a small social enterprise delivering local community transport and has expanded into a highly successful social enterprise. At what point would we say “Sorry, you have grown too much, so your ideas no longer deserve a fair hearing”?

Finally, it could also limit opportunities for larger charities and communities of interest to challenge for higher value services. Nobody would argue, for example, that Age UK does not represent the interests of older people. Yet if Age UK wanted to challenge to deliver the meals on wheels service alongside other services in a large authority area, this amendment could prevent it from doing so. It would be inflexible to set a threshold for service value above which an expression of interest could be rejected, and we would not want to reduce the scope of services that could be challenged.

Amendments 197EA and 197EB would enable relevant authorities to carry out a service review instead of a procurement exercise following the acceptance of an expression of interest. Amendments 197EC and 197ED would require relevant authorities to consult widely in carrying out such a review. We have introduced the community right to challenge to ensure relevant bodies with good ideas for how they can deliver services differently or better get a fair hearing and a chance to compete to run the service. These amendments would put at risk both of these aims.

It is unclear what a service review would constitute under these amendments, and the authority would not be compelled to take any action as a result. Many of you will have received the briefing from 10 leading voluntary and community sector groups, including ACEVO, NCVO, NAVCA and Locality, which states:

“Giving local authorities the choice whether or not to respond to an Expression of Interest with a procurement exercise would negate the right to challenge entirely, by effectively allowing local authorities to ignore Expressions of Interest”.

We are supportive of authorities reviewing their services and consulting widely as part of that activity. This is what good authorities will be doing regularly anyway. But that should not detract from or obstruct these important new rights for communities and I do not agree that they should be watered down in this way.

Having said that, if a local authority and any groups that had submitted an expression of interest can agree together that a service review is the most appropriate course of action, there is nothing to stop those groups withdrawing their formal interest and working with the authority to conduct such an exercise. Leaving the power in the hands of the community group ensures that the right is protected but gives the flexibility—where there is a good and proactive local authority—that noble Lords are requesting.

Amendments 197EC and 197ED impose an onerous duty and go beyond, for example, the best value duty consultation requirement, where the duty is to consult representatives of people who may be affected. Contacting every individual resident and service user would constitute a significant new burden. Again, good authorities already engage a wide range of service users and their representative groups as part of the commissioning and engagement process, and should be designing and commissioning services that best meet the needs of their communities.

Amendment 197FA seeks to enable relevant authorities, when assessing bids in a procurement exercise, to apply any criteria they consider appropriate relating to how they might promote or improve the social, economic or environmental well-being of their area as a result of the procurement. This amendment is unnecessary as it is already possible for relevant authorities to apply such criteria within the limits of procurement law. Any criteria applied beyond these limitations could be unlawful and subject to legal challenge.

Amendment 197FAA would require relevant authorities carrying out a procurement exercise following the acceptance of an expression of interest to consider,

“whether it would be appropriate to include particular restrictions on or requirements of persons bidding in response to the exercise”.

I can reassure noble Lords that this amendment is not necessary to ensure that a local authority can control the identity of the service contractor to which it lets the contract during the life of that contract. It is already standard practice for public contracts to contain a term that any purported transfer by the service contractor of its performance of the contract to another person will lead to termination of the contract.

Local authorities will want to retain control over the identity of the person providing services and will already do that in their service contracts. Even if that were not the case, EU procurement law is strict about a change of identity of the contractor. The substitution of a new contractual partner for the one to which the contracting authority initially awarded the contract could be regarded as a change to an essential term of the public contract in question. This could trigger a new procurement exercise.

We have not sought in these provisions to tell relevant authorities how they should design contracts, and nor should we. We have heard many times in these debates that we should be less prescriptive in what we ask of authorities, while ensuring power is really pushed down to communities. A local authority may already impose restrictions or conditions that apply to all persons bidding, as long as such restrictions or conditions are lawful and do not discriminate between bidders. Any attempt by a local authority commissioning a service to impose conditions or restrictions on some but not all persons bidding in the procurement exercise would risk being unlawful as being discriminatory.

I hope that noble Lords will feel able to withdraw their amendments. Yet, I understand the concerns that many noble Lords have about the Trojan horse issue—whether employees, a charity or someone else is challenging just with the idea of someone else coming in on the exercise. Clearly, all that has been proposed is a community right, and it is all about communities. The question comes when the community has challenged—I suspect that the community will have done that because of dissatisfaction—and the authority then says, “Well, we had better have a procurement exercise”. Certainly, if that exercise is beyond the EU figures there is no question that the exercise will be open. People will have put work in, as will have the community bodies and so forth. However, I do not see circumstances in which that procurement exercise can somehow be limited, because that would be outside the law of the land because of our involvement with the European Community. We must be careful not to kid ourselves about that.

However, having said that, everything in these proposals is about the community’s right. In my view, the community would be exercising that right because it thinks that it can do things better and that the service that it is getting would be better in the future than it received in the past.

[Lord Kennedy of Southwark]

I am pleased that the noble Lord understood the concerns raised on this important group of amendments, spoken to by the noble Lord, Lord Greaves. Is there nothing that the Minister can offer us in terms of looking at this further? Perhaps he may agree to consult with colleagues and come back at Third Reading.

[Lord Shutt of Greetland]

What I will say is this: I have been giving some thoughts regarding guidance, to which there has been reference all along. Guidance will be given and notes will be available from the department, but there may be circumstances where that guidance will be, “This is something on which you make your own mind up”. I am sure that the department will cull the debate and look at where offers ought to be made. Certainly, if guidance is required, guidance will be given. However, there will be instances where, because we are talking about localism, local people and people on local authorities will be making their own minds up.

[Lord Kennedy of Southwark]

Before the noble Lord sits down, can I ask whether there is any possibility of guidance being available by Third Reading, even in draft?

[Lord Shutt of Greetland]

It is extremely unlikely that the noble Lord will get it as quickly as that, but I believe that it will be available before 31 March.

[Lord Greaves]

Before my noble friend sits down and before I stand up, perhaps I may ask a question which has just occurred to me. If a service—for example, the refuse and recycling service—goes out to a contract and it is for well over £156,000, will an existing in-house provider be able to take part in that tendering exercise and compete against outside contractors in exactly the same way as it would under the old compulsory competitive tendering system or under the system in which councils sometimes put out a contract to test the market against their own in-house provision? Under the community right to challenge, if a contract goes out to tender like that, will the in-house provider still be allowed to take part in the exercise or will it be doomed?

[Lord Shutt of Greetland]

I may need to think about that and write to my noble friend. However, it seems to me that the in-house provider here could be the “two or more employees”. Those in-house people whom my noble friend speaks of would be the group of workers. That is how I think it would be done but, if I am wrong about that, I shall let him know. It seems to me that that is how the challenge would be used. However, if my noble friend is talking about procurement and there is an existing body, I do not see any circumstances in which that existing body will not be able to participate in the procurement exercise. I hope that that is helpful.

[Lord Greaves]

My Lords, I am grateful for that. I realise that my noble friend has not had a chance to think about that question but I think that the issue of “two or more employees” is totally irrelevant in this case. We are talking about a challenge made by an outside body or organisation. The contract is put out to general tender and there is not a two-person or six-person challenge from inside the organisation. There is an existing department full of staff who are currently working for the council and who may or may not be able to take part in the competitive tendering exercise. The more I think about this, the more it seems to be a crucial point, and it would be very helpful if the Minister could come back to us on it. This is a very new point and perhaps some clarification of it at Third Reading, if only to put the Government’s view on it on the record, would be extremely helpful. I hope that that will happen.

