House of Lords

Tuesday 27th March 2012 Lords Chamber

Tuesday, 27 March 2012.

14:30

Prayers—read by the Lord Bishop of Ripon and Leeds.

Royal Assent

Tuesday 27th March 2012 Lords Chamber

14:36

The following Acts were given Royal Assent:

Health and Social Care Act,

London Local Authorities Act.

Alcohol: Strategy

Tuesday 27th March 2012 Lords Chamber

Question

14:36

Asked by

[Baroness Hayter of Kentish Town]

To ask Her Majesty’s Government whether they will introduce legislation to implement their alcohol strategy.

[The Minister of State, Home Office (Lord Henley)]

My Lords, the Government will launch a number of consultations in the forthcoming months on key proposals in the alcohol strategy. This includes consultations on the level to be set for a minimum unit price for alcohol and a proposed ban on multibuy discounts in supermarkets and off-licences. Following the outcomes of those consultations, the Government will consider the necessary legislation to take those proposals forward.

[Baroness Hayter of Kentish Town]

In thanking the Minister for that reply and welcoming both the strategy and the commitment to a minimum unit price for alcohol, I ask the Government to undertake to continue to resist the blandishments of the drinks industry and to make every effort to move forward quickly with introducing the minimum alcohol price.

[Lord Henley]

My Lords, I cannot give any commitment about when and how we will do that. Obviously, primary legislation will be necessary to bring forward a minimum unit price. However, I can make it clear that the Prime Minister has given his own personal commitment that we will bring in a minimum unit price. That is why we are consulting on what the proposed and proper level should be.

[Baroness Gardner of Parkes]

My Lords, can the Minister tell me what the situation is? It is reported in the press that a minimum unit price might be illegal under European Commission rules as being anti-competitive. Does he have any views on that? What procedures would we have to follow to deal with that? We are very concerned on health grounds and support the idea.

[Lord Henley]

My Lords, I am not going to give my views on the legality. That would obviously be a matter for the European Court of Justice to decide in due course. I understand that the level at which we set the minimum unit price would be relevant. That is a factor that we will take into account in the consultation.

[Baroness Massey of Darwen]

My Lords, does the noble Lord agree that just to convey the message of sensible drinking is not enough to raise awareness? What are needed are very clear messages. How will those clear messages be targeted at the general public?

[Lord Henley]

My Lords, minimum unit pricing is just one part of the whole strategy announced by my right honourable friend the Home Secretary in her Statement late last Friday. Unfortunately, I was not able to repeat the Statement in this House because the House was not sitting. There will be other parts of the strategy, and the noble Baroness is right to talk about education and getting the message across. That is something that we will have to consider very carefully. We will consider not just direct education in schools but all other forms of education as part of that process.

[Baroness Finlay of Llandaff]

Do the Government plan to consult on legislative controls for alcohol home delivery services, particularly at night to a party which has run out of alcohol and during the day to those who are already inebriated? I understand that these services do not fall under the current licensing controls.

[Lord Henley]

My understanding is that any sale of alcohol falls under the control of the licensing laws. I appreciate that it is very difficult to deal with these matters, particularly when it comes to home deliveries of pizzas or whatever the noble Baroness is referring to. Again, that is something that we will have to consider if there is evidence of abuse because, as the noble Baroness is right to point out, it is illegal to sell alcohol to those who are inebriated.

[Lord Taverne]

My Lords—

[Lord Glentoran]

My Lords—

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, we have plenty of time for this Question, and the fourth Question is on the same subject. I think that we should hear from my noble friend Lord Taverne first.

[Lord Taverne]

My Lords, I warmly congratulate the Government on abandoning their previous preference for banning below cost sales of alcohol and on adopting a policy that was strongly recommended by the previous Chief Medical Officer, by Sir Ian Gilmore, who is a great expert on this, and by a very convincing study of drinking in Newcastle, which is not known for its abstinence. I suggest to the Minister that this is only a first step, because a higher price could be even more effective. Does he not agree that it is rather sad that the shadow Home Secretary in another place, instead of welcoming something of great importance for the future, should have used the occasion of the Government’s announcement for making party-political points?

[Lord Henley]

My Lords, I shall not comment on my noble friend’s last remark. However, when my right honourable friend announced the strategy on Friday, other than objecting to the date of the announcement, I did not notice much that the party opposite objected to in the Statement. As regards my noble friend’s other points, I know Newcastle and have seen some of the problems that city centres such as that in Newcastle can face on Friday and Saturday nights as a result of excessive drinking. That is what we are trying to target. As I said, minimum pricing per unit of alcohol is just one part of it but I commend to the House other parts of the strategy, which will be available in the Printed Paper Office.

[The Lord Bishop of Ripon and Leeds]

My Lords, given that those aged under 18 make up as much as a third of alcohol-related A&E attendances in some areas, does not more need to be done to inform schoolchildren of the dangers of alcohol abuse? Will the Minister consult colleagues in the Department for Education, including the noble Lord sitting next to him, to ensure that there is an improvement in the information given to schools?

[Lord Henley]

My Lords, I assure the right reverend Prelate that my noble friend from the Department for Education heard that. However, he is right to draw attention to the problems of underage drinking and particularly to the prevalence of underage drinkers ending up in A&E departments. In my own part of the world in west Cumberland, I have seen some very good work being done by schools in Workington, which, sadly, has the highest rate of admissions to A&E in the country. However, as a result of the work being done there, I hope that in a few years’ time we will see those rates fall, and fall considerably.

[Lord Brooke of Alverthorpe]

My Lords, I have a brief question. Will the Government legislate to show energy and calorie levels on the labelling on alcohol products?

[Lord Henley]

My Lords, that is not part of what we are proposing at the moment but we will no doubt consider it when the legislation comes forward. I look forward to discussing the amendment that the noble Lord will put forward on that occasion.

[Lord Flight]

My Lords, perhaps I may counsel that describing something as bad and telling adolescents that they should not do it is about the best way of encouraging them to do it. That needs to be borne in mind when providing guidance.

[Lord Henley]

My Lords, that argument can be put forward but I am not sure that it is necessarily always the case. I still think that we have a duty to offer appropriate warnings. If those warnings are made in the right way by the right people, the right message can be got across to young people. That is why I referred to what is taking place in west Cumberland.

Schools: Satellite Sites

Tuesday 27th March 2012 Lords Chamber

Question

14:44

Asked by

[Baroness Walmsley]

To ask Her Majesty’s Government what steps they are taking to prevent the expansion of grammar schools on to satellite sites.

[The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)]

The legislation governing the establishment or expansion of grammar schools has not changed. The Education and Inspections Act 2006 and the Academies Act 2010 effectively mean that there can be no new grammar schools and we have not proposed any changes to that legislation. Any school can seek to expand by opening another site, as has been the case since 1944, but to do so it must be a continuance of the original school.

[Baroness Walmsley]

I thank my noble friend for restating government policy. However, I do not see how that stacks up with the potential for doubling the number of school places for which selection operates in certain areas. As we know, under the School Standards and Framework Act 1998, no new grammar schools can open, so can my noble friend tell me the criterion for a new school and why the planned satellite grammar school in Sevenoaks can claim not to be a new school but part of Tonbridge Grammar School many miles away? If the new school is given the go-ahead, what will that do to the catchment area of the original school? Could we see a school stretching right across the county as it extends its catchment area by opening a whole chain of satellite schools?

[Lord Hill of Oareford]

As I said, my Lords, the fundamental position on opening a satellite school has not changed. There is a process in place if people want to come forward with a proposal to open or expand a satellite school, they can apply to the local authority, and to the Secretary of State in the case of an academy. Those proposals would be looked at on a case-by-case basis. The bar on new provision is absolute and clear, and it is not the case that the Government are seeking to shift that position either by the front or the back door.

[Lord Hunt of Kings Heath]

My Lords, in the circumstances described by the noble Baroness, it would appear that simply by calling a new school in essence a satellite extension, from what the noble Lord has said, it looks like it might be permitted. Is it not a fact that the Government’s policies are leading to much more selective education? How will we ensure fair admissions to our schools?

[Lord Hill of Oareford]

My Lords, it is absolutely not the case that this Government’s policies are leading to more selection. It is not happening everywhere. There was a big increase in the number of selective places between 1997 and 2011 when the number went up by 35,000 within the existing framework. Wherever it would have been possible for the Government to have sought to increase selection—for example, through new free schools or through the academy conversion programme—we have been absolutely clear in the Academies Act that we have taken the opposite view and have not permitted or encouraged the expansion of selection within the maintained system. We have said—this is the point about the admissions code—that all schools, whether maintained, non-selective or selective, should have the ability, in response to parental demand, to increase their published admissions number. That is the only change that has been made.

[Lord Jones of Birmingham]

Does the Minister agree that there is increased selection? It has happened under all Governments for at least a quarter of a century. It is now selection on the basis of money—whether you can afford a house in a certain area with a good school, or whether you can afford to send your kids to a public school. Governments of all parties have pursued a policy of selection by money, as opposed to what it should be—selection on ability.

[Lord Hill of Oareford]

My Lords, I hope that I have already made clear the Government’s views on selection by ability. The noble Lord is right that one of our big challenges is to make sure that we do not continue to have the consequences that he outlined. That is one reason for our drive and focus on raising standards in the maintained sector. We will try to make sure that more good places are offered to children where money is not an issue.

One reason why we removed the limit on the ability of a good and popular school to expand was to make it possible for more children to go to the school. One reason that we want free schools is to increase choice in the system. Many of those schools are being set up in areas of the greatest deprivation. I agree with the noble Lord that overall we should make sure that, rather than talking about selection for a small number of people—which is a historic argument that we have had in this country for a very long time—our emphasis should be on trying to raise standards for the greatest number of children, of all abilities, and on doing what we can to narrow the gap between rich and poor.

[Baroness Massey of Darwen]

Will the Minister tell me what consultation takes place in a community to advise on the nature of a school in that area?

[Lord Hill of Oareford]

The statutory processes around selective schools that we discussed have not changed at all. Proposals are put forward, and there are consultations, representations and so on. That has not changed.

[Lord McColl of Dulwich]

Does my noble friend agree that many of us in this House would not be here today had we not gone to a grammar school? What exactly is wrong with grammar schools?

[Lord Hill of Oareford]

It is nice to hear the contrary view put by my noble friend. Clearly, for the people who benefited, a grammar school education acted as an extremely powerful rocket booster for their opportunities in life. However, there were large numbers of children for whom that was not the case. The Government are trying to focus on raising standards for all children, recognising that children of differing abilities need a good education—whether it is a core academic education or a core technical and vocational education—and that we need a range of schools that will meet those needs.

[Lord Lea of Crondall]

My Lords, is the Minister aware that the point put so succinctly by the noble Lord, Lord Jones of Birmingham—I never expected to be saying this—is very widely shared in this House?

[Lord Hill of Oareford]

My Lords, I am sorry—I did not catch the beginning of the question.

[Lord Lea of Crondall]

The point put so succinctly by the noble Lord, Lord Jones of Birmingham, is shared very widely in this House. Is the Minister aware of that?

[Lord Hill of Oareford]

My Lords, I am now more aware than I was a moment ago. My answer is the same. I recognise that there is that perception—and that in some cases it is more than a perception, it is true. However, that is something that all of us want to get away from.

Elections: Registration

Tuesday 27th March 2012 Lords Chamber

Question

14:52

Asked By

[Lord Roberts of Llandudno]

To ask Her Majesty’s Government what steps they are taking to ensure that every eligible United Kingdom citizen between the ages of 18 and 25 registers to vote.

[Lord Wallace of Saltaire]

My Lords, the Government are committed to doing all that they can to maximise registration, including among 18 to 25 year-olds, and are looking to modernise the system to make it as easy and convenient as possible for people to register to vote. We have commissioned research to explore the registration of groups whom we know are underregistered —which certainly includes those between 18 and 25. We are also closely studying the experience in Northern Ireland, where promising work is being done to get young people registered.

[Lord Roberts of Llandudno]

My Lords, I thank the Minister for that reply. He knows as well as I do that if people are not encouraged to take part in the democratic process through the ballot box, there are other ways that have horrendous consequences. What plans have the Government for the coming year and elections to encourage people to register to vote? I declare an interest as grandfather of the Bite the Ballot movement, which encourages young people to engage with democratic institutions. Will the Government enable registration forms to be made available in schools, colleges, workplaces and places where young people spend their leisure hours, and also online? Could that be an immediate action?

[Lord Wallace of Saltaire]

My Lords, there are two problems with registration for 18 to 25 year-olds. One is the question of how far they are motivated to register. The other is simply how good the Government are at catching these people and making sure that they fill in forms. I am informed that the number of young men registered with a doctor is remarkably low. This is the biggest single hole in our registration. The percentage of 18 to 25 year-olds registered to vote is around 56 per cent. The percentage of people over 25 who are registered is well over 90 per cent.

[Lord Wills]

My Lords, the Minister will recall the debate that was held in your Lordships’ House at the beginning of January about electoral registration, where there was widespread concern from all sides of the House about the Government’s approach to individual registration and how it will cause a decline in electoral registration, including among young people. There was also concern that that decline in registration would benefit only one political party—the Conservative Party. In the light of that, the Minister will recall that there was widespread support from all sides of the House, including from the Conservative Benches, for a cross-party approach to addressing these problems. The Minister then undertook to go away and discuss with his colleagues such a cross-party approach. Can he update the House on how he has got on with his discussions, three months later?

[Lord Wallace of Saltaire]

That is a very good question. I have discussed that with colleagues, and we are continuing to discuss it, and I thank the noble Lord for maintaining the pressure on it. We have a real problem with how to get 18 to 25 year-olds caught up within the general system of interaction with government agencies. They move around much more frequently; they move between home and university; and they tend not to get caught up by a number of the ways in which government interacts with people.

[Lord Tomlinson]

May I suggest to the noble Lord, in the most helpful of ways, that he send a copy of the draft Bill on House of Lords reform to every 18 to 24 year-old and see how many are thus motivated by the democratic impulse of the Deputy Prime Minister to come out and vote?

[Lord Wallace of Saltaire]

My Lords, only this morning I was told by one Member of your Lordships’ House who spends time going out to schools that when talking with school students, one gets a very strong commitment to House of Lords reform. I recall that the Labour Party’s last manifesto committed it to House of Lords reform. I am sure that the noble Lord, Lord Tomlinson, and others will maintain that strong commitment when they discuss the Bill this time next year. It seems to me sometimes that there is nothing else on the minds of noble Lords opposite.

[Baroness Massey of Darwen]

My Lords, is the Minister aware that, in a debate among young people in this House last year, there was a very strong vote against House of Lords reform? However, that is not my question. My question is: what progress is being made on the institution of citizenship education in schools as a compulsory subject?

[Lord Wallace of Saltaire]

My Lords, successive Governments have struggled for some time with the whole issue of citizenship education in schools, and as the noble Baroness knows well, schools have struggled with how well PSHE as a whole is taught. I have asked about citizenship education and students tell me that they have had a bit on the European Union and a bit on Parliament in between the instruction on how they should behave in relations with the opposite sex. We all know that citizenship education remains a problem. It is a problem with which the Department for Education and others are grappling, but I encourage the noble Baroness to keep pushing.

[Lord Addington]

My Lords, it seems, as my noble friend will undoubtedly be aware, that the young are interested in single issues in politics. Would it not be a good idea to encourage those single-issue groups to inform the young of just how important it is to get involved in the political process in order to get anything done, and that voting is part of that?

[Lord Wallace of Saltaire]

My Lords, the localism agenda—and, indeed, reviving local democracy—is clearly one very important part of getting young people re-involved in democratic politics, because it is easier to understand how they interact with local politics. I have to say to all Members of the House that the way in which we handle the issue of constitutional reform over the next year will send a signal to young people about how responsible we are, at Westminster, in reacting to constitutional reform issues.

[Baroness Farrington of Ribbleton]

My Lords, the Minister seemed to indicate earlier in reply to my noble friend’s question that it has taken until now, three months later, to discuss within the department or the Government the issue that my noble friend raised. How much longer do we have to wait for it to become an all-party, cross-party discussion that might lead to the sort of positive results that the Minister seems to want?

[Lord Wallace of Saltaire]

I welcome the noble Baroness’s commitment to cross-party approaches to all aspects of political and constitutional reform. On the question of motivating people under the age of 25 to be involved in politics, we very much need an all-party approach, and that is one of the areas in which we all need to take a rather more responsible attitude than the circus of Westminster sometimes provides.

Alcohol: Minimum Pricing

Tuesday 27th March 2012 Lords Chamber

Question

15:00

Asked By

[Lord Renton of Mount Harry]

To ask Her Majesty’s Government what practical issues they considered with respect to the establishment and regulation of a minimum price for alcohol.

[The Minister of State, Home Office (Lord Henley)]

My Lords, as I said in my earlier Answer, the Government will launch a consultation on the level to be set for a minimum unit price for alcohol. The Government will consider a range of issues in detail as part of this consultation.

[Lord Haskel]

My Lords—

[Noble Lords]

Order.

[Lord Renton of Mount Harry]

My Lords, I thank my noble friend the Minister. Perhaps I might add to the points made very usefully in answers to the earlier Question tabled by the noble Baroness, Lady Hayter. I understand well the need to combat binge drinking, but does the Minister agree that the minimum unit price proposals are very hard to understand or measure? For example, I read in the Guardian last Thursday that one unit is 10 millilitres of pure alcohol and that is equivalent to half a glass of wine. There are big glasses, large glasses and small glasses, and that does not tell us nearly enough. Does the Minister accept that more explanation is needed of this public intervention that is so very important?

[Lord Henley]

My Lords, I am sorry if my noble friend finds these matters hard to understand and measure. That is one of the reasons why we are mounting this consultation. It depends what my noble friend drinks, but he might be aware that it is possible to buy a can of lager in a supermarket for as little as 20 pence, or a 2 litre bottle of cider for as little as £1.69. We think that those sorts of prices, charged particularly in the off-trade, are encouraging drinking that can lead to very severe anti-social behaviour. That is why we think it is important to look at the possibilities of a minimum unit price and consult on the appropriate level.

[Lord Snape]

My Lords, does the Minister agree that the main beneficiary of the Government’s proposals for unit pricing will be the drinks retailers? Does he agree that the issue of excessive drinking involves all social classes in the United Kingdom? Could he perhaps tell the House how doubling the price of White Lightning in supermarkets would affect the activities of organisations such as the Bullingdon Club?

[Lord Henley]

My Lords, I accept that it is possible that a minimum unit price could lead to extra profits for the retail industry, particularly for the supermarkets, but I am sure that they will find other ways to compete. We do not think it is right that they should be competing by means of low-priced alcohol that leads to the disorder of the sort we discussed earlier.

[Lord McColl of Dulwich]

Does my noble friend agree that the Government are to be congratulated on their strong stance on the obesity epidemic, declaring that the answer was to eat fewer calories and drink less alcohol? Will they go further and declare openly that although alcohol is a very pleasant poison to drink, it is nevertheless a poison?

[Lord Henley]

My Lords, we do not want to stop people drinking alcohol in a perfectly legitimate manner. I accept my noble friend’s medical advice that it is a poison, but it is one that we have grown accustomed to over the years. What we want to avoid is excessive consumption of the sort that leads to disorderly scenes in some of our town centres, which I referred to in my answers to the earlier Question.

[Lord Elystan-Morgan]

My Lords, does the Minister recollect that in replying to the first Question, he very sensibly said that the price of alcohol was only one weapon in the armoury of the Government in seeking to tackle alcohol abuse? Is it the case, as I believe it is, that for the last 100 years or so it has been a criminal offence on licensed premises for drink to be sold to or for a person who is already inebriated? If that is the current law, has it not fallen into desuetude? Will the Government concentrate on that? It could be a very potent weapon.

[Lord Henley]

The noble Lord understands the law very well. He is absolutely correct in that. These are matters for enforcement and we think that they should be taken up by the police and, subsequently, the licensing authorities. It is possible to remove the licence from an individual or a pub if it sells alcohol to someone who is obviously inebriated.

[Lord Haskel]

My Lords, have the Government considered achieving the minimum price by raising the tax rather than the price? If you raise the tax, we all benefit. If you raise the price, it is a windfall for the drinks industry.

[Lord Henley]

My Lords, I have to be very careful about what I say about changes to the taxation regime. It is slightly more complicated than that in that you would have to even out the tax rates on different forms of alcohol, which vary a great deal. That is one of the reasons why sometimes you find the two-litre bottle of cider that I mentioned earlier being so much cheaper than equivalent forms of alcohol. At this stage, we are looking at minimum pricing but no doubt it would be possible to look at other matters as well.

[Lord Roberts of Conwy]

My Lords, have the Government considered the 24-hour drinking introduced by the party opposite? Is that not partly to blame for what we are suffering socially now?

[Lord Henley]

My Lords, certainly the consequences of the changes made under the previous regime were not exactly what we were led to believe would be the consequences. It did not lead to the European-style drinking culture—the cafe culture—that the then Prime Minister thought that it would lead to. That is why we made a number of changes to the licensing regime, which, again, is part of our overall strategy on alcohol.

[Lord West of Spithead]

My Lords, we all know the dangers of excessive use of alcohol, which is a terrible thing. However, in the interest of balance of all these questions, does the Minister agree that sensible consumption of alcohol, or “poison” as it was called, can be very enjoyable and has been an integral part of western civilisation for millennia?

[Lord Henley]

My Lords, I absolutely agree with the noble Lord in those remarks. He will remember from his naval experience—I do not know how far he goes back—that originally a tot of rum was provided to all serving naval officers and ratings. That was removed because of the increasing complexity of ships and the technology on board, and the thought that it might not be a sensible thing for them to continue to drink. But, quite rightly, the Navy did not go dry in the style of the United States Navy. The noble Lord is right to make the point that there is a sensible balance to be drawn on this matter.

Legal Aid, Sentencing and Punishment of Offenders Bill

Tuesday 27th March 2012 Lords Chamber

Order of Consideration Motion

15:07

Moved By

[Lord McNally]

That the amendments for Third Reading be marshalled and considered in the following order:

Clauses 1 to 9, Schedule 1, Clauses 10 to 24, Schedule 2, Clauses 25 to 31, Schedule 3, Clauses 32 to 38, Schedule 4, Clause 39, Schedule 5, Clause 40, Schedule 6, Clauses 41 to 63, Schedules 7 and 8, Clauses 64 to 69, Schedule 9, Clauses 70 to 90, Schedule 10, Clause 91, Schedule 11, Clauses 92 to 106, Schedule 12, Clauses 107 to 111, Schedule 13, Clause 112, Schedule 14, Clauses 113 to 121, Schedule 15, Clause 122, Schedules 16 and 17, Clause 123, Schedules 18 and 19, Clauses 124 to 126, Schedule 20, Clause 127, Schedule 21, Clause 128, Schedule 22, Clauses 129 to 133, Schedule 23, Clauses 134 to 136, Schedule 24, Clauses 137 to 142, Schedule 25, Clause 143, Schedule 26, Clause 144, Schedule 27, Clauses 145 to 155.

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, I beg to move the order of consideration Motion.

[Baroness Trumpington]

My Lords, I apologise. Perhaps I may ask the noble Lord, Lord McNally, whether the removal of the boards which have recently been erected in Parliament Square will have to wait until the Bill supported by the noble Lord, Lord Marlesford, is passed. If so, I consider that the relevant authorities are wet.

[Lord McNally]

My Lords, I am not sure of the answer to that question. I know that I have just moved a formal Motion. In case the noble Baroness thinks that she will have to wait until about 11 o’clock to get an answer, I should say that all the Motions between this one and the Report stage of the Parliament Square (Management) Bill are formal. Perhaps she will let me move this formal Motion, and we can then move on very quickly to Parliament Square, when she might want to intervene again.

Motion agreed.

Schools (Specification and Disposal of Articles) Regulations 2012

Tuesday 27th March 2012 Lords Chamber

Alternative Provision Academies (Consequential Amendments to Acts) (England) Order 2012

Children Act 2004 Information Database (England) (Revocation) Regulations 2012

Motion to Approve

15:09

Moved By

[Lord Hill of Oareford]

That the draft regulations and order laid before the House on 19 January and 1 February be approved.

Relevant documents: 39th, 40th and 41st Reports from the Joint Committee on Statutory Instruments, considered in Grand Committee on 20 March

Motion agreed.

Parliament Square (Management) Bill [HL]

Tuesday 27th March 2012 Lords Chamber

Report

15:09

Report received.

Legal Aid, Sentencing and Punishment of Offenders Bill

Tuesday 27th March 2012 Lords Chamber

Third Reading

15:10

Clause 9 : General cases

Amendment 1

Moved by

[Lord McNally]

1: Clause 9, page 6, line 25, leave out from “order” to “(whether” in line 26 and insert “—
(a) add services to Part 1 of Schedule 1, or(b) vary or omit services described in that Part,”

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, the Government have tabled government Amendments 1, 6, 7, 8, 13, 14 and 18 following the commitment I gave on Report. The Government have listened to the reasoned arguments presented by my noble friend Lord Thomas of Gresford and other noble Lords, and we have brought forward these amendments accordingly.

Amendment 1 to Clause 9(2) would give the Lord Chancellor the power to omit, but in addition the power to add or vary the services in Part 1 of Schedule 1. He would be able to do so by modifying Parts 1, 2, 3 and 4 of Schedule 1. The power to vary a service allows us to amend the existing services within the schedule where they need to be altered, but without the need to omit a service and then add a new service. For example, if the Immigration (European Economic Area) Regulations 2006 were amended in the future, any such amendment might not mean that services need to be added to the schedule, but it might be necessary to vary the provisions in paragraph 31 of Part 1 in order to reflect any such changes to those regulations.

The provisions of Amendment 1 mean that the power in Clause 9(2) would be similar to that which exists in Section 6(7) of the Access to Justice Act 1999. We consider that this is the correct and sensible approach to take. The powers in Clause 9(2) would be exercisable by the Lord Chancellor when making an order. Clauses 41(6) and 41(7)(a) mean that such an order would be subject to the affirmative procedure and so subject to debate in and approval by each House of Parliament.

Amendment 2, tabled by the noble Lord, Lord Bach, would allow services to be added but not to be omitted. As I have said, the government amendment provides for balance to the existing Clause 9. Amendment 2 seeks to go further and actually removes the ability to omit. I firmly believe that that power to omit is necessary and gives the Bill a welcome flexibility. An example of where this may be necessary is where the governing legislation behind an area of law is repealed or otherwise altered and we need to alter civil legal aid provision accordingly. Another example would be where particular court proceedings are moved to a tribunal. It may cease to be appropriate to provide funding for advocacy for those proceedings, so an amendment to Part 3 of Schedule 1 would be needed.

As a result of Amendment 1, we no longer consider that we need certain powers in Schedule 1 to make secondary legislation. The purpose of this is not to reduce the categories in which legal aid will be available but are more technical in nature. To ensure that this is clear, let me explain in detail the powers which will be removed. First, Amendments 6 and 7 relate to paragraph 4(1)(k) of Part 1 of Schedule 1, which concerns the care, supervision and protection of children and provides for further orders or procedures to be prescribed for the purposes of this paragraph. In the light of the power to add services proposed by Amendment 1, we consider that the power at paragraph 4(1)(k) of Part 1 of Schedule 1 is no longer necessary.

Secondly, Amendment 8 would omit paragraph 9(3)(n) of Part 1 of Schedule 1, which relates to community care. Paragraph 9(3) defines community care services as services,

“which a relevant person may provide”,

under a number of listed enactments. Heading (n) of that definition allows other enactments to be prescribed for the purposes of that definition. With the power to add services under Clause 9, this is no longer necessary.

15:15

Thirdly, Amendment 13 relates to paragraph 15(1)(g) of Part 1 of Schedule 1, which concerns the protection of children. Paragraph 15 refers to civil legal services where a person is seeking in a private law family case to protect a child from abuse by applying for any of the list of orders or procedures set out in paragraph 1, and paragraph 1(g) provides for further orders or procedures to be added by being prescribed for this paragraph. Again, this is now unnecessary.

As a result of these amendments, we have made consequential amendments to paragraph 21 of Part 1 of Schedule 1, which concerns judicial review, and Part 3 of Schedule 1. Amendment 18 makes consequential changes by removing paragraph 23 from Part 3 of Schedule 1. Paragraph 23 of Part 3 ensures that advocacy is available in relation to prescribed legal proceedings relating to orders and procedures that might have been prescribed under the powers in Part 1 of Schedule 1 which, as I have explained, we no longer consider necessary. There is, therefore, no need for paragraph 23 of Part 3. As a result, the reference to paragraph 23 of Part 3 in paragraph 21(10)(b), which defines judicial review, is removed by Amendment 14.

Amendment 1 meets the concerns raised in Committee and I urge the noble Lord, Lord Bach, not to move Amendment 2. I beg to move.

[The Lord Speaker (Baroness D'Souza)]

My Lords, I remind your Lordships that if this amendment is agreed to I cannot call Amendment 2 for reasons of pre-emption.

[Lord Thomas of Gresford]

My Lords, I am grateful to my noble friend for the amendment. He knows that we on these Benches raised this issue before Second Reading. It is necessary to have flexibility brought into the Bill for two reasons: first, because economic conditions may improve and it may be possible to revert to a more generous legal aid scheme; and, secondly, because those of us with experience of litigants in person know they can clog up the courts and that, consequently, it may be necessary for urgent amendments to Schedule 1 to introduce legal aid to enable people to be legally represented. It is not fully appreciated by the public that legal representation shortens cases and leads to justice, rather than litigants in person trying to fight their own cause.

[Lord Bach]

I thank the Minister for the concession that the Government have made today. The clause as it stands before we pass the Government’s amendments should never have been in that form when the Bill was published and was always crying out for amendment. Indeed, members of my party in the Commons did their best to ensure that that happened. I am grateful to the noble Lord, Lord Thomas, and other noble Lords for persuading the Government that the clause needed changing. I shall not, of course, press my amendment; I will not move it.

I know the Minister and all other noble Lords will agree that the House seems somewhat empty today because our noble friend Lord Newton of Braintree is not with us in our deliberations. He took an active part in all the debates on the Bill for many months and, even though we could all see that he was not in good health, insisted on coming here, speaking his mind and voting in the way his conscience told him to vote. He took a real interest in the Bill and—I know all noble Lords will agree—it was a delight and privilege to work with him. It does not seem right or just that he is not here listening and speaking his mind. Having said that, I thank the noble Lord for the concession.

[Baroness Butler-Sloss]

My Lords, as a Cross-Bencher, I add to what the noble Lord, Lord Bach, has just said about the death of a man who was a great friend to many of us. Lord Newton was an adornment to this House, who stood, as the noble Lord, Lord Bach, has already said, for his conscience rather than for what his party, or any party, might wish. It is easy for me as a Cross-Bencher to examine my conscience, and I am well aware it is not so easy for members of political parties. He will be enormously missed. His name is on a number of today’s amendments, and I hope that noble Lords will forgive me for saying something about this before I move to Amendment 1.

I congratulate the Government. I do not do it terribly often but am going to do it three times today. This amendment, as the noble Lords, Lord Thomas of Gresford and Lord Bach, have said, is overdue. It is splendid that the Government have recognised the importance of having the ability to increase legal aid. I also very much support the fact that they are putting in “vary or omit”. All of us who have had anything to do with legislation know that from time to time it becomes redundant and has to be got rid of or needs a tweak here and there, and therefore needs a variation. I support this amendment as it is.

However, if the Minister will forgive me, I will make one or two points about what has happened as a result of this Bill so far as family cases are concerned. The noble Lord, Lord Thomas of Gresford, has already mentioned this but I will add to it. I strongly urge the Government to review the impact of the legal aid changes no later than a year from now, to see what happens to the family courts in the light of the removal of nearly all private law cases from legal aid. I am not sure the Government really quite accept what a number of us have been saying, to the Ministers in this House and the other place, about the impact on the courts. There will be longer lists. I know the Ministry of Justice is already aware that the lists in the courts are too long, and they will be increased substantially.

There will be longer hearings. As the noble Lord, Lord Thomas of Gresford, said—entirely accurately—without lawyers to keep a case under control, two litigants in person will spend an absolute age. The sort of case that takes a day, or possibly a day and a half to two, will take not less than a week. I have a vivid recollection of one litigant in person who took a week to give evidence and cross-examine. Every time I asked him to hurry up, it added another hour or two to the case. I am afraid I sat scribbling nonsense, because nothing he said was of any value to the conduct of the case.

It is going to be very difficult for district judges and magistrates to manage people totally caught up in the emotions of a failed relationship and fighting over money, a house or particularly children. They will have to do it but it will clog up the courts to an even more significant degree.

It will have an impact in children’s cases. One example in child protection issues is the fact that drink or drug abuse is sometimes detected only during the hearing of a private law case. It is crucial that the person who is drinking or taking drugs to excess is tested to see what should be done as to whether that parent is fit to have care of the child, or even to see the child. The Minister will be aware that in the Norgrove report that point was made about the very thin line between the private law cases and those that tip over into child protection issues. On Report, we discussed whether the mediator would identify cases where there might be abuse. There is a hard core of 5 per cent of cases that cannot be settled between the parties—and, of course, that 5 per cent of cases will carry on regardless and may not ever come to the attention of the mediator.

I ask the Minister, in congratulating him on proposing the amendment, to have a real look at the impact on the family courts within no later than a year to see what is actually happening.

[Lord McNally]

My Lords, of course I associate myself with the expressions of sympathy on the untimely death of Lord Newton.

On the matter raised by the noble and learned Baroness, we are committed to undertaking a post-implementation review of the specific policies set out in the Bill. As she acknowledged, we have just replaced a ratchet by a regulator, which should also help in seeing whether some of her predictions come true, and how we react to that.

Amendment 1 agreed.

Amendment 2 not moved.

Schedule 1 : Civil legal services

Amendment 3

Moved by

[Baroness Grey-Thompson]

3: Schedule 1, page 140, line 5, at end insert—
“Children under 181 (1) Civil legal services in relation to advice and proceedings where a child is, or proposes to be, the applicant or respondent in proceedings, or where the child is represented by a legal guardian, including—
(a) private family law;(b) any benefit, allowance, payment, credit or pension under—(i) the Social Security Contributions and Benefits Act 1992,(ii) the Jobseekers Act 1995,(iii) the State Pension Credit Act 2002,(iv) the Tax Credits Act 2002,(v) the Welfare Reform Act 2007,(vi) the Welfare Reform Act 2011, or(vii) any other enactment relating to social security; (c) all areas of education law not otherwise covered in this Schedule;(d) all areas of housing law not otherwise covered in this Schedule;(e) all areas of debt-related disputes not otherwise covered in this Schedule;(f) all areas of immigration and asylum law not otherwise covered in this Schedule;(g) all areas of clinical negligence law not otherwise covered in this Schedule;(h) all areas of consumer law not otherwise covered in this Schedule;(i) appeals to the Criminal Injuries Compensation Authority;(j) civil legal services relating to a review or appeal under section 11 or 13 of the Tribunals, Courts and Enforcement Act 2007; and(k) civil legal services relating to an appeal to the Supreme Court.”

[Baroness Grey-Thompson]

My Lords, I speak to the amendment in my name and in those of the noble Baronesses, Lady Eaton and Lady Benjamin. I am also very proud to say that the name of the noble Lord, Lord Newton of Braintree, was included on this amendment, and I know that I speak for all those in this Chamber when I say that he will be greatly missed.

This amendment would make legal aid available for children in all current cases, including when they are victims of medical negligence. At present, legal aid helps just over 40,000 children every year who have civil justice legal problems in their own right. If the Bill is left as it stands, legal aid for around 35,000 children every year will continue, but legal aid will not be available for around 6,000 children under 18 who would qualify if the current rules remained in place. The Government have so far not explained why those 6,000 children will be treated differently from other children who have problems under the same categories of law.

This is now the 40th day of debate in your Lordships' House and in the other place. I do not believe that the Government have been able to explain the criteria that will decide, for example, why 220 children will continue to receive legal aid support in cases about their education but 110 will not. This is from among the numbers remaining after the Government conceded last June that legal aid would be kept for cases involving children with special educational needs—numbers obtainable only through a freedom of information request by the Children’s Society.

When put on the spot about which children will lose legal aid, the Government say that they will be able to apply to be treated as exceptional cases under Clause 10. I do not believe that there should be any confusion or delay as to whether a child under 18 is entitled to legal advice and representation in British civil justice. Children are not adults—they do not have the capacity to represent themselves or to interpret the thousands of pages of laws and regulations that affect them.

The question of a child’s capacity to represent themselves is explicitly recognised and provided for in international law. The Children’s Commissioner for England, Dr Maggie Atkinson, wrote to the Lord Chancellor to warn that denying children a voice in legal proceedings would be in breach of the European convention. She said:

“Children, by virtue of their age and capacity, will not be able to present their case effectively in the majority of proceedings … Children’s need for legal aid in civil cases where they are a party should not be viewed as ‘exceptional’”.

15:30

I am very concerned that, in many of these cases, children have been put in the position of taking action against a local authority. It is a question of a child versus the state, and the state in this Bill is denying children the capacity to challenge it. Camila Batmanghelidjh of Kids Company told us about a child who came to her charity in desperate need of help, and how the charity’s lawyer was able to use legal aid to challenge the local authority to accept its responsibilities. Camila said:

“She was under 18, but not recognised as vulnerable by the local authority despite being chronically abused at home. In the end the judge agreed with us and forced Lambeth to take her into care, when they were leaving her on the streets. I think the point we want to bring is how local authorities are not doing their job properly, and legal aid is the only way they can be held accountable”.

However, what have the Government told us will happen to children denied legal aid? During Report in the other place, the Justice Minister said:

“Unaccompanied children with an asylum or immigration issue would have a social worker assigned to them, whose role would include helping the child to gain access to the same advice and support as a child who was permanently settled in the UK. They could also offer assistance with filling in forms and explaining terms, and give emotional support”.—[Official Report, Commons, 31/10/11; col. 689.]

So a social worker is expected to help in a case that might well bring them against their own employer, the local authority. If we do not support this amendment, we will be asking a child to go into the courtroom alone to argue his or her case against a barrister paid for by the taxpayer. It will be unjust and unfair, and I believe that it will also be a false economy.

The Ministry of Justice believes that it can save £6 million or £7 million from its legal aid budget by denying legal aid to these 6,000 children, but the knock-on cost to the public purse could far outweigh that sum. As we have heard throughout the debates on this Bill, the Government have given no estimate of the knock-on cost that will arise because legal problems are not sorted out early, even though they accept that there will be wider costs to society and to the taxpayer. The Ministry of Justice response to the consultation on the Bill said:

“The lack of a robust evidence base means we are unable to draw conclusions as to whether wider economic and social costs are likely to result from the programme of reform or to estimate their size … It is not possible to quantify accurately these wider costs”.

To deny children, the most vulnerable in our society, the ability to access legal aid without any understanding of what the wider consequences would be is not something we should accept. I beg to move.

[Lord Cormack]

My Lords, I will speak briefly to the amendment which stands in my name and that of my noble friend Lady Eaton and the noble Lord, Lord Crisp. Before doing so, I would like to add my tribute to those that have already been made to the late Lord Newton of Braintree—Tony Newton, as I knew him for almost 40 years. I was in the House of Commons when he joined us. He immediately made his mark as a man of calm determination who was never, even when he was in high office, tied to a particular political line. He always sought to follow his own conscience. I shall have great cause always to be grateful to him because when I was a lone voice on the Conservative Benches in speaking out at the time of Bosnia, he was Leader of the House yet he made sure that every week I was able to make my points, and he always responded with a degree of care, concern and empathy which endeared him to me then.

When I came into your Lordships’ House, we immediately became allies on a number of issues, not least those which concern us this afternoon. Lord Newton was tenacious and determined, and nobody in this House will ever forget the courage of that man, standing with his oxygen machine either by the Throne or at the Bar of the House, then leaving the machine to come and speak—most recently from near the Cross Benches—on subjects which concerned him. His name was on both the amendments that I am talking about, so in tribute to him I want to say a few words about Amendment 4. In doing so, I in no way dissent from what the noble Baroness, Lady Grey-Thompson, has said but my amendment is more narrowly focused. I had an opportunity, along with colleagues from all parties, to discuss some of these issues with my noble friend Lord McNally last week. I thank him for the care and concern that he displayed when we discussed these extremely sensitive and important issues. What I said to him then in private I say now in this Chamber: I do not for a moment question his commitment or his concern, and I know that he is as anxious to do right as we all are. However, he is a member of the Executive.

The Government have decided to make a number of cuts in all departments. One understands why, and I am not going to cheapen this speech or this House today by trying to score points about the deficit. I say to my noble friend that of course the Government have to cut, but that does not mean that they have to cut in every department when in some departments, as in his, the sums are relatively small. Those small sums, though, can make such a difference to a great many extremely vulnerable people.