There are times when I listen to Ministers reading out their briefing when I think, “If that is the best they can do, I must be on to a good point”. The attempt to rubbish my amendment concerning a service review by suggesting that it would involve consulting every single resident, which would not be possible, was really rather derisory. I do not blame my noble friend for that; he has his briefing to read out. Councils and other bodies consult users of services all the time and they know how to do it. It is not difficult and you do not have to be absolutely certain that you have consulted every single resident. You put out a consultation by whatever means are reasonable. It might be through the internet, leaflets, articles in local newspapers or whatever. Therefore, I thought that that response was a bit pathetic.

The Trojan horse argument is important but the real problem arises when that Trojan horse is accidental. If you get a community that is really keen on taking over a service and it has real local support but the contract has to go out to tender and the community cannot possibly match what an outside commercial organisation can provide in terms of cost, then that community is not going to be very pleased. It is going to say, “We challenged and these people from outside who have come in to make a profit have stolen our services away from us”. They might well have preferred the service to stay with the council rather than for that to happen. That kind of scenario will simply lose public support. It is not about rights for communities, it is about communities potentially being set up to provide rights for the commercial challenges from outside. The advice to councils is going to be absolutely vital. It has got to be clear, it has got to be strong and it has got to provide councils with all the safeguards they need—not to stop communities challenging and taking services over—but to stop it being abused.

21:30

This process is going to be very closely watched by a lot of people, including the unions. I should pay tribute to the help I have had from Unison in drafting some of these amendments and discussing these issues. But I am all in favour of residents and citizens and local people taking over services. I am all in favour of groups of employees taking over running services, because they can do it very well indeed. What I am not in favour of is a process which is going to be misused and end up with things happening which Ministers tell us they do not want to. I fear that this might happen. I am very grateful for all the time and effort that has been put in to providing briefings and answers and everything else over the last few weeks on this; the more briefings I get, the more worried and concerned I am. It may well be that it will end up back in your Lordships’ House if it all goes wrong in a few years’ time. For the time being, I beg leave to withdraw the amendment.

Amendment 197EZA withdrawn.

Amendments 197EA to 197ED not moved.

Amendment 197F

Moved by

[Baroness Hanham]

197F: Clause 71, page 61, line 33, leave out subsection (4) and insert—
“(4) A relevant authority must specify—
(a) the minimum period that will elapse between—(i) the date of the relevant authority’s decision to accept an expression of interest, and(ii) the date on which it will begin the procurement exercise required by subsection (2) as a result of that acceptance, and(b) the maximum period that will elapse between those dates.(4A) The relevant authority may specify different periods for different cases.
(4B) The relevant authority must publish details of a specification under subsection (4) in such manner as it thinks fit (which must include publication on the authority’s website).
(4C) The relevant authority must comply with a specification under subsection (4).”

Amendment 197F agreed.

Amendments 197FA and 197FAA not moved.

Amendment 197FB

Tabled by

[Lord Greaves]

197FB: Clause 71, page 62, line 4, at beginning insert “Subject to subsections (5) and (6)”

[Lord Greaves]

My Lords, I think we have thrashed this to death now. I do not think there is anything else to come. I will therefore not move it.

Amendment 197FB not moved.

Amendment 197FBA not moved.

Clause 72 : Consideration of expression of interest: further provisions

Amendment 197FC

Moved by

[Baroness Hamwee]

197FC: Clause 72, page 62, line 7, at beginning insert—
“( ) A relevant authority that is considering an expression of interest from a relevant body may require the body to provide any information that the authority considers desirable in connection with its acceptance or rejection under section 71(1).”

[Baroness Hamwee]

I shall not speak at much length. This amendment was tabled at the last stage as well. It would provide for a relevant authority being able to require whatever information it thinks desirable. I dare say my noble friend will confirm that it is not necessary to state this because it is implicit or provided for elsewhere. The reason I am moving it is because I want to quickly comment on some of the things he said in response to the last group. As it was Report stage I could not come back on them then. He said, “It’s all about community”. But what my noble friend and I are saying is that we fear that it is not. I very much welcomed his comment that guidance might well say, “Make your own minds up”. That is exactly what one would want to see. But I wonder if I could suggest to him that guidance might include some sort of flow chart which would assist authorities to understand what they can do and what they cannot do, and what direction they have got to be thinking in. I also say that my noble friend Lord Greaves’s point about how a procurement exercise allows for a tender from the authority—from the in-house service—is very serious. It may be one of those things where the answer is so obvious that none of us can see it because it is blindingly obvious. If it is not obvious, and if it is not answered in a way in which the Minister will understand we would regard as satisfactory, then it is so serious that we must not lose sight of it. We should not discard it now and we should return to it at Third Reading to ensure that it is entirely clear. I hope that will not be necessary. I beg to move.

[Lord Shutt of Greetland]

These matters are grouped together. I thank the noble Baroness. There are four amendments in the group and two have not been moved. This is the third one and I take it that the fourth will not be moved. On that basis I respond to my noble friend Lady Hamwee.

Amendment 197FC would enable a relevant authority to ask a relevant body for any information it considered desirable in deciding whether to accept or reject an expression of interest. The amendment is unnecessary. Clause 69(1) already enables the Secretary of State to specify in regulations the information to be included in an expression of interest. The majority of respondents to the consultation broadly agreed with our proposals on this and the policy statement placed in the Library of the House sets out the information we intend to specify be included in an expression of interest. This information will enable the authority to decide whether there is one or more grounds for rejection. If expressions of interest do not include any of the required information, we would expect relevant authorities to take a common-sense approach and simply ask for it.

This amendment would enable authorities to place additional requirements, and potentially a disproportionate burden, on relevant bodies, and treat expressions of interest from different relevant bodies differently, which would be unfair and could potentially leave authorities open to challenge. If the experience of implementing the community right to challenge shows that a relevant body may need to provide further information to enable authorities to take a decision on an expression of interest, then we can consider whether we need to amend the regulations to allow for this.

In the circumstances, I trust that my noble friend will feel she does not need to press this amendment. Following her other comments about guidance, I am sure that the resources of the department will provide guidance, flow charts and material in any form that clearly gets over to authorities the information that they need. As I have indicated all along, I believe that all these proposals are right, but, in the event, it is about trust and it is about communities; it is not about exposing big contracts to organisations under the umbrella of something which has been done for communities. I trust that everyone has got that trust and that it will work in this way.

[Baroness Hamwee]

I thank my noble friend for that response. Of course, I shall not press the matter, but I note that he talked in terms of the Secretary of State making regulations which will allow for certain information to be requested. I am looking for a little more individuality than that. However, I shall use this opportunity to add a coda to my point about the in-house service and procurement. I am not asking for an answer now, but I shall put the question on record. In order to take part in it, would the in-house service have to form a separate, new entity in order to be able to bid? That would seem to involve a lot of extra bureaucracy and work, which I do not think any of us would want to see. I shall put my noble friend out of his agony and beg leave to withdraw the amendment.

Amendment 197FC withdrawn.

Amendment 197FD not moved.