My amendment concentrates on the subject of clinical negligence and children. I stress one point in particular: those who are damaged by an agency of the state have a right to expect the assistance of the state, and the National Health Service is precisely that. If, in the care of the NHS, someone is damaged through clinical negligence then there should be an automatic right of redress. That is more particularly the case when we come to children, and that is what the amendment focuses on.

We had a debate a fortnight ago about those who had suffered brain damage from clinical negligence. They were to be treated differently from those who had been damaged physically in other ways. That is wrong. One should not discriminate in that manner between those who suffer physical damage, which may be with them for the whole of the rest of their lives, and those who suffer brain damage. I am not suggesting for a minute that there should not be assistance for all—indeed, that is the substance of the amendment—but it could be argued that those who suffer physical damage, be it paralysis or whatever, and who are conscious of that are in more personal need than those who suffer brain damage and may not be personally conscious of that.

It is wrong that we in this House should be passing any legislation without pointing that out and asking another place to think again, unless of course my noble friend can accept the amendment today, which would give us all great pleasure. If he cannot, although I hope very much that he will, then this amendment should be pressed to a vote in the event of the noble Baroness’s amendment not being approved. It may well be—I certainly shall not oppose it—but, if it is not, I will then wish to press my amendment unless my noble friend has accepted its form and substance. If this House has any truly lasting point and purpose, and I believe as strongly as any Member of it that it has, then we have a duty to say, “You haven’t got this quite right. You have got to rethink”.

I suppose that I cannot be too greedy and expect the same sort of majority that we achieved yesterday, but I hope that if it is necessary to put this amendment to the vote then it will carry. Here, we are concerned with those least able to help themselves. This really is a case of, “Suffer the little children”, and I very much hope that your Lordships’ House will ask the Government to insert an amendment along these lines in the Bill before it finally becomes law.

[Baroness Howe of Idlicote]

My Lords, I, too, should like to add to the laments that we all feel at the death of Lord Newton. On both sides of the Chamber, we all picture him standing stalwart, despite his obvious disability and discomfort—determined, as always, to give a fair view of the legislation.

I thank the noble Lord, Lord McNally, for the concessions that he made, particularly his government amendment regarding the victims of trafficking. It is most welcome. I also thank him as I was one of those at the meeting—of all parties and none—at which we all put our views to him. However, there remains a need to provide greater protection for vulnerable children and young people. My Third Reading amendment, Amendment 5, is very similar—almost identical—to that of my noble friend Lady Grey-Thompson. The difference is mainly that it raises the upper age from 18 to 24 for this very vulnerable group. It would protect only the most vulnerable people—around 12,000 out of 69,000 18 to 24 year-olds who will lose access to legal aid, specifically those with a disability and those who have been in care.

It is hard to think of groups of people who are more vulnerable than those covered by this amendment. Generally, young people are rarely equipped with the knowledge, skills and legal capacity to resolve their problems without expert advice. This particularly applies to these vulnerable young people, who are far more prone to experiencing multiple and severe problems and are therefore far more likely to require this specialist legal intervention to prevent their situation escalating and spiralling out of control. How are these young people expected to cope when they have problems if they cannot obtain legal aid?

The House will not need reminding, particularly in this economic climate, that the country is experiencing record levels of youth unemployment, rising youth homelessness and increasing levels of adolescent mental health problems. These young people need special help to get them through to a more fulfilled adult life at less cost to the community. It cannot make any sense to deny them this access to the legal advice that they desperately need to help them resolve their problems and turn their lives around.

The Government have said in their new cross-departmental youth policy that they believe in providing additional and early help to disadvantaged and vulnerable young people, including those in care and those with disabilities. Our amendment would help the Government to meet this commitment. It would protect young people who have a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities, according to the definition of disability that is used in the Equality Act 2010. Many of this group’s problems are in the area of social welfare law, being to do with housing, debt and welfare benefits. The considerable changes that many of your Lordships in this Chamber debated during the passage of the Welfare Reform Bill will undoubtedly mean that more young people with disabilities will face social welfare problems and will need that help to understand and gain from the new benefits regime. It simply cannot be right to leave disabled young people without the support they need to enforce payment of their entitlements.

As I have said, the amendment would also protect care leavers under the age of 25. This group is also highly vulnerable. Care leavers are far more likely to end up unemployed, homeless or in prison—alas, this will happen to too many of them—and to experience high levels of common social welfare problems. They will need good legal advice to avoid poor outcomes. The amendment would cost around £4 million, a figure far lower than the cost of not providing access to legal aid for these young people.

Research by Youth Access shows that legal advice which is targeted at vulnerable groups is particularly cost-effective and that this group is more likely to experience stress, violence and homelessness if they do not manage to get good legal advice at an early stage. Each year, 750,000 young people aged between 16 and 24 become mentally or physically ill as a result of their unresolved social welfare problems. That is costing the NHS at least £250 million a year. Much of that cost could be avoided if those young people received better and earlier support. Research by JustRights shows that any savings made through denying young people civil legal aid are likely to be outweighed by increased costs in the criminal legal aid budget alone. The Local Government Association has said that it has concerns about the extra costs for local authorities arising from the withdrawal of legal aid from care leavers.

This amendment not only makes economic sense but is the right and fair thing to do if we are serious about protecting these most vulnerable members of society. I very much hope that, when the time comes, everyone, including the Minister, will support it.

15:45

[Lord Thomas of Gresford]

My Lords, when I first looked at the Bill, I was pleased to see how much vulnerable adults and children are protected by the provisions of Schedule 1. One has only to look at the paragraph headings to see the protection that is given: for example, “Care, supervision and protection of children”, “Special educational needs”, “Abuse of a child or vulnerable adult”, “Working with children and vulnerable adults”. All these groups will remain within the scope of legal aid. Further headings comprise: “Mental health and mental capacity”, “Facilities for disabled persons”, “Inherent jurisdiction of High Court in relation to children and vulnerable adults”, “Unlawful removal of children from the United Kingdom”, “Family homes and domestic violence”, “Victims of domestic violence and family matters”, “Mediation in family disputes”, “Protection of children and family matters”, “Children who are parties to family proceedings” and “EU and international agreements concerning children”. Over and over again the emphasis is placed on keeping the needs of children and vulnerable adults within the scope of legal aid. I look forward to hearing from my noble friend what proportion those headings represent of all the cases involving children. Those children’s and vulnerable adults’ issues will continue to be within the scope of legal aid.

There is one aspect of Amendment 3 with which I entirely agree—I spoke about this in Committee and on Report—which is that legal aid should be maintained for a review or appeal on social welfare issues and for,

“civil legal services relating to an appeal to the Supreme Court”.

That is so for children, but my position is that it is important that legal aid for appellate processes should be available to all adults and children.

I listened with a great deal of sympathy to the exposition of Amendment 4 by the noble Lord, Lord Cormack, but he should bear in mind that conditional fee agreements with one-way costing, which is the new way in which conditional fee agreements are to be entered into, will be available for people who are not covered by legal aid, and the new changes will be much more acceptable. For example, there will be protection against the defendant’s costs for a losing claimant—a losing child or adult. They will not have to pay those costs. We have discussed those issues at length. The noble Lord should also bear in mind that the Government have announced that if you are legally aided and you obtain damages in a personal injury case, 25 per cent of those damages will be taken for the supplementary legal aid scheme to fund other people who are deserving of legal aid. Therefore, entitlement to legal aid will not mean that a person gets their damages in full. It is probably better in many of these cases to have a conditional fee agreement as it has been refashioned than it is to receive legal aid. I am sure that that is the way in which the legal profession will go.

[Baroness Eaton]

My Lords, I speak in support of the children’s amendments moved and spoken to by the noble Baroness, Lady Grey-Thompson, and my noble friend Lord Cormack. I should like to add my thoughts on Lord Newton, who kindly supported the amendment. I know that we will all miss his integrity and compassion in all our debates, particularly around these sensitive subjects. I also thank the noble Lord, Lord McNally, because I and other noble Lords have had a number of conversations with him, and he has been most gracious in his dealings with us. However, I still find myself in the unhappy position of being unable to support the Government’s intention to remove the clear and straightforward right to legal advice for children under 18 generally, and for all children who are injured in clinical negligence cases.

The Bill as it stands draws a distinction between, on the one hand, any child who suffers brain damage as a result of medical negligence before the age of nine weeks, and, on the other, any child suffering injury of any other kind caused by medical negligence—including a child who suffers from brain damage when they are nine weeks and one day old. Let me tell noble Lords about a Plymouth boy who suffered brain damage at the age of one when doctors at the Frenchay Hospital in Bristol failed to follow up a suspected aneurysm. Months later, he suffered a devastating bleed in his brain, which would have been avoided if the correct procedure had been followed. The boy will require care for the rest of his life; he cannot talk and will never be able to work. A settlement with North Bristol NHS Trust at the High Court in November 2011 will help to provide care for the rest of the boy’s life. He is now 10. The case could not have been started without legal aid, which would not be available if the Bill were to pass unamended.

I simply do not see how children who have been injured in these often heartbreaking circumstances can be divided into two groups in this way. We would allow legal aid for a baby suffering brain damage at birth, but deny legal aid to a baby suffering brain damage in hospital at the age of one. Or we would prevent a child who has been paralysed from seeking help. Just imagine two babies at two weeks old in the same hospital. One is brain damaged and the parents can seek support on their behalf, while the other is paralysed and the parents cannot get legal aid.

Are we really saying that a brain-damaged child who can walk needs more care and support than a child who has to be carried to the bathroom and turned in bed during the night? The severe difficulties facing the child’s parents will be exactly the same in both cases. They will be desperate for help. They will want to know whether they have a legal case and, first and foremost, they will be giving their child the day-to-day care and love that all parents must, whatever the difficulties.

Are we really going to ask half of those parents to appeal to the director of legal aid casework to see whether their child qualifies for legal aid as an exceptional case—as if that would be a satisfactory way to organise legal aid for children even from the Government’s point of view? I ask noble Lords to consider the expense, bureaucracy and delay that will result from such an approach.

I have highlighted medical negligence but, as a former leader of a local authority, I could go through each subject heading and make a similar case. The simple truth is that children are defined as minors in law because they cannot represent themselves and sometimes need protection and redress from their families and from the state. It is not good enough to suggest that a social worker can apply for their legal support as an exceptional case. Social workers are not legal executives and have no legal training. Inherent in that suggestion is a misunderstanding of the nature of the legal actions that may be taken. In most cases, the child will be challenging a decision or action taken by the local authority. Do we really believe that every social worker will apply for a child to have legal aid in cases which challenge his or her decisions or those of his or her employer?

All of us in this House understand that in a healthy democracy, it must be possible to challenge the state, particularly where children are concerned. We also understand that there are lots of terrible cases where children’s voices have not been heard, which is why we need to ensure that they can take independent legal advice that is accessible directly, not via a social worker or any other arm of government.

I support the amendments because I believe that they will save an enormous amount of trouble and wasteful expenditure for the Government, whom I support. I want to help the Government to pull back from what would be a regrettable and avoidable mistake, and they will save a great deal of anxiety for parents who are already coping with more than anyone should have to bear.

[Lord Avebury]

My Lords, I would have been inclined to support the amendment if I had not been here to listen to the debate and heard what my noble friend had to say, which appears basically to contradict the argument just made by the noble Baroness, Lady Eaton. She was saying that in the case of the infant who died at Frenchay Hospital, the case could not have been brought if legal aid had not been available; but my noble friend said that it was preferable, in terms of the amount that the litigant would receive, to conduct a case of this sort through the conditional fee arrangements which are now available. The litigant would have ended up with more money than would have been available to the child under the arrangements that prevailed at the time of that terrible accident.

I should like to hear from my noble friend when he winds up whether it is a general principle that can be accepted on all sides of the House that people who were formerly legally aided would have done worse than those who are now to be conducting their cases under the CFA. Saying that we do not need an arrangement of the sort put forward by the noble Lord, Lord Cormack, is a very powerful argument.

I also thought that perhaps the noble Lord had failed to notice that in all these cases involving children there is a litigation friend, who has to be approved by the court. Therefore, his comment that we are looking at people who are least able to help themselves may not be altogether valid. The parent or a suitable adult always appears on the child’s behalf and the child does not have to go into the court without that support. Therefore, although children may be apparently less able to conduct litigation, they do not have to deal with these matters in the court; litigation friends appear on their behalf.

16:00

[Lord Cormack]

I am well aware of that but the point that I was seeking to make in a very brief speech was that those who are damaged by an agency of the state deserve the help of the state automatically if they are seeking redress.

[Lord Avebury]

I am not sure that that proposition is right. I do not think that my noble friend had borne in mind the possibility that the child would do better financially under the CFA. That is a very important consideration. In fact, in my mind it is the determining consideration in how I approach this amendment. If the argument of my noble friend Lord Thomas of Gresford is correct, it is conclusive that we should not support the amendment but that we should allow cases to go forward under the CFA, under which people will be better compensated than they would have been.

[Baroness Massey of Darwen]

My Lords, I have put my name to an amendment in this group—that in the names of the noble Baroness, Lady Howe, and others. I simply make one appeal to the Government concerning their commitment to protect vulnerable children and young people.

I declare an interest as the chair of the All-Party Parliamentary Group for Children. Over the past year our theme has been vulnerable children. We have heard about the problems that such children and their families have in dealing with complex systems such as education, health and the law, and we have heard many passionate and committed speeches about these young people today. In my experience, this House has never been party-political on issues regarding children; it has always considered the well-being of children to be above party politics. That spirit has been shown today on the Benches opposite, and long may it continue.

The Minister for Children, Sarah Teather, for whom I have the greatest respect, made a commitment in 2010 to assess legislation against the needs of children, as enshrined in the United Nations Convention on the Rights of the Child, and I find it ironic that we are now considering legislation that will potentially damage vulnerable children and their families. The Government, in their report Positive for Youth—I shall not go into that but the commitment is there—made commitments to protect disadvantaged and vulnerable children, and the Liberal Democrat youth policy Free to be Young makes commitments to improve young people’s access to legal advice. I think we should all remember those commitments today. I trust that the Government will recognise that intervention at an early age, particularly for the vulnerable, is not only humane; it also benefits well-being and is cost effective. I hope that the Government will look again at the commitments to vulnerable children and young people.

[The Lord Bishop of Ripon and Leeds]

My Lords, as the first speaker from these Benches in this debate, I add my gratitude for all the work of Lord Newton of Braintree. It seems strange to be sitting here without his advice from behind me, as the noble Lord, Lord Bach, said earlier in the debate. He had immense care and concern for children’s needs and rights, which was evident right up to last week. Not to have his sharpness here in this debate is a loss for all of us, so our thanks to him.

The amendments would go a long way to providing security of legal aid for some of our most vulnerable children, at minimal cost. We seem now to have reached a point where legal aid will be provided for many children. I have listened carefully to what has been said by the noble Lords, Lord Thomas of Gresford and Lord Avebury. It seems to be almost accidental whether a particular child will come under the provisions of the Bill. The amendment moved by the noble Baroness, Lady Grey-Thompson, gives us the opportunity to treat all children in difficulties equally, with particular concern for education and sanctuary issues.

We all recognise the importance of education for all, so we must be concerned that Black Caribbean pupils, for example, according to the children’s commissioner, are four times more likely than others to be excluded permanently from school. Those children will often be vulnerable, frightened and very unsure about their future. They need the structure of the legal system to provide them with support at that point in their lives. Equally, we continue to affirm that we have an immigration system that deliberately provides sanctuary for children who have been victims of abuse of whatever kind. They may have been trafficked into this country—and I, too, welcome the Government’s changes on that issue. However, many will not have been trafficked; trafficking is extremely difficult to define. Nevertheless, they may have suffered sexual exploitation, domestic slavery or abuse. They may have been brought into this country as domestic slaves and will often have been abused. Some will be the subject of custody cases, which may lead to abuse or separation from a parent. Others would be in danger of abuse if they returned to a country where exploitation would continue.

Justice demands proper legal representation and the amendments provide a way of securing that at minimal cost. They would demonstrate our concern for the most vulnerable young people in our society. They are absolutely in accord with the Government’s aims and purposes, and I hope, therefore, that they will accept them

[Lord Wigley]

My Lords, I rise to support the amendment moved by the noble Baroness, Lady Grey-Thompson, and apologise for missing her opening remarks. However, before briefly addressing the amendment, I would like to associate myself with the words in remembrance of Lord Newton. In another place I worked very closely with him, as Tony Newton, when I was vice-chair of the parliamentary All-Party Disablement Group. Even when he could not meet us in all our demands, he was always very positive and looked for ways to come at least some of the way towards us. He will be a great loss for all of us in this House as well as for the many thousands outside the House for whom he worked so hard.

I also thank the noble Lord, Lord McNally, for some of the concessions that he has been able to make at other times—particularly for those with learning difficulties—which I was unable to acknowledge earlier.

On this specific amendment, all of us who have had reason to work on behalf of disabled children will be aware of the need to ensure that they get fair play within the system. If there is any danger of them losing out and not being able to go to appeal on benefits then there need to be safeguards in legislation.

Many of us served for weeks on end on the Welfare Reform Bill. We hoped that some amendments would strengthen it and make it more easily understood. In reality, the amendments failed. There will be challenges to the interpretation of the legislation that will need to go to the courts. Unless provisions such as those in the amendment are included in the Bill, people will miss out. Therefore, even if some aspects—to which the noble Lord, Lord Thomas, referred—are already covered elsewhere, others are not. Therefore, let us give another place a chance by agreeing the amendment. If there is then a need to pare it back, all well and good—but at this point, unless we agree the amendment we will lose everything.

[Lord Phillips of Sudbury]

My Lords, I was the constituent of Lord Newton of Braintree—Tony Newton—for nearly 20 years, and he was a close friend for the rest of his life. If I need a little courage in order not to follow the Whip today on at least one of the amendments in this group, I will get it from his memory. He was an extraordinary man of both first-class intellect and a really big heart. I do not know anybody who managed to marry intellect and heart in quite the effective way that he did.

I have practised law for more than 50 years. The memories that stick with me most are of trying to help—and often to help young people under 18 and their worried parents get fairness from a barbarically complicated legal system. I understand the extraordinary difficulty faced by my noble friend Lord McNally—and by the Government. They have the hugely difficult and unwelcome task of cutting back and saving on public expenditure. However, we are faced here with a balance between £6 million to £8 million, and justice for the particularly vulnerable and needy group of our fellow citizens who are under 18.

Looking down the list of issues that Amendment 3 covers, it is almost impossible not to believe that they are all essential elements of justice in the 21st century. The noble Baroness, Lady Grey-Thompson, made the point that the downstream costs of not addressing these sorts of issues with at least timely advice are likely to exceed any up-front savings. The King’s Fund report made that clear.

On balance, I am persuaded by my noble friend Lord Thomas of Gresford that I need not support Amendment 4. In the same way, I will be able to compromise on Amendment 5, even with the shadow of Tony standing over me. To extend the age limit to 24 would have a dramatic effect. Those in the 18 to 24 age group are more likely than the younger group to be able to look after themselves when it comes to advice and a limited amount of representation.

Finally, I wish that the noble and learned Lord, Lord Howe, was in his place. Those of us who have been practitioners in the law will remember the happy days ushered in by the Conservative Government of 1980, and the noble and learned Lord’s creation of the green form scheme, which meant that we could advise on all these things automatically, without reference to anybody and with a cap on how much we could charge. I wish we could get back to those happy days. In the mean time, I fear that I may be forced at least to abstain on Amendment 3 unless my noble friend Lord McNally comes up with a wholly unexpected concession —and I hope that he will.

16:15

[The Earl of Listowel]

My Lords, bearing in mind the wish of the House, I imagine, to move to a speedy conclusion in this debate, I shall say one sentence in support of my noble friend Lady Howe on Amendment 5 with regard to children leaving care. The noble Lord, Lord Phillips, just spoke of 18 to 24 year-olds and of his doubt that there is a necessity to protect them in law in this way with regard to legal aid. However, I would draw the House’s attention, and his attention in particular, to the experience of young people in care leaving care. A quarter of young people in care leave their foster carer or children’s home at the age of 16. These children have been traumatised—they would not have been taken into care unless that was the case.

Very few of them can stay with their foster carer or in their children’s home beyond the age of 18, so past that age most of these traumatised young people have to fend for themselves. They get some additional support, but they are pretty much on their own. The average age at which most of our children leave home and have to fend for themselves is 24, so I hope that your Lordships will keep in mind the particular vulnerability of young people leaving care. It is recognised in the Children (Leaving Care) Act, which gives them special consideration until the age of 21 and until the age of 24 if they are in education or training. I hope that the Minister will give that a sympathetic ear.

[Lord Crisp]

My Lords, I have added my name to the amendment proposed by the noble Lord, Lord Cormack, and I would like to speak very briefly following on from his eloquent speech and those of the noble Baroness, Lady Eaton, and others. First, like others, I am appreciative of the concessions that have already been made, but I think that they do not go far enough on clinical negligence. I recognise that it is a relatively small number of children who are left out by the concessions that have already been made.

As a former chief executive of the NHS, I add my simple tribute to Lord Newton of Braintree. He was chair of one of our great hospitals and, like others, I benefited from his wise and useful advice on many occasions.

Like others in your Lordships’ House who are associated with the NHS, I know very well the distress to all concerned that is involved in these clinical negligence cases. It obviously affects the children and their families, but also the staff and the institutions. What is most important here is to make whatever processes that are available as simple and quick as possible.

The Government’s proposal fails on three key points. First, what impact will these changes have on access to redress for this vulnerable group? I do not think from anything we have heard in this and earlier debates that they will improve access in any way but will undoubtedly damage it. Secondly, will it save the Exchequer and the NHS money? It will save the Exchequer money in the sense of saving money on legal aid, but all the evidence I have seen is that it will cost the NHS more through the processes that are being introduced. Thirdly, will it speed up and simplify the process for all concerned? I stress “all concerned”, including the staff of the NHS. I think the comments by the noble Baroness, Lady Eaton, made it clear that it simply will not. For all those reasons, I urge the Minister to reconsider and to accept this amendment, which will bring into scope a relatively small number of children to the benefit of us all.

[Lord Faulks]

My Lords, I speak as a practitioner in clinical negligence. Doctors who work in the NHS might be slightly surprised to find themselves described as “agents of the state”, but I take the point that the noble Lord makes that they should be accountable. Of course, they are accountable, and they can still be sued under the CFA system. The difference between the children in cases that are still outside scope unless this amendment is allowed and the children who will be within scope because of the concession made by the Government is, as I understand it, because of an assessment of the complexity of the cases. The Government have taken the view that because brain-damage cases require an enormous amount of investigation, there is a real risk that no one will take them on a CFA basis, whereas these children cases are, by and large—and I admit that the lines are not always hard and fast—less complex than that. I would respectfully suggest that although these are hard choices, it is a reasonable choice for the Government to have made in the circumstances.

I conclude by saying that I, too, received a great deal of assistance from the late Lord Newton as a new arrival in your Lordships’ House. I know that he would regard these brief observations of mine as—as he would describe it—very loyal, and I fear he would not have regarded that as a compliment.

[Baroness Benjamin]

My Lords, I support Amendments 3 and 5. I also pay tribute to Lord Newton. In the short time I knew him, he always showed integrity, dignity, compassion and a smiling face right till the end. He was a true gentleman. I also thank my noble friend Lord McNally for meeting with me, and for showing compassion and making it clear that children and vulnerable young people will continue to be covered by legal aid—and I believe him.

It therefore makes no sense for the 3 per cent of children and young people covered by these amendments to have to apply for legal aid from a fund that is called “legal aid for exceptional cases”—by definition, there will not be any exceptional cases as all children and young people are covered. Neither does it make sense to be applying for funds through a social worker or a local authority when the person or organisation being challenged may well be the young person’s own social worker or local authority. Even an adult would have difficulty with that process.

Therefore, the House has two options before it today, which are about the system and not the scope of legal aid. Option one is what Amendments 3 and 5 are all about. It would keep the current system where a child or vulnerable young person or their legal guardian can go to an independent lawyer, where they will be means-tested on the spot and their case reviewed. If they qualify, they will be given legal aid to cover them for legal advice and representation where appropriate.

Option two is the new system proposed by the LASPO Bill, in which a child will need to ask their social worker, who is not legally qualified, to make the time to apply for funding from the Ministry of Justice. However, no details have been given as to how long this will take, what legal training will be given to the social worker, how much the new system will cost, what happens if a social worker has not yet been allocated to the child or young person or how they will even find out how to do this.

I believe that the new system being proposed will be bureaucratic, expensive and time-consuming, and could lead to many miscarriages of justice. Even my noble friend the Minister says in his letter that this system will be challenged and end up in expensive cases of judicial review—meaning more money for the highest- paid lawyers, paid for by the taxpayer. This is not common sense.

I ask the Government to think again, to bridge that narrow gap, and include not just the 97 per cent already accounted for in the Bill, as my noble friend Lord Thomas highlighted, but all children, including that last 3 per cent of vulnerable children, who may be living independently from their parents, living in care or escaping difficult family circumstances. As I always say, childhood lasts a lifetime and these early experiences will have a fundamental effect on their lives. For the sake of these children, I ask the House to support Amendments 3 and 5, which would establish an independent process understood by all.

[Baroness Masham of Ilton]

My Lords, in supporting these amendments I give an example concerning Amendment 4. Recently, I had a letter about a tragic case. A baby had a boil on his behind. When his mother took him to have his polio vaccine, she queried the fact that he had a boil with the nurse. The nurse queried it with the doctor who said, “Go ahead and give him the vaccine”. The baby developed polio through the urine in his nappy. Now, years later, the boy is paralysed but the family have had no help and are still trying. Many cases need to be sorted out early to save years of anguish.

[Lord Bach]

From the opposition Front Bench I can be extremely brief, as I should be because this is Third Reading. These are very important amendments which the House will have to decide on shortly. JustRights has done some number-crunching on the issue of children. It points out that, while 95 per cent of funding may be protected, only 74 per cent of children are protected likewise. Therefore, the 6,000 mentioned by the noble Baroness who moved Amendment 3 will be left to navigate the legal system alone. These children will have no adult to help them—no litigation friend, in parlance.

It is absurd to think that in social welfare law cases, a conditional fee agreement is any substitute whatever for basic legal aid for getting legal advice for the kind of problems that affect these children. In effect, we are being asked to abandon some of these children— 16 year-olds perhaps—to a legal system that is far from understandable. They will be mainly children in care who have fractured relationships with their parents. The House knows so well that these are exactly the kind of children who, if they do not get early legal help, may end up in young offender institutions or secure children’s homes at enormous cost to the state, which would be much more than the small amount that the Government claim will be saved by not giving them legal aid. How much wiser would it be to spend that money early? Surely, for children, legal aid is greatly preferable to a CFA right across the board. We support the amendments.

[Lord McNally]

My Lords, in debates like this, I am always a little worried that noble Lords not in the Chamber when the Division Bells ring will come along and say, “What is this about?”. They may be told, “Oh, we are voting on legal aid for children”. Let us be clear, these amendments and this debate are not about whether we provide legal aid for children and vulnerable people; nor is it about not being willing to help those least able to help themselves; and nor is it about denying help to the most vulnerable in our society.

As my noble friend Lord Thomas of Gresford pointed out, the core principle of our reforms is to ensure that civil legal services will continue to be available in the highest priority cases; for example, where a person’s life or liberty is at stake or where children may be taken into care. The application of this principle has led us to protect the vast majority of funding and cases involving children. They include child protection cases, civil cases concerning the abuse of a child, special educational needs cases and cases involving children who are made parties to private family proceedings. Noble Lords will also recall that we have moved to make funding available for clinical negligence cases concerning brain-damaged infants. It is simply not true therefore to suggest that there will be no funding or very substantially reduced funding for the cases involving children and young people.

In addition, as indicated earlier, we have moved the amendment ratchet to “regulator” which will enable us to test whether some of the more dramatic warnings that have been issued about our reforms can be looked at. We are committed to undertake a post-implementation review of the specific policies set out in Bill. We believe that these safeguards are sufficient to ensure that children do not fall through the net. Our approach will mean that 97 per cent of current spend on cases involving child claimants will continue, and that is the overwhelming majority of current support. Spending reductions are never welcome, but I hope these figures put it beyond doubt that we have made a genuine endeavour to ensure that children are protected, even as we push on with the wider objective of our reforms, which is to focus scarce resources on the most serious cases, to contribute to savings and to reform the system.

16:30

I do challenge the assumption that the remaining 3 per cent will automatically require specialist legal advice rather than non-legal advice which can avoid involving a child in traumatic court processes. But, of course, the wider safeguards apparent in our reforms apply. First, if legal representation really is appropriate in an individual case, then exceptional funding will be available where required under the ECHR or EU law.

Perhaps I may take up a point made by my noble friends Lady Eaton and Lady Benjamin. They both took exception to the word “exceptional”. The word is merely the label used to describe the test under Clause 10 and is not intended to have any special legal meaning. It simply signifies that these cases fall outside the normal scope of civil legal aid. There is no expectation that children or any other applicants would be required to fill in excluded case application forms. These will be completed by a solicitor, as they are now under the existing scheme, and our intention is that payments may be made towards the costs incurred in making a successful application. We propose that the application process for excluding certificated work will be broadly similar to the existing process for in-scope cases. A number of noble Lords have made the point by saying, “It’s all very difficult and complicated”, but unless you are going to make a blanket payment, you draw lines and make conditions. There is a certain element of bureaucracy, if that is the right word, but I do not believe that this is a new and complicated programme. It can be used easily and, as I have said, the word “exceptional” is used simply to designate those matters which are out of scope.

Secondly, we have been focusing on delivering additional resources for citizens advice bureaux and similar, which provide the general, practical advice that can often prove better than the drawn-out, adversarial experience of legal action. As noble Lords know, the Chancellor announced last week that we will be making a further £20 million—and this time it is £20 million of new money—available for each of the next two financial years. This comes on top of the £100 million voluntary sector transition fund.

[Lord Beecham]

That is on top of the £80 million of cuts to citizens advice bureaux.

[Lord McNally]

Citizens advice bureaux operate in a country that is 10 per cent poorer than the last Government gave the country to understand. It is absurd to pretend that citizens advice bureaux or any other sector—local government and national government —should not face this reality.

In civil cases, it is already a requirement of the rules of civil litigation that a child or other protected party who lacks capacity must have a litigation friend to conduct a case on their behalf. In the case of a child, this is usually a parent unless the court specifically orders otherwise. It will only be in exceptional circumstances that the court will make an order permitting the child or protected party to conduct proceedings on their own behalf. Any step taken before a child or protected party has a litigation friend is of no effect unless the court makes such an order. There is no requirement that a litigation friend must act through a solicitor. It is therefore open to a child’s parent or other person caring for the child, for example, to act as the child’s litigation friend in proceedings where the child is a party. We believe that this provides a clear safeguard for children and vulnerable young people who lack capacity to conduct proceedings on their own behalf.

We recognise that Amendment 5 also covers the 18 to 24 year-old category. As I said earlier, we have provided for those who are most vulnerable. However, we have also been clear that, in what is a complex area, there must be flexibility. The exceptional funding scheme therefore provides a mechanism whereby the director of legal aid casework can grant legal aid in areas of scope which would normally be out of scope, where necessary, to ensure the protection of the individual’s right to legal aid under ECHR and EU law. In cases engaging Article 6 of the ECHR, the director of legal aid casework must take into account a person’s ability to represent themselves, the complexity of the proceedings, the importance of the issues at stake and all other relevant circumstances. An individual’s age as well as their capacity will be a key consideration in determining a person’s ability to represent themselves. The exceptional funding scheme will clearly be an important safeguard for children and vulnerable young people who would otherwise be unable to present their case.

Amendment 3, in particular, seeks to bring all cases back into the scope of legal aid where a child is a party, but the Bill already provides for child parties to be within scope of legal aid in family proceedings. The amendment is therefore in part unnecessary and seeks to replicate what is already in scope. The rest of the amendment seeks to keep funding across the board for children in all civil disputes without regard to the relative priority or alternative methods of resolving them. The majority of children will already fall within the scope of legal aid as provided for by the Bill. However, there are additional safeguards to provide further protection through exceptional funding powers and, should it prove necessary, the power to add to civil legal services.

[The Archbishop of York]

The Minister has not yet answered the question which I think the noble Lord, Lord Thomas, raised—and had I had the chance, I would have raised the same question—on Amendment 3, in relation to proposed new paragraph 1(1)(k), which specifies:

“civil legal services relating to an appeal to the Supreme Court”.

I have not seen that provision in the Bill as drafted, but it is quite important. What will happen to it? I agree with the Minister about the other provisions, but I do not think that he has answered the question on that one.

[Lord McNally]

It is always a pleasure to see the most reverend Primate the Archbishop of York in his place. I shall give him a definitive answer as I sum up and come to my peroration, as there are a number of other matters that I wish to cover.

Amendment 4 seeks to bring into scope children for all clinical negligence cases. I have already set out my arguments on how we have protected children in the Bill. On clinical negligence, in particular, we recognised the concerns that serious and complex cases involving brain-damaged babies may not be able to secure a conditional fee agreement, and we therefore brought forward an amendment on Report that will provide certainty for families and make the application process straightforward.

The amendments we have made will allow funding for cases where the negligence occurs in a period of time beginning with the point of the mother’s pregnancy until eight weeks after birth. This does not mean that the symptoms have to become apparent during this period. They could become apparent beyond this period and still be in scope providing that the relevant negligent act or omission took place during that period. We also moved to include an additional safeguard in respect of babies who are born prematurely. We recognised that these children are particularly vulnerable in the post-natal period and have therefore provided that where a baby is born before the 37th week of pregnancy, the period of eight weeks will not run from birth but will be taken to start from the first day of what would have been the 37th week of pregnancy. I hope noble Lords will recognise that the Government have listened and acted to introduce back into scope the most serious clinical negligence cases involving children.

Amendment 5 seeks to bring into scope civil legal services in relation to advice and proceedings for any person who is 24 years old or under and has a disability, is a former care leaver or is a vulnerable person as specified by regulations. We have provided for those who are most vulnerable, as I have said, under Amendment 3, which covers those under the age of 18. However, we have also been clear that there must be flexibility in this complex area. The exceptional funding scheme therefore provides a mechanism whereby the director of legal aid casework can grant legal aid in areas that would normally be out of scope, where necessary, to ensure the protection of an individual’s rights to legal aid under the ECHR and EU law. In cases engaging Article 6 of the ECHR, the director of legal aid casework must take into account a person’s ability to represent themselves, the complexity of proceedings, the importance of the issues at stake and all other relevant circumstances. An individual’s age as well as their capacity will be key considerations in determining a person’s ability to represent themselves. The exceptional funding scheme will clearly be an important safeguard for children or vulnerable young people who would otherwise be unable to present their case.

I am told that we have lost the vote about retaining legal aid for appeals to the Supreme Court.

[Lord Bach]

That is right, the Government have lost it. However, I hope that the noble Lord will go on to say that the Government will not try to overturn it.

[Lord McNally]

The most reverend Primate the Archbishop of York may be disappointed to know that he may have been absent to defeat us on that point at an earlier stage. As the noble Lord, Lord Bach, has indicated, the Government will look at these matters between now and consideration in the other place.

The only outstanding point that I wanted to cover was that made by the noble Lords, Lord Thomas and Lord Avebury, about the balance between CFAs and legal aid in injury cases. Although I am not a lawyer, I would say that, on balance, CFAs are the most effective way of taking these cases. It is worth remembering that 82 per cent of cases are already covered by CFAs. People are not left abandoned on a lonely sea—the process works.

It is always difficult to draw lines and easy to say that the lines have been drawn in the wrong place. As I said in opening, the amount of coverage for young people in this area is completely different from what was suggested in some speeches today. We believe that between the coverage of scope that we put into this Bill, the workings of exceptional funding and the availability of wider advice, there will not be the kind of consequences that have been suggested. I also make it clear that we do not think that Amendments 3, 4 and 5 are consequential, so if noble Lords do press them, we would want to test the opinion of the House on each. However, I hope that the noble Baroness will agree to withdraw her amendment.

[Baroness Grey-Thompson]

My Lords, I thank the Minister for his comments and consideration. The House appreciates that he has perhaps been given little or no room for manoeuvre. I would also like to thank all Members who have tried to ensure that children’s interests are safeguarded in this Bill. Most of all, I thank Members on the government Benches who have understood the problems with this legislation right from the start and have been prepared to raise them. We all understand that this is a very difficult thing to do. However, because of the very nature of the legislation and its impact on those unable in law to represent themselves, we need to ask the other place to take another look. Therefore, I wish to test the opinion of the House.

16:44

Division 1

Ayes: 232

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Labour: 164
Crossbench: 50
Bishops: 4
Conservative: 3
Independent: 2
Liberal Democrat: 1
Plaid Cymru: 1

Noes: 220

---

Conservative: 135
Liberal Democrat: 64
Crossbench: 15
Democratic Unionist Party: 1
Ulster Unionist Party: 1

16:59

Amendment 4

Moved by

[Lord Cormack]

4: Schedule 1, page 140, line 5, at end insert—
“Children and clinical negligence(1) Civil legal services provided in relation to clinical negligence in the course of the provision of clinical services which took place at a time when the individual was a child.
(2) In this paragraph—
“clinical negligence” means breach of a duty of care or trespass to the person committed in the course of the provision of clinical or medical services (including dental or nursing services);
“clinical negligence proceedings” means proceedings which include a claim for damages in respect of clinical negligence;
“child” means a person under the age of 18.”

[Lord Cormack]

My Lords, the House has just approved an amendment which I felt included my own. I am reluctant to ask the House to vote again but, since my noble friend said that Amendment 4 is not consequential, I have something of a dilemma. It is my view that what the House has decided embraces what my amendment contains. However, since my noble friend is shaking his head vigorously, I must, with great reluctance, therefore test the opinion of the House.

17:00

Division 2

Ayes: 228

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Labour: 159
Crossbench: 53
Bishops: 4
Conservative: 2
Independent: 2
Plaid Cymru: 1

Noes: 215

---

Conservative: 134
Liberal Democrat: 65
Crossbench: 9
Ulster Unionist Party: 2
Democratic Unionist Party: 1

17:14

Amendment 5

Moved by

[Baroness Howe of Idlicote]

5: Schedule 1, page 140, line 32, at end insert—
“Vulnerable young people(1) Civil legal services provided in relation to advice and proceedings under this paragraph where the applicant or respondent is aged twenty four or under, and—
(a) has a disability under section 6 of the Equality Act 2010;(b) is a former relevant child (care leaver) by reference to the Children (Leaving Care) Act 2000;(c) is a vulnerable person as specified by regulations; or(d) otherwise falls within the categories of vulnerable young people which the Secretary of State may prescribe in regulations.(2) Civil legal services provided in relation to advice and proceedings relating to any benefit, allowance, payment, credit or pension under—
(a) the Social Security Contributions and Benefits Act 1992;(b) the Jobseekers Act 1995;(c) the State Pension Credit Act 2002;(d) the Tax Credits act 2002;(e) the Welfare Reform Act 2007;(f) the Welfare Reform Act 2012; or(g) any other enactment relating to social security.(3) Civil legal services provided in relation to advice and proceedings relating to all areas of employment law not otherwise covered in this Schedule.
(4) Civil legal services provided in relation to advice and proceedings relating to all areas of housing law not otherwise covered in this Schedule.
(5) Civil legal services provided in relation to advice and proceedings relating to all areas of law related to personal debt not otherwise covered in this Schedule.
(6) Civil legal services provided in relation to advice and proceedings relating to all areas of immigration and asylum law not otherwise covered in this Schedule.
(7) Civil legal services provided in relation to advice and proceedings relating to all areas of clinical negligence law not otherwise covered in this Schedule.
(8) Civil legal services provided in relation to advice and proceedings relating to all areas of consumer law not otherwise covered in this Schedule.
(9) Civil legal services provided in relation to advice and proceedings relating to appeals to the Criminal Injuries Compensation Authority.
(10) Civil legal services provided in relation to advice and proceedings relating a review or appeal under section 11 or 13 of the Tribunals, Courts and Enforcement Act 2007.
(11) Civil legal services provided in relation to advice and proceedings relating to an appeal to the Supreme Court.”

[Baroness Howe of Idlicote]

My Lords, I, too, wish to test the opinion of the House. We are talking about a small group who, as my noble friend Lord Listowel put it so well, are highly likely to come from very deprived, disrupted backgrounds and are clearly in need of help. Over and above the success of the previous amendment—I am delighted with the result—I want to test the opinion of the House, and I hope that noble Lords will support my small amendment.