Amendments 197G and 197H

Moved by

[Baroness Hanham]

197G: Clause 72, page 62, line 13, leave out subsection (3) and insert—
“(3) A relevant authority must specify the maximum period that will elapse between—
(a) the date on which it receives an expression of interest submitted by a relevant body, and(b) the date on which it notifies the relevant body of its decision in respect of the expression of interest.(3A) The relevant authority may specify different periods for different cases.
(3B) The relevant authority must publish details of a specification under subsection (3) in such manner as it thinks fit (which must include publication on the authority’s website).
(3C) A relevant authority that receives an expression of interest from a relevant body in accordance with this Chapter must notify the relevant body in writing of the period within which it expects to notify the relevant body of its decision in respect of the expression of interest.
(3D) The relevant authority must give the notification under subsection (3C) —
(a) where the expression of interest is one to which a specification under section 70(2) relates and is made within a period so specified, within the period of 30 days beginning immediately after the end of the period so specified, or(b) otherwise, within the period of 30 days beginning with the day on which the relevant authority receives the expression of interest.”

197H: Clause 72, page 62, line 17, leave out from “of” to “and” in line 18 and insert “its decision in respect of the expression of interest within the period specified by it under subsection (3),”

Amendments 197G and 197H agreed.

Clause 73 :Supplementary

Amendment 198 not moved.

Amendment 199

Moved by

[Lord Wills]

199: After Clause 74, insert the following new Clause—
“Freedom of information and contracts
(1) Any contract for any sum over £1 million made by a relevant authority with any person after the coming into force of this section shall be deemed to include a freedom of information provision.
(2) Where such a contract is to any extent performed by means of a sub-contract, that sub-contract shall be deemed to include a freedom of information provision.
(3) In this section a “freedom of information provision” means a provision stipulating that all information relating to the performance of the contract which is held by—
(a) the contractor,(b) a sub-contractor, and(c) any other person on behalf of the contractor or sub-contractor,is, notwithstanding any contrary provision, deemed to be held on behalf of the relevant authority for the purpose of section 3(2)(b) of the Freedom of Information Act 2000 or regulation 3(2)(b) of the Environmental Information Regulations 2004.(4) A freedom of information provision shall not require—
(a) a contractor to disclose to the relevant authority any communication between itself and a professional legal adviser in connection with the giving of legal advice to it with respect to its obligations, liabilities or rights in relation to the relevant authority under the contract;(b) a sub-contractor to disclose to the contractor any communication between a professional legal adviser and itself in connection with the giving of legal advice to it with respect to its obligations, liabilities or rights in relation to the contractor under the contract.”

[Lord Wills]

My Lords, I shall speak also to Amendments 200 and 201 in my name on the Order Paper. The amendments are similar to those that I tabled in Committee, so I do not intend to detain your Lordships' House long by rehearsing at length the arguments that I made for them then.

However, the noble Lord, Lord McNally, was good enough to write to me on 18 July setting out why the Government felt that they could not accept those amendments, and placed a copy of that letter in the Library. Despite all the fine words in that letter— some noble Lords may even have read it—about freedom of information, I found the arguments advanced by the Government so weak that I felt I had no alternative but to table the amendments once more in the hope that the Government might think again.

I hope that I have good reason to think that the Government might think again about the amendments, designed to promote transparency, because of the pledge that they made in their coalition agreement, to,

“extend the scope of the Freedom of Information Act to provide greater transparency”.

However, as I set out in Committee, if the Bill works as it is intended to, far from extending the scope of freedom of information, it will restrict it. This comes in the context that, nearly a year and a half into the life of the Government, they have done virtually nothing to extend the scope of the Freedom of Information Act beyond the actions taken by the previous Government. By any account, the Government have a considerable way to go if they are to demonstrate that they made that commitment to transparency 18 months ago in good faith.

In his letter, the noble Lord, Lord McNally, rejected what is now Amendment 199, which deals with the question of what information the public can obtain under the Freedom of Information Act about the work done for a local authority under contract. He did so on the grounds that the Government are committed to reducing the regulatory burden on business. That is a commendable commitment. I say that as someone who set up a small business and ran it for 12 years. But it is not an overriding commitment. However irksome business may find regulations, Governments still impose them in the public interest. This Government have, for example, quite recently proposed to do that for the banking sector.

The Government say that they believe that freedom of information is in the public interest, so presumably, if businesses want to profit from taxpayers' money, they should be prepared to account for the use of it to the taxpayer. I should be grateful if the Minister could say in his reply whether the Government agree with that principle. If so, why are they resisting the amendment, especially as I have reworded it to ensure that very small businesses are not caught by it because there is now a limit of £1 million on the size of the contract that would be covered? That is particularly the case as the Freedom of Information Act and regulations already contain exemptions to protect the legitimate interests of business—for example, trade secrets or information likely to prejudice their commercial interests.

Much the same arguments apply in support of Amendment 200, which would bring companies controlled by local authorities within the scope of the Freedom of Information Act. In his letter, the Minister rejected that on the grounds that,

“it would create uncertainty for requests about the coverage of the FOI Act given that companies could pass in and out on transfer of shares”.

I agree that there might occasionally—not often, but occasionally—be some such uncertainty, but it could easily be clarified. It hardly constitutes a compelling argument for keeping secret from the public important information about how their money is being spent. Clearly the Minister recognised that this was not the strongest of arguments as he then added:

“Where a company is only partly owned by the public sector, there is an increased likelihood that areas of its business will be unrelated to the public sector”.

That is true but it is not a reason for keeping secret those areas of business which are paid for by the public and operate on the public’s behalf. It is not beyond the ingenuity of all those clever officials and lawyers who work for the Government to draft accordingly.

21:45

Finally, the Minister rejected what is now Amendment 201, designed to provide greater transparency for the way in which local authorities discharge their responsibilities under the Freedom of Information Act 2000 and so to improve their performance. This amendment was designed simply to bring local government into line with central government. In this case I have to say that the Government did not produce a weak argument for the rejection of this amendment. They produced no argument at all. The sum of their case was:

“The Government is not currently convinced of the need to make this a statutory requirement”.

Why are the Government not convinced? I am afraid the letter was silent on this point. We know for a fact that the performance of local authorities in delivering freedom of information in compliance with the legislation is variable. It can be excellent but can also be poor. Why would a Government claiming to be committed to transparency not compel local authorities to adopt a mechanism which has been shown to improve the performance of central government and which, by any stretch of the imagination, hardly constitutes an onerous burden on local authorities.

I recognise that the Minister may not be in a position this evening to accept these amendments, no matter how keen he might be to do so. But given all the Government’s fine words about transparency, could he at the very least agree to look at an appropriate timescale for ensuring that the provisions of this Bill do not undermine, as they currently do, the Government’s commitment to increasing transparency and could he undertake to come back and tell your Lordships’ House the results of his investigations at Third Reading? We know that the longer politicians stay in power, the more they like it and the less they like any fetters on the exercise of it. The value of freedom of information legislation and transparency is precisely the fact that it is a fetter on the powerful. Eighteen months ago this Government suggested that they understood the importance of fettering those in power. I hope the Minister can now demonstrate that they are still committed to that, not simply in words but in actions as well.

[Lord True]

My Lords, I must intervene. Obviously the noble Lord has not developed his arguments at the same length as in Committee but I am afraid I am as unconvinced by them now as I was then. It is certainly a worthy thing to pay lip service to freedom of information but one has to think about the practical impact of what is proposed. Although the noble Lord says that in Amendment 199 he places a limit on the extent of the burden by specifying contracts for any sum over £1 million, this is vitiated by the fact that his amendment goes on to say:

“Where such a contract is to any extent performed by means of a sub-contract, that sub-contract shall be deemed to include a freedom of information provision”,

and so on. It is like unwrapping a Russian doll. As we discussed in Committee, many of these large contracts may relate to construction, for example, where many small businesses will be involved. This may be onerous for small businesses and those businesses may well find themselves caught by the way that this amendment is drafted. The only people exempted are legal advisers to those bodies. Indeed, any other person acting on behalf of a sub-contractor, such as the bookkeeper of a small business, may be brought in to the scope of that amendment, as I read it. I should like the Minister to reflect carefully before going in that direction.

I argued that the new clause proposed by Amendment 201 could be absurdly onerous on local authorities. The noble Lord’s amendment uses “relevant authority”, which means that any parish council or community council in this country would have to publish annual reports on the Freedom of Information Act, environmental regulations and information on the number of requests that it had received. All the provisions here would apply to every authority in the country. My own council is very willing to comply with the Act—anybody can ask a question about it at council; we had a question on it answered two council meetings ago and this information was given—but the cost of doing so is already more than £100,000 a year. With the greatest respect, I do not think that extending this degree of reporting responsibility down to the level of the merest parish council and community council in this country, let alone larger authorities, is appropriate or necessary.

While respecting the enthusiasm of the noble Lord, Lord Wills, I hope that my noble friend will resist his amendment for the reasons that I and others have given and that we can proceed with the rest of the Bill.

[Lord Lucas]

My Lords, the noble Lord, Lord Wills, is quite right that enthusiasm for freedom of information seems to wane the longer a party is in power. He is perhaps sitting there, safely in the far corner of the Back Benches, so that he does not get too heavily stamped on by his own Front Bench. The Labour Party quite clearly lost enthusiasm for the Freedom of Information Bill in the course of taking it through Parliament. It was by the narrowest of squeaks that it survived at all, and that was only six months into government. If it has developed a new affection for it now, I am delighted, but I do not expect it to last.

However, on our Front Bench, we have Mr Freedom of Information himself. My noble friend has been dedicated to this cause for a long time, so I hope that he will take a constructive view of what we might do. I share many of the concerns of my noble friend Lord True and do not think that this amendment does the trick. However, more openness in local government and more consideration of which of the larger contracts in local government should be open to freedom of information would be consistent with the way in which the Government are going; for instance, in considering whether examination boards should be subject to the Freedom of Information Act or putting UCAS on the list of bodies subject to it, as we have a draft regulation to do at the moment. If the processes of the Health and Social Care Bill lead to a substantial transfer of what is currently public activity away from the public gaze, I shall propose that we make sure that it is brought back swiftly through the Freedom of Information Act. I do not see this Bill as leading to large-scale transfers of activity away from the public gaze into obscurity, but there should be some protection in case there is. I hope that we get a constructive answer from my noble friend.

[Lord Beecham]

My Lords, I shall resist the temptation to stamp on my noble friend; it is a highly resistible proposition. I support the thrust of his amendments. Indeed, I detect certain sympathy on the detail of Amendment 199 from the noble Lord, Lord Lucas. There are matters in it that are worthy of further consideration by government and I hope that they will not simply reject the topic out of hand even if they cannot quite accept the wording of the amendments for reasons which have been advanced tonight and perhaps others.

On the new clause that would be inserted by Amendment 201, it is not an extraordinary demand to make of a public body that it should keep a record of, or at least do a report on, requests for freedom of information. I should have thought that this was a reasonably appropriate matter for a council audit committee—I serve on such a committee—to have before it as it is information about the governance of the authority. It does not seem to me that the amendment seeks to impose an inherently onerous obligation. It is one that should be within the knowledge of members of that authority. I think that routing it through the audit committees, or possibly standards committees, of councils would be a good way to ensure that elected members do not lose sight of the council’s obligations and that they ensure that their officers actually comply with them. I hope that the Minister will accede to my noble friend’s request to think about this and to perhaps bring something back at Third Reading. It is an important issue and although sometimes, obviously, there are difficulties in complying with requests, there is no reason why these issues should not be examined and, in the interest of good governance, improvements made to the local regime.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, I am very grateful to the noble Lord, Lord Wills, for moving the amendment. It is well known that he was himself, when in office, a champion of freedom of information. I am very grateful for the comment of the noble Lord, Lord Lucas, about my own record. I failed to persuade Jim Callaghan to put freedom of information into the programme of the 1976-79 Labour Government, but I was very happy that it was with Liberal Democrat votes that the Freedom of Information Act that is now on the statute book passed through this House. I am sad to read that the Freedom of Information Act is among Mr Blair’s major regrets of his premiership as it remains one of the things that I am most proud of being associated with.

I think that the noble Lord, Lord Wills, is a little ungenerous about the approach of this Government. It is not true that we have done nothing since coming into office. In fact, quite the reverse is the case. I think that the initiative that this Government have shown in relation to freedom of information and transparency has been quite revolutionary. The Government are committed to extending the scope of the Freedom of Information Act and to increased transparency and have made considerable progress in this since May 2010. For instance, as part of a package of measures announced in January, we have already introduced primary and secondary legislation to extend the Act’s scope and are currently consulting on more than 200 further bodies in this regard. In order to ensure that the Act continues to meet the needs of its users, the Act as a whole will be subject to post-legislative scrutiny. I do not think that noble Lords fully appreciate just how revolutionary that is. Indeed, when I urged that we bring forward post-legislative scrutiny, some of the strongest supporters of freedom of information were slightly nervous that the Act would come under too much criticism. What I say to them, and say to supporters of the Act now, is that post-legislative scrutiny and the assessments built into it will give the opportunity to prove what I still believe: that freedom of information underpins good governance.

22:00

Alongside this is another government initiative that I believe is genuinely radical. The Cabinet Office is currently undertaking a public consultation on an open data strategy, aimed at establishing how to ensure a greater culture of openness and transparency in the delivery of public services. However, there are still challenges to be faced, one of which the noble Lord highlights here. It is vital that we ensure that changes in the way that public services are delivered do not undermine our progress in enhancing transparency. We need to meet this challenge through post-legislative scrutiny and the open data consultation. We are taking a wholesale look at where improvements can and should be made. This is the weakness in the noble Lord quite legitimately using amendments to the Bill to raise these issues. We must look across the board at where we take transparency and open data and not just in the area of local government. It is important that we assess carefully the likely impact of any change against the benefits that it will bring to ensure that transparency is both maintained and enhanced—but with due regard to the burdens that might be imposed on the public sector and those providing public services under contract.

It would not be right to rush through solutions now which might appear attractive but do not ultimately provide the most effective solution or which address the issues in a piecemeal fashion. Within this context, it would not be appropriate, as proposed by the noble Lord, simply to amend the Freedom of Information Act in relation to local government. The Act covers more than 100,000 bodies—central government, the education sector, the police, the Armed Forces, and the health service—and our approach should be consistent across the board. Where change is proposed, we should assess whether the change should be made in respect of all or most of these bodies, and whether alternative solutions are available.

I would like to reassure noble Lords that our opposition to the amendments tabled by the noble Lord, Lord Wills, does not spring from any lack of commitment to the cause of transparency. The Government are committed to driving the transparency agenda forward with pace. Where our work demonstrates that measures are necessary to increase transparency and accountability, these will be taken. The noble Lord, Lord Wills, is an old campaigner so he knows darn well that to give a specific detailed timetable on this is simply not possible. The Government recognise that there is a strong argument for increased transparency by bodies in receipt of public funds. The Government’s open data consultation is proposing and consulting on an extension to the types of organisation to which an open data policy would apply. The Freedom of Information Act will also be subject, as I have said, to post-legislative scrutiny to see how it is working in practice. Further policy in this area will be developed in the light of the evidence drawn from these sets of work.