17:15

Division 3

Ayes: 206

---

Labour: 157
Crossbench: 39
Bishops: 2
Independent: 2
Plaid Cymru: 1

Noes: 229

---

Conservative: 134
Liberal Democrat: 66
Crossbench: 19
Ulster Unionist Party: 3
Democratic Unionist Party: 1
Labour: 1

17:28

Amendments 6 to 8

Moved by

[Lord Wallace of Tankerness]

6: Schedule 1, page 141, leave out lines 31 to 33

7: Schedule 1, page 141, line 36, leave out “, or prescribed under,”

8: Schedule 1, page 144, leave out lines 37 and 38

Amendments 6 to 8 agreed.

Amendment 9

Moved by

[Lord Wallace of Tankerness]

9: Schedule 1, page 145, line 26, at end insert “or to secure the return of a related child who has been unlawfully removed from the United Kingdom”

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, this is an important government amendment on an issue that has been the subject of considerable debate in your Lordships’ House and, indeed, in the other place, on legal aid for cases of domestic child abduction. We have always been clear that legal aid should be available to both prevent and remedy international child abduction and, as indicated on Report, we have been listening sympathetically to the powerful arguments about legal aid for domestic child abduction. We agree that the unusual nature of these cases, including the terrible impact on those involved, means that legal aid is justified to find a child who has been unlawfully removed within the United Kingdom.

We think that our amendment, which has been worked up in the light of discussion with the noble and learned Baroness, Lady Butler-Sloss, achieves this. One point that the noble and learned Baroness has asked the Government to put on the record, which I am happy to do, concerns what we mean by unlawful removal. Unlawful in this sense has a civil rather than a criminal meaning, so if a parent with contact tried to take a child permanently from the parent with residence, that would be unlawful.

17:30

I should add for the sake of completeness that our amendments also add recovery orders under Section 34 of the Family Law Act 1986 to a list of remedies for which civil legal aid is available in international child abduction cases as well. We can see the potential relevance of such an order where a child has been removed from the parent with residence but not yet from the United Kingdom, so the final international removal might still be prevented. Another small technical amendment relates to what are described as Section 27 applications. Legal aid will be made available for the narrow associated issue of registering an order made in one part of the United Kingdom in another part of the United Kingdom if it has a different legal jurisdiction. I beg to move.

[Baroness Butler-Sloss]

My Lords, I should like to congratulate the Government and also to express my very deep gratitude to the Ministers in this House and in the other House for achieving a very sensible solution. I am also particularly grateful to the government lawyers who have done an enormous amount of work both for me and for those behind me, and who took the trouble to deal directly with the former chairman of the Family Law Bar Association and the chairman of the ILPA in relation to a later amendment. I really am very grateful.

However, I have a wish list—I might refer to it when the first government amendment that was accepted today enables a little more money to be provided—for two groups of left-behind parents. They are generally fathers, but sometimes they are mothers. The first situation concerns preventing a threatened abduction in a family where both parents are still living together because neither parent has yet applied for a court order. The left-behind parent may be warned by another member of the family that the mother, generally, will take off with the child and that the father will never see the child again. That would require a prohibited steps order. I understand the thinking of the Government on why they will not deal with the matter now. However, I would like them to put it on the waiting list because it needs to be done at some stage.

The second is where the mother—it is generally the mother, but sometimes the father—removes a child in a situation where there is not yet a residence or other order. That internal parental abduction case is not covered, either. I would like to put both those matters on the wish list and I hope that one of these days the Government will be sympathetic to them. However, the work that has been done, and the recognition by the Government that this should be dealt with, is splendid news, and we are all extremely grateful.

[Lord Beecham]

My Lords, it is only a few weeks since the noble Lord, Lord McNally, described Lord Newton as a national treasure except when he voted against the Government. I intervened somewhat mischievously to say that that was what made him a national treasure. In fact, of course, he was a national treasure for a long time before that. I have good memories of working with him when he was a very approachable Minister and I was the leader of my local authority. I also had the pleasure of serving under him as a member of the Local Services Honours Committee, which he chaired with great care, always exhibiting great thoughtfulness and fairness. He was a man of great conviction and great courage, as he demonstrated fully in your Lordships' House for so many months. We will all miss him, as other noble Lords rightly said.

I turn to the amendments in this group and join the noble and learned Baroness, Lady Butler-Sloss, in acknowledging that the Government have made significant improvements to the Bill and in congratulating the noble and learned Lord on doing that. I also congratulate the noble and learned Baroness on initiating these very welcome changes. I endorse what she said about further developments. Now, of course, the Government have the capacity to bring them about without primary legislation. The Opposition look forward to that in due course and certainly support the amendments in this group.

[Lord Wallace of Tankerness]

My Lords, I start by associating myself with the comments made by the noble Lord, Lord Beecham, about Lord Newton. I first encountered him in 1983 when I was a newly elected Member of Parliament and he was the Social Security Minister. I had a particular constituency issue and he could not have been more helpful or understanding. That was my experience of him as a Minister throughout my time in the other place.

The noble and learned Baroness, Lady Butler-Sloss, outlined her wish list. I think that she understands why the Government are unable to accept at the moment that legal aid should be available for these prevention matters. We find it difficult to see how the orders covered would be used in practice for prevention of removals in situations of urgency for which a case for funding is made, rather than for securing return after removal. If a child was in the process of being abducted and the situation was an emergency, legal aid would be available for the purpose of securing their return. It is more difficult to see why legal aid should be available to fund applications that are more contingent in nature, where there is no imminent danger of abduction or associated emergency but the measure is being sought on a precautionary basis. Very often those cases will be the stuff of general private family law proceedings, and we see the risk of such orders being sought for the benefit of funding in what are general disputes over where a child is to live and with whom—which, as we made clear in other areas, we will not fund.

Having said that, I welcome the co-operation that there has been, and very much appreciate the comments made by the noble and learned Baroness about the officials who worked on this and productively engaged with her and with those who advised her. I hope that what we brought forward meets the concerns raised. I have no doubt that we will be reminded of the wish list when we have had a bit more experience of the Act in operation. Again, I thank all those, both inside and outside the House, who worked toward a constructive solution on this matter.

Amendment 9 agreed.

Amendments 10 to 14

Moved by

[Lord Wallace of Tankerness]

10: Schedule 1, page 145, line 30, at end insert—
“( ) an order under section 34 of that Act for the child’s return;”

11: Schedule 1, page 145, line 32, at end insert—
“(1A) Civil legal services provided to an individual in relation to the following orders and applications where the individual is seeking to secure the return of a related child who has been unlawfully removed to a place in the United Kingdom—
(a) a prohibited steps order or specific issue order (as defined in section 8(1) of the Children Act 1989);(b) an application under section 27 of the Family Law Act 1986 for registration of an order relating to the child;(c) an order under section 33 of that Act for disclosure of the child’s whereabouts;(d) an order under section 34 of that Act for the child’s return.”

12: Schedule 1, page 145, line 34, leave out “Sub-paragraph (1) is” and insert “Sub-paragraphs (1) and (1A) are”

13: Schedule 1, page 149, leave out lines 1 and 2

14: Schedule 1, page 154, line 16, leave out from “Schedule” to “is” in line 18

Amendments 10 to 14 agreed.

Amendment 15

Moved by

[Lord Wallace of Tankerness]

15: Schedule 1, page 160, line 2, at end insert—
“Victims of trafficking in human beings33A (1) Civil legal services provided to an individual in relation to an application by the individual for leave to enter, or to remain in, the United Kingdom where—
(a) there has been a conclusive determination that the individual is a victim of trafficking in human beings, or(b) there are reasonable grounds to believe that the individual is such a victim and there has not been a conclusive determination that the individual is not such a victim.(2) Civil legal services provided in relation to a claim under employment law arising in connection with the exploitation of an individual who is a victim of trafficking in human beings, but only where—
(a) the services are provided to the individual, or(b) the individual has died and the services are provided to the individual’s personal representative.(3) Civil legal services provided in relation to a claim for damages arising in connection with the trafficking or exploitation of an individual who is a victim of trafficking in human beings, but only where—
(a) the services are provided to the individual, or(b) the individual has died and the services are provided to the individual’s personal representative.Exclusions(4) Sub-paragraph (1) is subject to the exclusions in Parts 2 and 3 of this Schedule.
(5) Sub-paragraphs (2) and (3) are subject to—
(a) the exclusions in Part 2 of this Schedule, with the exception of paragraphs 1, 2, 3, 4, 5, 6 and 8 of that Part, and(b) the exclusion in Part 3 of this Schedule.Definitions(6) For the purposes of sub-paragraph (1)(b) there are reasonable grounds to believe that an individual is a victim of trafficking in human beings if a competent authority has determined for the purposes of Article 10 of the Trafficking Convention (identification of victims) that there are such grounds.
(7) For the purposes of sub-paragraph (1) there is a conclusive determination that an individual is or is not a victim of trafficking in human beings when, on completion of the identification process required by Article 10 of the Trafficking Convention, a competent authority concludes that the individual is or is not such a victim.
(8) In this paragraph—
“competent authority” means a person who is a competent authority of the United Kingdom for the purposes of the Trafficking Convention;
“employment” means employment under a contract of employment or a contract personally to do work and references to “employers” and “employees” are to be interpreted accordingly;
“employment law” means an enactment or rule of law relating to employment, including in particular an enactment or rule of law conferring powers or imposing duties on employers, conferring rights on employees or otherwise regulating the relations between employers and employees;
“exploitation” means a form of exploitation described in section 4(4) of the Asylum and Immigration (Treatment of Claimants, etc) Act 2004 (trafficking people for exploitation);
“personal representative”, in relation to an individual who has died, means—
(a) a person responsible for administering the individual’s estate under the law of England and Wales, Scotland or Northern Ireland, or(b) a person who, under the law of another country or territory, has functions equivalent to those of administering the individual’s estate;“the Trafficking Convention” means the Council of Europe Convention on Action against Trafficking in Human Beings (done at Warsaw on 16 May 2005);
“trafficking in human beings” has the same meaning as in the Trafficking Convention.”

[Lord Wallace of Tankerness]

My Lords, Amendments 15 and 17 bring into the scope of legal aid cases in which the victims of human trafficking seek damages in either the civil courts or an employment tribunal. They would also provide legal aid to this group for immigration advice. The Government have always anticipated that legal aid would be available under the exceptional funding scheme for these damages claims, where such cases met the test for exceptional funding under what is now Clause 10 but which we came to know as Clause 9 during the earlier passage of the Bill. However, we listened to the concerns raised by noble Lords about whether in practice this would always be appropriate. I am pleased to say that we have responded positively to the concerns, and not least to the case made at Second Reading, in Committee and on Report by the noble and learned Baroness, Lady Butler-Sloss.

The House should be aware that paragraph 40 of Part 1 of Schedule 1 already provides for legal aid to be granted to victims of sexual offences to bring damages claims in relation to the offences. People who have been trafficked for the purposes of sexual exploitation and who wish to claim damages through the civil courts will already be able to get legal aid.

As I indicated on Report, we also considered whether legal aid should be available for the immigration aspects of trafficking. We listened to and accepted the arguments on this, given the particular vulnerabilities of this group of people. We plan to set out in regulations further provision on when it is appropriate for a victim of human trafficking to qualify for civil legal aid for immigration matters. Our intention is not to restrict numbers, and we will ensure that all victims for whom it is appropriate to provide advice will receive it. However, we cannot have a completely open-ended commitment for all immigration matters; otherwise, it is conceivable that victims of trafficking who, for example, apply for a student visa 15 years down the line will continue to qualify for legal aid for no good reason. The regulations will limit eligibility to a period relevant to the experience of being trafficked. We are discussing the most appropriate period of time, but we intend that it will be no less than an individual’s discretionary leave to remain, which can be up to three years.

I am pleased that we have been able to have a constructive engagement and hope that these amendments address the concerns that have been raised. This amendment includes legal aid for immigration advice for victims of trafficking. I beg to move.

[Baroness Butler-Sloss]

As the co-chairman of the All-Party Group on the Trafficking of Women and Children, I again congratulate the Government and express my gratitude not only to Ministers in this House and in another place but to the government lawyers and officials. The people who were so helpful on the previous set of amendments have been equally helpful on this, and I and those behind me are enormously obliged to them for the care with which they have gone through this and their ability to recognise, listen to, take on board and accept the points that have been made which are now reflected in this excellent amendment.

I wonder whether I might again produce a wish list for consideration at some later stage. There are four points that I would like to make. First, there are those who have been trafficked who do not know that they have been trafficked and will need advice about whether they have been trafficked. Secondly, there are implications for referral to the national referral mechanism. That point was discussed with the government lawyers. I understand why Ministers do not want to help those who do not refer themselves, but there will be a group or groups of people who will fall through the net. Thirdly, there are those who do not know whether they may have an entitlement to leave to remain other than by an asylum claim, such as discretionary leave to remain. That group will also not be covered. The fourth group is rather different. It is those who would wish to challenge a decision by the Home Office that they do not come within the NRM. Those are perhaps matters for another day. At the moment, those behind me and I are enormously grateful for what we have already got.

[Baroness Hamwee]

My Lords, I, too, welcome these amendments and add my thanks to the officials who have dealt with them. My file of print-outs of e-mails last week is quite large. I thank the Minister as well. I know that his experience in Scotland means that he was already alert to the issues surrounding trafficking. I think the whole House owes the noble and learned Baroness enormous thanks for keeping us at it and for keeping at it herself.

The Minister mentioned conditions, and I understand the concern about possible overuse—abuse would be the wrong term here—of the category of victim of trafficking for immigration applications far in the future. During the discussions last week about what has ended up as these two amendments, there was a suggestion that there might be a reference to prescribed conditions and then a decision that what is now Clause 11 could cover matters, as the Minister said. Will he tell the House whether there are any other concerns that the Ministry has in mind at the moment—it may find others—apart from the time limits?

The noble and learned Baroness mentioned concerns about the workings of the national referral mechanism and time limits. Like her, I hope that that will be kept under review. I have two other areas of concern around this. If legal aid is not available until there has been a reasonable-grounds decision, will the Border Agency put the immigration case on hold? In the mean time, what happens if the individual is in detention or is without housing and food? At the previous stage of the Bill, I referred to the complex needs of trafficked people and mentioned housing and benefits. Immigration is often the gateway to them. Article 12 of the convention refers specifically to accommodation and generally to subsistence, and I suspect the Government would prefer to be clear about this rather than find themselves with claims under what is now Clause 10. The importance of identifying victims of trafficking is a moral matter, but it is also important because of their role in detecting and prosecuting traffickers, and it may take some time for a victim to be identified or to self-identify, so I am adding to the list of considerations. The Government have said that they will keep matters under review and they now have a mechanism to do so. Therefore, I welcome the amendment, although there may still be work to be done.

17:45

[Baroness Gale]

My Lords, I am pleased that the Government have brought forward these amendments that give the victims of human trafficking the same support as that provided for the victims of sexual exploitation, as set out in Schedule 1. There is support around the House today for these government amendments and we, too, support them. They will make sure that the victims of human trafficking will be treated fairly and given the support that they need. The Minister has listened to your Lordships’ House and responded to the arguments which were so well rehearsed by the noble and learned Baroness, Lady Butler-Sloss, on Second Reading, in Committee and at Report in trying to convince the Minister of the need for these amendments. I am sure that the Minister will listen to the wish list as well as he has to the other arguments put before him. He promised that he would address these matters and we are all grateful that he has tabled these amendments. We fully support them.

[Lord Wallace of Tankerness]

I am grateful for the general welcome that has been given to the amendments, and indeed for the work that has gone in behind the scenes to get us to where we are today. The noble and learned Baroness, Lady Butler-Sloss, has indicated that she will continue, and that she has a further wish list. The fourth point in her wish list was to find out how to challenge a decision of the national referral mechanism. I am advised that that would be done by way of judicial review, which is within the scope of legal aid.

My noble friend Lady Hamwee raised more detailed questions about the operation of the provision. I will look at those matters and try to write to her with an answer. She also asked whether there are any plans to limit immigration legal aid in this context, apart from the time limits under regulations. The answer is that there are currently no plans to do so. In referring to the progress of these amendments and this issue through your Lordships' House, my noble friend also remarked that the noble and learned Baroness, Lady Butler-Sloss, has kept at it. I have no doubt that, even after this legislation becomes law, those who take a keen interest in the serious—appalling—issue of the abuse of individuals will keep a watchful eye on the issue and keep at it, and I am sure that the Government will certainly be made aware of any concerns that arise. On that basis, I hope that the House will agree to the amendment.

Amendment 15 agreed.

Amendment 16

Moved by

[Lord Best]

16: Schedule 1, page 160, line 6, at end insert—
“( ) Civil legal services provided for the purposes of sub-paragraph (1) include legal advice and assistance in respect of that individual’s financial circumstances, including any eligibility for housing benefits, where those circumstances have led or directly contributed to the relevant court order for sale or possession, or eviction.”

[Lord Best]

My Lords, Amendment 16 consolidates earlier amendments that I have brought before your Lordships to keep within the scope of legal aid the legal advice and representation that can prevent homelessness. I am now trying one last time to convince the Government that it would be a costly mistake to remove key components of this work from the scope of legal aid. These are the components of the current legal assistance, including negotiation on welfare benefit matters, that prevent homelessness by addressing the cause of the arrears which otherwise lead to a household losing their home.

This kind of work currently accounts for 20 per cent to 25 per cent of the funding for cases where the home is at risk. Removing the opportunity for legal aid to embrace these matters is likely to make the remaining 75 per cent to 80 per cent of expenditure far less effective. Without this amendment it will not be possible to continue to support a client by handling negotiations with housing benefit officers at the local authority or those at the Department for Work and Pensions dealing with support for mortgage interest. If such representation can happen only in the context of the courtroom, the invaluable work in sorting out the complexities of the benefit system prior to the matter reaching the courts cannot continue.

Even more frustratingly, where a case is adjourned for four weeks—as it often is—it will not be possible to use the time to straighten out the issues by expert negotiation with the relevant officials on behalf of the household concerned. When the matter returns to the court four weeks later, none of the work that currently goes on will have been accomplished. The only way to get the benefit officials into a dialogue at that stage would be to issue witness summonses to bring those officers to the court, taking them away from their other work, probably for the day. This is a very inefficient way of proceeding, wasting the time of officers and achieving a much less satisfactory dialogue. The chances of saving a family from the horrors of homelessness are much reduced, all because the change in legal aid funding stops the matter being resolved during the adjournment.

I promised the Minister that I would study his comments on Report with care. I have noted that,

“legal aid would be available on reaching agreement with a landlord to delay threatened possession action pending the resolution of a welfare benefits issue”,

but not to take the action that resolves that welfare benefits issue. The Minister made clear that,

“legal aid could be used to argue for an adjournment”,

so that the individual could,

“make the necessary payments if the benefits dispute is resolved in their favour”—[Official Report, 12/2/12; col. 103]—

and they now have the money due to them. Again, it is clear that help in actually reaching that position and resolving the benefits dispute will not be available.

The Minister explained that “general advice” will be available from various sources but he underlined the point that legal aid will not be available to negotiate on welfare benefit issues on behalf of a client. I cannot believe that this is a sensible approach, not least at this time of huge changes to the housing benefit system, which will inevitably mean mistakes by the administrators that will require technical experts to unearth and sort out. The value of this legal aid work will become of even greater importance in the future with the transition of benefit support for housing costs to the Department for Work and Pensions from local authorities, and a whole new system of universal credit, which undoubtedly will take some time to bed down.

I was grateful for the Minister’s clarifications but I fear they confirm the essence of the problem with this part of the Bill. Restricting the scope of legal aid to exclude assistance with these matters will clog up the courts with more and longer cases, and more adjournments, that could and should have been handled outside the courtroom. There will be costs to the state from an inevitable increase in the numbers who become homeless for lack of the legal assistance that could have sorted out the problem. Worst of all, there will be the injustice of people losing their homes unfairly or unnecessarily.

I hope that this amendment, which compresses and consolidates our earlier discussions on this matter, will prove acceptable even at this late stage. I dedicate it to a man who became a mentor and hero for me, Lord Newton of Braintree. I beg to move.

[Baroness Hollis of Heigham]

My Lords, I support the noble Lord, Lord Best, in his Amendment 16. Like him, I am a refugee from the Welfare Reform Act and, like him, I am deeply concerned that the new system of universal credit, which I strongly support, is coming together with huge cuts in housing benefit. This will produce uncertainty and complexity at the same time as withdrawing legal aid—unless the Commons supports the amendment previously passed by your Lordships’ House and unless the House supports the noble Lord, Lord Best, today.

To introduce a new system, with the implications for the tenants of my housing association of losing up to £1 million a year, means that some will face homelessness, eviction and bed and breakfast accommodation, or alternatively will flood the tribunals and the courts system. To withdraw legal aid at the time of introducing these cuts and changes to housing benefit, as well as universal credit, creates a perfect storm that no Government should wish to whirl up. I hope very much that the noble Lord, Lord McNally, will respond positively to the amendment moved by the noble Lord, Lord Best.

[Lord Beecham]

My Lords, I support my noble friend Lady Hollis and, of course, the noble Lord, Lord Best, in moving this amendment. They have made a very powerful case, which was rehearsed on Report. At that time, I quoted Shelter and the Nottingham Law Centre, two separate organisations from the not-for-profit sector, which strongly urged the Government to change their position on this. They are the organisations that provide legal help and advice, not necessarily extending to court proceedings, on the benefits side as well as the remainder of the housing issue—some of which, in fairness, the Government are including within scope.

This is a classic case, as my noble friend has implied, where there is a potential modest saving to the Ministry of Justice budget but a potential extra cost to other departments. If homelessness ensues, particularly where children are involved, very substantial costs are imposed on the budgets of the local authority, and maybe also on the Department for Work and Pensions, which in certain circumstances may be devolved; for example, special needs payments or crisis loans, which a family on the streets may clearly require.

In this context, cost is a consideration which, if anything, tells against the Government’s proposals rather than the other way round. I hope that the Government will recognise the strength of arguments from those dealing with this directly—not from the legal profession in this case, but from the advice sector—and provide for the possibility of timely advice being given to avoid worse consequences for the individuals and their families and, for that matter, the public purse. I hope that the Minister will reconsider the position the Government have hitherto adopted.

[Lord McNally]

My Lords, the noble Lords, Lord Beecham and Lord Best, acknowledge that this is one more time on which we have discussed these matters. We had detailed discussions in Committee and on Report. Amendment 16 is intended to bring into the scope of legal aid advice and assistance in relation to an individual’s financial situation, such as debt and housing-related welfare benefits issues, where they are linked to the loss or threatened loss of the individual’s home under paragraph 34 of Part 1 of Schedule 1. The House will be well aware that our proposals ensure that legal aid continues to be available to an individual in relation to the immediate risk of losing their home, through possession or eviction. This includes cases where the underlying cause is a debt or welfare benefits issue.

It may reassure noble Lords if I reiterate a few brief examples of where legal aid will be available under the loss-of-home provisions in paragraph 34 of Part 1 of Schedule 1. First, legal aid will continue to be available before a case is brought to court. It will be available where possession or eviction action is contemplated. Where an individual receives a letter which threatens possession action, legal aid will be available at that point. For example, legal aid will remain available to a person threatened with possession action for mortgage arrears to negotiate with their mortgage lender.

In the context of welfare benefits, it is important to recognise that, where a landlord threatens their tenant with possession proceedings, legal aid would be available to the tenant to reach agreement with a landlord to delay the possession action pending the resolution of the welfare benefits issue. If possession proceedings are issued, legal aid will be available to an individual to argue for an adjournment—for example, if they are likely to be able to make the necessary payments if an underlying benefits dispute is resolved in their favour. Where an individual loses a welfare benefits appeal and subsequently faces possession action for rent or mortgage arrears, legal aid will be available in relation to that action. We will also retain legal aid provision for judicial reviews about welfare benefits decisions and for welfare benefits matters which relate to a contravention of the Equality Act 2010.

This amendment would go much wider and would generally provide for legally aided advice and assistance on the financial circumstances of an individual—such as for underlying debt or welfare benefits issues—where these are linked to loss of home. This would run contrary to our approach. At a time when the country is recovering from a genuine fiscal crisis we need to focus limited resources on the highest-priority matters. As I have said before, we cannot agree that legally aided advice and assistance should be generally available in relation to a person’s financial circumstances—such as for debt or welfare benefits issues—in the situations covered by the amendment.

There is no doubt that people, including those in potential loss-of-home situations, find advice useful in areas such as debt and welfare benefits. But we are firmly of the view that what those affected often need is practical advice rather than legal advice funded by legal aid. Individuals who have debt problems often need advice on managing their finances better and on practical measures to resolve their situation, and can access that advice through a range of specialist organisations. It will come as no surprise to the House to hear me repeat that the Government greatly value the not-for-profit sector and the good-quality free advice which it provides to people in their communities on these sorts of matters.

My department is working closely with the DWP to improve the quality and effectiveness of initial decision-making in applications for social security, reconsideration within the DWP and the system of subsequent tribunal appeals. This work should make it easier for claimants to receive the right benefit provision. Moreover, welfare benefits appeals matters are resolved through a tribunal which is designed to be accessible without legal assistance, and general advice on welfare benefits is available from a number of sources.

I know that this issue has been raised at every stage. After these debates, we do not just close the book and not take any notice. We go back to the department and the Ministers and advisers have a discussion. There is also a discussion about the issues raised with other departments. This is not a decision taken lightly but we believe that the loss-of-home proposals in the Bill get the balance right in terms of focusing limited public funds for legal advice and assistance in the most appropriate circumstances. We have listened to the appeals made by the noble Lord and considered them. At this point, we cannot agree with them. I ask him to withdraw his amendment.

[Lord Best]

I am grateful to noble Lords who have spoken. I am also grateful to my noble and right reverend friend Lord Harries of Pentregarth, who put his name to this amendment but has had to leave us. I thank the noble Baroness, Lady Hollis, for talking of the perfect storm at a time of housing benefit change when advice will be incredibly important to people. Things will change dramatically on the benefit front and mistakes will be made by the officials concerned. Experts will be needed for support and assistance. I am grateful to the noble Lord, Lord Beecham, who reminded us that Shelter, Citizens Advice and such bodies are behind this amendment rather than the lawyers. He also mentioned the extra costs that homelessness always brings.

This is a cost-saving amendment. The noble Lord is right that much remains within scope. Some 75 per cent to 80 per cent of the work currently being done remains within scope, which is great, but a lot of that is wasted if the remaining 20 per cent to 25 per cent is cut out. Where possession is threatened is the bit where the argument can be taken up with the administrators, the housing benefits officers. With their negotiating skills and expertise, they can fix it and sort it. Cutting that out renders a lot of the rest of the expenditure much less worth while.

Before the hour gets any later and without further ado, I wish to test the opinion of the House.

18:04

Division 4

Ayes: 199

---

Labour: 147
Crossbench: 40
Independent: 3
Bishops: 1
Liberal Democrat: 1
Plaid Cymru: 1

Noes: 224

---

Conservative: 133
Liberal Democrat: 69
Crossbench: 14
Ulster Unionist Party: 2
Democratic Unionist Party: 1
Bishops: 1

18:18

Amendments 17 and 18

Moved by

[Lord McNally]

17: Schedule 1, page 169, line 15, leave out “or 31” and insert “, 31 or 33A(1)”

18: Schedule 1, page 170, leave out lines 5 to 11

Amendments 17 and 18 agreed.

Clause 10 : Exceptional cases

Amendment 19

Moved by

[Lord Pannick]

19: Clause 10, page 7, line 5, at end insert “, or
(c) that—(i) it is necessary to make the services available to the individual under this Part to prevent specific injustice in a particular case; and(ii) it is appropriate to do so, in order to prevent such injustice, from the funds (if any) which the Lord Chancellor in his discretion makes available to the Director for the purposes of this paragraph.”

[Lord Pannick]

My Lords, this amendment is in my name and in the names of the noble and learned Lords, Lord Mackay of Clashfern and Lord Woolf, and the noble Lord, Lord Hart of Chilton. Its purpose is simple—to implement more effectively the Government’s proposal to include an exceptional cases category for legal aid as set out in Clause 10. The problem which this amendment seeks to address is that Clause 10 is too narrowly drafted and will prevent the very flexibility that it is designed to provide. That is because the exceptional cases category set out in the clause applies only if the refusal of legal aid would amount to a breach of rights under the European Convention on Human Rights or would create a risk of doing so.

The difficulty, as the noble Lord, Lord Thomas of Gresford, stated when moving his amendment at the Report stage, is that it is inevitable that:

“All of a sudden a case will obviously require, in the interests of justice, to be supported by legal aid because of the wider interest that is involved”.—[Official Report, 12/3/12; col. 119.]

The case may concern a difficult and important question of statutory interpretation in the Court of Appeal or in the Supreme Court in a type of case generally excluded from the scope of legal aid. This amendment would confer a power on the director of legal aid to fund litigation if both of two conditions are satisfied. The first condition is that the director considers that funding the litigation is necessary—a strong term—to avoid injustice. I have adopted in the amendment the suggestion made in Committee by the noble and learned Lord, Lord Mackay of Clashfern, that the discretion should be defined not as a power to promote justice, but as a power to avoid specific injustice, a much narrower concept. The noble and learned Lord has asked me to express to the House his apologies for not being able to be here today.

The second condition which would need to be satisfied before the power could be exercised by the director is that the director considers that the case is an appropriate one for use of the funds, if any, made available for this purpose by the Lord Chancellor. That wording is designed to ensure that funding remains entirely within the discretion of the Lord Chancellor. The amendment, I emphasise, does not require additional funds to be found. The amendment leaves it to the Lord Chancellor to decide what funds, if any, to provide for this purpose.

If then the Lord Chancellor is not required to provide funds for this exceptional category of cases, your Lordships will wish to know what is the purpose of the amendment. The answer is that even if the Lord Chancellor were to say that no money is currently available for this exceptional category of cases—I hope that that would not be the case—it is vital to include a discretion in the Bill so that a statutory power exists to fund exceptional cases which can be exercised with the agreement of the Lord Chancellor when the economy improves.

Noble Lords should not approve a Bill confining legal aid in the manner proposed by the Government without including in it a provision which at least allows the Lord Chancellor, in his discretion, to provide some funding for the exceptional cases about which I am concerned. Parliament may not have a chance to address legal aid issues again for some time. I very much hope that even at this late stage the Minister will be able to accept the amendment, which confers power on the Lord Chancellor to allow funding for exceptional cases but imposes no duty on him to do so. I beg to move.

[Lord Hart of Chilton]

I support the amendment, which is also in my name. Interested bodies such as Citizens Advice, Justice for All and the Law Society have all pointed out that the Government’s exceptional funding safety net does not stretch wide enough for the reasons so clearly given by the noble Lord, Lord Pannick. I emphasise that the amendment of itself imposes no extra financial burden on the Lord Chancellor; it simply provides an opportunity for a discretion to be exercised if it is necessary—I emphasise the word “necessary”—to prevent a specific injustice occurring. If it was decided to use this power, the costs would be provided from discretionary funds made available to the director by the Lord Chancellor.

The amendment should be seen as a simple, practical and positive act of assistance to the Government, who, if they accept it, will have the flexibility to act in the circumstances provided for. Legislative opportunities for any Government are few and far between. In my view, this opportunity should be seized and the helpful amendment accepted.

[Lord Woolf]

My Lords, in the courts, many cases have three judges involved in determining what should be the outcome. If one judge gives a judgment on the provision which the other two judges think is totally convincing and where they have nothing useful to add, they just say, “I agree”. I agree with the speeches that have been made in support of the amendment.

[Lord Bach]

My Lords, we support the amendment. It could not be more cautiously and moderately phrased and worded and the Government would be wise to accept it.

[Lord Wallace of Tankerness]

My Lords, the House had the opportunity to debate issues similar to those raised in the amendment during detailed discussions in Committee and on Report. As the noble Lord, Lord Pannick, indicated, my noble and learned friend Lord Mackay of Clashfern came up with the phrase “in the interests of justice to prevent injustice”, which I said at the time had a certain seductive charm and that I would think about it. The noble Lord, Lord Pannick, moved the amendment and argued his case with seductive charm, as did the noble Lord, Lord Hart. The noble and learned Lord, Lord Woolf, was very much to the point, as was, very briefly, the noble Lord, Lord Bach.

I can assure the House that we have thought about these points. The Government believe it is right that there should be an exceptional funding scheme to provide an essential safety net for the protection of an individual’s fundamental rights of access to justice, and Clause 10 achieves this important end. It will be necessary to provide services to an individual under Clause 10(3)(a), where a failure to provide some measure of legal aid would, for example, clearly amount to a breach of Article 6 of the European Convention on Human Rights, which guarantees an individual’s right to a fair trial and access to the courts.

As has been said on a number of occasions when we have debated exceptional funding determinations under what was Clause 9 but is now Clause 10(3), they will be made in accordance with the factors that the domestic courts and the European Court of Human Rights have held to be relevant in determining whether publicly funded legal assistance must be provided in an individual case.

In considering whether legal aid should be provided in an individual case engaging Article 6, the director will need to take into account, for example, the importance of the issues to the individual concerned and the nature of the rights at stake; the complexity of the case; the capacity of the individuals to represent themselves effectively; and the alternative means of securing access to justice.

It is not lost on me that the noble and noble and learned Lords who tabled the amendment have carefully mirrored the existing formulation of the clause in their proposed addition. I thank, particularly, the noble and learned Lord, Lord Mackay of Clashfern, for triggering this discussion and this line of thought in Committee. I again assure the House that I have considered the alternative formulation carefully. However, as I said on Report, we are satisfied that the provision that the Bill currently makes in respect of excluded cases is both appropriate and sufficient.

18:30

First, it is extremely important to make the point that, under the existing draft of the clause, the director will be able to provide funding for cases to prevent a specific injustice in so far as that injustice also amounts to a breach of the European convention or relevant European Union law. The Government believe that it is more appropriate to use this legal benchmark as a means of determining whether an applicant would suffer injustice. Article 6, in particular, provides a suitably serious threshold, guaranteeing the right to a fair trial and an individual’s right of access to the court.

Obviously, I cannot provide a blanket guarantee that every matter that noble Lords would consider an injustice would be covered by our formulation of this clause. However, at this point, I take the House back to the fundamental structure and architecture of the changes that we are making to the general legal aid scheme. We have said on many occasions that these reforms are required to create a fair, balanced and sustainable legal aid system. We have taken into account the importance of the issue, the litigant’s ability to present his or her own case—including their vulnerability —the availability of alternative sources of funding, and the availability of other routes to resolution. As noble Lords know, we have used these factors to prioritise funding so that civil legal aid will be available in the highest priority cases: for example where a person’s life or liberty is at stake, they are at risk of serious physical harm or immediate loss of their home, or children may be taken into care.

I recognise and appreciate that the second limb of the carefully crafted amendment, as the noble Lord, Lord Pannick, has indicated, goes some way to meeting concerns that were expressed on Report about the potential breadth of such an amendment. Under the proposal, the director will only be able to use such funds as the Lord Chancellor decides to make available for the purpose of this subsection. However, I ask your Lordships to reflect on the fact that this approach would create a rather peculiar arrangement that would be at odds with the safeguards concerning the independence of the director, which we believe are fundamental to our proposals and which we have strengthened in response to valuable debates that have been held throughout the Bill’s passage.

I accept and recognise that the motivation is to give some leeway or discretion to the Lord Chancellor. The noble Lord, Lord Hart, said it would help the Government. Nevertheless, giving the Lord Chancellor a discretionary fund that he could allocate to the director at the time of his choice would risk politicising decision-making and eroding the clear boundaries that this statute seeks to create between the Lord Chancellor and the director.

For example, let us envisage a scenario in which the director wishes to make funding available for a particular case but there are no funds available for him to do so. What is he meant to do in these circumstances? Would it be appropriate for the director to have to enter into discussions with the Lord Chancellor about the provision of funding for a particular case? Indeed, would it be permissible under the Bill, given that Clause 4(4) explicitly prohibits the Lord Chancellor from giving directions or guidance to the director in relation to individual cases? It is difficult to see how the Lord Chancellor could meaningfully give his assent to the provision of such funds without breaking the spirit—if not the letter—of that prohibition. Clause 4(4) guarantees the objectivity of the decision-making process for both in-scope and excluded cases, and is there to serve as a safeguard against political interference in the making of any individual exceptional funding decisions in the future. We do not wish to put that at risk by establishing a discretionary funding stream, as envisaged in this amendment.

If we accept this amendment, we risk undermining not only the decision-making safeguards that the Bill creates but the general scope of our reforms of civil legal aid. These are important points, which weigh in the balance against this amendment. For the reasons given, I invite the noble Lord to withdraw his amendment.

[Lord Pannick]

I am grateful to the noble and learned Lord for his consideration of this matter and to other noble Lords who have spoken. The noble and learned Lord raised two points, as I understood him. His first concern was that this amendment would somehow politicise the functions of the director. It would not. The Lord Chancellor would remain responsible for funding questions and would decide whether it was appropriate to provide additional funding. It would be entirely a matter for the director to decide on the allocation of such funding, if any. There is no question of any politicisation of these responsibilities.

The noble and learned Lord also suggested that it was satisfactory for the exceptional cases category to be confined to those cases in which an issue arises pursuant to the European Convention on Human Rights. In my view, that is not adequate. The exceptional cases category should be sufficiently broad to cover exceptional cases whether or not an issue is engaged under the European convention.

I suggest to noble Lords that there is no basis for resisting this amendment. The Government agree that there should be an exceptional cases category—and they are right. This amendment would ensure that the exceptional cases category is sufficiently broad to enable the director to deal with exceptional cases, if and when the Lord Chancellor provides funding. This amendment imposes no duty whatever on the Lord Chancellor and requires no funding to be provided. It is purely permissive, and I invite noble Lords to support it on that basis. I wish to test the opinion of the House.

18:36

Division 5

Ayes: 201

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Labour: 142
Crossbench: 44
Independent: 3
Democratic Unionist Party: 1
Bishops: 1
Ulster Unionist Party: 1
Conservative: 1
Plaid Cymru: 1

Noes: 201

---

Conservative: 126
Liberal Democrat: 67
Crossbench: 3
Ulster Unionist Party: 2
Bishops: 1

18:49

Clause 21 : Financial resources

Amendment 20

Moved by

[Lord McNally]

20: Clause 21, page 16, line 40, leave out “13 or”

[Lord McNally]

My Lords, the House will recall that my noble friend Lord Macdonald was most persuasive in Committee so that during Report a government amendment was agreed that removed the power to introduce means testing and make regulations setting criteria for determinations in relation to advice and assistance for individuals in custody. Amendment 20 is a government amendment that removes references to determinations under Clause 13, on police station advice and assistance, from Clause 21, which concerns financial resources. This is a consequential amendment in light of the Government’s amendment accepted on Report to remove the power to means test police station advice and assistance. This technical amendment is required to remove from Clause 21 the reference to regulations under Clause 13. I beg to move.

Amendment 20 agreed.

Amendment 21

Moved by

[Baroness Coussins]

21: Before Clause 44, insert the following new Clause—
“Exception for international human rights cases
The changes made by sections 46, 48 and 49 of this Act do not apply in relation to proceedings which include a claim for damages for international human rights cases as defined in section 58(C)(2B) (Recovery of insurance premiums by way of costs) of the Courts and Legal Services Act 1990, as inserted by section 48 of this Act.”

[Baroness Coussins]

My Lords, the other amendments in the group are clearly consequential, in the case of Amendments 22, 23 and 26, and directly consequential, in the case of Amendment 27. These amendments are designed to preserve the status quo in our justice system for victims of international corporate human rights abuse. I am very grateful to the Minister for the further meetings he has had with me and with others since Report, and for the correspondence we have had. I readily knowledge that he wants to achieve the same things as do I and my co-signatories to these amendments, who are from all sides of the House. Indeed, I had very much been hoping that at this stage we would be announcing an agreement of some sort, and I am very disappointed that this has not turned out to be the case. I am afraid that I have not even been able to persuade the Minister to see it as acceptable to put corporate human rights abuses on the same footing as clinical negligence, as Amendment 27 would do.

I do not believe that the Government have adequately understood the impact of the Rome II regulations, which are binding on the UK as an EU member state, let alone the additional restraint and restrictions that this Bill would provide. Figures to illustrate this are very hard to come by, because of the small number of cases of this sort that have been settled over the past decade, so many have included a confidentiality agreement as part of the settlement.

However, I will illustrate the impact of the Rome II regulations with one brief example that is in the public domain: the Trafigura case, which is probably also the most well-known case, where toxic waste was dumped on a large community in the Côte d’Ivoire. There were 30,000 claimants in this case, who shared £30 million in damages—£1,000 per head. It is estimated that under the Rome II regulations, the damages would have shrunk to £6 million, making it £200 a head. Yet the “after the event” insurance premium would still have cost over £9 million. If £200 a head seems a very small amount of compensation for loss and damage to life, homes, health and community, how much less compensation would there be under the provisions of this Bill? It makes it far too costly and risky to bring the cases in the first place.