I am basically saying that the points raised by the noble Lord, Lord Wills, are interesting and certainly will be studied, but it is necessary to get our ducks in a row. We will do a cost benefit analysis on freedom of information. That has already been commissioned and will feed into the work of post-legislative scrutiny. My department will deliver by the end of this year a post-legislative scrutiny memorandum that will be the basis of the work by the Justice Select Committee that will start early in the new year working out and testing the practicalities of the Freedom of Information Act. Bodies will be able to give evidence to the Justice Select Committee on that work. As I said, the open data consultation will close on 27 October and will be followed by a White Paper.

I do not accept the suggestion of the noble Lord, Lord Wills, that the Government are not active in this area. The transparency agenda will make the Freedom of Information Act look like a poor relation of a Government who are really committed to transparency and will push this ahead. In the light of those assurances that what we really want to do is make sure that we have our ducks in a row before we move forward, rather than any hostility to the ideas that the noble Lord has raised, I hope that he feels ready to withdraw his amendment.

[Lord Wills]

I am extremely grateful to everyone who has spoken in what has been a not particularly lengthy but very revealing debate. I am grateful to the noble Lord, Lord True, for his contribution. It reminded everybody of the battles that still need to be fought for the public to get the mechanisms that they need to hold those who serve them properly to account.

I am grateful to the noble Lord, Lord Lucas, for although I think he disagreed with the wording of my amendments—I have always made it clear that I am very happy for them to be revised—I detected a sympathy towards the general thrust of them. I hope I am not wrong in that. I join him in paying tribute to the Minister as he has a very honourable, long and splendid record in campaigning for transparency and freedom of information. Any criticism I might be about to make does not reflect on him personally. He has a very long and honourable record in this field.

I agree with him. This bit of legislation will benefit, I am absolutely confident, from post-legislative scrutiny. Post-legislative scrutiny was a very welcome constitutional innovation brought in by the previous Government. I am wholly in favour of it and I think this legislation, as all legislation, will benefit from it. I agree with him on that but there I am afraid our agreement ends. I ask him to look at Hansard tomorrow to see what I actually said about the record of this Government. I did not say they had done nothing. I said they had done nothing that they had not inherited from initiatives taken by the previous Government. Everything he has mentioned was set in train by the previous Government. In the coalition agreement they said they would increase transparency. I take that as going beyond what the previous Government did. That is where, I am afraid, I was very disappointed in the Minister’s response. In all sorts of other areas of constitutional legislation which we have debated at great length in this House they have rushed it through with great vigour and energy, brushing aside getting all their ducks in a row and all those other metaphors the Minister brought out just now. There has been none of that. It was so urgent and so important it had to be ramrodded through Parliament at great speed with consequences we are going to suffer from for a very long time.

Why is transparency for this Government so much less important than all those other constitutional measures? In my view it should be even more important and the Government are showing absolutely no urgency in this field. If this Bill simply left the situation as it was I could perhaps sit down now and say, “Oh well, give the Minister a bit more time to see what happens”, but it does not. When this Bill goes through, as it will, if it works as intended, and I am sure it will more or less, it will not leave things as they are. It will decrease, perhaps significantly, the scope of the Freedom of Information Act. The people we serve, the voters and taxpayers, will suddenly find they cannot get information they think they have a right to know because suddenly great swathes of services will be removed from their right to know. That cannot be right. The Minister said they will do it when they get they get their ducks in a row and all the rest of it—some time, never. He cannot even commit to coming back at Third Reading—

[Lord McNally]

There has been an absolute tsunami of transparency. My right honourable friend Francis Maude has been frightening the life out of Whitehall and his ministerial colleagues by the way he has been forcing through transparency and the transparency agenda. It really is no good the noble Lord, Lord Wills, rewriting the history of the past 18 months. In fact, this has been a period of real progress in transparency in government. He should have the decency to acknowledge it.

[Lord Wills]

If the Minister would actually listen to what I was saying—I would be delighted if that was the case. I would sit down happily. I am sitting here on the Back Benches. I have no need to sign up to the Front Bench position any more on anything. I sit here quite happily committed to greater transparency. If what the Minister had just said were the case I would sit down happily now, but it is not the case. The coalition agreement says greater transparency. All the Government are doing is carrying through what the previous Government had already put in place. That is the record. It is not rewriting history. It is there firmly on the record. All I asked the Minister to do at the end was to set a timescale—maybe next year, maybe two years or sometime this Parliament. Absolutely nothing he said suggests that he going to do anything in this Parliament to make sure that this Bill does not restrict the scope of the Freedom of Information Act. On that basis, with great reluctance, I am afraid I am going ask to test the opinion of the House.

22:09

Division 3

Ayes: 17

---

Labour: 16
Crossbench: 1

Noes: 136

---

Conservative: 80
Liberal Democrat: 44
Crossbench: 7
Democratic Unionist Party: 1
Ulster Unionist Party: 1
Plaid Cymru: 1

22:21

Amendments 200 and 201 not moved.

Clause 75 : List of assets of community value

Amendment 201A

Moved by

[Lord Brooke of Sutton Mandeville]

201A: Clause 75, page 63, line 33, after second “land” insert “(except land where privately owned), assets, services and facilities in its area that are currently”

[Lord Brooke of Sutton Mandeville]

My Lords, this is the first time in my parliamentary life that I have found myself moving two initial amendments to be followed by 19 government ones, which in turn secrete in their midst a single Cross-Bench one, to be moved by the highly experienced noble Lord, Lord Cameron of Dillington. I am also conscious that when today’s business started, this group of amendments was the haven towards which the Government were sailing.

I am moving my two amendments on behalf of the British Retail Consortium, the BRC, which supports in principle greater localism in decision-making and welcomes the Localism Bill. It has been active throughout the Bill’s passage and has supported the Government’s focus on facilitating greater business participation within the decentralisation process. Although significant improvements have been made, though, there are still areas of substantial concern for retailers that, if left unresolved, will increase uncertainty for business and could reduce the potential for economic growth.

Your Lordships’ House will be familiar with the state of retail markets at present. Although my only home is now in rural Wiltshire, only a blind man could miss the effects of a struggling economy on the nation’s high street. In the eyes of the BRC, the clauses covering the community right to buy have the potential to distort markets for property and land, as well as having unintended consequences on the performance of businesses impacted by assets being placed on a statutory list. I am using this more clumsy definition because listed buildings, or listed assets, have another, more specific definition.

The BRC is calling for maximum certainty about what is and is not a “community asset”. In its view, there should be a clear national framework within which local decisions are taken. It is calling for minimum uncertainty for current owners and would-be investors. Assets such as undeveloped land and buildings, or assets with only potential future community value, should be excluded. The BRC is also seeking full and genuine opportunities for businesses to be consulted and listened to during the development of this legislation and when the listing process is established.

In short, the BRC is seeking amendments to the Bill to help provide clarity as to what “community value” may encompass and to ensure that potential building usage and undeveloped land are excluded. To this end, I hope that Amendment 201A is self-explanatory.

I realise that Amendment 202A may also be inelegant and clumsy, but its purpose is to avoid distorting markets for property and land and the legendary incidence of the law of unintended consequences and to protect the proper behaviour of markets—that is, to accelerate economic growth. I understand and concur with the Government in their emphasis on growth in their planning arguments but sauce for the goose is also sauce for the gander, and attention should be paid to business interests in their analysis of what will happen if the legislation serves in any way to impede economic growth taking place at this time. I beg to move.

[Baroness Hanham]

My Lords, I apologise at this time of night, but I am going to take a little time both in responding to the first amendment and in going through the amendments that are down in my name.

In Committee we discussed a lot the concerns of noble Lords in relation to some aspects of the provisions within these clauses, and I agreed to take those away and consider them further. I do not think that the noble Lords were on the whole opposed to the principles of the provisions; they were just concerned about the implementation.

There were particular concerns that the provisions could act as a disincentive to landowners who are currently making their land available for community use, and could impact on their ability to dispose of their land to family members or through inheritance. There were also concerns that the provisions could have a detrimental impact on the sale of going-concern businesses, and that the provisions were open to vexatious nominations from individuals with no real desire or ability to purchase the asset in question. There were also calls for greater certainty to be put on the face of the Bill regarding the definition of an asset of community value and the length of the moratorium periods.

We have been working over the Summer Recess with interested parties to address these concerns, and I am therefore going to beg to move a series of amendments that will provide greater certainty and clarity and will minimise any unintended consequences. As I said, I hope the House will forgive me for taking a little time to go through these.

As for the amendments proposed by the noble Lord, Lord Brooke, I say now that I do not think that the response I have got is adequate, and I am hoping that by the time I get to the end of what I am saying the Box will have provided an answer for me. If not, I am going to have to write to him.

In summary, these amendments will place a definition of community asset on the face of the Bill; clarify that individuals will not be able to nominate assets to go on the list; set out a number of exempted disposals, including transfers of land within families and by inheritance, and business-to-business going-concern sales; put the length of the moratorium periods on to the face of the Bill; and remove various delegated powers.

We placed in the Library a policy statement which we sent to everybody on 8 September and which explains these amendments and sets out our thinking about the content of the regulations in more detail.

Perhaps I may pass over the amendments of the noble Lord, Lord Brooke, for the moment. I hope that I get an answer that is nearer to what he was dealing with than the one that I have at the moment. I hope he will forgive me for that.

I turn to the government amendments. Amendments 202B and 202F place a definition of asset of community value on the face of the Bill. A building or other land is to be defined as an asset of community value if the following requirements are met: first, if its actual current use furthers the social well-being and interests of the local community, or a use in the recent past has done so; secondly, that that use is not an ancillary one, such as where farmland is used for the annual village bonfire; and thirdly, it is realistic to think that there will be a use which furthers social well-being in the future, whether or not this is exactly the same as existing use. This means that for an asset which already furthers social well-being or interest, it must be realistic that it will continue to do so. And for one which did so in the recent past, it must be realistic to think that there will be community use again within the next five years—and that is the period for which a listing would last.

Amendment 202F clarifies that social interests can include cultural, recreational and sporting interests. Each local authority operating the scheme will refer to this definition when deciding whether a building or other land should be listed as an asset of community value, and in the light of these amendments we are proposing to remove, through Amendment 202E, the power for the Government to set out matters that local authorities must take into account in deciding whether a nominated asset should be listed. These amendments are in line not only with concerns that noble Lords have raised but, importantly, with the results of our recent consultation exercise, in which 80 per cent of respondents agreed that local authorities should have the power to decide what constitutes an asset of community value based on a broad definition and the list of exclusions.

22:30

I also remind the House that we intend to exclude residential premises and associated land from listing unless it is integral to an asset such as a pub or a shop. We will also exclude land of operational use, such as major transport networks. That will be set out in regulations. In light of what the Government have brought forward, I hope my noble friend Lord Brooke will be content to withdraw his amendment when I get around to it.

Amendments 202G to 202K move on to the nominations process. It is important that the list of assets of community value reflects the buildings and land that the community itself recognises as benefiting its social well-being. We want to ensure that those nominating an asset for listing do so on behalf of their community, rather than on an individual’s whim. Therefore, we have tabled government Amendments 202G, 202H and 202J, which will clarify Clause 77. They replace a delegated power with a provision in the Bill, which states that only voluntary or community bodies with a local connection will be eligible to make community nominations, in addition to parish councils in England and community councils in Wales. There will be a need to define these terms to ensure that eligibility is restricted only to local groups who are concerned with the social well-being of the neighbourhood. Therefore, Amendment 202K will extend the existing delegated power in Clause 77(4) to define “voluntary or community body” and provide conditions to be met to demonstrate local connections in regulations.

I come to Amendments 202L, 203 and 203A to 203C. Amendment 203 removes the power to make regulations in Clause 79(5) on the giving of written notice of an asset’s inclusion on or removal from the list, including how to do so when the local authority does not have a name or address. Amendment 202L provides, instead, that where it does not appear “reasonably practicable” for the local authority to give the written notice, it must take reasonable alternative steps to bring the notice to the person’s attention. Amendment 203B removes the power to make regulations in Clause 81(4) on the form and content of the list of unsuccessful community nominations. Instead we will make clear with Amendment 203A that local authorities may remove an unsuccessfully nominated asset from the list after five years if they so wish. While it is on the list of unsuccessful assets, the entry must give reasons for it not being included as an asset of community value. Amendment 203C removes the power in Clause 82(2) to make regulations on how the lists of community assets and unsuccessfully nominated assets are published without any replacement provisions. Removing these delegated powers will provide more certainty about how the scheme will operate and recognises that local authorities do not need prescription from central government.

Turning to Amendments 203D and 203H, in Committee I indicated the types of disposals that we intended to exempt from these provisions, including business-to-business transactions where the existing business is sold as a going concern and the disposal of listed land that forms part of a larger estate. The purpose of these amendments is to ensure that the provisions do not act as a disincentive to landowners who already offer their land for the use of the community, in that they do not have an adverse impact on thriving business.

Amendment 203D sets out some of the exempt relevant disposals in the Bill. These are: disposals made as a gift; disposals made due to the inheritance of the land; disposals between members of the same family—the definition of “family member” that we are proposing is set out in Amendment 203H; disposals where only part of the land has been listed as an asset of community value; disposals of businesses as a going concern; disposals occasioned by the resignation or death of a partner in a firm of trustees of a trust; and transfers between trustees, a trust and a settler, and between a trust and a beneficiary.

We are retaining the power to specify further exempt disposals in regulations, and we intend to add further detail in regulations with regard to disposals of part-listed land. We will continue to work with key interested parties to develop the contents of the regulations. A full list of the exemptions that we propose to make through regulations is contained in a policy statement which I laid in the House Library on 8 September. In developing this list we have listened to the views of interested parties and those who responded to consultation.

Amendments 203E to 203G and Amendment 203J set out the timeframes that will apply, and offer reassurance that they cannot be changed except by further primary legislation. A number of noble Lords have made a strong case, both inside and outside the Chamber, for the value of certainty in relation to the length of these periods. Therefore, we propose to set the following moratorium periods: six weeks for the interim period during which a community group can decide to trigger the full moratorium; six months for the full period of the moratorium; and 18 months for the protected period during which property owners can sell the asset without being subject to another moratorium. These periods will all run from the date on which the local authority is notified of the intention to sell a listed asset.