It is a question of straightforward arithmetic, added to which there is no cost to the taxpayer whatever as a result of these amendments. We have a very good system in place already, which is the envy of many other countries in the world that are looking to us to build their own system to deal with international corporate human rights cases. I appeal to the Minister even now to accept my amendments, but if he cannot then I hope that the House will support me in trying to prevent the clock being turned back for poor and vulnerable victims of human rights injustices at the hands of UK companies, which should remain accountable in practice as well as in theory. I beg to move.

[Lord Howarth of Newport]

My Lords, if the Government think it appropriate that the private disputes of Russian oligarchs should be settled in our courts, how much more appropriate is it that poor people in countries such as the Côte d’Ivoire, who have been treated utterly disgracefully by a large international corporation, should also be able to seek remedy in the British courts? Should we not be proud to make that a possibility?

[Lord Judd]

My Lords, the noble Baroness is to be congratulated on having persevered so well and firmly with this cause, right up to Third Reading. I remember in my early days as director of Oxfam that I was in north-west Brazil where, having travelled overnight in a rickety bus, I arrived in this very poor town. Around the tower of the church, there was a banner in Portuguese which said, “Prison bars will not prevent the truth escaping”. When I, together with the field director, probed to try to find out what had happened and what was wrong, evidently a greedy land grabber had been bribing the judge with cattle and the judge had repeatedly ordered these people off their land. They had no social insurance—nothing. They had no means of surviving but to go on farming the land they traditionally farmed. In the end, because they resisted, he threw them and the local secretary of the peasants’ association into prison for good measure.

I had gone with my colleague to discuss agriculture—wells, tools, seed and irrigation—but what became very clear was that these people were preoccupied totally with justice. They wanted to have some resources to be able to go to the regional court and put their case before it. I can remember us sitting over some beer and doing some rough calculations, and reckoning that we could find a bit of money to help support them to go off to the regional court. One of my best moments in those formative years as director of Oxfam was when I heard at headquarters in Oxford that having taken their case before the regional court, the local judge was in prison and they were back on their land.

I tell this story because I have repeatedly found in my work with the Third World that what holds people back is a lack of justice and fairness, and what they are wanting is a fair crack of the whip. If this is true within the context of their own societies, when we move into a globalised society—with the vast power of the biggest international companies and the almost limitless resources that they have at their disposal for legal undertakings, cases and the rest—the case becomes even more obvious. I am very unhappy with this whole Bill, and have been from the beginning, because it is about limiting access to justice when surely a cause in a civilised society is to increase access to justice. If we have a serious commitment to the people of the Third World, as the Government keep demonstrating that they want to have, nothing is more important than ensuring that they can get access to justice. I really will be very despairing if the Government, even at this 11th hour, cannot respond to what the noble Baroness has argued.

[Lord Thomas of Gresford]

My Lords, I have huge sympathy with the claimants in the Trafigura case, who received £30 million in damages, and if I thought that access to justice for people in their position were being blocked by this Bill I would be entirely with the noble Baroness. Unfortunately, the costs in that case were £100 million, reduced on taxation to £40 million. I do not feel particularly proud of a legal system which produces such a disparity between the damages that were actually received by the claimants and the lawyers who acted on their behalf.

19:00

[Lord Brennan]

My Lords, the topic under debate appears to involve general agreement that this class of case is a proper one to be brought in the courts of this country. The critical question therefore is: is it financially possible to bring such a case under the proposed reforms in this Bill? These are long cases, which take years, and they are complex and very expensive. They involve defendants with economic might who are prepared to take on the claimants remorselessly. I remind the House that the Trafigura case actually reached the stage where this Parliament was debating whether that company’s obtaining of a super-injunction meant that Parliament could no longer debate the issues raised by the case. That is might.

The idea that such a case can readily be brought and financed under these reforms is one with which no one whom I know in the law agrees. I have been involved in four of these 10 or 12 cases in the past decade and they have all involved millions of pounds on both sides. In Trafigura, the published costs of the defendants without a trial were £14 million. I await with interest to hear from the Minister any mathematics or economic analysis that explains to this country how lawyers here under these new arrangements—a reduced success fee and no “after the event” insurance—could fund such a case. Everyone I speak to says, frankly, that it is impossible.

If the Minister comes forward with some mathematics that are realistic and not ethereal, and if he gives us financial analysis that is not far distant from reality, the House might still be persuaded. As yet, no one in public has produced such material. The result is that we expect the developing world to open its doors to our great companies to make large profits for the benefit of our country but, when those investments produce adverse consequences, we in this country close our doors of justice to the people who have suffered. That cannot be acceptable, and the Government should think again.

[Lord Stevenson of Balmacara]

My Lords, the noble Baroness, Lady Coussins, has introduced this group of amendments with her customary fluency and passion, and she has been joined by other speakers who have made the case well. As has been pointed out, this measure risks damage to the UK’s reputation for justice to those people who have suffered damage to their human rights caused by companies based in the United Kingdom. I am sure that none of us wishes to see that happen.

We have support from all around the House, and we are grateful to those who have joined in on these amendments. The settled view of your Lordships’ House is clearly that there is a real danger that, if this Bill goes through in its present form, the changes that it makes to the way in which international human rights cases are to operate, combined with the restricted damages that the Rome II regulations impose on the level of damages that can be awarded to claimants, will make it impossible for such cases to be mounted in the UK in future.

As the House has heard, several very important independent charities have been lobbying hard on this issue. Several meetings have been held with the Minister and correspondence has been exchanged. We hoped that an accommodation could be reached, and we went to see him yesterday in the hope that that might be possible. He e-mailed us today to say that he could not accept our amendments.

It is clear to me that while on the one hand the Government do not want to be responsible for preventing these cases continuing in future, they have not so far been convinced that it is highly probable that they will occur in future. Why is that? The arithmetic, as has been said, is very clear. We seem to be in a situation where the department’s overriding concern that the architecture of the Bill should be retained is working here against good legislation. What other arguments can there possibly be? We have heard from those directly involved in these cases and we know what the figures are. It is clear that the facts outlined by the noble Baroness, Lady Coussins, and my noble friend Lord Brennan that the Government are wrong. I hope that when the time comes the noble Baroness will test the opinion of the House, and we will be supporting her in the Lobby.

[Lord McNally]

My Lords, I confirm that we have been in regular discussions about these amendments, and I regret that I am not able to accept them today.

There have been a number of comments about costs and indeed about the Trafigura case. What strikes me most about that case is that the £30 million that was won in damages worked out at about £1,000 per victim—against, as has already been accepted, legal costs that at one time, until they were beaten down, were running at £100 million. To me, that is an obscene system.

With regard to the reforms that we brought forward, we have said that we believe CFAs will continue. We are also introducing damages-based agreements. Far from welcoming them, though, the CBI and others worry that those may well provide funding in this area. So, it is not that the Government are opposed to bringing companies to account for their behaviour. I just do not believe in the rather broad claims by the noble Lords, Lord Brennan and Lord Judd, that this issue will dramatically affect the lives of people in developing countries. There are other areas of policy that are going to do much more than that.

I make clear that the Government strongly support claims arising from allegations of corporate harm in developing countries being brought, and we support the protection of damages for personal injury. Where we disagree with the supporters of the amendment is that we do not believe that our plans would prevent such cases being brought or ultimately damage the ability of NGOs and others to hold big business to account.

An exception along the lines proposed is in our view neither necessary nor justified. It is not necessary because reformed “no win no fee” arrangements will still allow cases to be brought. It is not justified because it would undermine the wider rationale for the Jackson reforms in Part 2 of the Bill, which should apply across civil litigation without any exceptions. In doing so, it would introduce unfairness between different types of claimant.

We recognise, however, that, following the Rome II regulations, damages in these cases can be relatively low, and they will not be subject to the 10 per cent increase available for other claims. The costs awarded can nevertheless be extremely high, as was demonstrated by the Trafigura case. The question is whether any exception should be made for these cases either on a wider basis, as proposed in Amendments 21, 22, 23 and 26, or on a narrower basis, as proposed in Amendment 27. I concede that in putting forward Amendment 27, the movers tried to put forward a narrow-based solution.

The Government have listened to this debate and those that went before, and we have reflected carefully on the points raised. We have held many meetings with interested stakeholders and NGOs over the past months, and the Government are fully aware of the strength of feeling on this issue. I have looked again at the evidence that has been presented, including reports by Professor Rachael Mulheron of the University of London and Mr Smith of First Assist. Both reports make the general case for recoverable success fees and insurance premiums to continue in these cases, but they do not present any figures showing why these cases could not be brought in future. During our discussions with the NGOs we have asked for such evidence but it has not been forthcoming, even though we have asked them for more detailed figures.

The truth is that the available evidence shows that these cases, though few in number—about 10 in a decade—have historically been highly profitable for the legal firms involved. Although under our plans the margins available would be reduced, they are still likely to remain attractive. I remind noble Lords of the sums involved. Since the previous Government introduced the recoverability of success fees and insurance premiums in 2000, we know that there have been only around 10 of these cases, mainly undertaken by a single firm of solicitors. Most of these cases have succeeded or settled, but some claims have been pursued in which costs have not ultimately been recovered. The figures suggest that in those cases that were not pursued to trial, there were disbursements of some £131,000 and legal costs in the region of £1.4 million. I appreciate that those figures will not cover all costs in all cases but they should be a fair ball-park indication. £1.4 million sounds like a lot of money for a firm to bear in what are effectively losses on a case not pursued and won until the substantial sums that have been received in success fees are considered. We know that in the case of Trafigura alone, success fees—intended to cover the costs in lost cases—of around £29 million were allowed by the Court of Appeal. Those figures amount to a net gain for claimant lawyers from these cases over the past decade of more than £27 million from the success fees for Trafigura alone. That does not include all the success fees in the other successful cases.

These figures speak for themselves. They cast all emotion aside and demonstrate the substantial gains in legal costs from these cases and the proportionately much lower costs expended. When the ratio of earnings to losses is more than 10:1, the current system can, to put it mildly, bear some reform. Therefore, while I recognise that claims against multinationals can be complex, the changes that we are making to the CFA regime will not prevent these cases being brought in the future. They can still be brought but the costs will be more proportionate. As Lord Justice Jackson recognised, a greater incentive for claimants’ lawyers to work more smartly is needed so that they incur only costs that are justified when bringing a claim, rather than allowing costs to escalate.

It is worth pointing out, as I have previously in the House, the criticism by the Court of Appeal of the costs claimed by the claimants in the Trafigura case. In that case, the court itself questioned whether some of the work undertaken by the claimants’ lawyers was necessary. It criticised them for seeking costs of £100 million in a case that resulted in payment of £30 million in damages. It is not for me to question the conduct of those involved, but it needs to be borne in mind when looking at the extraordinary costs claimed in that case alone. I should add—again, as I have pointed out to the House previously—that in that case the defendant’s costs were approximately £14 million, which is around one-seventh of the costs claimed by the claimants.

I turn now to Amendment 27, which seeks to allow for the recoverability of “after the event” insurance premiums to pay adverse legal costs, including expert fees and other disbursements. In doing so, the amendment goes much wider than just the cost of funding the expert reports for which we have provided in the special situation of clinical negligence cases. The amendment would potentially cover paying the other side’s costs, too, but this is not necessary because we are introducing a system of qualified one-way cost shifting in personal injury cases, which will protect losing claimants from having to pay the other side’s costs. We have discussed making exceptions in relation to expert reports in other contexts, but we do not believe that an exception is more needed here than in other cases. As I have said, the costs recovered in successful multinational cases have been substantial and could provide funds towards paying up front for reports where needed.

As I indicated on Report, on several occasions my officials and I have met representatives of the NGOs that support these cases. However, we have not been persuaded that such cases cannot continue to be brought when our changes are implemented. Nor are we persuaded that they justify an exception in the Bill that would be unfair to other, no less deserving claimants.

The House will be aware of all the arguments that I have rehearsed today, in Committee and on Report. We have treated subsequent discussions with the seriousness they deserve, and we have listened carefully. However, the Government continue to believe that reform is unavoidable, necessary and overdue. In this case in particular, we should not mix up a challenge to overgenerous costs with a denial of access to justice. Access to justice is precisely what the reformed CFA regime will protect, but as part of a more proportionate and balanced system. Therefore, I urge the noble Baroness to withdraw her amendment.

19:15

[Baroness Coussins]

My Lords, I thank all noble Lords who have contributed to this debate and the Minister for his very detailed and thoughtful reply. I am only sorry that, although we started from the same place, we have not reached the same conclusions.

There has been much reference in this debate to costs running into millions of pounds. However, the Rome II regulations provide for damages paid to successful victims to be calculated according to the costs in the country where the abuse took place, whereas legal costs are calculated according to what they are in the UK. Therefore, vast disparities are bound to occur. It was the UK Government who signed up to this, not the South African miners or the Peruvian campesinos. We need to take responsibility for that and for the additional restraints proposed by the Bill.

In a case with thousands of claimants, of course the costs will run into millions. If there are 1,000 claimants, there will be 1,000 medical reports and 1,000 toxicology reports to get. There will be travel and translation costs. Of course it will be expensive. The firm of solicitors to which the Minister referred, Leigh Day & Co, which has conducted most of these cases, routinely cross-subsidises its human rights work by taking on many other types of case. That enables it to take on those human rights cases. In the case of Trafigura, for example, in which each victim was awarded £1,000, it was not extraordinarily disproportionate for the company to have achieved £3,000 in costs, given the kind and amount of work and the length of time that such cases involve.

The disparities and the inequalities are too great. Justice is justice, whatever the cost. I want to test the opinion of the House.

19:17

Division 6

Ayes: 176

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Labour: 140
Crossbench: 28
Conservative: 1
Liberal Democrat: 1
Bishops: 1
Independent: 1
Plaid Cymru: 1

Noes: 206

---

Conservative: 122
Liberal Democrat: 66
Crossbench: 10
Ulster Unionist Party: 3
Democratic Unionist Party: 1

19:29

Clause 46 : Conditional fee agreements: success fees

Amendments 22 and 23 not moved.

Amendment 24

Moved by

[Lord Pannick]

24: Clause 46, page 33, line 18, at end insert—
“(7) To the extent specified in regulations made by the Lord Chancellor by statutory instrument, the amendments made by subsection (4) and section 48 and the repeal made by section 49(1), do not apply in relation to a costs order made in favour of a party to proceedings of a description specified in the regulations.
(8) A statutory instrument containing regulations under subsection (7) is subject to annulment in pursuance of a resolution of either House of Parliament.”

[Lord Pannick]

My Lords, this amendment is in my name and that of the noble Lord, Lord Alton of Liverpool. It seeks to confer on the Lord Chancellor a power to disapply provisions of Part 2 in particular categories of case. Noble Lords will know that Part 2 removes the power of the court to make unsuccessful defendants pay success fees and “after the event” insurance. Successful claimants would need to make these payments out of their damages. Concern has been expressed in your Lordships’ House that this may deter or prevent claimants bringing meritorious claims and may operate unfairly by effectively reducing the damages which they obtain. This concern has been expressed in a wide variety of legal contexts from industrial injuries to insolvency claims.

The Minister’s response to these criticisms has been to express the hope, and sometimes the belief, that Part 2 will not have the adverse consequences for access to justice which critics of these provisions fear. The reality is that neither the Government nor the critics of Part 2 can be sure what effect it will have on access to justice in practice. The Minister will, I hope, accept that it is possible that after the Bill is enacted and comes into effect, experience may show that in specific contexts the concerns expressed by those of us who are worried about the implications of Part 2 are justified, and that access to justice is being impeded.

This amendment would confer a discretion on the Lord Chancellor to respond to any problems that are seen to occur after enactment by excluding defined categories of case from the statutory provisions if he thinks it appropriate to do so. The new provision would confer a power in Part 2 equivalent to the Lord Chancellor’s power in Part 1 under Clause 9(2) to modify Schedule 1 in relation to the scope of legal aid—a power for the Lord Chancellor which the Government accepted was appropriate in Part 1. I cannot see why the Lord Chancellor would not wish to have such a discretion in Part 2 equivalent to that which is given by the Bill in Part 1. In neither context does the discretion impose any duty on him.

Parliament is unlikely for some time to have another opportunity to look at these important matters. Given the importance of the changes that we are making in Part 2, given the concerns that have been expressed about their impact on access to justice, and given that these matters may look very different indeed in some legal contexts in the light of experience after these changes are made, it is surely wise to add to the Bill a power for the Lord Chancellor whereby it would be entirely within his discretion to modify the effect by excluding categories of cases. I beg to move.

[Lord Alton of Liverpool]

My Lords, I shall be brief. I support the amendment in the name of my noble friend Lord Pannick. Just over a week ago, your Lordships were reminded by no less a person than Her Majesty the Queen that during her time as monarch she had signed more than 3,000 pieces of legislation enacted by Parliament. All of us who have been Members of this House and the other place know that we have a penchant for passing vast swathes of legislation that we never revisit subsequently. We all know that we sometimes legislate in haste and repent at leisure. I have had the feeling during the passage of this legislation that we will later regret some of the measures we have passed.

The problem then is what we are able to do about it. Although we sometimes add sunset clauses, and Select Committees can revisit legislation and make recommendations, we often do not put in the kind of belt-and-braces provision that my noble friend Lord Pannick has placed before your Lordships’ House this evening. It is eminently reasonable. It is perfectly good for Parliament to say that if things were to work out in the worst-case scenarios in the way that your Lordships at various stages in Committee and on Report have suggested may happen, and if the Minister is proved not to be correct in what I am sure he sincerely believes regarding the way in which this legislation will be interpreted in due course, there ought to be some way of doing something about it if it is to be found wanting.

Giving this discretionary power to the Lord Chancellor and making it consistent with Part 1, as my noble friend has just described, seems to be the perfect way of dealing with the problem. It is eminently reasonable and, like my noble friend, I cannot see any good reason why the Government would want to resist something that requires no expenditure and does not place on them any duty but simply gives them a discretionary power. I hope that the amendment will commend itself to your Lordships.

[Lord Beecham]

My Lords, the Opposition certainly support the amendment moved by the noble Lord, Lord Pannick, in his customary and eminently reasonable way. He clearly draws the analogy between the changes that the Government, to their credit, accepted in relation to legal aid and what is being advocated here. It adopts the precautionary principle whereby if things went wrong—they may not of course—there would be a fairly simple way of correcting them if the amendment were to be accepted. If it is not accepted, we would presumably be in for a long delay while primary legislation was enacted, as both noble Lords have made clear.

In this case, discretion is the better part of legislative valour, and I hope that the Government will accept the amendment. It does not bind them to anything but provides an opportunity for corrective measures to be taken, if that should prove necessary, in precisely the same way that they have accepted in relation to legal aid.

[Lord McNally]

My Lords, the noble Lord, Lord Pannick, has tabled his amendment along the lines he suggested on Report. He suggested then that it might be sensible to have a power to disapply the effects of Part 2 in relation to the abolition of recoverability of success fees and insurance premiums in respect of particular categories of case. The amendment now seeks to achieve that.

I have referred on several occasions during the passage of the Bill to its central architecture. The Government’s view, quite simply, is that the current recoverability regime is wrong in principle. It is wrong in principle to impose substantial additional costs on losing parties, whether in relation to success fees or insurance premiums. Those costs add to the already significant costs of civil litigation and allow for risk-free litigation by claimants and what I earlier described as inflation in our legal system.

I have explained the rationale for our proposals and why we consider that they should apply across the board without exception, and I do not propose to repeat those arguments now. The amendment seeks to allow different recoverability in different classes of case. We are implementing a package of reforms, not all of which are contained in the Bill. This package has been carefully put together to be fair between claimants and defendants.

I understand the noble Lord’s intentions. I understand that he thinks it sensible to allow for exceptions to be made at a later date. However, we are legislating now on what we consider to be a fair and overdue basis. Funding arrangements need a degree of certainty. Claimants and defendants need to be able to plan and adapt to the new regime. The amendment would only create uncertainty. Will an exception be created? For what and when? Rather than settling the issue of CFAs, as this Bill seeks to do, the amendment would open the door to constant campaigning and calls for individual exceptions. The amendment may be well intentioned but it is fraught with difficulty. It would provide uncertainty and confusion where we are seeking to introduce clarity. It would provide increased costs where we are seeking to reduce costs. It is wrong in principle and unnecessary. I urge the noble Lord to withdraw it.

[Lord Pannick]

My Lords, I am grateful to noble Lords who have spoken in the debate. I simply do not understand how the amendment undermines certainty any more than does the equivalent provision in Part 1. I repeat that it would simply confer a discretionary power on the Lord Chancellor. I understand that the Government believe that the architecture in Part 2 is correct, but the Minister should accept that experience may show that in some contexts, the architecture does not work. The amendment would, importantly, ensure that if those concerns prove to be justified, the Lord Chancellor will have a power to do something about it.

This is an important matter. I wish to test the opinion of the House.

19:40

Division 7

Ayes: 162

---

Labour: 133
Crossbench: 22
Independent: 2
Plaid Cymru: 1

Noes: 195

---

Conservative: 116
Liberal Democrat: 64
Crossbench: 8
Ulster Unionist Party: 3
Democratic Unionist Party: 1
Bishops: 1

19:52

Amendment 25

Moved by

[Lord Prescott]

25: Clause 46, page 33, line 18, at end insert—
“( ) The amendments made by subsections (2) and (4) do not apply in relation to proceedings that include a claim for damages or other relief in relation to—
(a) interference with personal information or breach of privacy; or(b) defamation.”

[Lord Prescott]

My Lords, Amendment 25 stands in my name and in the names of my noble friend Lord Bach and the noble Baroness, Lady O’Neil of Bengarve.

This is a simple but important issue. However, I do not want to delay the House, as we have had a number of debates on these matters. The amendments in this group would retain the recovery of success fees and “after the event” insurance premiums from the losing side in privacy and defamation cases. The Bill removes these costs and puts them on to the complainant, and I consider that to be fundamentally wrong, particularly in view of what we have seen of late in the way of actions by the press.

It is argued that such recovery of fees may prevent defendants—normally powerful and wealthy people in the media, and in this case the press—defending themselves against a complaint of breach of privacy. I understand that point but I would give more weight to an individual complainant who had suffered breach of privacy from the media or the press. The absence of conditional fee arrangements will prevent the complainant with no personal financial resources seeking legal redress in a case of breach of privacy. Indeed, in this type of case the defendant and complainant are not on an equal footing, and we have to take that into account.

I have benefited from the current no-win no-fee arrangement in pursuing my case against the Murdoch press and the Metropolitan Police. I would not have been able to pursue that case without such an arrangement because, quite simply, I would not have been able to afford it. This Bill strengthens the media’s case by reducing their costs, even if they are found guilty and damages are awarded against them. However, not only does it reduce their costs but it transfers the costs to the successful complainant. However one looks at it, it is not justice for the person who wins the case to be penalised by further costs.

Perhaps I may take my case as an example, although this is not just about me; it would apply to most people in the same situation. The average level of damages awarded in these cases is approximately £40,000. So, in my own case, £40,000 was awarded in damages, there were £40,000 of costs on my side and £40,000 of costs on the media’s side. Put together, that is a considerable cost to be carried by the complainant. However, added to that is the success fee, which is compensation for lawyers taking on difficult cases. In a case such as mine, the success fee would be carried by the people who lost the case. The other type of cost is insurance. If you are going to gamble on winning a case, you have to take out insurance so that it is the insurer and not you who pays the costs. Those success fees and insurance costs are now to be transferred in some form to the side that wins the case, so in a case like mine the damages would not completely cover the costs.

If there has clearly been a serious breach—in my case, it was phone hacking, criminal acts and all the things that we are aware of from the Leveson inquiry—it cannot be right for the complainant who has suffered from those acts to be poorer. More importantly, it cannot be right that the press should have their costs reduced. I understand that it is a heavy cost but that is part of the penalty. The situation is almost like that of the polluter pays. You should think very carefully before you say some of the things that you say and you should not carry out what are clearly criminal acts. If you commit the offence, you pay the price of legal action against you, and the current no-win no-costs arrangement allows many people to sue in such a situation.

The Government are shifting the balance of payments and costs on to the complainant, even when the complainant is found innocent and the defendant is found guilty. I do not think that that is right. I have tried to think of the Government’s reasons for doing this. In some of the debates it has been argued that it is down to the cost to the public, but no evidence has been given for that. What is the cost to the taxpayer? I agree that there are probably heavy legal costs and I have referred to some of them, but if you want to do something about that there are plenty of regulations and powers that can be used. It could be argued that in some cases that is what is happening now. The burden should not be put on those who make the complaint. The defendant in this case should carry the full costs.

Then one wonders who is demanding this change. Clearly, the Government agree with it but who is pressing the Government? The answer is: a very powerful body of media. I know that because they tried to get the previous Labour Government to make this change in the law but they would not agree to it as they thought it was unfair. I see a look of puzzlement on the Minister’s face. Jack Straw may have felt that there was something in it but there was no government decision on it. I leave it at that—we refused to go along with it. However, when this Government came in, I do not know whether it was at a dinner at No. 10 but they obviously got together with some very powerful people and said, “Right, we’re going to do this for you”. It is clear that they want this change and I have given some of the reasons. The innocent parties who have suffered from breach of privacy or phone hacking are not calling for these changes. To be frank, they could not have taken up their cases without the no-win no-fee arrangement. The only people who seem to have argued powerfully for it are the media, and I am not just talking about the red tops or Murdoch. I have referred before in this Chamber to a survey of all the media—the press and television—in which they said unanimously that they wanted their costs to be cut. They did not argue that those costs should be transferred to the claimant; they just wanted their costs cut, and they were unanimous in that.

The people who have certainly not asked for this change are the McCanns, the Dowlers or Mr Jefferies. They sent a letter to the Prime Minister asking him not to do this as it would disadvantage people like themselves who had been injured by the actions of the press. We should take that into account. I noticed that in the Naomi Campbell case, curiously, the British press argued that a change should be made to human rights law. That is not usually their line on human rights but in this case they claimed that their human rights had been damaged by Naomi Campbell. She is a very rich lady and could certainly afford to bring a case. However, that is not the norm. We have to think of people such as the McCanns and the Dowlers, who have been greatly affected, as has become clear from the Leveson inquiry.

The issue is clear; it is about justice. On which side will we apportion the change? Where does the balance lie between the strong and the weak? That is what we do all the time in legislation. This loads it against the weak in favour of the powerful, which is fundamentally wrong. This legislative framework does not follow what we normally try to do. The Minister is talking about whether this can be put into the Defamation Bill. If it is right to put it in that Bill, why wait? I fear that when the Defamation Bill is debated it will be all about defamation costs but there will be very little about privacy breaches, which is what the amendment is concerned with. If the Minister wants to leave the defamation issue, he should leave it to the Defamation Bill, but if the issue is important, he should do it now and change it, or at the very least send it to the other place to consider it further. To duck behind the Defamation Bill and say that it will be dealt with then is frankly not giving the issue the justice that it is entitled to. I am saying that we should side with the weak in this case, not the powerful. Let us have justice. That is what this place is about.

20:00

[Baroness O'Neill of Bengarve]

My Lords, I know that it is Third Reading and at this point I shall speak to process and not to substance. We already have in the Bill two exemptions from certain provisions relating to success fees and cost recovery via insurance—Clauses 44 and 45. The existing exemptions for those two clauses relate to respiratory disease and industrial disease, particularly when there has been a breach of a duty of care.

Amendments 25 and 28, to which the noble Lord, Lord Prescott, has just spoken, and to which I am speaking, seek to establish parallel exemptions for proceedings that include a claim for damages or other relief that relate either to personal information or breach of privacy or defamation. This is simply not the moment to try to alter the costs regime in actions pertaining either to privacy or defamation. The tectonic plates are shifting in this area. We have around us many cases that relate to criminal breaches of existing legal protections of privacy as, after all, not all have been settled. We also have a report by the Joint Committee on Privacy and Injunctions from only a fortnight ago to which nobody has yet been able to give much attention, but it deserves some attention. We have notably Lord Justice Leveson’s ongoing inquiry and we have a number of parallel inquiries going on into other aspects of the phone-hacking scandals that came to light last summer.

In some quarters, it is an expectation that defamation legislation will have a place in the Queen’s Speech. Is that a rumour? I do not know, but in some cases I think that it is a firm assumption. I know that nothing can be said about that, but in short, this is simply not the time to alter the costs and fees regime relating to cases in this area. If defamation legislation is coming forward in the Queen’s Speech, then will be the time to think about that. If not, there will be time to think about these other things that are ongoing.

I believe that there would be one other way that might seem to offer the Government a route for dealing with this difficulty of timing, which I accept is not something that could have been anticipated, but it is a severe difficulty. That would be to take advantage of Clause 152, which permits different parts of the Bill for different purposes—that is an unusual way of putting it—to be commenced at different points. It would be open to the Government to delay commencement on those issues. I accept that that is a way of avoiding making commitments now that might have to be reversed if there were a Defamation Bill. However, that is simply not satisfactory from the point of view of litigants—both claimants and defendants—in privacy and in defamation where the stakes are too high and the uncertainty is too great. At this stage, an exemption parallel to the exemption in Clauses 44 and 45 would be the appropriate way forward.

[Lord Bach]

My Lords, we have heard two powerful speeches on this matter. I say from the Front Bench that we support the amendment in the name of my noble friend. Legal aid has never been available for redress in this field, so no-win no-fee has become an essential bulwark for the impecunious citizen of moderate means against for the main part much more powerful media corporations. Such actions, as the House knows, recently led to the exposure of systematic wrongdoing at News International that saw innocent people’s lives just taken apart. We have heard reference already to the Dowlers and the McCanns, and to Mr Jeffries, too. But even politicians, such as the right honourable Simon Hughes, has been a victim, and have relied on no-win no-fee to get justice.

The Jackson reforms on road traffic accident personal injury cases, which we welcome very much on this side, comprising 75 per cent of all claims, are recognised as having a potentially devastating effect on this area of law. The Liberal Democrats in the other place agreed with us when they tabled amendments exempting privacy and defamation actions. I very much hope that they will be consistent if the matter is taken to a vote tonight. That is what they proposed in the other place, so will they really vote against it tonight? The Joint Committee is looking at the draft Defamation Bill. Everyone owes a huge debt to the noble Lord, Lord Lester of Herne Hill, who I am delighted to see in his place. He is unusually silent on this matter tonight but perhaps I can understand why.

[Lord Lester of Herne Hill]

I am waiting for the noble Lord to finish.

[Lord Bach]

That is a first. I am delighted to hear it. The Joint Committee looking at the draft Defamation Bill agreed with the point that I am attempting to make now. It said of the Government’s proposals that,

“we are sufficiently concerned about them to ask the Government to reconsider the implementation of the Jackson Report in respect of defamation actions, with a view to protecting further the interests of those without substantial financial means”.

The Government are trying to stay the House’s hand—many Members of this House are concerned about the impact on these cases—by saying that they will deal with the issue in the Defamation Bill. That is not good enough. In some ways, we will break the civil justice system in this Bill and the Government are saying, “Don’t worry; we’ll fix it later”. That is not good enough. Even if the Government change the definition of defamation, what will they do to make litigation viable for those of limited means? The fundamental problem, as the House knows, is that damages are low in these cases. Indeed, Lord Justice Jackson recommended increasing them substantially in a part of his report, but not the only part, which has been ignored by the Government. The costs of bringing them in are quite a lot higher.

The Government are doing everything they can to make these cases impossible to bring in the future. They are even refusing to put qualified one-way cost shifting in the Bill, which is an essential protection against adverse costs should a litigant lose in this kind of case. The House should not think that it is good enough for the Government to say, “Trust us; we’ll fix it all later”. The amendment should be supported because, as the noble Baroness said in her thoughtful and impressive speech, it is not good enough just to rely on some Bill that may or may not appear in the next Queen’s Speech whose contents we know not.

[Lord Lester of Herne Hill]

My Lords, I listened with great interest to the speech of noble Lord, Lord Bach. He will remember that when he was a Minister in the previous Government, his master, the right honourable Jack Straw, decided that the present regime of costs was oppressive and unfair because it imposed a chilling effect on the publishers of newspapers and other media. Mr Straw decided that it was an abusive system because of the effect that it had on free speech. The effect arose from the fact that unscrupulous, greedy or perhaps simply normal lawyers acting for claimants were taking advantage of success fees and running up enormous legal costs that dwarfed any claim for damages, leaving a publisher defendant, for example, with a damages claim for £20,000 accompanied by a costs claim for £250,000.

In the Naomi Campbell v Mirror Group Newspapers case, the European Court of Human Rights found that the circumstances breached the right to free speech enshrined in Article 10 of the European convention. In that case, exactly what I described happened in a gross and abusive way. Mr Straw and the previous Government recognised that the system was an abuse and proposed a rather crude mechanism to cut down success fees to an arbitrary figure. Although this House passed the measure, the other place refused to do so and it fell.

As I shall explain in a moment, I have great sympathy with the problem. However, at the moment I am dealing with the existing abuse. I begin by dealing with it because the amendments in this group, which refer to defamation, privacy and breach of confidence, would leave in place precisely the scheme that has been held to be contrary to the European Convention on Human Rights, on free-speech grounds. They would leave in place the exact conditional fee agreement and success fee scheme, with all its capacity for abuse. For that reason, the amendments should be resisted.

Of course, I agree with the noble Lord, Lord Prescott, and others who spoke, that there is a problem in defamation and privacy cases. It is that the normal costs regime does not work very well in those cases, where often what are sought are not massive damages but other forms of remedy that cannot be dealt with under the scheme in the Bill. That is why at a previous stage I tabled an amendment to introduce what I hoped would be a proportionate way of dealing with the problem. The noble Lord, Lord Prescott, put his name to the amendment. I am entirely at one with him in saying that there needs to be a special and proportionate regime that applies to defamation and privacy cases. We are entirely at one in our aim, and that is exactly what our colleagues in the other place indicated in the view that they took on the matter.

The question is: what is the best way of meeting this legitimate aim? A means must be found of dealing with the David and Goliath problem—both ways. In one case there may be an extremely rich and powerful claimant and an impoverished defendant—let us say a citizen critic, or a little NGO, who cannot afford to pay the costs of the claimant. In another case the claimant may be a weak or impoverished individual who is up against a powerful newspaper or other big corporation, and the same problem will arise. We need to find a scheme that ensures equality of arms—a level playing field—between the strong and the weak in these cases such as privacy and defamation claims where the remedy in the Bill is not suitable.

20:15

Sir John Whittingdale's Joint Committee on Privacy and Injunctions drew attention, in its report published yesterday, to the need for this to be dealt with in some way. I agree with the committee on that. However, the amendments cannot solve the problem because all that they would do would be to leave in place the present, bad system without any change. Therefore, what is needed is a reply from my noble friend the Minister explaining the Government’s approach to changing the costs regime. This does not have to be in a defamation Bill. As I understand it—although this needs to be confirmed—there is ample power for costs rules to be altered, especially for privacy and defamation cases, without the need to write the power into a defamation Bill. If I am right, whether a defamation Bill is in the Queen’s Speech hardly matters; the point is that the Minister will have the power to make adjustments. Since I strongly support the introduction of a defamation Bill—as do many noble Lords—I hope that the changes will be made as part and parcel of a Bill, and will therefore be worked out.

I am sorry to have taken so long. I am trying to say, with respect, that the amendments are misconceived; I hope that the House will not divide on them. They would violate the European Convention on Human Rights and would retain the very abuses of which the right honourable Jack Straw was so conscious. They would not fit the Bill as a matter of process. What is needed is for the Minister to reply, to recognise that there is such a problem and to indicate whether the Government have the power to tackle it in the way that I suggested.

[Lord McNally]

My Lords, my noble friend is catching something that perhaps I should not call Pannick disease. The noble Lord, Lord Pannick, has a habit of asking questions and then giving the answers. We will have to see whether I will be able to satisfy my noble friend on the questions that he raised.

As I explained, the basic rationale for the proposed reforms to no-win no-fee conditional fee agreements is to squeeze the inflation out of our legal system. It is to rebalance the system to make it fairer as between claimants and defendants. They do this by correcting the anomaly whereby those who bring cases have no incentive to keep an eye on the legal costs. Right now, the recoverability of success fees and insurance premiums from the losing side can have the perverse effect of preventing defendants fighting cases, even when they know they are in the right, for fear of the disproportionate legal costs involved if they were to lose.

High and disproportionate costs have a negative impact not just because they can deny access to justice but more broadly because they can lead people to change their behaviour in damaging ways because of the fear of claims. Nowhere is that more true than in relation to responsible journalism, as well as to academic and scientific debate. The judgment of the European Court of Human Rights, to which my noble friend Lord Lester referred, in January 2011 in Mirror Group Newspapers v the UK—the so-called Naomi Campbell case—found the existing CFA arrangements with recoverability in that instance to be contrary to freedom of expression under Article 10 of the convention. Editors and journalists have long warned of the chilling effect of the current libel regime and argued that part of the problem is the huge costs that no-win no-fee cases impose. However, defendants are not always rich and powerful newspapers; they are also scientists, NGOs, campaigners and academics.

I have already made the general argument that any exception to reforms intended by Lord Justice Jackson to apply across the board is invidious and likely to lead to unfair anomalies with special treatment for some areas of law but not others. In the case of defamation, I additionally argue that these amendments are premature because, as the noble Lord, Lord Lester, explained, these issues need to be considered in the context of the defamation Bill, which we aim to introduce as soon as a legislative opportunity arises.

[Lord Bach]

Will that cover privacy as well? That is a question to which I would like an answer from the Minister, please.

[Lord McNally]

The noble Lord will have to wait and see. One thing is certainly true: I have made every effort to make sure that defamation is not engulfed in a tsunami from Leveson. If we really want to reform defamation and not get caught up in a much wider privacy law, what I am trying to do is the way forward. Stunts like dividing the House tonight will show that, on this Bill, the noble Lord is still more interested in short-term political gain than in making progress.

[Lord Thomas of Gresford]

As a member of the committee that has just reported, I should remind the noble Lord that it advised against a privacy law.

[Baroness O'Neill of Bengarve]

Before the Minister finishes winding, will he explain to the House why he does not think that these exemptions—the noble Lord, Lord Lester, may be entirely right—are the right way to go? Does he not think that two successive changes in the regime are the very worst thing for litigants in this area? In so far as we are leaving the Bill as it is, one change will happen now and another will happen down the road if there is legislation on defamation.

[Lord McNally]

We are talking about a Bill that does not come into effect until 2013. Given that defamation legislation is in process, I do not think the fact that there is a slight lacuna is a major problem in terms of the issues that the Bill will deal with. If it takes a little longer, that is a problem, and I will return to that.

That Bill and associated measures seek to reduce the costs of litigation and discourage unnecessary litigation in the area of defamation. We seek to do so, very broadly, by introducing a range of substantive and procedural changes and also by focusing on alternative dispute resolution, which is quicker, at lower cost, and offers more meaningful redress.

Any exceptions for defamation or privacy cases from the changes in Part 2 are unnecessary because our CFA reforms should not prevent strong cases being brought. I share the concern that individuals who are not wealthy or powerful sometimes need to bring defamation or privacy cases. Nothing in our proposals should prevent that where a case is a good one.

The noble Lord, Lord Bach, sometimes makes me gasp when he starts lecturing our Benches on consistency. The noble Lord, Lord Prescott, asked why this was happening now. Perhaps I may quote an expert on these matters:

“CFAs will remain available for defamation cases; thereby, lawyers will still be able to use them in deserving cases”.—[Official Report, 25/3/10; col. 1157.]

Those were the words of the noble Lord, Lord Bach, as Justice Minister, when he rushed attempts to reduce success fees before this House just before the election. We have already heard what happened in the grand coalition that was the Labour Government when the proposal went down the other end. Nevertheless, the noble Lord, Lord Bach, told this House:

“There is a substantial body of opinion that 100 per cent recoverable success fees should not continue in defamation cases”.—[Official Report, 25/3/10; col. 1156.]

He was backed up by a consultation which said,

“immediate steps are needed in respect of defamation proceedings”.

[Lord Bach]

My Lords, I stand by those remarks. If the Minister thinks that there is something wrong—for example, the difficulty in relation to damages where, under his Government’s scheme, claimants will have to pay up to 25 per cent of the damages they get—what is he going to do to change that? He is in government now.

[Lord McNally]

We are doing what they did not do. We are bringing forward a Defamation Bill that will address many of these problems. The noble Lord says that he does not know what is in the Defamation Bill. A Defamation Bill was brought into this House by my noble friend Lord Lester two years ago, when this Government first came in. In reply to that, I said from this Dispatch Box that we would take up this Bill. We went into a consultation, which has been published. We produced a draft Bill, which the noble Lord may have noticed. We also had pre-legislative scrutiny under the chairmanship of the noble Lord, Lord Mawhinney, and we have responded to that.

We have played this by the book. We have not tried to rush through legislation, as the noble Lord did in the dying days of his Government. We have carried out a sensible look at defamation. The noble Lord knows the conventions. I am very hopeful that we will find parliamentary time in the very near future.

As I have already said, the legislation in this Bill does not come into effect until 2013. The Defamation Bill and the procedural reforms that we intend to take forward with it are of course about reducing the complexity and therefore the expense involved. In order for those aims to be achieved, we will look at the rules on costs protection for defamation and privacy proceedings for when the defamation reforms come into effect. I can give the House the assurance that we will do so. Bearing that in mind, I hope that the noble Lord will withdraw these amendments. We are on course for a reform of our defamation laws.

[Lord Lester of Herne Hill]

My noble friend the Minister accused me of asking questions to which I knew the answer, but this question I do not know the answer to. Is the Minister saying that there will be adequate powers, either under existing law or the future legislation, to create any cost changes that are needed to secure a level playing field and equality of arms? If that is what he is saying, I am completely satisfied.

[Lord McNally]

That is precisely what I am saying. I have not brought this Bill this far to score such an enormous own goal. Noble Lords, particularly those who have been in government, know full well how these processes are carried forward. Nothing will happen that will not be fully and thoroughly debated in both Houses of Parliament. I know that various groups have been briefing and arguing for action now. I do not think that these amendments carry us forward in any way.

I give noble Lords as full an assurance as I can. Bills have to go through Cabinets and Cabinet committees, et cetera, but they also have to go through two Houses of Parliament, where this issue is extremely live. I cannot imagine that the kind of issues that the noble Lord, Lord Prescott, has raised tonight will not be dealt with fully in that Defamation Bill. With that, I urge the noble Lord to withdraw his amendment.

[Lord Prescott]

I certainly do not withdraw the amendment and I hope that the House will vote on it.

20:28

Division 8

Ayes: 120

---

Labour: 108
Crossbench: 6
Democratic Unionist Party: 1
Independent: 1
Plaid Cymru: 1

Noes: 194

---

Conservative: 113
Liberal Democrat: 62
Crossbench: 13
Ulster Unionist Party: 2
Bishops: 1

20:40

Clause 48 : Recovery of insurance premiums by way of costs

Amendments 26 to 28 not moved.

Clause 57 : Rules against referral fees

Amendment 29

Moved by

[Lord McNally]

29: Clause 57, page 42, line 29, after “death,” insert—
“( ) the legal services relate to any other claim or potential claim for damages arising out of circumstances involving personal injury or death,”

[Lord McNally]

My Lords, I committed on Report to bring back at Third Reading amendments to address issues raised by my noble friend Lord Hunt of Wirral in respect of Clause 57. Amendment 29 addresses situations where the referral fee for an ancillary claim, such as for damage to a motor vehicle involved in a road traffic accident, in addition to a personal injury claim, may be inflated to include a payment for a referral fee for the personal injury claim. Amendment 30 makes it clear in the Bill that the payment of referral fees to a third party, whether or not they are regulated, will not avoid the prohibition on the payment of referral fees. This gives both practitioners and regulators a clear marker and removes doubt as to the effect of the clause. We do not wish to place additional burdens on regulators and these amendments will remove the potential for confusion on what is and what is not covered by the ban.

I wish to put on record my thanks to my noble friend for tabling his amendments, which have enabled the Government to strengthen and clarify the ban on referral fees in personal injury cases. I beg to move.

[Lord Hunt of Wirral]

My Lords, I thank the Minister and declare my interest as a partner in the international commercial law firm, DAC Beachcroft LLP, and my other interests in the register.

I warmly applaud the coalition Government’s intention to ban referral fees in personal injury cases. The amendments establish greater clarity around the operation of the ban on referral fees to ensure that there must be no side-stepping of the intention to ban them. I thank him warmly for bringing forward these amendments at Third Reading.

[Lord Beecham]

My Lords, it is with some relief that I return to the question of referral fees for positively the last time in the course of the Bill. The Opposition have no objection to these amendments in the circumstances and we congratulate the noble Lord, Lord Hunt, on having suggested them to the Government.

I do not know whether the noble Lord read the Daily Telegraph last Monday— which I think informed the speech of the noble Baroness, Lady Deech, with its suggestions about the Labour Party’s alleged scheme for referral fees, about which I spoke at our previous meeting—but there is a certain irony in the amendment. He may not know—I did not know until after the event—that no less a body than the Daily Telegraph runs a referral scheme, including for personal injuries. It is interesting that that newspaper should have run a story criticising the Labour Party for something that does not exist when it has precisely the same scheme. Apparently it has a scheme with a firm called Irwin Mitchell, of which the noble Lord will have no doubt heard, which levies referral fees. Oddly enough, the Daily Telegraph did not disclose that in the piece that it ran.

However, the Opposition are quite content with the amendment.

Amendment 29 agreed.

Amendment 30

Moved by

[Lord McNally]

30: Clause 57, page 43, line 6, after “consideration” insert “whether any benefit is received by the regulated person or by a third party”

Amendment 30 agreed.

Amendment 31

Moved by

[Lord Woolf]

31: After Clause 66, insert the following new Clause—
“Restorative justice
(1) In section 142 of the Criminal Justice Act 2003 (purposes of sentencing), in subsection (1)(e), at end insert—
“including, where the person affected agrees to this, reparation by means of restorative justice”.”

[Lord Woolf]

My Lords, the amendment is supported by the noble Lords, Lord Ramsbotham and Lord Beecham, and the right reverend Prelate the Bishop of Liverpool. I am afraid the hour is such that I am not sure that those who put their name to the amendment, apart from the noble Lord, Lord Beecham, are in their places. It is a modest amendment, which has benefited considerably from the discussions that have taken place on the subject of restorative justice through the earlier stages of this Bill. Indeed, this is my third attempt to find an amendment to which the Government could not possibly object. I have had discussions with the Government and all I can say about this amendment is that I have not yet heard—although I look forward to the Minister’s speech—any reason why they can possibly take any exception whatever to the amendment.

20:45

Restorative justice is a relatively new arrival on the criminal justice scene. I indicated in the earlier proceedings that it is part of the rather rare good news in the criminal justice area. For those who take an interest in improvements in the way in which we deal with offenders and victims, it offers evidence that things can be done better than they were in the past. Although restorative justice is possible, there is no provision in legislation yet, as far as I am aware, that makes clear in express terms, using the expression “restorative justice”, what is the precise, core role of the courts. There are indications that the role can include restorative justice but I respectfully suggest that nothing appears clearly in legislation covering the position now. I hope and believe that the Government have plans, but cases have to be decided day in and day out, up and down the country. The courts look to Section 142 of the Criminal Justice Act 2003, which has a menu of what the purposes of sentencing are. One of those includes effecting “reparation”, by unspecified means.

All I seek to do with this amendment is to insert, in clear terms, that reparation includes restorative justice. That will be a message to those who are involved in the justice process that restorative justice has come of age. I hope the House will support me in seeking to do that, because it is undoubtedly desirable. The Government have issued, I think in the last few days, a consultative document, Punishment and Reform: Effective Community Sentences. A significant part of that document deals with restorative justice. For example, paragraph 115 says that restorative justice,

“offers a unique opportunity to give victims of crime the opportunity to be heard and have a greater stake in the resolution of offences and the criminal justice system as a whole. This may entail agreeing a restorative activity for the offender to undertake such as making some form of reparation to the victim, monetary or otherwise or meeting the offender face-to-face to discuss the crime, giving the victim an opportunity to explain to the offender what damage they caused”.

Then it goes on to say:

“RJ is also a vital tool in the rehabilitation of offenders and prevention of further offending. But it is not an easy option to undertake—offenders must directly face the consequences of their actions and the impact that it has had upon others. They must seek to make amends for the damage they have caused and it therefore challenges them to change their behaviour as a result”.

The consultative paper refers to the fact that 14 per cent of offenders have reduced their frequency of offending as a result of being involved in restorative justice. Perhaps even more importantly, 85 per cent of victims have expressed satisfaction with restorative justice. It is therefore not surprising that the Government should speak in the terms that I have just cited on the question of restorative justice in this consultation paper.

The consultation paper will serve a very real purpose, not least in respect of restorative justice. I do not know what will come out of the consultation when it takes place, but if Ministers are serious about restorative justice, as I believe they are, for the purposes of sentencing they will need the modest amendment that I am proposing. It should be said expressly that,

“where the person affected agrees to this, reparation by means of restorative justice”,

is included, and is covered. That is what my amendment does.

The amendment refers to the need for the consent of the victim because that is an essential part of restorative justice. It is not meant to be something imposed on victims, unless they wish to take part, which would add to the effect of the offence. That is clearly not what is intended either by the Government or by me. It is my belief that judges up and down the country will be assisted by this clarification.

I conclude these opening remarks by saying that I am grateful to those who are to speak, and I will see what they have to say, but I would like them to identify any reason why this amendment should not be made. I suggest that if the Government oppose the amendment without having any reason for doing so it would be very unfortunate and would send a wrong message to those trying to improve the criminal justice system.

[Lord Ramsbotham]

My Lords, earlier in the day in this debate, many tributes were paid to Lord Newton of Braintree. I wish to be associated with all of them. Early on in the passage of this Bill, when we had the initial skirmish about access to justice, he noticed that I had tabled an amendment questioning the fact that this Bill referred to punishment rather than rehabilitation of offenders. We had a discussion about the core values of the criminal justice system. Reflecting on that, I looked at the core values that the Ministry of Defence reckons are the values of this country: liberty, fairness, transparency and the rule of law. Lord Newton and I had a very interesting discussion about that because, although that may be a direction to the military, it applies to the whole direction of the criminal justice system in this country.

I support this amendment so strongly, and hope that the Government will take the wise words of my noble and learned friend Lord Woolf seriously, because both this Government and the previous one have set great store by the need to look after victims. Restorative justice helps suitable offenders to address the harm that they have caused to their victims, so it is at the heart of what both the main political parties have been saying on this issue. My noble and learned friend mentioned the fact that 85 per cent of the victims were satisfied with the process. However, there is also another factor, which is that 78 per cent of those victims said that they would recommend the process to others. In other words, this process enjoys their support.

If one has a vastly expensive and overcrowded prison system, it only makes common sense, quite apart from economic sense, to do everything possible to reduce the numbers in it so that what is done there can be made more effective for those who need the treatment that it can provide. Restorative justice has shown that it can result in a 27 per cent decrease in reoffending rates. Therefore, it must be a cost-effective contributor to the process.

I find it extraordinary that here we are at Third Reading with those of us who support the rehabilitation revolution feeling that we have had, during this process, almost to fight the Government to get rehabilitation included as part of the purpose of the Bill. We have had to fight inclusion of the word punishment which the Government added and which would increase the expense. We are trying to reduce expense by proposing all the things that have been proven to be able to do so. Nothing that I have seen in recent years has given me more encouragement than the possibilities of restorative justice. I hope that the Government will consider very seriously the amendment proposed by my noble and learned friend.

[Lord Hylton]

My Lords, I have not spoken on the whole of this Bill and I only do so now because I have seen the good effects of restorative justice in Belfast, in London and at home in Somerset. It is right that it should be one of the things that are taken into consideration in sentencing, and I hope that the Government will accept the amendment.

[Baroness Howe of Idlicote]

My Lords, I very much support my noble and learned friend Lord Woolf’s amendment because his amendment seems absolutely right. I have twice attended such meetings, with quite a long distance in between, where both the victim and the offender were present and able to exchange their views. Both meetings were extremely impressive in the effect which the victim and offender had on one another and in terms of the satisfaction they felt. As we have heard from my noble friend Lord Ramsbotham, the very fact that this process has produced something like a 27 per cent drop in reoffending rates speaks for itself. I make that point because I entirely agree that there can be no real, logical reason for not accepting the amendment—linked, as it is, superbly in this way. A great deal of research by my noble and learned friend Lord Woolf has gone into it. I therefore hope that, on this occasion, the Minister can accept the amendment.

21:00

[Lord Cameron of Dillington]

My Lords, I support the amendment. Restorative justice is an important tool to have in your kitbag when trying to prevent or mend the effects of crime. It is not a soft option; rather, it is an economic option with extremely good, tried-and-tested results.

In Somerset, where I come from, we had a scheme that ran for five years, from 2005 to 2010. The plan was that the scheme would expand and spread to other communities but, sadly, its funding was cut by around 90 per cent due to central and local authority cuts. In the five years that it operated and the 940 cases that it dealt with, the reoffending rate was less than 5 per cent compared with our more normal courts and probation service reoffending rate of 65 per cent to 70 per cent. Among the 940 cases there were 90 cases of first-time offenders who were thus diverted from the criminal justice system, the likely establishment of a criminal record and the inevitable ongoing costs and negative social impact of that. In terms of pure economics, 30 per cent of the cases referred would have gone to court and thus cost the Somerset taxpayer some £612 per case, compared with £139 per case for the restorative panel.

As everyone knows, restorative justice saves police time, has immeasurable social benefits and brings a new perception of crime and safety into the community, which is important, as well as the re-education of potential criminals. The object of restorative justice is to repair harm and thereby strengthen the community. The process treats the harm, not the individual who caused it. As the noble and learned Lord, Lord Woolf, said, it allows the victim a voice and a part in the decision-making about the best way for the harm that they have suffered to be put right. It is not adversarial but rehabilitative.

Frequently the offender has never had the education, whether from life or from a parent, necessary to understand the effect of their actions. Invariably, when they hear, either from the victim or from the victim’s friends and family, about the detailed and personal effects on the victim of what they did, they feel intense remorse, which is very uncomfortable. The context of the discussion enables them also to realise that they themselves actually count, the people around them care and what they do matters and has an effect. They are given a choice that can change their lives and that of their community for the better. I strongly support the amendment.

[Baroness Butler-Sloss]

My Lords, I can be brief, having heard what the noble Lord, Lord Cameron, has said, setting out the facts about what works well in the county next to the one where I live. It is very impressive.

It is right to say that restorative justice is not for everyone. There is a sort of case where it would be quite wrong: someone who has been a victim of serious domestic violence, for instance, would seldom find it possible to meet the offender, who is often another member of the family. In suitable cases, though, and there is no shortage of suitable cases, it is good for the victim—as the noble and learned Lord, Lord Woolf, has said, it gives them a voice—but it is extremely salutary for the offender, as the noble Lord, Lord Cameron, has said.

I have had instances where offenders—young offenders in particular; those just grown up—have ended up in floods of tears because they had not appreciated the impact of the way in which they had behaved, particularly in something like burglary or theft when they took from someone elderly some not very valuable things that had enormous personal value for that victim. Being told, with the victim in tears, that a great-aunt’s cup that had been preserved through the family had been stolen and thrown on the ground can lead to the offender being in tears too, and this shows that there is a real value.

The figures from Somerset showing the high degree of non-reoffending, which is a great deal more than the noble and learned Lord said was the average of 27 per cent or 28 per cent, shows that restorative justice is a real tool. I find it utterly astonishing that this Government, who have been listening throughout so much of the Bill, have failed to listen on this issue.

[Lord Hodgson of Astley Abbotts]

My Lords, briefly, I support the amendment of the noble and learned Lord, Lord Woolf. I have been involved in restorative justice through a charity called Why Me? for some years. I became involved because it offered a victim-oriented strategy, as mentioned by the noble Lord, Lord Ramsbotham. Restorative justice offers an opportunity for the person who has been offended against to address the trauma that they have suffered, to see how and why it came about and, in that way, to achieve some sort of closure. On the other side, it has had significant effects on reoffending. As the noble and learned Baroness has pointed out, offenders will say, “There was just a name on a charge sheet but when I see that it belongs to a person with a home and a family, which I have broken into or broken up, I begin to see some of the dreadful things that my actions have done”. Therefore, I am anxious that the Government should accept this amendment.

There are only two reasons why they might not accept it that I can see. First, there might be a need to restrain public spending. I accept that there is a need for this sort of activity to be carried out by well trained people to be effective. However, there will be a net benefit. If we can continue to achieve the reduction in reoffending rates that has been achieved in the past, there will be a reduction in costs as we avoid some of the costs of reoffending. Secondly, the Government have said that this amendment is overly prescriptive but I have some difficulty in understanding why. As the noble and learned Lord pointed out in his opening remarks, this just adds to the menu of options available. Therefore, it is not prescriptive in my reading of how the amendment has been drafted.

In conclusion, my concern is that if we are not careful, the idea of RJ will fall victim to what I call the Daily Mail effect. Restorative justice is not an easy thing to defend. It can appear a bit touchy-feely. One or two cases that led to difficult headlines in the newspapers could lead to the Ministry of Justice saying, “This is a bit difficult. We had better back off from this one”. Therefore, my reason for strongly supporting the noble and learned Lord’s amendment is that if we get it into the Bill, we will then have something that can be used in the future and cannot be brushed away by some unfortunate event that might lead to public opinion turning against it and putting temporary political pressure on the Government of the day.

[Lord Beecham]

My Lords, from the opposition Front Bench I strongly support the amendment moved by the noble and learned Lord. I do so not just because he was a distinguished judge and a most eminent Lord Chief Justice, whose words should be weighed very carefully by all sides of this House; not even because he is a fellow Novocastrian and a fellow honorary freeman of Newcastle-upon-Tyne; but because what he proposes makes such eminent sense, as several of your Lordships have pointed out. The record of restorative justice is one of success. It is not universally successful but, as we have heard, it has made a significant impact on reoffending rates, is cost-effective and, as the noble Lord, Lord Ramsbotham, pointed out, is an alternative to other forms of punishment that are generally more expensive and often less efficacious.

I cannot think of any reason why the Government should resist an amendment phrased in the way that this is. There is an analogous process called “justice reinvestment”, which is a rather more collective way of making reparation, whereby offenders put something back into the community through a community payback scheme or something of that kind. Justice reinvestment is not part of this amendment, although it is a valuable process. If the Government reject the amendment, we will not see justice reinvestment but, in effect, justice disinvestment. That would be a mistake, from which only the victims of crime—and the taxpayer, for that matter—would suffer.

I hope that the Minister, when she replies, will see the enormous persuasive logic of the case made by the noble and learned Lord, supported as it has been on all sides of the House. I hope that the Government will recognise that to incorporate an amendment of the kind that the noble and learned Lord has moved will strengthen, not weaken, the Bill. I hope that they are prepared on this occasion, as they have been on other occasions, to listen to the sense of the House and accept the amendment.

[Baroness Northover]

My Lords, Amendment 31, tabled by the noble and learned Lord, Lord Woolf, returns to restorative justice. I thank him for bringing this important issue before the House and for his tenacious support for its principle.

The amendment is very timely as this morning we published our consultation on community sentences, Punishment and Reform: Effective Community Sentences, which includes a chapter on reparation and restoration. I am very pleased that the noble and learned Lord has welcomed this publication. The consultation offers us an important opportunity to seek the views of practitioners, sentencers, magistrates, probation officials, victims and victims’ groups about the use of restorative justice as part of our response to tackling more serious offending through the use of community sentences. It asks questions about the use of pre-sentence and post-sentence restorative justice, what more we can do to strengthen and support the role of victims in RJ and, crucially, what might be the right approaches to building capacity and capability and boosting a cultural change for RJ. We want to gather all views on how to do this, and through what means, so that we can develop the most effective approach. Noble Lords have emphasised their experiences of how restorative justice works and have cited research to back up those experiences.

We are anxious to ensure that innovative and effective restorative practices continue to be developed and are driven by local areas and tailored to local need. We certainly want to support initiatives by building capacity in the criminal justice system so that we can deliver the restorative process that this amendment champions. I believe, therefore, that we need to undertake the important consultation exercise that we have initiated today before we can give consideration to whether further specific legislation is necessary for restorative justice, taking into account all the options for how we intend to widen its application.

Noble Lords have made a very powerful case for the use of RJ. My honourable friend in the other place Crispin Blunt, my noble friend Lord McNally and I very much welcomed the meeting that took place earlier today, to which the noble and learned Lord has referred. I hope that it reassured him that we are making progress in this area to increase the use of restorative justice across the criminal justice system. We hope that he will contribute his enormous wisdom and experience to the consultation that we launched today. I assure noble Lords that everything that they have said will be fed into that consultation process and what emerges from it.

[Baroness Butler-Sloss]

I apologise for interrupting the noble Baroness but she has got to a point where I need to ask a question. Here is a vehicle of primary legislation into which something about restorative justice can be placed. If she and the Government wait for the results of the consultation, where on earth will they find the vehicle of primary legislation into which to slot restorative justice?

[Baroness Northover]

I think that I am being invited to comment on what might be in the Queen’s Speech, as was my noble friend. That is way above my pay grade.

[Baroness Butler-Sloss]

I merely wanted to say that here is a piece of legislation into which this measure can be placed. However, if it is not included in this legislation, there is a danger that it will not go in anywhere. In the absence of primary legislation, there is a danger that the Government will have difficulty in implementing the measure. That is the point I am making; I was not trying to get an idea of what is in the Queen’s Speech.

[Baroness Northover]

I understand what the noble and learned Baroness is saying. As we discussed in Committee and on Report, the use of restorative justice can already be taken forward under current legislation. The question is whether further legislation is required. The noble and learned Lord and other noble Lords have made the case that restorative justice is useful, as has the noble and learned Baroness. However, as I say, RJ can already be taken forward and is being developed. We hope—

[Lord Woolf]

Perhaps the noble Baroness will forgive me for also interrupting her, but I should like her assistance. Am I right in assuming that she intends restorative justice still to be supported by the courts? Does she agree that there is no express reference to restorative justice in legislation setting out the power of the courts to make use of it? Although there are references to similar matters, they do not clearly permit restorative justice.

[Baroness Northover]

I hear what the noble and learned Lord says, and he makes his case very cogently, as he and others have done at other stages. However, he, too, will recognise that the courts can use restorative justice and are doing so. That is happening. However, the Government take seriously the need to develop this area further, and noble Lords have made that case very clearly. The consultation has been brought forward. We expect that what has been said here will be fed into that consultation, and I hope that the noble and learned Lord will feed his own experience and expertise into that process. The important thing here is to make sure that the practice is taken forward and provision is expanded. That commitment I can certainly give him. Given the consultation and the process that is being carried forward, I hope that he will withdraw his amendment but continue with his commitment, which we very much support.

[Lord Woolf]

I thank the Minister for the way in which she presented her case. She has said everything possible to support deferring the inclusion of the reference to restorative justice, which I think is important because it makes it clear to judges up and down the land that restorative justice is part of the purposes of sentencing. That message can then be incorporated into the process.

I thank the noble Lord, Lord Hodgson, for his helpful remarks. He was obviously concerned about resources. In the present situation, everyone is concerned about resources. The amendment does not require the Government to put one penny into restorative justice. It does not deal with that subject, so he need not have that concern.

I know that there is every probability that, if we do not do it now, one day this will be done, but this is an excellent opportunity to do it. There is no reason why we should not. With respect to the comments of the noble Baroness, I did not identify any reason why we should not, other than the fact that consultation is to take place, but consultation can go on irrespective of whether or not we do this. We all support the consultation process. In those circumstances, albeit that the hour is late and that we have had a long day on the Bill, I propose to divide the House.

21:18

Division 9

Ayes: 69

---

Labour: 45
Crossbench: 18
Bishops: 3
Conservative: 1
Plaid Cymru: 1

Noes: 123

---

Conservative: 98
Liberal Democrat: 20
Ulster Unionist Party: 3
Crossbench: 1

21:29

Amendment 32

Moved by

[Baroness Linklater of Butterstone]

32: After Clause 68, insert the following new Clause—
“Guidance for Probation Trusts
The Lord Chancellor shall publish guidance for Probation Trusts concerning how Probation Trusts publicise to magistrates arrangements for magistrates to claim reimbursement for contact with Probation Trusts including reimbursement for the costs of visits undertaken in connection with community programmes.”

[Baroness Linklater of Butterstone]

My Lords, following our debate on Report, I return to an amendment which concerns a new clause that I propose to insert into the Bill. I feel that there is something very familiar about this exercise, as my hero, my noble and learned friend Lord Woolf, has just argued a very simple amendment with huge implications, which is what I feel I have been trying to do during debate on this matter.

I have been careful to follow the rules governing amendments at this stage of the Bill, and I am grateful for the Public Bill Office’s advice and help in drafting this amendment. It has meant focusing on one particular aspect which I did not fully explore earlier—namely, expenses—and seeking clarification on some of the Minister’s remarks.

In this redrafted amendment, I am requesting that the Lord Chancellor should publish guidance for probation trusts on how magistrates can claim reimbursement for the costs of visits to community projects and programmes. I wonder whether this could be done through Her Majesty’s Courts and Tribunals Service, as has, I understand, been under consideration lately. If there is to be no statutory liaison for the time being between the magistracy and the probation service, which is what I was seeking, it is still essential that the costs of visits should be reimbursed so that magistrates can see and believe for themselves what local community projects and programmes consist of. There is, quite simply, no better way, even if only one or two visits are made each year. Given that the role and work of magistrates in the courtroom is entirely voluntary, they really should be supported in informing themselves, through local visits, of what their sentencing options are. I cannot emphasise how important engaging with the participants is in understanding what is being delivered. We all want and need magistrates to make informed decisions if the goal of reducing reoffending is to be realised, so this sort of engagement is really important.

I should like to seek clarification from the Minister on some of the sympathetic remarks that she made on Report. She mentioned, without specifying them, meetings between probation trust boards and magistrates and pointed out that “they”—the magistrates—

“can, in fact, claim expenses from the probation trusts in attending these meetings. This is an area where the Government might assist by doing more to publicise the process if magistrates are unaware of it. We will certainly consider, as a practical approach, encouraging better liaison by publicising this”.

This comment caused an immediate debate the following day between magistrates and probation about the meetings she was referring to. They concluded that they are the meetings of probation trust boards which magistrates can attend and for which they can claim expenses. Guidance has been carefully laid down by the senior presiding judge Lord Justice Goldring on this: magistrates can attend but solely as advisers or observers—nothing to do with visiting projects or even talking about them.

The exception is when magistrates sit exclusively in the Family Proceedings Court and may become formal members, but only in a private capacity, not representing the judiciary. Furthermore, he advised that there should not be more than two members on a trust, which means a total of 70 magistrates throughout the land from the 35 trusts, which is hardly a significant number out of 29,000 magistrates. This is the only formal contract that results in any payment of expenses that they could think of. It is also quite a different process from any arrangements that magistrates might be able to make to visit programmes, which are custodial alternatives and my chief concern. If I have misunderstood, I should be grateful if my noble friend would clarify the point.

I would also mention that the National Sentencer and Probation Forum—another body—is a management forum consisting of three senior magistrates, two chiefs of probation, two judges and some civil servants. I believe that it discusses issues of performance, commissioning, et cetera, and meets quarterly. Until I had read the briefing for this debate, I did not know of this body’s existence. As a somewhat remote management group, does the Minister think that this is the appropriate body to carry forward magistrates’ engagement with their local provision of programmes, or deal with expenses?

When the Minister said that,

“it is important that magistrates see for themselves the work of probation trusts”,

it seemed that my argument had been heard in part. For that, I am truly grateful. However, she went further and said:

“We will look to see if there is more that we can do to ensure that best practice is brought to the attention of probation trusts”.

Will she also clarify that comment? I presume she meant that it is brought to the attention of magistrates, as it is the trusts which provide the programmes that magistrates may find suitable for disposal once they have seen them. Could she also say exactly what she means by “best practice”, which is at the heart of the matter if we are to improve understanding and prevent reoffending, which is seriously important? She said:

“We are also ready to work with the Magistrates’ Association and others to ensure that we have practical arrangements in hand to encourage magistrates to take part in meetings so that information can be exchanged”.

Will she clarify what sort of meetings they might be? That has the potential to be helpful. When she noted that,

“the amendment does not ensure that magistrates attend these meetings … it instead places a duty on probation trusts to provide information”.—[Official Report, 20/3/12; cols. 789-90.]

I am not clear about the nature of the meetings she has in mind. However, I am, of course, aware that probation trusts can only provide information and the option to visit, for magistrates to get information that way. They could not be expected to require magistrates to attend any meeting.

This discussion made me wonder inter alia what would happen if the existing training arrangements for Crown Court judges, called continuation courses, and which of course are compulsory, were voluntary and left to individual choice. What would happen then? Perhaps something similar in terms of dropping attendance? However, it is unimaginable that these courses should not be required for judges, and I believe that they should be for magistrates.

Given the positive assurances that my noble friend gave in her earlier responses, will she now confirm the timescales for what she suggested the Government have in mind? We all know that the road to hell is paved with good intentions—and I am quite sure that the Government have no intention of going down that road. It is important that we should all be given a clear indication of what to expect from the practical suggestions that she made.

I was grateful for the receptiveness of her responses on Report, and I hope that we will hear more, bearing in mind that not a single substantial argument against my case was raised in the House or outside it, except by the Government, who appeared to feel that my amendment was not necessary because of the obstacles that they discerned. The rest of us beg to differ—and I beg to move.

[Lord Ramsbotham]

My Lords, I support the intent of the amendment moved by the noble Baroness, Lady Linklater. I will admit to some subversion. When I was Chief Inspector of Prisons, the Magistrates’ Association one day brought me a large blue book containing the guidance issued by the Prison Service for visits paid to prisons by magistrates. The association asked me whether I would support it. I read it and advised the association to put it in the bin immediately, because it advised that when magistrates went to prisons, they should accept the programmes laid on by the governor that would show them all the things in the prison that they did not need to use or see.

I advised the magistrates instead that when they went to prisons, they should say: “I want you to do three things. First, show me what would happen if I was a prisoner arriving for the first time, so that I can see the reception arrangements. Secondly, I want to discuss the arrangements that might be made for sentence planning and conduct during the time I am in prison. Thirdly, I want to see what arrangements will be made as I come up to release from prison”. Within a month, I had the Magistrates’ Association back saying, “Thank you so much. That has given us a purpose when we go on a visit”. Then, when I went into prisons, I had a response from the staff who said how refreshing it was to have magistrates coming in who were interested in what they were doing with and for prisoners.

What I like about the amendment proposed by the noble Baroness, Lady Linklater, is that this process should be followed by magistrates showing an interest in what probation is trying to do in the community with and for prisoners. If there is that interactive relationship between the organisations involved, you will get a much more cost-effective and proactive organisation. Everyone will feel that they are working together rather than feeling that they are being shown something for the sake of being shown it because that is an exercise that they go through. Therefore, I entirely support the spirit of the amendment.

[Lord Beecham]

My Lords, the noble Baroness makes a persuasive case to encourage the Government to invest not money but a modest degree of guidance to assist the process of magistrates effectively learning more about sentencing options, about what happens when they institute different forms of punishment and about what happens, in particular, in relation to community sentencing. This is not a huge burden. When one thinks of some of the legislation that has passed through your Lordships’ House in recent months —a Localism Act that with its impact analysis weighed in at something over 8 pounds, as I recall, and contained 225 clauses, a health Bill that had 1,000 amendments en route to your Lordships’ House and all the rest of it—one cannot imagine that it would take very much effort on the part of those responsible to produce fairly simple guidelines on a very narrow topic, which is the subject of this amendment, that could facilitate greater awareness of what is available to magistrates in terms of sentencing options. It seems to me an overwhelmingly simple matter and one that the Government could graciously concede without any damage to the Bill. On the contrary, it would enhance the intentions of the Bill and the intentions of government policy, to which we have referred and which, no doubt, we will shortly hear again from the Minister. Along with the noble Baroness and the noble Lord, Lord Ramsbotham, I would be at a loss to understand what could possibly persuade the Government that this is not a simple and desirable course to follow. I hope that the Minister will not feel that she is constrained to remain rigid on the position that has hitherto been adopted, which produces nothing to assist magistrates or, indeed, anybody else.

[Baroness Northover]

My Lords, this amendment returns to the issue raised by my noble friend Lady Linklater throughout the passage of the Bill. As I said on Report, my noble friend Lady Linklater has considerable experience of bringing together magistrates and those working in probation and of building trust in alternatives to custodial sentences. That is the key area here. That is exceedingly important. We agree with my noble friend about the merits of what she is trying to achieve. However, we do not feel that there is need for legislation to reach that goal. It is interesting that the noble Lord, Lord Beecham, talks about guidance.

As I said on Report, we will look to promote best practice on liaison and information sharing and to make clear that there are already arrangements available for magistrates to claim expenses from probation trusts to encourage such close liaison. We have already begun that process. The national sentencer probation forum has agreed to look at this issue. That forum brings sentencers, including magistrates, together with probation trusts and Ministry of Justice officials to discuss national issues of common interests, including liaison arrangements. We want to gather from sentencers and probation trusts any issues of which they are aware in relation to local liaison arrangements, along with examples of good practice in information sharing. I am pleased to say that the forum has agreed to consider these issues at a forthcoming meeting. I hope that my noble friend is reassured by that. It may be that as a result of that examination of the issues, it emerges that there is indeed a need for guidance in the way that the noble Lord, Lord Beecham, indicated, or some other clarification of existing procedures. However, I stress again that there is no need for new primary legislation to enable that to happen.

21:45

I will now address the points on which my noble friend Lady Linklater sought clarification. I mentioned on Report that magistrates can claim expenses from Her Majesty’s Courts Service or probation trusts. The rules and guidance on expenses are quite complex. Given the lateness of the hour, I am very happy to write to my noble friend and spell those out in greater detail. In general terms, the Courts Service pays expenses for costs that arise from the formal duties of a magistrate; for example, attending justice issues group meetings or formal training courses. For other activities involving probation, it is open to the magistrates to claim expenses from local probation trusts. I should clarify that when I said before that it was appropriate to claim expenses from the probation trusts, this was indeed for such things as the informal local liaison meetings.

My noble friend raised the issue of best practice. On Report I emphasised that the Government wanted to encourage best practice in regard to local liaison and information-sharing in the way that she has outlined. This can come from probation or the magistrates, and we want to look at examples of effective local liaison, where there are regular, well attended local liaison meetings and where magistrates are aware of the work of probation in their area. That is what we want the national sentencer probation forum to consider.

My noble friend also asked for clarification of what I meant by meetings with magistrates. As I have said, there are two main elements. First, there are the local liaison meetings, where probation trusts and magistrates can come together and discuss issues of mutual concern in the local area; for example, the current availability of programmes run by probation or issues raised by magistrates, such as the availability or type of work being done as part of community payback schemes. We want to look at how these meetings operate now and promote the type of approaches where local liaison works best. Secondly, I also mean the familiarisation visits that magistrates may make to probation, such as visits to see community payback schemes in operation. Again, we want to learn from where this is happening well.

Therefore, I hope that I can reassure my noble friend that we are looking at best practice regarding liaison and information-sharing, and we have already started on that. We will consider any practical solutions necessary to address existing problems under the current legislation. With that clarification and reassurance that work is indeed under way, I hope that my noble friend will feel able to withdraw the amendment.

[Baroness Linklater of Butterstone]

My Lords, I thank those who have contributed to this short debate. I am grateful to the Minister for replying in the way that she has, which I acknowledge was an attempt to be helpful.

As I pointed out earlier, the reality is that there are 35 probation trusts. Lord Justice Goldring says that no more than two magistrates should attend, and then only as observers and advisers. The forum that she referred to meets quarterly to discuss major management issues, with three senior members of the magistracy, two judges and two senior probation officers present.

I have been addressing the issue that involves 27,000 magistrates visiting the important projects in the areas in which they work so that they can make more informed disposals and understand what is going on. This is also in the interests of good sentencing, good decisions and safer communities. We have not touched on this, but the magistrates do a great deal of work to help keep the standard of these projects very high so that the best possible practice can be realised. I was hoping to hear a bit more about that.

I was terribly interested in the “blue book” story from the noble Lord, Lord Ramsbotham. It is another example of what this is about; namely, that seeing is believing and engaging with people, rather than talking about an issue once a quarter or having the occasional visit from probation officers with some information. You cannot get the same insight. I do not think that anything can supplant the actual experience.

As my noble friend mentioned, we have two reviews coming up—one on the magistracy and another on probation. Perhaps the underpinning of the work we have done on this subject during the passage of this Bill will inform a much more focused debate than we have been able to have with my one small amendment. Given the lateness of the hour and in the hope that that is where we will get some positive results, I beg leave to withdraw the amendment.

Amendment 32 withdrawn.

Clause 77 : Alcohol abstinence and monitoring requirement

Amendment 33

Moved by

[Lord McNally]

33: Clause 77, page 58, line 45, at end insert—
“(9) In Schedule 9 to that Act (transfer of community orders to Scotland or Northern Ireland)—
(a) in paragraph 1(5), after “require” insert “an alcohol abstinence and monitoring requirement or”, and(b) in paragraph 3, after sub-paragraph (4) insert—“(4A) The court may not by virtue of sub-paragraph (1) or (3) require an alcohol abstinence and monitoring requirement to be complied with in Northern Ireland.” (10) In Schedule 13 to that Act (transfer of suspended sentence orders to Scotland or Northern Ireland—
(a) in paragraph 1(5), after “require” insert “an alcohol abstinence and monitoring requirement or”, and(b) in paragraph 6, after sub-paragraph (4) insert—“(4A) The court may not by virtue of sub-paragraph (1) or (3) require an alcohol abstinence and monitoring requirement to be complied with in Northern Ireland.”(11) In the Armed Forces Act 2006—
(a) in section 180 (transfer of service community order to Scotland or Northern Ireland), in subsection (2), after “3(1)” insert “and (4A)”, and(b) in section 204 (transfer of suspended sentence order to Scotland or Northern Ireland), in subsection (2), for “6(5)” substitute “6(4A) and (5)”.”

[Lord McNally]

My Lords, Amendments 33, 34, 35, 42 and 43 are minor and technical consequential amendments, which provide clarification of the provision of the alcohol, abstinence and monitoring requirement introduced by an amendment on Report. Our intention is that new requirements should be available to the courts in England and Wales but not to the courts in Scotland or Northern Ireland. The amendment therefore ensures that the new requirement will not be capable of being imposed by a court in England and Wales on a person who is resident in Scotland or Northern Ireland. I beg to move.

[Baroness Finlay of Llandaff]

My Lords, I welcome these amendments. I am grateful to the Government for addressing an area that I overlooked in the amendments that I had drafted. I also should like to place on record my gratitude to the noble Baroness, Lady Northover, who, with me, met the domestic violence groups, as we had promised in the previous proceedings. We had a very useful and fruitful meeting with open discussion. At the end, everyone agreed that it was very clear that there was never any intention that the pilots should involve domestic violence, particularly not at the beginning, because the issues around domestic violence are so complex. The organisations involved in domestic violence very much want to be consulted at every stage of further development and the programmes in place to help people cope in situations of domestic violence are very important in trying to provide a safer and more stable society.

Amendment 33 agreed.

Clause 78 : Piloting of alcohol abstinence and monitoring requirements

Amendments 34 and 35

Moved by

[Lord McNally]

34: Clause 78, page 59, line 24, after “(5)(a)” insert “—
(a) ”

35: Clause 78, page 59, line 25, at end insert “;
(b) may not enable a court to provide for an alcohol abstinence and monitoring requirement to be complied with in Scotland or Northern Ireland.”

Amendments 34 and 35 agreed.

Clause 145 : Offence of squatting in a residential building

Amendment 36

Moved by

[Baroness Miller of Chilthorne Domer]

36: Clause 145, page 132, line 7, at end insert “or if the building has been empty twelve months or more and is not subject to a current planning application”

[Baroness Miller of Chilthorne Domer]

My Lords, during the passage of this Bill we have learnt that there is no need for this clause because squatting in people’s homes is already criminal. We have learnt that there was a big need for guidance and we would not be where we are today unless there had been an abject failure of successive Governments to issue any guidance on the use of Section 7 of the Criminal Law Act 1977. If enforcement of those more reasonable measures in that Act had been properly understood, duplicating the legislation in this much harsher way would not have seemed necessary; nor is there a demand for it.

I thank my noble friend the Minister for our two meetings. She also wrote to me after the Report stage to say that the Government consultation was evidence of demand, so I looked again at the results of the consultation. In fact, out of the 2,217 people who responded, 96 per cent did not want to see any action taken to criminalise squatting, and even more surprisingly, only 10 people, 0.5 per cent of all the respondents, wrote in to say that they had been the victims of squatting. I do not feel that either need or demand has been demonstrated.

We have also learnt that this is going to cost a good deal. In a Bill that is all about cost cutting, even the Government’s own impact assessment suggests that the cost of this measure will be between £5 million and £10 million, which is a pretty wide estimate. However, those figures are probably optimistic. If the clause is enforced, it will cost the Ministry of Justice and the Home Office many tens of millions in enforcement, court time, rehabilitation, curfew monitoring and so on, and that is before we get to the costs of rehousing.

I am still against this clause in every way but, on the basis that the Government are determined to push it through, I must look at mitigating in any way I can the injustices being perpetrated against the homeless, and that is the purpose of the amendments I have tabled. My noble friend Lady Hamwee will go into greater detail on the definition of “residential”, which we feel is still inadequate. I will address my comments to the commencement of the clause. What will happen to those individuals who will be affected when the law is changed? I need to know about the practicalities of how individual homeless people who are currently squatting will get to know about the change in the law, or will they simply be criminalised overnight? Could there be a system of warning them and offering help to find alternatives? Are local authorities actually prepared to do that?