In the public consultation there was a clear consensus for an interim moratorium of six weeks and a protected period of 18 months. In addition, just over half of those who responded supported a full moratorium period of at least six months. We have heard compelling evidence from the voluntary and community sector that six months is the minimum realistic time needed to raise funding and to put a business case together in order to make a bid. In addition, Amendment 203J removes the delegated power to prescribe moratorium lengths in regulations. I hope noble Lords will recognise that we have taken the necessary steps to address concerns raised at Report, and that the amendments we have proposed provide greater clarity with regard to these provisions. I hope, therefore, that noble Lords will feel free to support them.

If I may, I can now respond to the noble Lord, Lord Brooke. The definition in Amendments 202B to 202F sets out that the asset must already be of a community value, currently, or in the recent past. The reference to potential use is to allow community groups to develop options for future use of such buildings. The definition covers only social interest and well-being. It does not include economic considerations. We have also sought to exempt business-to-business going-concern disposals. I hope that answers the noble Lord’s concerns—I think he was talking about land that was also owned by business and clearly there, unless the asset is or has been assessed as being of community value, it would be excluded.

I expect that the noble Lord, Lord Cameron, will want to speak to his amendment, Amendment 203ZA, before we move on to the debate.

[Lord Cameron of Dillington]

My Lords, I rise to speak to my Amendment 203ZA and to ask one or two questions about the Government’s new amendments and proposals. However, before doing so, I should like to thank the Government for listening to the debate and to the concerns of this House in Committee, and for listing to the numerous comments they have received from outside bodies. In particular, I thank the noble Baroness for her understanding and flexibility throughout all this. While I am not totally satisfied with what we have now, it is fair to say that we can work within the rules that she has set out. I still think that the red tape is a good example of what all Governments do, which is to go over the top. However, the Government having moved so far and the fact that we have had extensive debates, we—or certainly I—will accept where we are now.

My amendment is designed to pre-empt the regulations that, I gather, will give the landowner only 28 days to appeal for a review of the nomination of his or her asset. This is a short period in which to prepare a case and supply the necessary evidence. Such haste is not warranted because such a review will probably take place at a time when the assets are nominated rather than when an asset is about to be sold. Therefore, there is unlikely to be any real urgency at this time.

More importantly, the asset is actually on the list until it is taken off and the community’s interests therefore remain protected during any pause, and thus a delay is to the community’s advantage and not the landowner’s. It is therefore right that the latter should have more time to prepare their case for appeal. In my amendment I have suggested a period of 60 days. I hope that the Government can agree with me.

I have three questions on the proposals put forward by the noble Baroness—actually, my third question relates not to those proposals but to part of this chapter. My first question relates to Amendment 202H on nominations from voluntary or community bodies with a local connection. I am concerned about the use of this provision and the possibility of vexatious claims, nominations and proposals. There need to be firm rules to prevent them. I realise that these rules will, I hope, be forthcoming in the intended regulations, but I was hoping for some indication of the Government’s thinking at this stage. How longstanding does a group have to be before it can put forward a nomination? How many people have to be involved? Is there a percentage of the population of the community who must be involved? Do they have to be registered as charities, or if they are sports organisations or other clubs, do they have to be affiliated to a regional or national body? What is to stop a husband and wife or two neighbours forming the “Ambridge Tiddlywinks Society” today and trying to register a piece of land tomorrow? I hope that the Minister can provide helpful words of wisdom on that.

As to my second question, what is the reason for the Government requiring lists of unsuccessful nominations? I am not complaining about that but I want the reasons to be spelt out for me. Is it to put that land definitively beyond the reach of any community group and to make that knowledge public, or is it to announce to the world that this land nearly made it and maybe next time, with a bit of careful rewording, it will make it? If, as I hope, the latter is not the case, why remove the nomination from the failed list after a period of five years, as opposed to there having to be a change of circumstances involved—which would seem to be a much better way forward?

Finally, I refer to Clause 80(6)(d), which states that regulations will provide for appeals against an adverse review of a decision to nominate an asset. As I understand it—I am not sure that this remains the case, but I have seen it somewhere—the appeal will be judged by the same council that carried out the review in the first place. This must be wrong. Everyone knows that whenever possible a local council, or for that matter any other body, will favour its own team against an outsider. Would the Government be prepared to rethink that proposal? Would they be prepared to consider an independent outside body to look at such further appeals against a decision on review, and to state now clearly on the Floor of the House that the regulations will affirm that?

22:45

[Lord Gardiner of Kimble]

My Lords, concerns about the unintended consequences of the assets of community value provisions were raised at Second Reading and in Committee. Indeed, my noble friend Lord Cathcart and I tabled amendments because of our concern. Therefore, I thank the Minister very much for her understanding and determination to ensure that the Bill hit the right target in bringing forward the Government’s amendments tonight.

I also include in my acknowledgement and appreciation of the work undertaken the Bill team and, indeed, outside bodies such as the Country Land and Business Association for securing practical solutions. The common objective that we all share is vibrant communities for the future and I hope that the Bill as amended will help to fulfil that aspiration.

[Lord Greaves]

My Lords, I thank the Government for listening to the debate on this matter in Committee and for coming forward with amendments which, by and large, are very sensible. I particularly appreciate their picking up the ancillary use point that I raised in an amendment, a great deal of which makes sense. Furthermore, I think that we all owe a debt to the noble Lord, Lord Cameron of Dillington, for the hard work that he put into this part of the Bill—not least because it meant that we could leave it to him and concentrate on other parts of the Bill.

[Lord Kennedy of Southwark]

My Lords, we have had an interesting debate at this late hour on this group of amendments. I can offer the Government some measure of support tonight, as there is lots to welcome in their proposals here, and they have clearly listened to the concerns expressed in the House.

The origin of some of the proposals can, of course, be found in the previous Administration. Amendment 201A, moved by the noble Lord, Lord Brooke of Sutton Mandeville, is not an amendment that we on these Benches can support, although his Amendment 202A , requiring the Secretary of State to publish criteria by which an asset must be assessed in order to be defined as being of community value, could be of some merit, as is the proposal from the noble Lord, Lord Cameron of Dillington.

[Baroness Hanham]

My Lords, I am extremely grateful for the more or less general support for what we have done, and, in my turn, I thank all those who have diligently attended meetings—not only the noble Lord, Lord Cameron, but my noble friends Lord Gardiner, Lord Cathcart and Lord Howard of Rising. I fear that I may have forgotten someone but there have been great consultations, mostly over the summer, and I am very grateful for the time that noble Lords have put in to ensure that these provisions do not have the unintended consequences that were anticipated.

The noble Lord, Lord Cameron, was the only person to pose questions and perhaps I may turn to those. His amendment would give landowners 60 days to request the local authority to carry out an internal review of its decision to list an asset. We are now going to move from 28 days to six weeks, which is a bit longer, but we think that that will give a landowner time to decide whether he needs to appeal the decision. The details of the procedures for carrying out an internal review, including who can do it, will, I am afraid, be in regulations. I am sure that we will have an opportunity to talk about this further before then, but it is anticipated that that is what will happen.

The process will be that the landowner will first be contacted by the local authority if the land has been nominated by a community group. Therefore, in practice, landowners will have been aware of the process well before they receive the formal notice of the local authority’s decision. Once a review has been requested, it is proposed that the local authority will have six weeks to conduct the review. We also intend to provide in the regulations that, if a local authority and the landowner agree, this period can be extended. Therefore, I think that flexibility is built into that system.