With nothing set out in the Bill, how will the Government ensure that appropriate help is offered? Evidence given to us by the charity Crisis, which has researched this issue, shows that when squatters who want to leave a squat present themselves to their local authority for help with housing, they are given a home-finder pack that at best contains a list of landlords, but since they have no money, the pack is of little help. They may be given a list of hostels, but some 2,000 hostel beds have been lost in the past year, so the hostels are likely to be full. Can my noble friend tell me what should happen then? There is nothing in the Bill to suggest even consultation with local authorities, let alone powers to make them act. Can squatters be deemed to be intentionally homeless, because then local authorities have no obligation at all to house them? They would automatically be denied help. Will the Government invite representatives of Crisis, a charity which does so much for the homeless, to work with officials on potential transitional measures? They might be able to offer some practical suggestions for measures that could be put in place to support homeless people who are squatting.

Finally, I should like to ask my noble friend about empty dwelling management orders. The number of empty homes is staggering, at over 720,000 across the UK. In London alone, there are some 74,500 empty homes. Some of them are owned by local authorities and housing associations, which is a bit of an irony since those bodies are meant to be in the business of housing people. However, by far the greatest number of empty homes are in private hands. If the Government think it is criminal to squat, they should also think it is criminal to leave properties empty, denying them to society year after year. What are the Government doing to ensure that the scandal of all those empty homes comes to an end?

I challenge the fact that this clause is still needed, but it is before us. These modest amendments try to make the position clearer and a little more just. I beg to move.

[Baroness Lister of Burtersett]

My Lords, I preface my remarks with the comment, “Better late than never”. I add my tributes to those made earlier to Lord Newton of Braintree. Back in the 1980s when I worked with the Child Poverty Action Group, I knew him to be a fair and open-minded Minister. On the day of my introduction to this House, he welcomed me from the Benches opposite in a very warm and generous way. Like so many other Members of your Lordships’ House, I thought of him as my noble friend. I thank the noble Baroness, Lady Miller of Chilthorne Domer, once again, for her perseverance in ensuring that we debate this important issue at not exactly a reasonable hour but at least a slightly less unreasonable hour than the last time. I am pleased to add my name in support of the amendment. As I made clear on Report, Clause 145 is wrong in principle. It is unfair because it treats what is a homelessness and welfare issue as a criminal justice issue, and it is unnecessary because residential home owners are already protected in law.

22:00

On reading the previous debates, it feels that the two sides are talking past each other. On Report, the Minister talked about the misery caused by people squatting in other people’s homes. The noble Baroness, Lady Miller, said that we are talking mainly not about homes—about which, of course, we all feel protective—but simply about empty properties. Amendments 36 and 37 try to deal with this by exempting properties empty for 12 months and not subject to a current planning application. Surely this is the least we can do to ensure that homeless people, the main group who will be criminalised by the clause, will be protected.

On Report, the Minister likened squatting to stealing a car, a handbag or a phone—but there are no wider social consequences if such consumer items are left abandoned for a year. In contrast, the Government acknowledge in their housing strategy that a large number of empty homes most certainly does have wider implications for the available supply of housing. They accept that we must increase the number of empty homes brought back into use as a sustainable way of increasing the overall supply of housing. You could say that squatters are doing it for themselves, rather than waiting for the Government to get round to it.

The Minister also said on Report that the definition of “residential” proposed by the noble Baroness, Lady Miller, would introduce confusion and complexity, but surely a more explicit definition in the Bill would clarify the matter and reduce the need to rely on the courts to interpret case law, as suggested in the Minister’s letter to the noble Baroness.

To the Minister’s credit, she did not pander to the kind of stereotype caricatures of squatters peddled in the right-wing media. She tacitly acknowledged that we are talking mainly about homeless people. I remind noble Lords of the figures supplied by Sheffield Hallam University for Crisis. These show that 41 per cent of homeless squatters report mental health needs; 34 per cent have been in care; 42 per cent have physical ill health or a disability; 47 per cent have experienced drug dependence; 21 per cent sometimes self-harm; and 15 per cent also have a learning disability.

The Minister pointed out that squatting is often dangerous and bad for health and ideally, she argued, people should be in mainstream services. I am sure that we all say amen to that. However, it is even more dangerous and worse for health to be out on the streets, and there is a growing number of people who are.

Mainstream services let single homeless people down. Crisis has stated:

“Shockingly 78% of homeless people who squat have approached their local authority for help and have been turned away without a resolution to their housing need. Single homeless people are usually not entitled to housing and although local authorities do have a duty to offer advice and assistance we know that too often this does not happen”.

I know the Government will be working with local authorities and that they have allocated additional funds. Can the Minister assure the House that these funds will be ring-fenced? At a time when local authorities have cut back on the support they provide, for example, for women fleeing domestic violence, have cut back disproportionately on the Supporting People fund, and face having to deal with the responsibilities from the delegated Social Fund—all at a time of big cuts in the finances available to them—I do not feel optimistic. That is why Amendment 41 is so important.

Another reason why it is very important that we have a tighter definition for this clause is because it might not be the end. In the summary of responses to the consultation, the Minister, Crispin Blunt, says in his foreword that this provision is “a first step”. The document says that:

“At this stage the Government will not seek to criminalise squatting in non-residential buildings”,

and that they will,

“continue to keep the law under review … to determine if any further action is needed”.

I find this very worrying. If we accept this clause unamended, we could be on a slippery slope to the criminalisation of all squatting in any kind of accommodation. At the very least, I hope the Minister can give an assurance that the Government will monitor the impact of this clause before they even start thinking about extending criminalisation to non-residential property.

We have been asked to adjudicate on very different perceptions of what is fair. It is too late to remove what I believe is a very unfair clause but it is not too late to mitigate its impact. We have a responsibility to do so.

[Lord Elystan-Morgan]

My Lords, I wholeheartedly agree with what has been said by all speakers on this matter. For any new criminal offence to be created, or for any existing criminal offence to be extended, there is a heavy onus on the Government of the day to show that that is reasonably necessary. It is against that template that Clause 145 fails completely. There is a great deal of misunderstanding about the matter, which may very well have been deliberately fomented by the right-wing press. It is said to people, “What would you do if you were on holiday and came back to find that there were 20 people living in your house and having every intention of living there for ever?”. Of course, you would say it would be absurd for such a situation not to be visited by a criminal sanction—but it is already visited by a criminal sanction.

The civil law has catered for this situation—whether it be developed property or not—for a long time, since the early 1970s. Those of us who belong to the noble calling of the law will realise that Order 24 and Order 113 apply and provide a procedure that is swift, effective and cheap, provided it is competently carried out. There is no problem whatever so far as the civil law is concerned.

In 1977, with the Criminal Law Act that the noble Baroness has referred to, it was realised that there were situations where owner-occupiers were in fact trespassed upon in their own homes, normally when they were away for a day or two or where people were expecting to move into property but found that they could no longer occupy it. Section 7 of that Act said very clearly that it did not apply to non-residential property. A clear distinction was drawn and deliberately considered in detail by Parliament. That seems to have been a boundary of common sense, fairness and justice.

Why is that boundary being transgressed now? What is the case in favour of changing that boundary? It is my submission that there is no case whatever for doing it. The civil law amply provides for civil sanctions. If those are not obeyed, then of course the courts can always act on the basis of contempt of court. The punishments are severe, as we know. The criminal law deals with those cases when it is right, proper and inevitable that there should be a strict criminal sanction. It does not apply to non-residential property because it was never thought necessary that it should do so. The Government of course have issued a consultation paper on this matter, to which a substantial number of people responded—96 per cent of whom said there is no need to change the law at all. This is not a case of softness towards people who defy the law but a case of looking in a mature, fair, just and proper way at a problem. The conclusion of so many people in an excellent position to judge is that there is no need whatever to do anything. A letter in the press signed by 163 distinguished petitioners, jurists and academics, supported that view. The Criminal Bar Association, the Law Society and the Metropolitan Police supported that view. In relation to the consultation, the Metropolitan Police said:

“The Metropolitan Police, responding on behalf of the Association of Chief Police Officers, considered that the law was broadly in the right place and that the existing array of offences allowed them to tackle the worst cases of squatting (e.g. where squatters cause the rightful homeowner to be displaced) … They warned that new offences could have an impact on policing in terms of community relations, local policing objectives and cost”.

On the question of cost—and I have no doubt that other noble Lords will deal in some detail with this matter—it is abundantly clear that the Government’s own estimate of a cost of some £25 million to the public purse over a period of five years is woefully inadequate and entirely unrealistic. They have not taken into account the fact that tens of thousands of persons squatting do not apply for housing allowance. These cases, if people are ejected from their squats, will find their way into the courts. There will be massive expenses adherent to that situation. Again, there is little doubt that the figure of £25 million— I would not seek to try to set a specific figure—can probably be multiplied by 10 or 20, leading to a massive non-saving in a Bill that is dedicated to saving expense to the public purse.

I ask the House to consider one further matter. This is retrospective legislation. Clause 145(1) applies to a situation when a person, the defendant, has trespassed in the premises, knowing that he is trespassing. He may have entered 10 years before, when there was no such thing as a criminal sanction in relation to that type of trespass. That is retrospective legislation and that is what Parliament abhors and resorts to only in the most drastic of circumstances. It is the very thing that is condemned, as the House knows, by Article 7 of the European Convention on Human Rights.

All in all, this is a wholly unnecessary piece of legislation. It is utterly merciless, utterly unfeeling and utterly costly, and it is likely to be a heavy and unnecessary burden on the time and energies of the police. The next best thing to rejecting it would be to accept the amendments, which I support wholeheartedly.

[Baroness Hamwee]

My Lords, I congratulate my noble friend on her persistence in dealing with this matter and provoking some very powerful speeches from your Lordships, as well as making her own.

The issue is homelessness and housing supply. Whatever is being done now by the current Government, the stark fact is that at this moment the housing needed is just not there and cannot be created in an instant. Ordinary, decent, desperate people, whose motive is not envy, or to deprive others, or to make a political statement, are simply seeking a roof. Many of them would be regarded as vulnerable, in any normal sense of the word. Like my noble friend, I am interested in and concerned about the interface between these provisions and local authorities’ housing responsibilities —in particular, whether a conviction is needed for someone who has been squatting to be unintentionally homeless. How does all that fit together, and what guidance will be given to local authorities on this?

22:15

My noble friend trailed, perhaps a bit too enthusiastically, my reference to the definition of housing. I will not go into a lot of detail; I make the simple point that those who know housing law far better than I do advise that the terms used in this Bill are not ones normally found in legislation. To all lawyers, that raises a question—I can see nods coming from the Cross Benches. One term in particular is,

“for use as a place to live”.

In ordinary, common-sense terms, one understands that but we are talking about quite precise terms in legislation. The amendment as drafted may not be the best way of dealing with this, but it was an attempt to address the point using current legislation. My noble friend also referred to empty dwelling management orders and, like her, I am concerned to know what the Government’s intentions may be on the future of those orders, which are much underused. However, it seems that the Government are not very enthusiastic about them; they are of course a matter for local authorities.

Because of the time, I do not want to rehearse all the arguments that others have made fully, some of which I alluded to last time. However, I would like to ask about guidance to be issued regarding the new offence. Section 7 of the 1977 Act is, as we know, in force and I do not think there is any guidance regarding that. It is wider than this clause, as I understand it, because it covers ancillary land, and that answers the point about the necessity for this clause. I will not go further into that now, but how are the police and the CPS to choose which route to go and which section to use? We have just heard about ACPO’s response and its views, and I understand that the Government always issue guidance about a new offence. The guidance this time would need to go further, because it needs to be retrospective.

Finally, there is the question of commencement. In her Amendment 41, my noble friend has proposed that the section should,

“not come into force until”,

there has been consultation with,

“representatives of local authorities and”—

using language to which we have become accustomed over the years—“such other persons as” are considered “appropriate”. The term consultation here really does mean consultation. It does not mean just a period of grace or formality, because the consultees proposed in Amendment 41 are those who know the position on the ground. They know about the availability of conventional housing. To come back to the point from which I started, this is about housing supply and homelessness.

[Lord Howarth of Newport]

My Lords, it is unfortunate that the amendments tabled on this important subject by the noble Baroness, Lady Miller of Chilthorne Domer, should have been reached so late at each successive phase of our consideration—in Committee, on Report and now at Third Reading. It is unfortunate because the House is less full than it might have been, and it is much more difficult at this stage of the evening to win a vote on an amendment opposed by the Government. If it is unfortunate for her, though, how much more unfortunate is it for homeless and vulnerable people all across the country? They will be deeply grateful to her for the passion, determination and eloquence with which she has pursued this subject, and we ought also to thank her.

We face a housing crisis in this country, and that crisis is deepening. I am grateful to the noble Baroness, Lady Northover, for the letter that she wrote to a number of us following a debate on Report on squatting. She herself has acknowledged that while the nature of the case means that it is difficult to know precisely how many people may be squatting in this country, the best estimate by academics, homelessness organisations and people who provide advice services to squatters is that there are no fewer than 10,000 people squatting and possibly as many as 50,000. Those are large numbers and those statistics, uncertain as they are, underline the gravity of the issue all the same.

What are the Government doing to respond to this problem? It so happens that today the Government have published the national planning policy framework. It is an important document with an extended two-page section in which the Government offer their thoughts on:

“Delivering a wide choice of high quality homes”—

words that may sound a little hollow to those who are homeless and those who are squatting. However, there are good intentions in the document. It is a vigorous exhortation to all concerned to act to increase the supply of housing in this country. There is a section at paragraph 51 that is very relevant to the amendments tabled by the noble Baroness:

“Local planning authorities should identify and bring back into residential use empty housing and buildings in line with local housing and empty homes strategies and, where appropriate, acquire properties under compulsory purchase powers”.

If local authorities were to act on that exhortation, that would be helpful. I would be grateful if the Minister would say how much more the Government intend to do to translate that aspiration and exhortation into an effective and practical reality. I am concerned that even where local planning and housing authorities will wish, as I am sure they will, to increase the supply of housing available for people in desperate need and to follow the particular advice that I have just quoted, it may not be easy for them because their resources have been much reduced and we are now just entering a phase in which local authorities are having to face the first and biggest part of a reduction of some 30 per cent in available resources. If they decide that they would like to use compulsory purchase powers, it is not clear to me how they are going to be able to afford to do so.

The Government’s broader economic strategy has, unfortunately, squeezed both growth and confidence, as the Chancellor was driven to recognise last week. The upshot is that the housing market is pretty well dead in the water. People do not have the confidence to apply for mortgages and bankers do not have the confidence to offer them, so house builders cannot find a market. While the private sector of housing development is stagnant, the Government have seen it as appropriate drastically to reduce funding for social housing construction. In the face of a rising population and rising demand, particularly at the lower end of the market, we are seeing reduced supply. The consequence is that rents are rising, and in the face of rising rents the Government have also judged it right to cut housing benefit severely.

The Government have also introduced their new policy for council tax benefit—a fixed budget for each local authority to limit the total that it can spend on the benefit. Our late friend and colleague, Lord Newton of Braintree, whom we all miss so much, spoke on that very topic in our debates on the Welfare Reform Bill. He asked what the position would be if there was a fixed budget for council tax benefit in a local authority area but a factory closure meant that it had to be spread across a larger number of people. He said that it was mad—that was the word that he used—and I think it is.

The noble Baroness, Lady Miller, is absolutely right to pull us up on this and to insist that, in the face of these circumstances and against the background of these other policies, now is not the time to criminalise people who may be driven by circumstances to fairly desperate actions, and to squatting in particular. It is not the time to criminalise them if they squat in a residential premise that has been unoccupied for 12 months and for which there is no planning application. She is also right to ask the Government, at the very least, to postpone implementation of this clause until they have conducted a thorough consultation with people across the country and on the ground who understand these issues. It is of course late. However, if the noble Baroness decides to test the opinion of the House, I will enthusiastically support her.

[Lord Avebury]

My Lords, I shall add only a few sentences to what the noble Lord, Lord Elystan-Morgan, said about the undesirability of creating new criminal offences unless there is a substantial reason to do so. Surely that argument is doubly important when the offence carries a term of imprisonment, in this case of up to 51 weeks. We all know—I thought that there was general agreement on this—that short sentences are harmful, leading to greater recidivism on the part of those so imprisoned.

If we are to create these new offences, there have to be extremely powerful arguments in their favour, whereas here the exact opposite is true. I will not rehearse all the reasons that have already been given by noble Lords as to why these provisions are unnecessary and harmful. However, keeping houses empty for more than a year is to be discouraged. People whose homes are occupied by squatters already have effective remedies. In the consultation, not only were 96 per cent of respondents against the clause, but that included the substantial opinions of such organisations as the Law Society, ACPO, the Criminal Bar Association, Liberty, Shelter and Crisis. There is also the fact that homelessness is increasing rapidly. For all these reasons, I hope that the Government will see reason and accept my noble friend’s amendment.

[Baroness Howe of Idlicote]

My Lords, I commend the noble Baroness, Lady Miller, on her persistence in pursuing this issue. Over time, she has opened our eyes to just what is involved.

The noble Baroness, Lady Hamwee, raised the question of homelessness and housing supply. One of the things that worries me a lot is the number of blocks of flats that are blocked up over huge areas and have been, I should have thought, for a good 12 months. They are areas of housing that could have been redeveloped much earlier if there had been any sense of urgency about getting on with that sort of building. We all know that there is a great deal of replacement of existing buildings in this country; it goes on the whole time. We know that we are in a financial crisis and that there are many people out of work who do not have the money to pay rent. I commend noble Lords to remember that just outside our own door, at the entrance to the Underground, one can find signs of people sleeping there at night. They sleep on the cold stone with their tiny bits of property literally outside the entrance to the Underground and cover themselves up with cardboard boxes as best they can. It is hardly a good advertisement for what we are doing to help those who are genuinely homeless.

I would like the noble Baroness who is responding to the amendment to concentrate on how many premises remain empty when they could be inhabited by families. That is no doubt a factor that increases rents. I will leave it at that. However, I have certainly begun to think rather more seriously about the issue than I did when the noble Baroness, Lady Miller, first raised it.

22:30

[The Lord Bishop of Ripon and Leeds]

My Lords, I, too, am very grateful to the noble Baroness, Lady Miller, for her determination to challenge what I still take to be the unintended consequences of Clause 145 regarding the further criminalisation of squatters, which is simply unnecessary. I do not want to repeat arguments that have already been made but this measure will have an impact on the care and support that the voluntary sector seeks to provide for the homeless in our cities. Like most cities, Leeds is seeing a steady rise in homelessness. The reasons for this are complex and the voluntary sector and the local authority are working hard to mitigate its effects, at least as regards providing mental health help for the homeless. However, we simply cannot provide accommodation for all street sleepers. Many homeless people are squatting in empty houses to avoid sleeping on the streets. This clause criminalises squatting, thereby affecting some of the most vulnerable people in our society. I hope that these amendments can be accepted to provide context and support for those people as the voluntary sector and local authorities seek to provide them with help and encouragement for the rest of their lives.

[Lord Campbell-Savours]

I wish to intervene briefly in this debate. I have come into the Chamber for the scrap metal debate but it seems to me that we may be overlooking a major flaw in the amendment. Clause 145 states:

“A person commits an offence if”,

and then lists various conditions. However, the amendment seeks to add to the statement in the Bill that,

“The offence is not committed by a person”,

the phrase,

“if the building has been empty twelve months or more and is not subject to a current planning application”.

So what happens if a building has been empty for marginally longer than 12 months and is being improved? Perhaps it is being improved to meet building regulations, or the person improving the property might be awaiting a mortgage payment to fund improvements, which might mean that they go over the 12-month period.

[Lord Elystan-Morgan]

I will be corrected if I am wrong but I believe that that matter is adequately dealt with by Section 7 of the Criminal Law Act 1977, which covers not only persons who are in occupation but persons who anticipate occupation. I think, therefore, that the category of persons listed by the noble Lord will be covered by that provision.

[Lord Campbell-Savours]

That is the noble Lord’s judgment, but perhaps I may finish my contribution. Perhaps the Government intend to comment on the interpretation that he has just given. They might also take into account my further point that a planned improvement which has not taken place over a 12-month period could be the subject of an argument with neighbours, who may well be preventing the completion of the improvement to the property. All I am saying, basically, is that to introduce a current planning application as a way of stopping it could lead to unfair treatment of those carrying out improvement programmes. Let us hear what the Minister has to say.

[Lord Strasburger]

My Lords, I should start by declaring an interest, or at least a former interest. In a previous life, I was a shareholder in and director of a company that made its money—in fact, quite a lot of money—from keeping squatters and others out of empty properties. You might conclude, when I have finished my short speech, that I am a bit of a gamekeeper turned poacher.

This clause was added late to the Bill, which might explain why it is a rather clumsy and blunt instrument. I am not sure who this new offence is aimed at. Is it aimed at squatters in vacant properties, who are not currently committing a criminal offence, or is it aimed at squatters in occupied properties that might be temporarily empty while the occupiers are on holiday, or even shopping? As we have heard, squatting such as that is already a criminal offence. I am not sure which situation this clause is intended to address. Perhaps the Minister will enlighten me.

This clause is a blunt instrument because its unintended consequence—and I sincerely hope that it is an unintended consequence—is to protect unscrupulous property owners who keep properties vacant for years for purely speculative reasons and, in the process, prevent homeless people having somewhere to live. The amendment deals with that by limiting the period of that protection. This clause is a cuckoo in the nest because such a provision has no place in the Bill and has no connection with any other part of it. Squatting should not be considered in isolation, as we have heard, but should be considered in the context of housing and homelessness.

[Lord Bach]

My Lords, the House will be delighted to hear that I intend to be brief. It owes a huge debt of thanks to the noble Baroness, Lady Miller, for having persistently come back with her amendments on this absurd clause, which, as the noble Lord who has just spoken said, does not fit in. “Cuckoo in the nest” is a polite way of putting it. The clause does not fit into the Bill at all and makes one wonder why on earth the Government ever included it.

If the noble Baroness were to test the opinion of the House, we, the official Opposition, would support her because she is clearly right. Everyone who has spoken on the substance of these amendments has said that the current clause is unsatisfactory, wrong and completely unnecessary. Why is it there? There is no need for it to be there in terms of criminal offence. We have heard from the noble Lord, Lord Elystan-Morgan, and others that legislation already exists that covers the point completely. The clause is there to placate the right-wing press and right-wing prejudice. That is something that the House should bear very much in mind when considering this issue.

The Law Society, the Bar Council, ACPO and the Metropolitan Police—all those groups who have had the courage to speak out, as has the noble Baroness against the clause—are not exactly groups associated with squatters. They are independent, able groups that have come to a view about a brand-new criminal offence that is planned. Unless we do something about it this evening, it will almost certainly become law comparatively shortly.

The irony of our proceedings is that if the noble Baroness were to test the opinion of the House this evening, it would very likely be her own side who made sure that she did not win.

[Baroness Northover]

My Lords, at Report, I explained the role of the new squatting offence in giving greater protection to owners and occupiers of residential property who encounter squatters living in their properties. Various noble Lords have asked whether that is needed. Interestingly, only yesterday I received a letter from the deputy leader of the London Borough of Redbridge. He states:

“In one recent case in Ilford, a house owned by someone who had died became a squat during the eighteen months it was taking for lawyers to resolve her estate. In a second case a homeowner was no longer able to manage their own affairs and had been taken into care. In neither case was there an ‘owner’ able … to address the problem”.

The noble Lord is quite right to say that there is protection for a level of squatting, but, as I explained at Report and put in a letter, so I will not go into it again, the provision covers a number of additional areas where it is difficult to deal with squatters.

I know that many noble Lords, especially my noble friend Lady Miller, are concerned about the impact that a new offence might have on vulnerable people who squat. I thank my noble friend for meeting me last week, and my noble friend and my noble friend Lady Hamwee for meeting my honourable friend Crispin Blunt, my noble friend Lord McNally and me earlier today. Then and at the earlier meeting, my noble friend Lady Miller expressed concern about the possibility of a rise in demand for local authority homelessness services when the new offence comes into force.

We have already given assurances on the Floor of the House that we will work closely with the Department for Communities and Local Government to liaise with local authorities and the enforcement agencies prior to commencement to ensure that they are aware of the new offence. That is extremely important. We take very seriously mitigating any problems and we share my noble friend’s concern about the welfare of vulnerable people. However, allowing squatting to continue, sometimes in dangerous and unhealthy premises, cannot be the answer. Instead, we intend to continue to work with other departments, local authorities and homelessness services to ensure that vulnerable people are given the help and support they need to find alternative forms of accommodation.

Of course, as the noble Baroness, Lady Lister, emphasised, a number of those in that situation are suffering from mental or other problems. We have an obligation to them, as vulnerable members of society, to be properly housed. In squats, they have no protection. That cannot be right. The Government have already demonstrated our commitment to preventing homelessness by maintaining investment, with £400 million available over the next four years. We recognise the issues that single homeless people, in particular, face, and we are prioritising improvements in the help that they receive. The ministerial working group on homelessness has for the first time pledged that no one should spend more than one night out on our streets, supported by the new £20 million homelessness transition fund. The working group will publish its second report on preventing homelessness more broadly later in the spring.

[Baroness Lister of Burtersett]

Will the Minister answer my question? Will the transition fund be ring-fenced?

[Baroness Northover]

Most of the money that goes to local authorities is not ring-fenced. The emphasis is on devolving to local authorities the responsibility for the people in the area. Given the lateness of the hour, I am very happy to write to the noble Baroness more specifically on that point if I have not got it right. I do not think that the money would be ring-fenced but, if I am wrong about that, I shall correct it in a minute or write to her. Nevertheless, that money has been identified to provide funding to address homelessness.

[Baroness Lister of Burtersett]

If this money is not ring-fenced, how can the Minister know that it will be spent on single homeless people?

22:45

[Baroness Northover]

There is an ongoing debate about what you ring-fence and what you leave as the responsibility of local authorities. If you give them a responsibility to house their vulnerable local residents—or non-residents—they have to fulfil that obligation. It seems that a bit of clarity of thought is needed here. It is not appropriate to place the responsibility for a squatter on the shoulders of an individual who happens to have an empty property. If that person is well off, he should be paying his taxes, those taxes should go to society and society should look after its vulnerable people. Squatting is not the answer; nor is placing such a responsibility on the shoulders of an individual in that way. That is why it is important that we address squatting but, when a problem such as this is picked up, it is also important that we address the transition issues that my noble friend rightly identified. It is important to see what the implications are and that is why we have placed the emphasis on tackling homelessness. As I said, we have announced the first ever £20 million—

[Lord Strasburger]

I thank the Minister for giving way. Did I hear her argue earlier that one motivation for this clause is to improve the health and safety of squatters?

[Baroness Northover]

Yes, I would say so. I do not think it is right that people should live unprotected. For example, the noble Baroness, Lady Finlay, flags up monitors for heating systems and the dangers involved there. How can anybody be protected or have tenants’ rights if they are squatting? I think we owe it to our citizens to make sure that they are housed properly and that they do not live without that kind of protection, as is the case with squatting. Perhaps I may continue.

On preparing local authorities for commencement, we plan to do a range of things, including working with the National Homelessness Advice Service to provide training for local authorities, raising awareness through regional seminars and websites, and working with Citizens Advice to ensure that home owners and squatters are informed of the changes.

One or two noble Lords asked about the consultation. The vast majority of responses—1,990 out of 2,216—were received via the website of the campaign group Squatters’ Action for Secure Homes. That is fair enough. However, the remainder came from landlords’ associations, local government associations, law firms and so on. We also received responses from individual property owners who had first-hand experience of squatters in their buildings. I have just mentioned the letter that I received yesterday from the deputy leader of Redbridge Council which referred to a couple of cases and the impact on the areas involved.

I was asked by my noble Friend, Lady Hamwee, whether squatters who vacate their squats will be considered intentionally homeless. That is obviously a very important point. Section 191 of the Housing Act 1996 provides that a person becomes homeless intentionally if it is a consequence of something that he or she has deliberately done or failed to do. The accommodation that he or she has left must have been available for their occupation and reasonable for them to continue to occupy. Therefore, it is unlikely that a squat being occupied illegally could be considered as accommodation that is available to be occupied. I hope that my noble Friend is reassured on that point.

I was also asked about whether we could commit to working with Crisis, and we certainly will. We will involve Crisis when we are liaising with the local government department and local authorities on the implementation of the offence. It is very important that that is taken forward. I was asked about the empty dwelling management orders. In January 2011 the Government announced that we would be making changes to those orders. These proposals will limit the authorisation of interim EDMOs to those properties that have been wholly empty for at least two years. They will require local housing authorities to give property owners a minimum notice period of three months before applying to a residential property tribunal for an interim EDMO. They also require the local housing authority to provide all the information that it has on the empty property that is causing a nuisance to the community, and that the community supports the proposal for the local housing authority to take control.

I was asked by my noble friend Lady Hamwee about guidance for the police and the CPS. We will liaise with ACPO prior to commencement on the provision of appropriate guidance, including how the new offence will interact with existing offences in Section 7 of the Criminal Law Act 1977. There were various other points but I shall move on to Amendment 36 and the point about occupying buildings that have been left empty for a year or so.

As I explained, this amendment is problematic for a number of reasons. I explained this on Report and in my letter. There are many reasons why a residential building might be left empty for a year or more, and I have just referred to the letter from Redbridge. Clearly, if a property is inherited following a death or probate is taking a while to sort out, those kinds of issues may mean that a property is empty. Reference was made by my noble friends Lady Miller and Lady Hamwee to the definition of a building. I note that my noble friend has proposed a definition that would sit alongside the current definition in the Bill. We are concerned that that would introduce unnecessary confusion and complexity. We talked about this at our meeting this morning. I am happy to expand on that if required but it is five minutes to 11, so unless noble Lords want to come back to that, I urge them to accept the simplicity of what is there at the moment, which is the right way to go.

I commend my noble friend for her concern for a very vulnerable group of people. As I have just said, it is important to look at this with some clarity in terms of the social responsibility to individuals and how society should ensure that the vulnerable are cared for and housed properly, and that squatting is not the answer. I understand why my noble friend has tabled the amendments and her concerns about unintended consequences of legislation. I hope that she is reassured that we have looked very carefully at the issues that she has raised and that we have sought to address them, in terms of assisting vulnerable people. I therefore hope that she will be willing to withdraw her amendment.

[Baroness Miller of Chilthorne Domer]

My Lords, I am tremendously grateful to all Members of the House who spoke in this debate—which finally had the airing that it deserved, even though it was late—and to all Members of the House who stayed to hear it. It was an incredibly important debate about whether we should choose to criminalise a section of society. Many extremely good points were made and I will not rehearse them all at this hour. One theme that ran through all the speeches was that of unintended consequences.

I entirely agree with my noble friend that it is society’s responsibility to look after the vulnerable—and, I would add, the homeless. That responsibility does not include criminalising them; that is where we part company. However, I see that Amendment 36 is problematic, and I accept the criticisms around the definition of “residential”. We were trying to offer something that was slightly better than what was in the Bill.

Noble Lords concentrated on the issue of what people will do. As my noble friend Lady Hamwee said, the housing is not there and cannot be created in an instant. Therefore, there will be a group of people who will face very difficult decisions about whether to stay in a squat and be criminalised, to sleep rough or to present themselves to their local authority. We keep coming back to the issue of local authorities and consultation. I think that the Minister accepted that consultation with local authorities was the key. The House would feel very reassured if that were put in the Bill.

While accepting that my other amendments are faulty, I will seek in due course to test the opinion of the House on Amendment 41. In the mean time, I beg leave to withdraw Amendment 36.

Amendment 36 withdrawn.

Amendment 37 not moved.

Clause 147 : Offence of buying scrap metal for cash etc

Amendment 38

Moved by

[Lord Faulkner of Worcester]

38: Clause 147, page 133, leave out lines 34 to 39

[Lord Faulkner of Worcester]

My Lords, Amendment 38 is in my name and that of my noble friend Lord Berkeley. The Minister will recall that in the debate on Report on the exemption of itinerant collectors, exactly one week ago almost to the minute, he said:

“It might be that we will have to come back to this at Third Reading”.—[Official Report, 20/3/12; col. 878.]

This amendment gives the Government the further opportunity to think again about the exemption.

I need not repeat how pleased I am that the Government accepted the principle of cashless transactions and agreed with me that the LASPO Bill offered the means to implement it. Having got that right, however, why are they running the risk of undermining their own policy by creating this huge potential loophole?

The Minister will be aware that the exemption caused a mixture of bafflement and dismay—not just in the House, where the only noble Lord to speak in its favour on Report last Tuesday was the Minister, but throughout the scrap metal industry. Operators are almost unanimously of the view that the Government’s proposal to mandate cashless payment for the purchase of scrap metal must apply to all dealers, with no exemptions. They pointed out to me—and I suspect to many other noble Lords—that this view is strongly endorsed by sectors that are especially hard hit by metal theft: transport, the energy industry, local government, the Church of England, the War Memorials Trust and law enforcement agencies.

I shall not go over the same ground that noble Lords covered in last Tuesday’s debate but will confine myself to one or two observations. First, the exemption is unfair and discriminatory. It grants special privileges to those members of the industry who are most responsible for the problems of metal theft. The itinerant collectors do not all sell on what they have collected to reputable scrap metal dealers; some of the material is shipped abroad in containers. Others will launder the scrap metal they take to registered dealers, and there will be no way of knowing where it came from or whether it was stolen.

Ian Hetherington, the director-general of the British Metals Recycling Association, wrote in the latest issue of the trade magazine, Materials Recycling Week, that,

“the bill sends out a message that itinerant operators can operate outside the law. It provides a loophole for other unscrupulous operators and serves to undermine a legitimate industry that has spent hundreds of millions of pounds complying with environmental legislation”.

I shall ask the Minister three questions. First, is he able to give us any news tonight on the Government’s plans for replacing the Scrap Metal Dealers Act 1964 and will we see a Bill to do that in the next Session? Secondly, how will the five-year review of the offence of buying scrap metal for cash, as contained in Clause 148, work? Thirdly, can he give an assurance that applications for itinerant trader status will be monitored and, if there is an upsurge in them in order to get around the cashless provisions, that the Government will do something about it? If we do not get satisfactory answers, the Government are in danger of losing much of the good will that their welcome policy on cashless transactions has created by granting an exemption that pleases almost nobody and perpetuates the no-questions-asked philosophy. I ask the Minister to think again. I beg to move.

23:00

[Lord Jenkin of Roding]

My Lords, I shall add a word or two to what the noble Lord, Lord Faulkner, said. When the Minister addressed the House last Tuesday, he made it clear, and I certainly accepted, that the exception is very much smaller than had originally been assumed by many of those who read the clause in the Government’s original amendment. It excepts a particular class of itinerant scrap dealer; namely, those who have been the subject of an order under Section 3 of the 1964 Act. I am sure that my noble friend is entirely right that that is a much smaller number of people than many had originally assumed.

I made such inquiries as I could to find out how many of these people there are and whether there is any recent trend in people seeking to include themselves in the loophole—as it certainly is—in the injunction for cashless transactions only. A good many authorities that were questioned were quite unable to supply the answer. That does not suggest that at the moment there are very many people who are subject to this. However—and this seems to me to be important—since it has come out that there is this one exemption from the requirement that dealings should be made otherwise than for cash, the numbers are increasing.

When the section that I referred to was originally enacted, it was with a view to exempting those who would be subject to an order under the Scrap Metal Dealers Act from the requirement to keep records of from whom they acquired the scrap metal and the nature of the metal. I remember that when I was first married, the children were fascinated because there was a man who went down the street with a horse and cart and used to shout out as he went down, which was imitated by the children. They thought he was saying, “Hey, Tubby the Tuba”. Of course, it was not that, but I do not know what he was saying. With that kind of dealer, one can understand the intention that he should not have to keep records. All he was doing was collecting people’s leaking kettles and other forms of waste metal from local householders. It is not like that now at all. It has developed in the 48 years since that Act was passed into an entirely different kind of trade. For instance, when the local authority in Birmingham was questioned, it said that in the course of a year it would normally see 10 or so new itinerant traders seeking inclusion in an order under the Act. In the past few days it has had no fewer than 12. They are already running into this loophole. They want to continue to be able to deal in cash. As the noble Lord, Lord Faulkner, has said, this is knocking a very large hole in the measures that we are taking to deal with what has become a very mighty scourge of the community in all sorts of ways.

The more widely this exemption is known, the greater the number of traders who will seek to bring themselves under it. That is what frightens me about this. The exemption does not allow them to go cashless; it is the exemption from other forms of control, leaving people able to continue to deal in cash for materials that will simply never be traceable. That has been defined as the heart of the problem. To their great credit, the Government have introduced a substantial measure, albeit short of the reform that I originally described some months ago as the amendment of the “Steptoe and Son” legislation of the last millennium. That will come, we have been promised that; but in the mean time, they are leaving themselves with a hole.

In addition to the points made by the noble Lord, Lord Faulkner, I have two questions. First, can the Minister explain why the Government are making this exemption? Of course, you could not have expected what I have called the “Hey, Tubby the Tuba” chap with his horse and cart to maintain records and pay by cheque—of course, long before there was any plastic money in the form of cards—and that may have been perfectly reasonable. All sorts of market traders now are able to take payments with the electronic equipment that is available. There is no problem with people like that being able to pay for their products and services and so on in that way. So why are we left with an exemption for people who no longer exist in the form in which they did when the Act was originally passed?

Secondly, how many of them will there be? What is the Government’s estimate of how many are going to, as it were, pour through this loophole in an effort to maintain what has been right at the heart of this burgeoning crime of the stealing of metal of all sorts? The consequences of that crime have been described over and over again, some of them extremely serious in terms of the damage to people, the inconvenience, the cost and so on. Why are we leaving this loophole and how many people are going to be subject to this exemption?

Like the noble Lord, Lord Faulkner, I have not found anybody who is concerned with this who has not been deeply disturbed by what is otherwise an entirely welcome piece of legislation, which we are very glad to see even at this fairly late stage in the passage of this Bill. Why is this loophole being left? It is going to be serious. It will increase and we will have to wait for months before we can get the new legislation in place that the Government have promised. I add my words of considerable dismay that we have this now. It may well be that there is something else that I have not understood about the exemption. If so, my noble friend on the Front Bench will no doubt tell us what it is. But at the moment there is not anybody concerned with the trade who for the life of them can see why.

[Lord Campbell-Savours]

My Lords, the Minister’s case last week was predicated almost exclusively on the basis that the group of people who were exempt was small in number. The noble Lord, Lord Jenkin of Roding, has driven a coach and horses through that argument on the basis of the research that he has done over the past few days. It is what we have repeatedly warned the Minister will happen; namely, that the trade will increase in the hands of the itinerants as against those who trade at the moment for cash in this area.

The questions that I asked last week remain unanswered. First, why do we have to wait for a five-year review? It is enshrined in legislation, is it not? Secondly, why can we not have a review, let us say, in six months? In the event that a review were to reveal that what the noble Lord, Lord Jenkin of Roding, has indicated tonight is true, what mechanism in legislation exists for repealing the provisions that have been driven through Parliament tonight, at nearly midnight, in what is, once again, a late night debate?

The question in my mind is simple: what could go wrong over the next few months? We know now that the itinerant trade will increase. We also know that it is distinctly probable that thieves who steal this material will sell it to itinerant traders who will find some way to break it up, to sell it abroad or to bring it into the market in a way whereby it cannot be traced. Under the new arrangements, it will be very difficult, as we move to greater itinerant control over the market, to track illegal material, which is the very reverse of the intention of the Government in introducing this legislation. It will also move more of the trade into the hands of traders who will not be making VAT returns. They almost exist in a shadow market of people who will always trade for cash and they will always find ways of trading for cash. Nor will they ever be accountable in any way to the Inland Revenue.

The noble Lord smiles in his seat as he dismisses this case, but I think that Ministers are totally out of touch with the real world out there of people who trade in cash and how they operate, and how they simply do not exist anywhere in official records. They are the people who increasingly will take over, as the noble Lord has just suggested, this trade.

We have also not considered the knock-on consequences on traders who trade currently on the margins of legitimacy and who at least could be more effectively regulated if the right regulatory framework was to be put in place at this stage when it is clearly not being put in place. Even at this late stage of this legislation, I believe that Ministers should reconsider the position.

The noble Lord is about to get up and he will tell us all that we have got it wrong; that we do not understand how the market works; that they will be able to regulate the trade; and that these people are already covered by existing legislation. Let me tell the noble Lord that we simply do not believe him. We believe that in a matter of months, or certainly within a few years, it will become quite obvious that this legislation is failing in its intent and it will no doubt be revealed in the tabloids. Stories will surface saying that despite the legislation that was introduced, the trade is still going on. The problem is that an accelerated approach has been taken to the legislating in this area without taking into account the need to accompany this legislation with other legislation, as well as reform of other legislation, as referred to by my noble friend in his earlier contribution.