I was also asked who can nominate an asset and about the voluntary and community body. Conditions will be set out in the regulations to demonstrate a local connection. The intention is to ensure that such groups are genuinely concerned with the social well-being benefit of their community and that they are based in the relevant community or neighbourhood. This may include unincorporated groups, so as to allow groups that have recently been set up to help save an asset. There are many examples that have already taken place where people have set up a group to try to save their pub or an asset. We know that that can and has happened. We do not feel that we ought to stand in the way of such groups. However, we will look to see whether we need to place stricter requirements on them as to whether they need to be incorporated or recognised, very much as the noble Lord has said. I will come back to him on that as we make those regulations.

I am extremely grateful to all those who have given their time to do this. I hope that we have more or less answered their concerns. I know you can never be 100 per cent sure—there is bound to be somebody round about who does not think we have quite gone far enough—but I think we have addressed all of the concerns that were raised.

[Lord Brooke of Sutton Mandeville]

My Lords, if I may say a word at the close of this debate, having moved the original amendment that stimulated the admirable speech by my noble friend the Minister, I think that I am right in saying that I put down my amendments either just before or at the same time as those of my noble friend the Minister. Therefore, my amendments did not take into account the amendments that the Government were putting down. However, I join everybody else in congratulating my noble friend on and thanking her for the admirable series of amendments that the Government have provided.

As to what my noble friend very kindly said in response to my own amendments this evening—on which the whole debate was in the end hung—I will of course read her response and compare notes with the British Retail Consortium. I do not expect there will be a need to come back to this matter at Third Reading, but nevertheless I reserve the possibility after I have had those conversations. I am most grateful for all the contributions made in this short debate. I am sure everyone will be delighted when I sit down. I beg leave to withdraw my amendment.

Amendment 201A withdrawn.

Amendments 202 and 202A not moved.

Clause 76 : Land of community value

Amendments 202B to 202F

Moved by

[Baroness Hanham]

202B: Clause 76, page 64, line 23, leave out from “Chapter” to end of line 26 and insert “but subject to regulations under subsection (2), a building or other land in a local authority’s area is land of community value if in the opinion of the authority—
(a) an actual current use of the building or other land that is not an ancillary use furthers the social wellbeing or social interests of the local community, and(b) it is realistic to think that there can continue to be non-ancillary use of the building or other land which will further (whether or not in the same way) the social wellbeing or social interests of the local community.(1A) For the purposes of this Chapter but subject to regulations under subsection (2), a building or other land in a local authority’s area that is not land of community value as a result of subsection (1) is land of community value if in the opinion of the local authority—
(a) there is a time in the recent past when an actual use of the building or other land that was not an ancillary use furthered the social wellbeing or interests of the local community, and(b) it is realistic to think that there is a time in the next five years when there could be non-ancillary use of the building or other land that would further (whether or not in the same way as before) the social wellbeing or social interests of the local community.(2) The appropriate authority may by regulations—”

202C: Clause 76, page 64, line 27, leave out from “that” to “a” in line 28

202D: Clause 76, page 64, line 31, leave out from “that” to first “a” in line 32

202E: Clause 76, page 64, line 36, leave out paragraph (c)

202F: Clause 76, page 65, line 9, at end insert—
““social interests” includes (in particular) each of the following—
(a) cultural interests;(b) recreational interests;(c) sporting interests;”

Amendments 202B to 202F agreed.

Clause 77 : Procedure for including land in list

Amendments 202G to 202K

Moved by

[Baroness Hanham]

202G: Clause 77, page 65, line 15, after “value” insert “only”

202H: Clause 77, page 65, line 27, leave out from “person” to end of line 28 and insert “that is a voluntary or community body with a local connection.”

202J: Clause 77, page 65, line 32, leave out paragraph (b)

202K: Clause 77, page 65, line 33, at end insert—
“(za) the meaning in subsection (2)(b)(iii) of “voluntary or community body”;(zb) the conditions that have to be met for a person to have a local connection for the purposes of subsection (2)(b)(iii);”

Amendments 202G to 202K agreed.

Clause 79 : Notice of inclusion or removal

Amendments 202L and 203

Moved by

[Baroness Hanham]

202L: Clause 79, page 66, line 25, at end insert—
“but where it appears to the authority that it is not reasonably practicable to give a notice under this subsection to a person to whom it is required to be given, the authority must instead take reasonable alternative steps for the purpose of bringing the notice to the person’s attention.”

203: Clause 79, page 66, line 33, leave out subsection (5)

Amendments 202L and 203 agreed.

Clause 80 : Review of decision to include land in list

Amendment 203ZA not moved.

Clause 81 : List of land nominated by unsuccessful community nominations

Amendments 203A and 203B

Moved by

[Baroness Hanham]

203A: Clause 81, page 67, line 41, after “land” insert “—
(a) may (but need not) be removed from the list by the authority after it has been in the list for 5 years, and(b) while it is in the list,”

203B: Clause 81, page 68, line 1, leave out subsection (4)

Amendments 203A and 203B agreed.

Clause 82 : Publication and inspection of lists

Amendment 203C

Moved by

[Baroness Hanham]

203C: Clause 82, page 68, line 24, leave out subsection (2)

Amendment 203C agreed.

Clause 83 : Moratorium

Amendments 203D to 203J

Moved by

[Baroness Hanham]

203D: Clause 83, page 69, line 15, after “land” insert “—
(a) if the disposal is by way of gift (including a gift to trustees of any trusts by way of settlement upon the trusts),(b) if the disposal is by personal representatives of a deceased person in satisfaction of an entitlement under the will, or on the intestacy, of the deceased person,(c) if the disposal is by personal representatives of a deceased person in order to raise money to—(i) pay debts of the deceased person,(ii) pay taxes,(iii) pay costs of administering the deceased person’s estate, or(iv) pay pecuniary legacies or satisfy some other entitlement under the will, or on the intestacy, of the deceased person,(d) if the person, or one of the persons, making the disposal is a member of the family of the person, or one of the persons, to whom the disposal is made,(e) if the disposal is a part-listed disposal of a description specified in regulations made by the appropriate national authority, and for this purpose “part-listed disposal” means a disposal of an estate in land—(i) part of which is land included in a local authority’s list of assets of community value, and(ii) part of which is land not included in any local authority’s list of assets of community value,(f) if the disposal is of an estate in land on which a business is carried on and is at the same time, and to the same person, as a disposal of that business as a going concern,(g) if the disposal is occasioned by a person ceasing to be, or becoming, a trustee,(h) if the disposal is by trustees of any trusts—(i) in satisfaction of an entitlement under the trusts, or(ii) in exercise of a power conferred by the trusts to re-settle trust property on other trusts, (i) if the disposal is occasioned by a person ceasing to be, or becoming, a partner in a partnership, or(j) ”

203E: Clause 83, page 69, line 21, leave out “prescribed period” and insert “six months”

203F: Clause 83, page 69, line 24, leave out “prescribed period” and insert “six weeks”

203G: Clause 83, page 69, line 28, leave out “prescribed period” and insert “eighteen months”

203H: Clause 83, page 69, line 29, at end insert—
“(6A) For the purposes of subsection (5)(d), a person (“M”) is a member of the family of another person if M is—
(a) that other person’s spouse or civil partner, or(b) a lineal descendant of a grandparent of that other person.(6B) For the purposes of subsection (6A)(b) a relationship by marriage or civil partnership is to be treated as a relationship by blood.”

203J: Clause 83, page 69, line 30, leave out subsection (7)

Amendments 203D to 203J agreed.

Consideration on Report adjourned.

House adjourned at 10.54 pm.