23:14

[The Minister of State, Home Office (Lord Henley)]

My Lords, it might be useful if I intervene now because there are a number of misconceptions about what is going on. Perhaps I may say that I rather regret the words of the noble Lord, Lord Campbell-Savours, for whom I have the utmost respect, because he implies that whatever I say, I am out of touch and do not know what is going on. He seems to suggest that what I say will be untrue. That is not the case. What I would ask of your Lordships is that—dare I say it?—they should listen to me very carefully because I think I can allay the fears and answer the questions that have quite rightly been put by the noble Lord, Lord Faulkner, and my noble friend Lord Jenkin about the problems we are facing and where we are on this issue.

I start by paying tribute to the noble Lord, Lord Faulkner, who was the first person to suggest that we should go down the cashless route. That is what we are doing, and he was the first to spot that there was a chance to do so in this legislation. It is why we are doing that and a few more things in this Bill, but the other things will have to wait until suitable legislation comes through. There is no five-year review, as the noble Lord, Lord Campbell-Savours, puts it. We have said that we will come to the other bits as and when we can, at which point we will resolve those matters. Again, at this stage I would ask noble Lords to listen to me very carefully as I explain what we are going to do.

Your Lordships will be aware that we tabled amendments on Report proposing three legislative measures to tackle metal theft: greater fines for offences under the Scrap Metal Dealers Act 1964; creating an offence of buying scrap metal for cash, and a revision of police entry powers to help enforce the new offence because it is important to make sure that we get the enforcement right. A similar amendment to the one we are dealing with tonight was tabled by the noble Lord, Lord Faulkner, but his revised amendment seeks to remove the existing exemption that allows certain itinerant collectors to be exempted from the cashless offence. I am going to deal with that in due course.

I should make it clear that anyone who trades in metal, whether they are a large multinational, the local scrap metal dealer or a door-to-door collector, which includes the itinerants, must register with their local authority under Section 1 of the Scrap Metal Dealers Act 1964. It might be that they do not register, in which case there are sanctions, but it is also why we are increasing the sanctions under an Act which I have said before is past its sell-by date. Failure to register is a criminal offence that under Clause 146 of this Bill will now be punishable by an unlimited fine. Anyone, be they an itinerant or a large multinational, who does not register can be punished with an unlimited fine. As part of its focus, the national metal theft task force, which we announced late last year, will ensure compliance with the registration requirement. I shall say a little more about enforcement later.

The police are currently able to enter and inspect any commercial premises that belong to a registered scrap metal dealer, including those used by itinerant collectors. Our amendment will ensure that they can also enter and search unregistered premises with a warrant if they have reasonable grounds to suspect that metal is being traded for cash, and being unregistered may well be relevant evidence in that regard, although obviously that is for magistrates to decide when they issue a warrant.

I do not suppose any of your Lordships who are in the Chamber did so, but when we debated the 1964 Act almost 50 years ago, Parliament chose not to overburden small businesses by including an exemption for door-to-door collectors from some bookkeeping. That is why the exemption was brought forward in that Act. As a result, in addition to the mandatory registration I have already mentioned, businesses can apply to their local authority for an order under Section 3(1) of the 1964 Act, to which my noble friend Lord Jenkin referred. That order would be granted by the local authority, but only in consultation with the chief officer of police for the police force area. Let me be clear: there is no blanket exemption for anyone who simply claims to be an itinerant collector. They have to be registered under Section 1 of the 1964 Act and they then have to get the exemption under Section 3(1) of the same Act, which has to be agreed by the local authority in agreement with the police.

The amendment that we have put forward follows the structure of the existing Act and the exemption is for a defined and locally known group of collectors to operate. So, if an itinerant was operating in a large number of different areas, he would need a Section 3(1) exemption from each local authority area in which he was operating. It is not a question of having one exemption and then being able to use that throughout the country. If he does not have that, he will be in breach of the law and could suffer the consequences.

It should also be noted that itinerant collectors who have obtained a Section 3(1) order are reliant, obviously, on selling their collected metal into the scrap metal industry. I appreciate that there are allegations that a lot of this metal goes into containers and is shipped abroad. We have no evidence of that—it does not appear to be happening—but if in the future we do see signs of metal going straight into containers and being shipped abroad, it will be easier to deal with because there are a limited number of container ports in the country compared to the vast number of scrap metal yards into which the metal is going at the moment.

On enforcement as we are seeing it on a day-to-day basis, the British Transport Police, as part of Operation Tornado—which is an operation into scrap metal theft in the north-east of England at the moment but which will be expanded in due course—encounter these collectors on a daily basis. On many occasions, the police find that they are unregistered and that they do not have a waste carrier’s licence, which they need if they wish to transport waste. As a result, they have had their scrap and, if it is not insured to carry waste or has not been registered to carry waste with the environment agencies, their vehicle confiscated. So there are enforcement procedures in place.

Registered collectors who have a reduced record-keeping requirement under Section 3(1) will, as I have said, still have to trade into the scrap metal industry. When they do so, they will not receive cash—they cannot receive cash—and that is what our amendment does.

So, to make it clear, Section 3(1) reduces the record-keeping requirements for those who only collect metal, but this is in addition to them also being registered under Section 1. It is not about signing up for one or the other, as some people imply, nor is it a matter of choice for the individual itinerant collector just to announce that he is now an itinerant collector. If he wants to be an itinerant collector he must be registered under Section 1 and under Section 3(1).

If the noble Lord’s amendment was to be successful and itinerant collectors with a Section 3(1) order are included, the offence of trading in cash would be more difficult to enforce for those individuals because of the nature of the work they do in travelling from street to street in the manner described by my noble friend.

To evidence compliance with the new cashless offence, we have strengthened the record-keeping requirements under Section 2 of the Scrap Metal Dealers Act which apply to the vast majority of the industry registered under the Act. We require that records are kept of who the payments are made to and the method of payment, and that receipts are copied and retained. The few collectors with a Section 3(1) order will not be required to keep those records. I cannot give a precise figure on the number of Section 3(1) itinerant dealers—that would mean going to every local authority in the country—but, of necessity, that figure will be relatively few. As I have made clear, they will have to be agreed to by the local authority with the agreement of the local chief of police.

To reassure the House further—

[Lord Campbell-Savours]

Will the noble Lord give way?

[Lord Henley]

No, I am not giving way to the noble Lord. It is entirely a matter for me to decide whether I give way to him.

To reassure the House further on this point, the Home Office is willing to work with the Local Government Association, with local authorities and with the police through ACPO, to help them provide advice to their members about the levels of assurance required in terms of identity, residence and any relevant criminal convictions before Section 3(1) orders are issued. That will ensure that they are operated in as tight a manner as possible.

I want to make clear—as I hope I did at Report—that banning cash from the scrap-metal industry is a vital first step to tackle metal theft and remove the drivers behind it. I think that the noble Lord, Lord Faulkner, is with me on that. However, it is part of a wider package of work to tackle metal theft, including better enforcement and seeking design solutions to make metal harder to steal and increase the possibility of it being traced.

I will say a little again about enforcement. As I have said, we have strengthened that with the dedicated metal theft task force. We have already seen very significant progress, not least in the north-east, where there is quite a large amount of metal theft. Since the launch of Operation Tornado at the start of the year in the three northern police forces—Northumbria, Cleveland and Durham—we have seen a 50 per cent decline in the amount of metal theft in that area. That is driven by the voluntary adoption by the scrap-metal industry—or at least a considerable part of it—of greater identification checks when purchasing metal. We did not get the agreement of all of them but we are getting a considerable amount; and with this legislation we will get considerably more. I am also pleased to let the House know that the Association of Chief Police Officers is rolling out Operation Tornado nationwide over the coming months. As I have said, that operation has seen a 50 per cent decline in theft.

This is not the loophole that some noble Lords believe it is. We are not proposing a blanket exemption, but are allowing a very small number of specifically registered itinerant collectors to continue to operate as they currently do. I close by letting—

[Lord Campbell-Savours]

The noble Lord talks about the “very small number” of itinerant collectors, which was at the heart of the speech by the noble Lord, Lord Jenkin of Roding. If there are so few in each local authority, why could a departmental official not have contacted each local authority and asked them whether it is two, three or half a dozen? That would not have taken huge resources at the department, particularly when it was at the very heart of the defence of the legislation being used by the Minister at the Dispatch Box, both last week and this week.

[Lord Henley]

The noble Lord will have seen many questions over the years coming back to him with the reply that they cannot be answered without disproportionate cost. I will look very carefully at what he has had to say but, looking at the regulations involved in those itinerants first registering under Section 1 and then getting the exemption under Section 3(1), it was not thought necessary to write to all 400 and whatever local authorities. I will have a look at whether it is possible but I do not think it is necessary. I want to—

[Lord Campbell-Savours]

My Lords—

[Lord Henley]

Perhaps the noble Lord could just calm down a bit. It is late at night and we are trying to answer this problem in an appropriate manner.

I want to end by reiterating that we are committed to reviewing the Scrap Metal Dealers Act as soon as parliamentary time allows. That is why I dismissed the idea that it could not be done in less than five years. When we do so, we will be looking very hard at the role and regulation of scrap-metal dealers and itinerant collectors. I want to repeat the point that all noble Lords ought to grasp. It is not true that itinerant collectors can come by their own whim—they must go through a local authority inspection process and one that requires the approval of the local police. That is the important matter.

I hope that the noble Lord, Lord Faulkner, will accept that the clarification I have given has dealt with the various questions he put to me and that he will be content to withdraw his amendment.

[Lord Jenkin of Roding]

One of the questions that I asked my noble friend was why it was felt necessary to make this exemption. There is nothing new in what my noble friend said tonight that went beyond what he said last week and what my own researches have shown. Why is there still this exemption for the kind of chap whom I described in my speech of 40 years ago? The 1964 Act was passed a few months before I became a Member of the other place, which is rather a long time ago. Why is it necessary to have this exemption now? My noble friend has not fully satisfied me on that.

23:30

[Lord Henley]

I did deal with that—I said that the exemption goes back to that Act and there is proper regulation of those itinerant traders. It is one that we can look at in future, but we do not think that it is right to increase the burden on them, particularly as there is not the opportunity that my noble friend implied for a mad rush of traders to become itinerant traders, because there is a process by which they are regulated by local authorities and the police. I do not believe that there is the problem that he sees, but it is one that we can look at in future.

I felt that I had answered the question and made it clear that, if the amendment went through and those people were removed, it would create problems in dealing with them—as I said to the noble Lord, Lord Faulkner.

[Lord Faulkner of Worcester]

I am not going to apologise for bringing the subject back at Third Reading, because we have learnt a great deal this evening from the Minister in his very interesting speech.

I thank the noble Lord, Lord Jenkin of Roding, and my noble friend Lord Campbell-Savours for their quite excellent contributions. The noble Lord, Lord Jenkin, has taken the trouble to look at the issue in some detail and has come forward with a series of questions, some of which he has had answers to —although, with one or two of them, he may feel that the answer was a little bit opaque. My noble friend was a bit feistier than the noble Lord, Lord Jenkin, but he too made some powerful points. Again, I was interested to hear what the noble Lord, Lord Henley, said in reply.

One benefit of having this debate this evening is that the officials in the Home Office will be aware that there is great interest in this House about the legislation as a whole and particularly about whether the exemption is going to work. If the noble Lord, Lord Jenkin, is right and there is a large increase in the number of applicants for exemptions, it will be evident that the loophole has become unacceptable and will do great damage to the much wider and laudable aim that the Government have of eliminating cash from the sale of scrap metal. I hope that we at least see that the Home Office reviews this carefully, and I assure the Minister that we will come back to this on future occasions to ask questions on how it has gone.

I am a little unclear about the five-year review to which my noble friend Lord Campbell-Savours referred, which is in Clause 148. It might be more satisfactory if the review took place more quickly than that. However, I express my appreciation to the Minister for the thoughtful way in which he responded to the debate. I am not satisfied on all the points that he has made, but it is not my intention at this time of night to have a vote—although I must apologise to my noble friend Lord Campbell-Savours, who would like to have a vote. The message from the debate to the Minister is that we want to watch how this legislation develops and, if it goes wrong, I hope that remedies will be offered to us very quickly. I beg leave to withdraw the amendment.

Amendment 38 withdrawn.

Clause 152 : Commencement

Amendment 39

Moved by

[Lord Bach]

39: Clause 152, page 137, line 15, leave out “(2) and (3)” and insert “, (1A), (2) and (3).
(1A) An order under this section bringing into force sections 46 and 48 may not be made until the Lord Chancellor has laid before both Houses of Parliament a statement outlining the proposed arrangements for insolvency proceedings in the light of the changes made by Part 2”

[Lord Bach]

My Lords, I will be as brief as I can with this amendment. This is the third time that the issue has come before the House. The names put to the amendment on the first occasion were those of the noble and learned Lord, Lord Mackay of Clashfern—who made a very powerful speech—the noble Lord, Lord Thomas of Gresford, and mine. On Report it was just my name and that of the noble Lord, Lord Thomas of Gresford, and he made a very powerful speech. Now it is down to one, and I intend simply to ask the Minister some questions.

The Minister will recall that, on Report, he stated that the Government accepted that “insolvency proceedings are untypical” and—stand apart as they are—that they are,

“one of the few areas where CFAs sometimes work to the advantage of government departments”,

and creditors generally. Despite that, and despite what I would argue are clear arguments in favour of it, the Government have decided against “a carve-out” for insolvency. The Minister announced that there has been,

“agreement across government, in respect of insolvency proceedings”,

and,

“that new ways will be implemented to deal with these cases without recoverable success fees and insurance premiums”.—[Official Report, 14/3/12; col. 358.]

The insolvency profession has apparently not been involved in any discussions with the Government about this new way of approaching insolvency proceedings and is concerned that the Ministry of Justice and HMRC may have decided that a contingency legal aid fund could be set up for insolvency cases.

My questions to the Minister are as follows. First, what are the Government planning with regard to insolvency proceedings and—to ask the same question as the noble Lord, Lord Thomas, asked on Report—when will this be implemented? Is it indeed a contingency legal aid fund, or is it not? Secondly, if the Government are not going to exempt insolvency proceedings, will they agree to carry out a proper impact assessment to determine the impact that this will have on the taxpayer and business community? Thirdly, have the Government consulted the insolvency profession on how this might work in practice? Fourthly, will this measure help safeguard returns not just for HMRC but for private businesses as well? Fifthly, will this measure act as a fraud deterrent, as the current system does? Sixthly, if this new way does not work, what protections will the Government put in place to safeguard returns to HMRC and businesses? Could there be an exemption, for example, further down the line? Lastly, can the Minister assure the House that the Government will consult the insolvency profession on the details of these proposals? Those are the questions that I would like answered. I beg to move.

[Lord McNally]

My Lords, as I indicated on Report, we have reached agreement across government in respect of insolvency proceedings. In future these cases will need to proceed without recoverable success fees and insurance premiums. Alternative ways will be developed in time to deal with these important cases. We are working on a programme for implementing Part 2 of the Bill, and the details relating to insolvency proceedings will be set out in due course, before implementation. Insolvency cases will need to proceed without recoverable success fees and insurance premiums in the future. The impact of the Government’s CFA changes on those affected will depend on a number of unknown factors, including the volume of cases pursued in future, the number of cases which win, the levels of success fees and ATE insurance premiums negotiated, and the recoveries made in those cases. The Government will work with HMRC and others to further assess the impact of our changes. Policy discussions within government continue all the time, and remain confidential until the policy is agreed and announced. I urge the noble Lord to withdraw his amendment.

[Lord Bach]

Of course I am going to withdraw my amendment this evening, and I understand that the Minister could not answer all the detailed questions that I put to him just a few minutes ago. I would be grateful if he would be good enough to get his officials to write to me, through him, with the replies that he was not able to give tonight.

[Lord McNally]

To clarify, my Lords, we will engage as well with insolvency practitioners.

[Lord Bach]

I am glad to hear what the Minister has said. I hope that he can write with a fuller answer. I beg leave to withdraw the amendment.

Amendment 39 withdrawn.

Amendment 40 not moved.

Amendment 41

Moved by

[Baroness Miller of Chilthorne Domer]

41: Clause 152, page 137, line 22, at end insert—
“(3A) Section 145 shall not come into force until the Lord Chancellor or the Secretary of State has consulted representatives of local authorities and such other persons as he considers appropriate.”

[Baroness Miller of Chilthorne Domer]

My Lords, I move this amendment because of the reasons expressed from all sides of the House, and because it is my hope that the House of Commons might debate this properly as it did not have a chance to do so in Committee.

23:40

Division 10

Ayes: 26

---

Labour: 15
Liberal Democrat: 5
Crossbench: 2
Independent: 2
Bishops: 1
Plaid Cymru: 1

Noes: 107

---

Conservative: 77
Liberal Democrat: 27
Ulster Unionist Party: 2

23:51

Clause 153 : Extent

Amendments 42 and 43

Moved by

[Lord McNally]

42: Clause 153, page 137, line 38, at end insert—
“(3A) Section 78 extends to England and Wales, Scotland and Northern Ireland, subject to subsection (10).”

43: Clause 153, page 138, line 24, after “sections” insert “78,”

Amendments 42 and 43 agreed.

Bill passed and returned to the Commons with amendments.

Water Industry (Financial Assistance) Bill

Tuesday 27th March 2012 Lords Chamber

Second Reading and Remaining Stages

23:51

Moved By

[Lord Taylor of Holbeach]

That the Bill be read a second time.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)]

My Lords, in December, the water White Paper, Water for Life, set out the many challenges facing the water sector: how much water we have available now and in the future; the impact on our natural environment from water and sewerage management; and the issue that this Bill is designed to address, which is keeping bills affordable.

We have seen in the south-west the long-term impact that investment in sewerage has had on customers’ bills. Ofwat’s price control regime balances the need for such investment with the impact on customers’ bills. However, we should remain alive to the arguments for different approaches when circumstances require, whether to address the exceptional consequences of past decisions, as with the south-west, or a case such as the Thames tunnel, where the sheer scale of such a project dwarfs the ongoing business of a water and sewerage company.

The Water Industry (Financial Assistance) Bill contains two simple spending powers, which will enable the Government to implement two policies that the Chancellor set out in the Autumn Statement, both of which are designed to reduce the costs of infrastructure investment falling on water and sewerage customers. The Bill will allow us to fund South West Water to keep its household customers’ bills down now and to provide contingent financial support for the proposed Thames tunnel in London.

Clause 1 is a general power to enable the Government to give assistance to water companies for the purpose of reducing charges payable by customers. The only purpose for which we currently plan to use the power is to reduce the bills of South West Water’s household customers by £50 a year until the end of the next spending review. We believe that the circumstances that they face are exceptional. For years they have faced the highest water bills in the country as they have paid the costs of the £2 billion invested in infrastructure post-privatisation. The benefits of this investment include improved water quality, reduced leakage, cleaner beaches and better bathing water, but the costs have been borne solely by South West Water customers and their bills have risen as a result. We believe that the Government should help to correct the historical inequity. We do not want another such inequity to arise.

London’s sewerage system is operating close to capacity —and the situation will only get worse with population growth, urbanisation and climate change. Even after construction of the Lee tunnel and improvements to sewage treatment works, around 20 million tonnes of untreated wastewater will still be discharged in a typical year from combined sewer overflows into the Thames. This is unacceptable on environmental and health grounds, and it needs addressing.

The proposed Thames tunnel offers the most timely, comprehensive and cost-effective solution for dealing with sewage discharges into the River Thames in London. Alternatives have been considered, including by the Thames Tunnel Commission, which is chaired by my noble friend Lord Selborne. However, none of the alternatives identified during the extensive studies carried out over the past decade has been found to swiftly and adequately address the environmental and health objectives for the Thames tideway while at the same time complying with our statutory obligations.

This includes alternatives such as a western tunnel combined with sustainable drainage systems. Implementing sustainable drainage on the scale required to address the combined sewer overflows east of a western tunnel would be hugely disruptive, expensive and unlikely to meet the environmental objectives. The existing sewerage system into which a western tunnel would discharge has limited spare capacity, so the western tunnel would spill more often and lead to significant odour problems, due to the amount of time sewage would be stuck in the tunnel. In-river treatment would not prevent untreated sewage from spilling into the Thames. I do not believe that the public want raw sewage to continue to spill into the Thames. Thames Water’s public consultations and complaints to the Environment Agency confirm this. However, we recognise that this is an expensive project.

Clause 2 will allow the Government to provide financial support for exceptionally large or complex works on water or sewerage infrastructure, such as the Thames tunnel. We are willing in principle to provide contingent financial support for exceptional project risks where this offers best value for money for Thames Water customers and taxpayers. However, as a Government, we will want to be assured that, when offering this contingent support, taxpayers’ interests remain a top priority. We are therefore working with Ofwat, Infrastructure UK and Thames Water to make sure that the financial structure for the proposed tunnel includes safeguards to minimise the likelihood of government support being called on. We believe that simply having the power available will help us to maximise private sector investment in the tunnel and keep the cost of its financing down.

I am aware that concerns were raised in another place about the breadth of powers in the Bill, and desire was expressed for greater parliamentary scrutiny ahead of government spending. The powers in this Bill are by no means unusual in their flexibility for future circumstance, nor do they remove the need or opportunity for proper parliamentary scrutiny of government spending plans in the usual way. Tough decisions always need to be made about the use of government money. I am sure that any future financial assistance under these powers would inevitably be the subject of much debate internally in the Government, in Parliament and with the public.

In the case of the south-west, there were years of campaigning and then the independent Walker review, which identified this as a set of exceptional circumstances. Financial assistance would never be given to water companies on a whim. However, exceptional circumstances do and will arise, as we have seen with South West Water and the Thames tunnel. As I said, we will need investment in infrastructure to keep our water supply resilient. We do not know what the future holds and we want future Secretaries of State to be able to use the power where genuinely necessary.

I reassure noble Lords that any public financial support for the Thames tunnel or similar projects will be tightly controlled. In fact, both clauses allow full terms and conditions to be attached to financial assistance. A £50 reduction to South West Water’s charges will be governed by a funding agreement to ensure that it is transparent on customers’ bills and that South West Water will not benefit from administering the payment.

Some noble Lords may be disappointed that we have only today—tonight—to scrutinise the Bill, although it is a small and, dare I say, perfectly formed Bill. The scope of the Bill is limited to financial assistance and, consequently, it has been certified as a money Bill. However, the department’s plans for a wider water Bill are well known and we aim to publish that bigger, more substantial draft Bill for Parliament to get its teeth into in the coming months. That Bill will contain the other legislative reforms promised in the water White Paper. I beg to move.

12:01

[Lord Grantchester]

My Lords, the business before your Lordships’ House tonight was flagged up as a Bill only last month, at the beginning of February. It is indicative of a poorly balanced legislative programme whereby the other place has completed its deliberations and is therefore largely inactive while your Lordships' House is kept busy night after night. Having this Bill designated a money Bill partially cures that imbalance. However, it is deeply unsatisfactory, and conducting a one-stage passage late at night in your Lordships’ House underlines the fact. It is regrettable that several noble Lords are unable to participate because of that.

This short, two-clause Bill belies the years of deliberation, reports, campaigns and research that have gone into the two areas that the Bill covers: South West Water and Thames tideway. Calling it a money Bill deprives your Lordships’ House the opportunity to scrutinise much of the background work and reduces parliamentary governance to a unicameral dimension. Avoiding the Bill being hybrid has resulted in it being unnecessarily wide ranging in its scope and the powers it grants to the Secretary of State. Set against the water White Paper, the national policy statement on waste water and the infrastructure planning changes, that is deeply unsatisfactory.

The Minister outlined the Bill and its purpose, although it cannot be stated in the Bill. But this is the wrong Bill. Your Lordships’ House cannot amend it. Rushing it out in the last weeks of the Session says something deeply troubling about the department and the coalition’s programme next Session. Has Defra missed the opportunity to put forward the right Bill, a new water Bill, in time to be included in legislation for next Session? The Minister has already said that he has secured a consolation prize of a draft Bill instead. How long does that put back the necessary measures that are badly needed?

Clause 1 is of benefit to South West Water householders and brings relief from the legacy of privatisation, as bills in the south-west have risen 43 per cent more than in other areas. Water bills are becoming a nationwide pressing anxiety, with rises set to be 5.7 per cent per household this year. As yet, there is no generally recognised definition of water poverty in the same way as applies to fuel poverty. Nevertheless, 11 per cent of all households spend more than 5 per cent of disposable income on water, with 23 per cent of households spending more than 3 per cent.

The Opposition support the Government in reducing the discrepancy in South West Water bills for consumers. Nevertheless, there are anxieties about the measure. With a cost of around £40 million per annum, South West Water will receive £50 per household. This is rather a blunt instrument. While happily confronting the universality of certain payments, such as universal child benefit, the coalition is introducing another such payment here. Has the Minister considered other options? He will know that for farmers and growers water use is a key factor of production. Has his department looked at whether visitors and holiday homes could contribute further or be denied the subsidy? With a new water Bill, the benefits of WaterSure, introduced by the previous Labour Administration, could be brought to a greater number of claimants for a more focused and targeted operation.

As the Bill is silent on how long the subsidy will be paid, can the Minister give the House more detail tonight? The Explanatory Notes quote the water White Paper, which states,

“until at least the end of the next spending review period”.

Indeed, the Minister stated that in his introduction. It would be helpful if he could confirm that date and say what his department has in mind after that period. We understand that it might be continued as part of Defra’s own budget. Can he say which part and for how long? In view of his department’s eagerness to introduce budget cuts, what other expenditure will need to be cut to fulfil this payment to the south-west? Will his department come forward with transparency through a statutory instrument so that Parliament can fulfil its role in scrutinising expenditure? There are grave concerns that the Bill is being used for election purposes.

Lastly, can the Minister inform the House whether his department has sought to see strings attached to the payment? South West Water is a company with a monopoly in the area. Many fund managers have water utilities in their portfolios because of the high dividend policy followed. Have the Government expressed any views regarding company bonuses or regarding any reduction in leakages or an abstraction review while this payment continues?

The opposition Benches support the Bill in relieving financial pressure on South West Water bills. However, we would like to see the introduction of social tariffs across the industry to help those on low incomes. We also call on the Minister to undertake reviews and to make reports to Parliament so that the situation can continue to be monitored. More importantly, we wish to see a sunset clause introduced, whereby the Government have to promote proactively any further payments and state where the payments will come from.

Clause 2 is intended to fund a vitally needed infrastructure project—the Thames tideway tunnel. London’s sewers carry both raw sewage and rain run-off. They were designed for a capacity of 4 million inhabitants but London now has in excess of 8 million inhabitants. Because rainwater is included, this means that there are 50 to 60 overflows every year straight into the Thames. Small amounts of rain—even 2 millimetres—can result in massive amounts of untreated sewage discharges. It is extremely unfortunate that past works included rainwater with the sewage. How to tackle the problems has been the subject of a decade of argument, proposals, options and reports. The cost has increased to £4.1 billion and the project could take until 2020 to complete.

I know that several noble Lords—most notably the noble Earl, Lord Selborne, who chaired a report on behalf of several local authorities—will speak further about the scheme details and their alternatives. I shall concentrate on some wider issues that need to be taken up. First, we need to understand in some depth the risks of infraction proceedings. It is deeply unsatisfactory that my noble friend Lord Berkeley cannot speak at this late hour, as he has specifically researched this position in Brussels. If the United Kingdom is at risk now, will this continue to be the position until works are complete? Will the Government seek some accommodation that proceedings will not be initiated, especially as construction may temporarily exacerbate the situation? While the Bill gives the go-ahead to finance the tunnel solution, it will still be subject to the planning process and no doubt be called in by the Secretary of State for Communities and Local Government. Can the Minister assure the House that while the decision-making process with DCLG is a legal one, the lead will continue to be taken by his department?

This is all the more interesting as the Explanatory Notes state:

“As the Bill is concerned solely with public expenditure, no Impact Assessment has been undertaken”.

That will be deeply worrying for many noble Lords as it means that there will be little parliamentary opportunity to monitor the progress of works, that environmental concerns are being properly addressed, and that innovation and technology advances will be promoted so that value-for-money outcomes can be achieved. Can the Minister say how effective scrutiny and governance of the scheme will be in the future? The scheme no doubt will be promoted by Thames Water in commercial circumstances.

The opposition Benches will support the scheme provided that it meets the EU directive and its standards. Does the Minister know that that can be the case? There are enough valid concerns and criticisms in much of the alternative options that an impact assessment of future complementary projects could be vital. There are the Deephams discharges and whether it is better to rebuild the plant on existing footprint or to rebuild on a new site. Can the Minister say whether that will be designated a nationally significant project as well?

Can the Minister also say whether measures complementary to large infrastructure projects such as SuDS—sustainable drainage systems—will also be given due weight so that the tunnel will be fit for purpose for generations to come? Rainwater and sewage should be separated on all new build. Climate change will necessitate many behavioural changes and much of England will be subject to water restrictions from 5 April this year. On this side of the House, we are worried about the lack of thought on how to reduce per capita water usage. In the UK, household water consumption has grown to around 150 litres or 35 gallons per person per day, which is double what many other western countries achieve. From these Benches, we call for more action, including the publishing of the so-called missing chapter of the water White Paper to ensure that water efficiency measures are taken more seriously.

We welcome the 4,200 new jobs and maybe a further 4,000 that will be created in the supply chain. We would wish to see the requirement to include apprenticeship programmes to level 5 and level 6 standard. At this late hour, I do not wish to detain the House long. The Bill gives the Minister wide powers. He must ensure that Thames Water can finance the project in the most cost-effective manner and report this to Parliament to reassure us that costs will not continue to increase. Can the Minister assure us that Ofwat has strengthened its capacity to focus on the tunnel? Lastly, can the Minister be confident that none of this expenditure will fall foul of state aid rules? Does he have confirmation from Brussels that the Thames tunnel will be fit for purpose?

12:13

[Baroness Miller of Chilthorne Domer]

My Lords, this is a slightly confusing situation when a money Bill has to be presented by a Defra Minister. I hope that that device, if I may call it that, or the process that this is going through, will not be one that our Government have to resort to very often. I do not want to detain the House at all. I want to give up the time that I would have used to my noble friend Lord Taylor of Goss Moor, who has worked on this issue for many years. Simply, I would say that having lived in the south-west myself for so many years, I am extremely happy to see this coming forward. I am also looking forward very much to hearing the contribution of the noble Earl, Lord Selborne, who worked so hard on this issue with the commission that he chaired.

I have one question. Presumably the infrastructure that was mentioned as being eligible for grant, loan or guarantee is hard rather than soft engineering or very different solutions such as fitting all houses with waterless lavatories, if that were an option in future. I would be grateful if the Minister would comment on that.

12:15

[Lord Wigley]

My Lords, I will speak briefly. I am sure that many noble Lords will be aware that water can be an inflammable substance in Wales. I realise that the immediate purpose of the Bill is fairly narrow, as the Minister described. Nevertheless, the Long Title states that this is a Bill:

“To make provision for the giving of financial assistance … in connection with the construction of, and the carrying out of works in respect of, water … infrastructure”.

That is a much broader purpose, as the Minister hinted. In the Second Reading debate in the other place, the Parliamentary Under-Secretary of State, Richard Benyon, stated that,

“the powers in the Bill are appropriately drafted. Although we currently have no plans to use those powers other than to assist South West Water customers and in relation to the Thames tunnel, we heard many calls today … for us to legislate … to invest in new infrastructure to help make the country more resilient to droughts in future”.—[Official Report, Commons, 6/3/12; col. 746.]

Clearly, that is part of the general strategy of the Bill, although it leads through to another piece of legislation, and no doubt we will cover other aspects of that. The wider considerations cannot be ignored.

Before considering these wider aspects, I note that the water rebate being facilitated by the Bill is, as currently envisaged, an England-only benefit. That is fair enough: no doubt the argument is that the National Assembly will handle any such question in Wales. If that is the line taken by the Government, the immediate question arises of whether the National Assembly will get a Barnett-consequential payment that will allow it to consider helping beleaguered Welsh Water ratepayers in similar circumstances.

In December, the Environment Secretary, Caroline Spelman MP, said that one idea that continued to be discussed was piping more water from Wales to England. That was at the launch of the Water for Life White Paper. I am very much aware that the Mayor of London, Mr Boris Johnson, also suggested—in 2010—moving water supplies from Wales and Scotland to areas of shortage in the south and east of England. Apparently he favours taking water from reservoirs in Wales, via the Severn and the Wye, to link to the Thames and the Trent. One has been made very much aware in recent weeks of the problems facing drought areas in southern and eastern England.

As I understand it, people in the parched east and south-east must look for new sources of water supply to meet domestic, agricultural and industrial needs. However, we in Wales had some very difficult experiences over the past half-century with such matters—in particular the manner in which the Tryweryn Valley was drowned and the village of Capel Celyn submerged to provide a source of water for Liverpool. There was immense hostility to the scheme. When Liverpool Corporation pressed the Bill to facilitate the drowning of the valley, every Welsh MP bar one voted against it, but it was passed. To make things worse, the price of water in Wales then became significantly higher than it was in cities like Liverpool and Birmingham that got their water from Wales. At one time, the price was three times higher. That puts into context what is now proposed for south-west England. I have every sympathy for people there because we, too, had these problems.

I raise the issue now to suggest that if there is any likelihood of English water companies looking again towards Wales—and one understands that they may need to because of their circumstances—there should be a firm undertaking from the start that fair recompense should come to Wales for the water abstracted directly or indirectly for such purposes. I will go further and suggest that the UK Minister should now open a dialogue with Welsh government Ministers with a view to establishing an understanding on any such water transfers that will be fair to everyone.

A leading Welsh economist, Professor Dylan Jones-Evans has stated:

“Wales has got the water. The issue now is who owns that resource and whether Wales is getting a fair price for it as if it was selling any other commodity, product or service”.

Of course, Professor Jones-Evans was a Conservative candidate in a recent election to the Welsh National Assembly. The Welsh Environment Minister, Labour AM John Griffiths, has also spoken in similar terms. He stated:

“Our view is that in Wales we have a very important resource in our water, and that it must be recognised as such. In any future negotiations or developments, we would obviously want to get full value for that very important water resource”.

Apparently, Severn Trent Water has set out proposals that will allow water companies to trade water from one region to another. Severn Trent Water operates in Wales, but I ask whether it is in any shape or form answerable to the Welsh public for its policies or activities of that sort.

I have a proposal for the Minister: before this issue becomes polarised and attitudes get antagonistic, the UK Government and Welsh Assembly government Ministers should get together to discuss a financial model that will make it worth while for Welsh authorities, local and national, to be partners in any such developments so that they take a positive attitude towards facilitating solutions that may be of mutual benefit. A modest scheme of payment for water abstracted from Wales could be really beneficial to communities in Wales that need to maximise their resources and very often do not have such resources at hand. This Bill may be modest, but it could foreshadow significant developments, and I appeal for a positive attitude from Her Majesty's Government.

12:21

[Lord Jenkin of Roding]

My Lords, it is part of the rules about money Bills that if we do not pass them within a month of their being introduced in the House of Lords, they can go forward for Royal Assent without our debating them. Although the hour is extremely awkward for many, including some who have not been able to stay, I am grateful to have this opportunity to make just one point about the Bill, about the Thames tunnel.

There has been a great deal of consultation on the tunnel with local communities up and down the river. I know that my noble friend Lord Fowler is going to talk about the area that he knows. I should declare an interest: I live in Vauxhall, and we are going to have one of the sites quite near there. Some of us have been putting some pressure on Thames Water to make sure that the absolute minimum of road transport is used for the purpose of the tunnel. It is a tunnel down the river, which should make it possible to move very large quantities of the spoil from the tunnel and the shafts by barge. There are also railway connections—one thinks of Battersea in particular—and it should be possible to take some of the spoil away by rail, and more importantly, to bring in by rail some of the components, some of which will be in very large quantities, such as the concrete for tunnel lining.

Will the Minister make it clear beyond peradventure to Thames Water that it must make every possible effort to reduce the amount of road transport necessary to construct this tunnel? In its briefing Thames Water states that its,

“current plans mean 50 per cent of all materials being transported directly from our sites by river. Over four million tonnes of material will be moved directly from our sites by river transport”.

Of course there is a cost element, and Thames Water has to balance that, but the evidence of a report by an acknowledged expert, Maurice Gooderham—a report called for by the noble Lord, Lord Berkeley, who is one of those who cannot be in his place this evening—made it clear that he thought that river transport for spoil and materials would be economic. It would, in fact, be more cost-effective to use as much barge traffic as possible for this purpose. He makes the point that Blackfriars station, which of course is built out over the railway bridge, was supplied entirely by river and virtually no lorry transport was necessary to construct it. Of course, many parts of Crossrail are a long way from the river and therefore there is not the same possibility, but the project is making the best use of the railways as it can in order to reduce the amount of road transport.

What concerns me about this, and why I raise this point, is that when one talks to Thames Water about rail, it will tell you that it is currently exploring,

“opportunities to use rail freight to move material to or from our sites”.

As has been made clear by both my noble friend and the noble Lord, Lord Grantchester, this project has been in the planning for years—indeed, it goes back decades. Why are we only just now starting to explore,

“opportunities to use rail freight”?

The noble Lord, Lord Berkeley, and I have had discussions with the senior management of Thames Water, and I was told by one of its senior officials that it has got the message loud and clear. Why has it not had it before? A letter I had from Thames tunnel earlier this week states:

“We have commissioned a transport strategy study, which brings together our transport assessment and environmental impact assessment work, to consider the benefits of increasing river transport and whether it is practical and economic to do so”.

Better late than never; but can my noble friend make sure that his department really brings as much pressure as it can on Thames Water to minimise the disruption to local communities from excessive use of road transport?

Of course, most of the work is going to be done by contractors. Contractors will bid at the lowest price they can and if they think it is cheaper to use lorries, that is what they will put in their contracts. There have to be very clear limits on what the contractors can do by road transport. That has got to be built into the tender so that they are all tendering on the same basis of the maximum use of river and rail and the minimum use of road transport. Can this be made a condition of planning permission? One needs to bring the maximum pressure possible on Thames Water and its contractors to make sure that there is the minimum disruption to local communities.

There has been a general acceptance—not universal—that this is the best way of dealing with these combined sewage outfalls, which cause the problems that have been described this evening, but it needs to be done with the minimum disruption to the local communities, who are going to have to put up with what will be quite a long construction period. If my noble friend can give me some reassurances on that, I shall feel that it has been worth staying until after midnight.

12:28

[Lord Fowler]

My Lords, I entirely agree with all the comments made by my noble friend Lord Jenkin, particularly about the use of barge traffic and the view that we should do our utmost to preserve the interests of local communities. This Bill covers very serious issues. I am not sure that I regard 12.30 am as the right time to do a Second Reading of a Bill of this kind. It is rather ironic that the House of Commons went down hours ago yet here we are still debating in the House of Lords—but let us leave that to one side.

Clause 2 gives the Government considerable powers. As the Explanatory Memorandum makes clear, it creates a power to give financial assistance in connection with the construction of water or sewerage infrastructure. Under this clause, the Secretary of State can provide assistance in any form, including by grants, loans, guarantees and indemnities, provision of insurance and acquiring shares or securities in a body corporate. The power is discretionary and may be exercised for such reasons as the Secretary of State feels desirable. That seems to me to encompass fairly wide powers as far as the Government are concerned.

We know that this considerable power is being taken to ensure the construction of the Thames tunnel. We also know that the estimated cost of this tunnel will be more than £4 billion, although it could be substantially more than that. We know in addition that work will take six years to complete from the start of construction, which is 2016, although the bill for ratepayers will be increased even before construction begins.

We have all received, I think, a briefing paper from Thames Water setting out how it sees the advantages to be had, which in essence is that London’s sewers can no longer cope with the problems, a point that the Minister made. It seems to me that Thames Water rather overstates its case when it says:

“It cannot be acceptable to allow the River Thames to be an open sewer”.

That is not the position at the moment. It is also guilty of very selective quotation, such as when it tried to knock down an argument of the leader of Hammersmith and Fulham Council by quoting the view of a 15 year- old youth rower. The difference is, of course, that the leader of the council is the elected leader of the community and, as such, deserves to have his views given proper weight.

Let me for the sake of this debate accept the argument that the tunnel is necessary and that the amount of money devoted to it is justified. What it does not dispose of is the argument on just how this tunnel is to be built and, in particular, where the construction points and the drive shafts will be situated. These will be massive sites. The classic case is what is now happening in south Fulham, where Thames Water has decided to put one of these sites. I declare an interest as a resident of Fulham, although I think that I am not directly affected by this.

Currently, the plan is to have the site near Wandsworth Bridge in Carnwath Road. That will bring substantial disadvantage to the people there. The site is a tiny urban wharf in the centre of a densely residential locality at the apex of a commuter traffic bottleneck, so it has about every disadvantage going. At least 180 homes directly border the site, with more than 800 residents plus a junior school for 320 children, all within a 100-metre radius. There is a business park and at least 150 full-time jobs are likely to be destroyed. It will completely kill off—this I think in many ways is most important—the imminent wharf regeneration and all new plans there. The site still is 50 per cent too small without two compulsory purchases that will have to be made.

There are substantial disadvantages, not least the development costs of up to £200 million higher than the alternative site. What was never satisfactorily explained is just why, very suddenly and without warning, this site was chosen when all the preparatory work had been carried out at another site further down the Thames at Barn Elms, which seems to have all the advantages. It is a small part of a huge available area of flat green recreational space, well away from homes and buildings. There are no houses at all within 200 metres and the site is screened from most nearby homes by a stand of tall trees. Not a single full-time job would be lost. Less than 2 per cent of the large area of ordinary, unlandscaped recreational land that is available would be taken up. It seems on the face of it that the area has every advantage for the planners to go that way, so why was this change made and what caused the change of mind? It is true that Barn Elms is green-belt land, but much of it could be put back to its original state. Everyone agrees that rectifying the changes made in south Fulham would be more difficult and certainly much more disruptive.

I agree totally with what my noble friend Lord Jenkin has said about transport. At present, it is estimated that lorry trips to the site will average 31 per day for two years, rising to 33 per day when the tunnel is being lined. When it comes to moving the plant and construction materials, the plan is to do that by road in order to reduce costs. I will simply echo what my noble friend has said. When one has the natural route of the Thames itself, advantage should be taken of it. That would be to the benefit of the local population. However, my most profound concern is the choice of the site itself. I would be grateful if the Minister could throw light on the issue in his reply.

My last word is this. The matter goes further than a local issue because it impinges on national policy. Only today we were told about the need to build houses on brownfield sites. The site in south Fulham is ideally situated to do that. It is a perfect site for social and low-cost housing, which is desperately needed in south-west London. That could be achieved, while equally it could not be achieved in Barn Elms, where permission would simply not be given. A water authority is making this choice for reasons that are unclear and obscure; we are choosing options on what could be achieved in terms of national housing policy. The Minister might therefore like to describe the planning process in this case and how the views of the local council and local residents can be overridden, although I hope that they can be taken into account. With respect, I am not sure that the Minister can walk away from this saying that it is simply a matter for the planning authorities. The whole purpose of Clause 2 of this Bill is to give authority for the spending of £4.1 billion of taxpayers’ money. If national money is to be used in this way, it must be justified.

The hour is late but this is an important issue. Again, I would underline to my noble friend that it is a matter that the residents of south Fulham—I am sure that it is not the only example, but it is the one that I know—take very seriously indeed and, more than that, so does the local authority. It would be more than a pity if those views were overridden and if other planning options in the area were rejected. I hope that the Minister, even at this late hour, can give us some guidance—guidance that both my noble friend Lord Jenkin and I are asking for—and that he can give some reassurance and hope to the people of that part of London.

00:39

[The Earl of Selborne]

My Lords, like others, I shall confine my remarks to Clause 2. As has been noted already in this short debate, I chaired the Thames Tunnel Commission, which was set up by five London boroughs, when it sat in July, August, September and October.

Although we have been discussing the Thames tunnel since the urban waste water treatment directive was brought into national law in the 1990s—indeed, we have been in breach of that directive since 2000—things have moved on since then. Many ideas had remained fixed as to what is the most up-to-date and appropriate technology and there were concerns, of course, about the escalating costs, so we were asked to review the previous studies; to reassess the assumptions of those studies in the light of subsequent research and data; to look at what other cities—not only in the European Union but elsewhere around the world—had done when faced with much the same situations; to hear from interested parties; and to reassess the requirements in order to meet the urban waste water directive in the light of subsequent directives, not least the water framework directive, and other national government policies such as the national ecosystem assessment. The concern was not only about the cost of £2.3 billion in 2006 going up to £4.1 billion. When we were doing the exercise the cost was £3.6 billion, but it went up to £4.1 billion within three days of us reporting.

It is not fair to say, as Thames Water tends to do, as has just been noted, that the Thames is an open sewer because there have been some successes. The Lee tunnel, which is under construction at the moment at a cost of £600 million, and the upgrade of the sewage treatment works, some of which have been heavily implicated in fish kills, have and will achieve, irrespective of the combined sewer overflows, considerable improvements in the quality of the river. However, it is undisputed that 20 million tonnes of sewage going into the river is unacceptable. The figure is roughly half if you include the sewage treatment works and the Lee tunnel CSOs but, nevertheless, it is common ground that 20 million tonnes is unacceptable.

It is worrying that when the cost was a mere £2.3 billion, which was to include the Lee tunnel, Ofwat’s review of the costs and benefits found that there was only a marginal benefit. The cost has now gone up to £4.1 billion —and this is after having spent £900 million, so you could say that the cost has actually gone up to somewhere nearer £5 billion—and, surprise, surprise, the cost-benefit analysis carried out by Defra in November 2011 once more establishes that there is just about a case to be made in terms of cost and benefit.

The way in which these figures have been adjusted in order to ensure that the answer comes out correctly is by altering the goalposts. The assumption in the first cost-benefit analysis was that it should be paid off over 60 years; now it is going to be paid off over 100 years, which makes it much easier. There is also now an assumption that because we are now richer we can afford more, so the ability and willingness to pay increases. I find these cost-benefit analyses extremely suspicious. Defra knows what the answer should be and has commissioned the cost-benefit analysis. I hope that the National Audit Office, or some other body, will look carefully at these figures, which I think are spurious.

A great deal of concern was expressed by the people who took the trouble to speak to us that the agenda was being driven by the infraction proceedings. That, of course, would concentrate the minds of Defra enormously, and the implications of the fine which could be accrued well before 2023, when the tunnel will eventually deliver, are horrendous. I have no doubt that if I were a Defra Minister I would do anything to try to ensure that that day of judgment was postponed in some way.

In the Bill before us today the taxpayer is being asked to underwrite part of the cost without any assurance that it will meet the requirements of the Commission or the interpretation of what the urban waste water treatment directive requires. It is certainly not the fastest solution. My noble friend on the Front Bench described it as timely and cost-effective but the onus is going to be on Defra, or on Thames Water or whichever company is going to eventually own the tunnel, to demonstrate just that. It certainly has not been demonstrated yet. We need to know whether it is the most cost-effective, the fastest and the most comprehensive solution. By comprehensive, I mean that it gives to society as a whole the benefits that we all look for from major water infrastructure proposals.

When Richard Benyon, the Defra Minister, announced in early November that the cost was going up to £4.1 billion from £3.6 billion and that a Bill such as this was to allow the taxpayer to underwrite part of the cost, he said:

“Financing a tunnel of this size at a cost that is value for money for customers is a challenge. The Government believe that the private sector can and should finance this project but accept that there are some risks that are not likely to be borne by the private sector at an acceptable cost. It is willing in principle to provide contingent financial support for exceptional project risks where this offers best value for money for customers and taxpayers”.—[Official Report, Commons, 3/11/11; col. 42WS.]

That is precisely the issue—what does offer best value for customers and taxpayers? Who will demonstrate that this provides best value for money? When this application comes before the planning authority, that is the information that Defra, the Environment Agency and Thames Water must surely be required to produce. It is not just the customers from Gloucestershire to Essex who will pay, all of whom will be paying up to £70 per household more than they are at the moment; it is of course now the taxpayer throughout the country.

If you say often enough that the tunnel is nearly full in dry weather and there is no other solution than a full-length tunnel, it becomes accepted wisdom and is unchallengeable; but this is exactly what we tried to determine. We do not dispute or doubt that parts of this Victorian tunnel system are indeed overloaded and running full even in dry weather. However, you have to assess the need for a full-length tunnel— 24 kilometres—against the alternatives, which would be dispersed water treatment plants, sustainable urban drainage systems, storm water disconnection, distributed storage of sewage waste in a storage tunnel for later release, and the enhancement of the existing sewerage network bottlenecks.

In other words, you have to ask the question of how you would cope with this problem without the tunnel. We agree that the problem is to have something in place as quickly as or more quickly than the tunnel, which will discharge no more than the 2.3 million tonnes that the tunnel is likely to discharge. However, if that is the criterion that you have to meet, you have to establish that these other options that I have mentioned cannot deliver that at less cost and more quickly. The Minister has said that the tunnel will do just that, but until someone demonstrates that these other options simply will not be able to deliver, then those people who question whether we have been given the information that we are entitled to have as customers of Thames Water and taxpayers are entitled to continue to complain.

All these hypotheses as to what will happen in different weather events in different combined sewer overflows ultimately depend on the efficacy of the modelling. However, we were very concerned that when we asked to see Thames Water’s computational models we could not verify that as the modelling reports and results were not provided despite repeated requests. The tunnel will reduce the discharges to about 2.6 million tonnes, and it would be perfectly reasonable to ask that that is the criterion that all other systems should meet.

The water White Paper that came out in December might never have been written, as far as this Thames water project is concerned. It is an excellent White Paper that talks about water for energy recovery, flood risk management schemes, surface water management plans, protection and enhancement of ecosystems and green infrastructure—and, of course, what local authorities and others could do to reduce storm flows with a green infrastructure. None of that in any way, shape or form is aided or abetted by the Thames tunnel, which is essentially a Victorian solution that worked well in Victorian times, when the method of transport was horses. The residue from horses was not very different from sewage, so you treated the two the same. Now when you separate storm water from sewage you reduce immediately the load in these tunnels. While we are always told that separation and SUDS are uneconomic, with regard specifically to the targeted areas—the CSOs with which we are particularly concerned—it may well be cost-effective to turn them off by such measures rather than connect them to a tunnel. It cannot be done with the big CSOs. There were 10, but one of them is being dealt with now by the Lee tunnel. There are still nine large pumped CSOs, and there is simply no doubt but that they have to be dealt with either by a treatment works or a shorter tunnel—or, indeed, by a full-length tunnel. It is no good thinking that they can be turned off by SUDS or by other measures.

The Environment Agency said in its paper, An Assessment of the Frequency of Operation and Environmental Impact of the Tideway CSOs, that if the load from those nine CSOs was removed there would not be a significant effect on dissolved oxygen from the remaining CSOs. That is an important point to bear in mind. We are worried about dissolved oxygen, because that is what is going to kill the fish. We are worried, too, about health and aesthetic impacts. But largely if you remove the big-pump CSOs and use a discrete system, what you have left are the intermittent CSOs, many of which are not going to be connected to the tunnel anyway but will be dealt with by internal adjustments. Of course, that does not remove the necessity for storage of the effluent, but they will not need to be connected nevertheless. Then you are dealing with a very different order of issues.

Of the nine CSOs, seven happen to be on the western extremities. I rather liked the idea in the Jacobs Babtie report of 2006, when Ofwat was concerned about the escalating costs, going up to £2.6 billion, and the shorter tunnel was thought to be a sensible solution. Of course, it would have to be complemented by separation, SUDS, storage, real-time control and the like. It was rejected because it was thought that it would not meet the infraction proceedings, and we have been on the rollercoaster ever since. The cost is now £4.1 billion and increasing. If the Minister of the day had had the courage and sense to look carefully at the data, which may not have been available in those days, as to what discharges were from the other 18 CSOs —not the nine that caused all the problems—we would be looking at a very different order of issues.

While we are criticised in the Thames Tunnel Commission for not coming up with an alternative plan, that was not what we were asked to do. We were asked to make sure that within the public domain there was the sort of information that could be expected to give the sort of background to making a sensible decision. I regret the complacency shown by Defra, the Environment Agency and others, which have repeated time and again that this is the only possible solution, as from their own point of view it is in many ways, because it gives the responsibility to Thames Water. It would not result in the messy business of local authorities being involved with producing the green infrastructure alternatives, which nevertheless in the long run simply have to be part of the mix for dealing with storm water and sewage. When the planning application is finally submitted, Defra has an obligation to ensure that Thames Water’s claims—which, as I say, are often less than helpful—are given impartial, independent assessment, with full transparency of the assumptions made and of the modelling. Now that we have a Bill in front of us and are expecting the taxpayer to underwrite this, that is the very least that the taxpayer is entitled to.

12:55

[Lord Smith of Finsbury]

My Lords, I declare an interest as chairman of the Environment Agency. It is a pleasure to follow the noble Earl, although I would not agree with the entirety of his analysis of the problem. I fully support the Bill and the most important reason for that support is that, through the contingent support and underwriting it puts in place, it will enable the Thames tunnel project to go ahead. The Thames tunnel is desperately needed. The problem has been mentioned on several occasions by other noble Lords. In an average year, at the moment, 39 million cubic metres of raw sewage, mixed with surface water run-off, discharges into the River Thames. That will reduce a bit with the Lee tunnel and with other work that is under way, but it will remain a hugely significant problem. The reason, of course, is the combined sewer overflows.

Most of London is served by a combined sewerage system that collects sewage from toilets, waste water from sinks and washing machines together with rainwater run-off from roads, roofs and pavements. The system was designed so that overflows would discharge into the River Thames to prevent the back-up of sewage flooding into people's homes and streets. The system does this through a network of combined sewer overflows, stretching along the River Thames. During the course of a normal year, these discharge into the river something like 60 times. This is simply unacceptable in the midst of our capital city, not to mention the potential dangers of infraction from Europe under the urban waste water treatment directive. The fundamental reason is that we have a modern city of 8 million people, and many more during the daytime, which has been heavily paved and concreted over during the past few decades and is sitting on top of a Victorian drainage and sewerage system.

The Thames tunnel, I firmly believe, is the only sensible solution to the problem. Doing bits and pieces with local solutions for particular spots of difficulty would get us some way towards a reduction of discharge into the Thames; it would not provide the overall solution to the problem. Yes, there will be issues about the precise location of work that has to be done in order to construct the tunnel, which needs to be carefully chosen in order to cause minimum disruption. The noble Lords, Lord Jenkin and Lord Fowler, are absolutely right to draw attention to the need to ensure that that disruption is kept to a minimum, but the tunnel itself has to go ahead.

The tunnel will not only stop most of the sewage pollution that we have at the moment but will also help the sewerage network to cope with future impacts that will come from increased population and from what climate change will bring. We know, for example, that climate change will bring more frequent, concentrated downpours of rain over a sustained period. That will cause the problem to magnify if we do not do something in order to address it.

The tunnel will help to reduce health risks to river users and it will help to bring the river up to the healthy condition that it can attain. One of the great success stories of the past 25 years has been the improvement of water quality in the River Thames. Twenty-five years ago the Thames was a dead river but it now supports over 100 different species of fish. We have made huge progress over the course of those 25 years but the one major remaining problem is the combined sewer overflows and the pollution problem that they bring.

There is another reason, as well as the Thames tunnel, why I support the Bill. Its provision to allow support for major water infrastructure work more generally, not just for the Thames tunnel, could be vital as we seek ways to cope better with drought in the years to come. Because of two exceptionally dry winters, south and east England at the moment are already in drought conditions. Some river flows and most levels of groundwater are perilously low. The period from October 2010 to February 2012—the past 16-month or 17-month period—has been the driest since 1922. Rainfall in the south-east for the month of February just past was only 40 per cent of the average for a February. We are going to have to work very hard over the course of the next six to eight months to balance the needs of public water supplies, agricultural irrigation, the industrial use of water and the ecology of rivers and fish stocks in order to ensure that all those needs can be properly met.

In the longer term, if we look forward to the prospect of more extremes of weather patterns as a result of climate change, there is a need for water companies to do more to sort out the problems of leakage—frequently another problem that they have inherited from Victorian pipework systems—but there is something else that is desperately needed. Water companies and water regions need to get better at sharing water between each other. Interconnections are already in place and in use in some instances, but more are needed and every support needs to be given to water companies to put them in place. I am not talking about a national grid for water, which would not make any sense at all, but we need to get water better shared region to region and water company to water company, in local places and particular locations—short interconnections that will make it possible for wetter areas to assist dryer ones. Crucially, this will need to be a high priority for the next Ofwat price review round. The sooner that the capital schemes to put greater interconnectivity in place can be prepared and put together, the better, and it may just be the case that in some instances the provisions of the Bill might help. I wish it good speed.

01:04

[Lord Selsdon]

My Lords, I have been up to my neck in water and sewage for most of my life, and if I speak for too long I know I will have some more thrown at me. I thought I would speak a bit about competence and a bit about history.

At this time in the morning many years ago I was in a hotel in Cairo and I felt rather ill. I picked up the phone because I felt so ill, but the phone did not work. I fell on the floor, and then I shrieked and someone came in. I had got something remarkably unusual: gippy tummy. A nice doctor turned up and I said, “What’s wrong with all this?”. He said, “Well, it’s the sewers, you know”. I said, “Really? I used to be in that world”. After a while, I went along to see the head man and said, “Why don’t we British, who built the sewers here for a million people in 1907, rebuild your sewers now that you have 10 million people?”.

I went out and formed a body called British Waste Water. It was a two-pound company. One pound was for me; the other person never turned up. We made a few proposals. The first thing that we had to do was bring the Egyptian swimming team back to swim across the channel that had been cancelled in 1956 when Butlins was organising it. We built a relationship.

The plan was to do a good job. We had not had much experience in the United Kingdom because there had been relatively little infrastructure spending. That project cost £2 billion. The Government provided £50 million of initial aid and another £500 million of export credit. We got all the British companies out there. They did not know what they were doing—they had not been near it. The problem was how to clean it all up. It took around eight years and, as I said, cost roughly £2 billion. The difference was made not only by the skills that were transplanted there but by Egypt suddenly being cleaned up. The tourism business could survive again because there were no problems.

To go down in Cairo, where the water table is only two feet below the ground, you have to open a hole and make a hatch like that of a submarine. Your building team go down as divers. You have to put compression in to keep the water out.

Finally, we needed to put in blue bricks. Only the British can build the best blue bricks. We wanted Egyptian bricklayers. One of them said to me, “We haven’t got the skills. Can you find some brickies?”. I was at Loughborough, where there was a pub called the Bricklayer’s Arms. We put some notices in the Bricklayer’s Arms and the brickies turned up. We then built a brick plant on the Nile, just like the pharaohs had, which was a great success. That project worked very well because the British got back their old technology. I know that whoever works on the Thames sewers will do a good job.

Out of all this comes an economic or cost-benefit analysis. I have dealt with the Thames for many years in relation to sport and recreation. I chair the Greater London and South East Council for Sport and Recreation. I have rowed up and down the Thames. I have listened to presentations which said that rowers might be poisoned. However, it is a very simple matter of collecting the right stuff and emptying it. It is not a big job.

However, what happened after Cairo? What did those same contractors do? They went off and built the Channel Tunnel. The noble Lord, Lord Berkeley, was involved in that as well. I am trying to say that our knowledge and experience in this country may have died in many things, but in water and sewerage we are still among the best in the world, if not the best. I have no worries about the problem of contractors. I would of course take them down the Thames in barges. It is just a question of organisation. Once upon a time, we were good at organising but this House is obviously not as good at organising its business as it ought to be.

01:08

[Lord Taylor of Goss Moor]

My Lords, I will keep my remarks brief. I start by declaring an interest: I am a member of the board of South West Water. However, it is not South West Water that is the beneficiary of the first part of the Bill; it is the customers of South West Water.

My interest in this issue dates all the way back to when I was first elected as a Member of Parliament and quickly became involved in debates on the privatisation of water. I raised concerns then about the impact on the south-west. There was a fundamental error in the calculation of the costs of the bathing water directive and how they would impact on customers in the south-west. It took far too long for Governments of various hues to recognise the severity of the impact of far and away the highest water bills on people who are among the lowest earners in the UK. This was driven by the simple geography of having 30 per cent of the beaches and just 3 per cent of the population, and the dispersed geography in which that population lives. That made it extremely expensive to deliver the kind of reliable clean water system and clean beaches that are now, quite rightly, being delivered.

I strongly welcome the Bill, as it finally recognises the need to take action to deliver justice to those individuals. It is hard to over-exaggerate how big those impacts are. Those not on a meter can easily pay bills of £800 or £1,000. These people do not live in large houses and are often elderly, and these bills constitute a huge proportion of their income. Therefore, although I welcome the Government’s action, I do not think that it is sufficient in itself. That is why I want to press the Minister on it.

First, the Government’s commitment is actually a short-term commitment. There is no real indication of what will happen in the longer term. The decision was taken not to provide a lump-sum dowry which would have created a permanent solution. Therefore, there is considerable uncertainty around this issue. I still hope that Ministers will indicate where they would like the direction of travel to be. I understand that commitments may not be given short of commenting on the spending review and where budgets will be in a few years’ time. However, I hope that the Government will indicate that they recognise that this is a long-term issue, not a short-term one.

We need to make it clear to customers that, although prices are regulated, there are continuing upward pressures on them. This measure is a £50 discount off what people would otherwise pay year after year; it is not a permanent reduction in the cash amount that they will pay. People will gain from this measure for as long as it is in place but they cannot look forward to a big cut in bills and then no further rises—that is not the basis on which we work.

The second issue on which I wish to press the Minister concerns the fact that the Government want this £50 to go to every single customer. There are some real issues to be overcome in delivering that, particularly for customers in park homes and mobile homes who may be served by a single meter to the site. The water is then distributed round the site and they are charged individually, but not by the water company. Therefore, the water company has no information on the individual householders. I hope that the Government will work constructively to use all the information that they have at their disposal to ensure that those customers, who are often among the poorest, get the benefit of the £50. I know that it is the Government’s intention to do that but it is by no means clear how the measure will be delivered.

Thirdly, I very much regret that the Bill does not put in place a national social tariff. The Government have taken the decision to go down the route of company-specific social tariffs. For those in the highest water bill area—South West Water—that means that there is a higher burden on customers, who will not receive the relevant benefit. The social tariff will not be so low as to take people down to average water bill prices that apply elsewhere in the country, so they cannot gain the same benefit that they would under a national scheme. I understand that the Government think that there are issues with creating a scheme that distributes the costs and benefits nationally but I believe that it is the only fair way of meeting the needs of these very low-income individuals.

Finally, we must remind all customers of South West Water that they will overwhelmingly benefit from going on a meter. Many low-income customers are frightened of metering. However, if they go on a meter, they can very quickly save themselves much of the cost.

01:13

[Lord Knight of Weymouth]

My Lords, this is a short Bill of three pages, so there is a chance that we will have read the whole thing. That is a good thing, as is the Bill’s brevity. It is difficult to oppose the Bill as it stands, as it does only two things and in principle I support both. Who would not want South West Water customers to have some relief from their extraordinarily high bills or for the River Thames to be relieved of unacceptable levels of sewage? The Bill is also difficult to oppose because, of course, it is a money Bill. That means that in this House, as we have heard, we cannot oppose it—even if we want to—because we do not have the power. We must therefore make all our comments this evening—even at this ridiculously late hour. The timetabling of the debate at this late hour is ridiculous and is yet another huge discourtesy to this House by the Government. That is becoming a habit.

My noble friend Lord Berkeley has had to catch a train to chair a conference in Glasgow in the morning. So seriously has he taken this issue that in order to prepare for this debate he even travelled to Brussels last week to discuss with the Commission the risk of infraction. It is deeply regrettable that he will not be heard. I have therefore agreed to pass on an edited version of his speech in my speech and we will therefore get two speeches for the price of one.

My noble friend asked why there was the urgency in having to pass this Bill tonight instead of waiting until next month when we have time. The answer is obvious and perhaps a little tawdry: the Government want to be able to give households in the south-west their promised £50 before the local elections in May. The urgency to pass this Bill tonight contrasts with Defra failing to fulfil its promises to Parliament to make announcements today on dangerous dogs and carbon reporting. It is a shambles.

I should move on to what is my main problem with the Bill. As my noble friend Lord Grantchester said, this is the wrong Bill. We need a proper water Bill, as promised by the Government, that is properly debated in both Houses and gets on to the statute book over the next year—not as a draft Bill with further delay until the year after—to do these and other important things, such as dealing with abstraction, which is essential if we are to reduce drought risk, and putting in place a proper water affordability scheme involving the social tariff that the noble Lord, Lord Taylor, talked about.

The two issues in the Bill are urgent and raise complex issues. As we have heard, noble Lords have carried out detailed work on the issues relating to the Thames tunnel and I pay tribute to noble Lords’ speeches on that subject. This short debate has yet again demonstrated this House’s expertise and why it is so important in improving legislation for Parliament. Yet, because Defra could not secure a slot in the Queen’s Speech for a proper Bill, that expertise is being sidelined. Frankly, it is an insult to your Lordships, but I suspect that the Government are finding us a little too tiresome and troublesome these days and are therefore keen to invoke financial privilege a lot more.

My other difficulty with the Bill relates to the extent of the powers that it confers on the Secretary of State. Again, this could have been properly debated in relation to a public Bill, but now we are victims of the need to avoid hybridity. I have no wish for the Bill to be hybrid—the parliamentary long grass is not a place for me. As Defra’s Explanatory Notes to the Bill make clear, this is a Bill to assist consumers on the south-west peninsula and the Thames Water area only, but the Bill cannot say so for fear of being hybrid. The consequence is that the Secretary of State will have the power to give financial assistance in any form to any English water company, with any conditions that she sees fit, as long as the assistance is used to reduce charges for customers for water supply and sewerage services. Similarly, she can assist any water or sewerage company with any large or complex infrastructure project in England if she,

“considers it desirable to do so”.

The Explanatory Notes, which do not form part of the Bill and are not endorsed by Parliament, clarify that the costs will be £40 million for the south-west and up to £4.1 billion for the Thames tunnel, but that clarification has no status. Unless the Minister can advise me otherwise, Her Majesty’s Government could, if they were to be persuaded of another scheme, perhaps as a pre-election giveaway in some area precious to the coalition parties, just go ahead with that scheme without coming back to Parliament. That is unacceptable.

In that regard, can the Minister tell me whether he has considered a sunset clause on the Bill’s provisions? Should we not have some mechanism that requires the Government to come back periodically to justify this expenditure? Is this approach a long-term solution? Does it really pressure water companies to maximise efficiencies in the interest of consumers? Can we be convinced that this is not a long-term subsidy to water company shareholders?

So I am not keen on the Bill because of its process and extent. It is effectively a blank cheque. However, let me briefly address the substance of South West Water bills and the Thames tunnel. As we have heard, the Bill will enable the Government to make a £50 annual payment to households in the South West Water area to reduce their water bills. South West Water is a classic case study of what happens when privatisation goes wrong.

When the previous Tory Government introduced what became the Water Act 1989, it was supposed to be a new start for the water industry, but in the south-west, as we have heard, it created a water company responsible for 30 per cent of England’s coastline, but with a customer base of just 3 per cent of the population. There had been no investment in sewerage infrastructure, so the £2 billion needed to clean up the coastline was paid by the unfortunate South West Water customers through their bills, leaving them with the highest average unmetered bill in the country. As a resident of the south-west, I am happy to say that I live just outside this area and am served by Wessex Water.

In some ways, Part 2 is intended to prevent the same thing happening to consumers in the Thames area as their sewage infrastructure is brought up to standard. We welcome the £50 a year for households in the South West area, but the Bill will do nothing for households in other areas. I repeat the question from my noble friend Lord Grantchester: will the scheme exclude second home owners? It would be very popular in the south-west were it to do so.

From April this year, water bills will rise on average by 5.7 per cent, or about £20 a year. The Government have taken a hands-off approach and are considering leaving it to water companies to decide whether to introduce social tariffs. Ofwat, the independent water regulator, estimates that one in 10 households currently spends more than 5 per cent of their income on water and sewerage. That is 2.26 million households across England and Wales: almost 1 million single adults, 73,000 pensioners and 540,000 families with children. The Government had promised a draft water Bill in the spring. As I said, we will have to wait until Defra finally gets its ducks in a row before we get that Bill.

On the Thames tunnel, I have read the various views on this huge project. No one denies that we need to do something, but I am struggling, despite the compelling speech by the noble Earl, Lord Selborne, to see what alternative there is to the combined sewage outflow tunnel. Bubbling appears discredited, separation of rainwater and sewage too expensive and lots of mini-schemes highly uncertain. I am therefore persuaded to support this scheme as well.

However, I would like the Minister to address the concerns of my noble friend Lord Berkeley. In the speech he would have delivered tonight he says that the Bill represents the failure of the industry and its regulator to get companies to perform efficiently and to reduce charges. He has grave concerns with regard to the Thames tunnel. He would have said that the costs are estimated at £4.5 billion plus EU fines, but the risk of cost overruns in such a major tunnelling scheme are not properly thought through and are also likely to be high. The cost to London’s consumers could be as much as £80 per household per year for 30 years.

My noble friend is worried about state aid. This looks like potential for massive state aids to one monopoly supplier company. What criteria are being used for choosing one company—or will all get help? Have the Government checked with the European Commission whether either of the state aids proposed are legal and what conditions are likely to be attached? This is a major project, now with government support and finance if things go wrong and therefore no incentive to save money or look at alternatives.

When my noble friend heard Ministers continue to repeat that the project was necessary to clean up the Thames as required by the European Commission to avoid infraction proceedings, he went to Brussels last week to meet officials dealing with the infraction and hear at first hand what they thought. It is important for the House to hear what they thought.

The European Court of Justice is currently considering the case and is likely to give its judgment this summer. The Commission expects to win, but can of course never be sure. Following the Court decision, if the EC wins, it will give the UK three to five years to complete whatever scheme is necessary to comply. Almost certainly, the UK will be fined, but it will be a little less the quicker a compliant scheme is completed.

Public statements by Ministers about intentions are not relevant. The Commission noted that this directive should have been complied with by 2000 and that, if this did not happen until 2022-23, a large fine was likely. Clars Environmental has estimated that the fine could be as high as £750 million. The amount can, we understand, be mitigated by completing any compliant scheme quickly, perhaps by a maximum of five years. The Commission’s case is that it has always required an output specification for the water quality but it has never given the UK Government any instruction or indication that a particular solution is required or desirable. It emphasised that the choice of solution was down to the member state as subsidiarity. The Commission was not of course certain whether the currently proposed tunnel scheme would meet the criteria, and of course it has to wait to see what is said in the ECJ judgment, expected this summer. It is then up to the Commission to enforce the judgment and, at that stage, to consider whether the tunnel solution or any other will comply with the judgment. So we have a Thames Water scheme costing £4.5 billion racing ahead without any up-to-date consideration of alternatives or, more importantly, whether that scheme as designed will meet the ECJ and EC requirements and therefore stop the fines continuing.

My noble friend Lord Berkeley would have gone on to talk about some of the alternatives put forward by the noble Earl and Chris Binnie. He thinks that many of these could be implemented sooner than the Thames tunnel scheme, with a consequent reduction in the infraction fine and in capital costs. Therefore, his second question to the Minister is: will the Government set in train an urgent review of alternatives by someone without a vested interest in the present scheme which will take into account the likely and actual decisions of the ECJ and EC enforcement people to achieve a more cost-effective and efficient solution more quickly, and one that is more environmentally friendly than the existing scheme? Is the massive potential fine of £750 million enough to persuade the Government to think again? Who knows? A series of smaller schemes might even get the job done quicker, he says, with a consequent reduction in infraction fines. I would ask: given that the fines could reach hundreds of millions of pounds, can the noble Lord tell us the department’s view on this? Can he also promise your Lordships that, if the Government lose their case in the European Court, a Minister will come back to this House with an urgent Oral Statement to tell us how the Government will fund the inevitable fines?

I have other concerns but I shall not delay the House further. I deeply regret that the expertise of this House has been sidelined and that we cannot debate more fully and amend to improve, but of course I look forward to the Minister’s response.

01:27

[Lord Taylor of Holbeach]

My Lords, I thank all noble Lords who are here and who have contributed to this debate at an unsociable hour, although that has not affected the quality of the contributions, nor the vigour with which they have been presented. I just say to the noble Lord, Lord Knight, that there seemed to be a bit of an inconsistency between the case that he presented and the case where he was listening to the judgment of the noble and absent Lord, Lord Berkeley, on this issue. I welcome his broad support for the Bill. Clearly, he recognises that the Government have to act. We are under pressure from the Commission to clean up our act, as were the previous Government. If that is time-sensitive, then the Government have done the right thing by bringing the Bill forward to enable this project to go ahead at the first available opportunity.

The quality of the debate has not been affected by the lateness of the hour. It reflects well on this House that it is capable of scrutinising legislation at any hour. I have here a fistful of sheaves from the Bill team and I shall do my best to answer all the points that have been raised. The noble Lord, Lord Grantchester, was in a particularly interrogative mood, as he often is. If I miss out any points, I hope that noble Lords will forgive me, and I shall certainly ask the Bill team to write to noble Lords on particular issues if I fail to address them.

The noble Lord, Lord Grantchester, mentioned the water White Paper and said that there was a missing chapter on water efficiency. I would not like him to think that that was the case because water conservation is covered in every chapter of the water White Paper. In particular, chapter 6 covers our plans for water efficiencies in homes and businesses. It is a very important part of our strategy for dealing with the ever increasing demands for water in this country. He asked questions about whether there could be some abuse of these financial powers in, say, an election year. Any financial assistance would inevitably be the cause of much debate. There can be no disposition of government money without Parliament being very much on the alert. We know in the case of the particular move to fund the south-west that there had been years of campaigning and an independent water review to address this matter. We consulted publicly and made an announcement in the Budget specifying who could benefit from financial assistance, the duration and the reason why the Government were making the payment.

Noble Lords have asked why there is no sunset clause. We made it clear that we should leave it open for the Government to have the flexibility to offer similar support to future projects, should the case be strong, but such support could not be given without proper scrutiny in Parliament. I can give that commitment. What about the rest of the commitments to legislate that the Government made in the water White Paper? We intend to publish a draft Bill, as I said in my opening remarks. We have made considerable progress in drafting the Bill. It is important to get the legislation right. The advantage of a draft Bill is that we have an opportunity for further scrutiny before the Bill comes before the House. This will be a strategic shift in the water industry, in which I think Parliament will want to be fully engaged. I make no apology for what has been suggested that there has been an unnecessary delay in the implementation of the water White Paper.

I turn to particular points that have been made about South West Water and the welcome by my noble friend Lady Miller of Chilthorne Domer and my noble friend and namesake Lord Taylor of Goss Moor. The independent Walker review examined the situation in the south-west and suggested a number of different models by which government should address the issue. We sought advice from Ofwat on the most effective way of dealing with it and considered all the other options in detail. The particular method has been chosen because it will be the most effective in dealing with the inequity that the whole measure is designed to address. My noble friend Lord Taylor asked again about how the funding might continue, which came up in a number of speeches. The Treasury has agreed that Defra can, if necessary, make a call on reserve to fund this policy through the current spending round. Defra will then need to bid for funding for the next spending review in the usual way.

Several noble Lords called on us to review social tariffs. As noble Lords will know, the matter is in the hands of individual water companies. The reasoning behind this is that companies know the most effective way to deliver a social tariff policy in their area. The noble Lord, Lord Grantchester, asked about this, and there were questions from my noble friend Lord Taylor on the same subject.

I turn to the question of the Thames tunnel, which is the second part of the issue. The noble Lord, Lord Grantchester, asked whether CLG or Defra would take the decision on planning. CLG is the planning authority under the Planning Act, but decisions on development consent for wastewater infrastructure of national significance may be taken jointly by the Secretaries of State for CLG and Defra, based on Planning Inspectorate recommendations. In this case that would seem the most likely process, but I cannot give a categorical assurance.

Questions were asked about state aid. Contingent financial support will need to be state aid compliant—and it is contingent finance to support investment that we are offering. Investors will want to know this before they invest. Our initial analysis of state aid rules is that this contingent support may require us to notify the European Commission. If appropriate, we will make the necessary state aid notification this summer.

There was much talk of the infraction risk, and of how much any fines were likely to be. The noble Lord, Lord Knight, speaking the words of the noble and absent Lord, Lord Berkeley, was very exercised about this. I understand that it is a serious matter, and that there is a case that we must be able to answer. We are working with the Commission. It is in our interest and that of the Commission to make sure that by building the Thames tunnel we will ensure that London’s river is clean and pollution-free. That is the purpose of the exercise. We are working with the Commission to make sure that it is aware of our commitment to achieve that.

The noble Lord, Lord Wigley, rightly wanted assurances about the devolved position of Wales. There have been no discussions about the construction or enlargement of any reservoirs in Wales. Indeed, none of the water companies, which all produce a 25-year outlook, includes any construction programme for a new reservoir in Wales. I do not suppose that the noble Lord is volunteering their construction; his questioning was not along those lines. However, I assure him that no English company at this stage anticipates this construction—and clearly any such arrangement would have to be approved by the Welsh devolved authorities. I hope that devolution will make these matters better between the two Governments, and between water companies and the Welsh Government.

I would hope that that is the future, and it must be one of the benefits of devolution which can protect the interests of the Welsh and the English in their relationships on this matter.

My noble friend Lord Jenkin talked about the transport of supplies for the construction of the Thames tunnel. I know that the noble Lord, Lord Berkeley, asked me a Question on this matter, so I know that he is also interested. This House may have been one of the instruments that has reinforced this view on Thames Water because it is considering how it can limit the impact of construction traffic. The company intends to use the river wherever practical. We should remember that not all the construction sites are on the river, but quite a large number of them are. Barges can be very efficient. It is certainly the Government’s view that the river should be used. My noble friend referred to Blackfriars Bridge. That is entirely a riverside construction. It is not just the 406 million tonnes of excavated material that have to be moved; it is also the construction materials that need to be brought on to site. The Thames tunnel briefing, which I hope my noble friend has had a chance to see, makes Thames Water’s intentions about the transport of freight quite clear.

My noble friend Lord Fowler expressed particular concern about the Carnwath Road site and the change from the Barn Elms site to Carnwath Road. It is a planning matter. As he will know, planning prefers brownfield sites, such as Carnwath Road, as opposed to Barn Elms, which is not a brownfield site, but it will be considered by the Planning Inspectorate. Thames Water will need to justify this choice of site and the route of the tunnel as part of its application. It will need to submit an environmental statement describing aspects of the environment significantly affected. I hope that helps my noble friend, although it does not give him a reversal of the decision.

My noble friend Lord Selborne has considerable experience on this matter and expressed a number of concerns. I would like to address particularly his concern about costs, which was echoed in what the noble Lord, Lord Knight, had to say. Inevitably, there will be some variation in cost. It is rare for projects to come in on price and on time. This is a complex and extremely large project. Ernst & Young is currently employed by the department to provide financial advice on the most suitable and appropriate financing mechanism to deliver the proposed Thames tunnel that is fair to customers of Thames Water and to UK taxpayers. Ernst & Young is advising on structuring incentives into the financial mechanisms that will help drive desirable behaviours by those delivering the project to help ensure the effective management of project costs.

My noble friend Lord Selborne asked how the Environment Agency decided which combined sewer overflows were unsatisfactory. The EA assessed all 57 CSOs that discharge into the River Thames to identify which were having an adverse environmental effect. It looked at the frequency and volume of discharges, whether they were close to recreational areas, the number of complaints and the reports from other organisations operating on the Thames. Thirty-six were classed as unsatisfactory and therefore need to be addressed, and 34 discharge directly into the middle and upper reaches of the Thames in London.

My noble friend Lord Selborne and the noble Lord, Lord Grantchester, asked what a tunnel would deliver. It would reduce the number of these spills from about 50 to 60 times a year to just three or four times a year, and the estimated volume of discharges from about 18 million cubic metres to just over 2 million cubic metres, improving water quality, with benefits for wildlife and river users. It would also ensure that we continue to meet the UK’s obligations under the urban waste water directive.

The noble Lord, Lord Smith of Finsbury—I nearly called him my noble friend—welcomed this project. The Environment Agency, with which he is very much engaged, is part and parcel of the team that is hoping to bring about the Thames tunnel project. I am very grateful for his support this evening, and for the contribution of my noble friend Lord Selsdon, whose experience in this matter I had not been aware of until he made his contribution to this debate.

There was some concern about the money getting to the right customers. South West Water is very much aware of the need to take account where metering and use are not necessarily directly connected because of multiple occupation or other situations. The money is designed to be per household and South West Water is intending to do that.

I have done my best to run through the questions asked. I hope noble Lords will understand if I did not pick them all up. I will do my best to address those that I have failed to do so by letter. Meanwhile, this may be an appropriate moment to thank all the staff and the Bill team for their support in seeing this debate through. We expect to have to work all hours. We have to share that expectation with a great many other people, and I am very grateful to them and I am sure the House will share in that regard.

Bill read a second time. Committee negatived. Standing Order 46 having been dispensed with, the Bill was read a third time and passed.

House adjourned at 1.48 am.