Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Geddes)
My Lords, as I am sure all noble Lords present are aware, if there is a Division in the Chamber while we are sitting, this Committee will adjourn as soon as the Division Bells ring and resume after 10 minutes.
Civil Aviation Bill
(12 years, 5 months ago)
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Lord Rosser
“( ) The CAA must, at such intervals as it considers appropriate, review market power determinations made on the basis of an earlier analysis.”
Lord Rosser
My Lords, this is a probing amendment. The Bill provides that operators of dominant areas located at dominant airports require a licence to levy charges for airport operation services, and states that an airport area is dominant if the CAA makes a determination that the market power test is met in relation to the area. Subsection (8) of Clause 7 states that the Civil Aviation Authority may make separate market power determinations in respect of different areas at the same airport with the same relevant operator and may also make a market power determination in respect of an airport area that consists of two or more areas that are not adjacent if the areas are located at the same airport. Subsection (9) then states that a market power determination ceases to have effect if the Civil Aviation Authority publishes a notice of a further market power determination in relation to the airport area or in relation to an area that includes all of the airport area.
The effect of the amendment, which would add further words to the end of Clause 7(8), would be to require the Civil Aviation Authority, at such intervals as it considers appropriate, to,
“review market power determinations made on the basis of an earlier analysis”.
It is not clear whether other wording in the clause, or elsewhere in the Bill, is intended to require the Civil Aviation Authority to review decisions that it has made on market power determination. Circumstances can change over a period of time, and factors that were important in the original decision may cease to be so, or other factors may come into play.
Other subsections in Clause 7 say that the Civil Aviation Authority may make a determination that the market power test is or is not met in relation to an airport area, and that the Civil Aviation Authority must make a market power determination if asked to do so by the operator of the airport area or any other person whose interests are likely to be materially affected by the determination, subject to certain laid-down criteria being met.
There ought to be a requirement for the Civil Aviation Authority to review market power determinations it has made, irrespective of whether it is asked to do so. Subject to what the Minister has to say in reply, that does not appear to be a requirement laid down in the Bill. Even the reference in subsection (1) to the Civil Aviation Authority making a determination whenever it considers it appropriate to do so is not clear as to whether it also means reviewing a market power determination it has made that the test has been met or whether it applies only to making determinations where it has not previously been decided that the test has been met.
If the Minister does not intend to accept the amendment, I hope that he will say why the Government do not consider it appropriate, if that be their argument, or which provisions already in the Bill cover the issue raised in the amendment. Perhaps the Minister could also say how often the Government expect the Civil Aviation Authority to be making market power determinations. Are they likely to be regular occurrences and is it anticipated that such decisions will have to be revised or amended on a regular or frequent basis or only rarely? I beg to move.
Lord Jenkin of Roding
I was surprised at the last sitting of the Committee when my noble friend made it clear that it is envisaged by the Government that there should be competition between two different terminals at the same airport. At an airport such as the JFK International in New York, where the terminals are situated widely apart and are approached in different ways, there may be some sense in that. Even in as large an airport as Heathrow, which now has five terminals, I find it difficult to conceive how there could be competition between the various terminals. It is built into this clause, on which the noble Lord, Lord Rosser, has moved his amendment, which seems to have some merit.
I would be grateful if, in responding, my noble friend could describe how he sees such competition arising. At the moment, taking Heathrow or Gatwick as an example, they are all under the same management. It may be separate between the airports; I find it difficult to conceive how it might happen between terminals. I would be grateful if my noble friend could explain how this might come about. It would obviously need to involve a change of ownership between the different terminals. Is there any prospect of that or is it somehow envisaged that there should be competition without a change of ownership? Perhaps my noble friend might explain that.
Lord Berkeley
Like the noble Lord, Lord Jenkin, I, too, was confused. I suppose there could be competition with baggage handling taxi services. The heart of an airport is, after all, the runways. Is it envisaged that there is competition between two runways? If it is, that is remarkably stupid. One never knows, and it will be interesting to hear what is subject to competition in this clause and what is definitely not, within a particular airport.
Earl Attlee
My Lords, I thank the noble Lord, Lord Rosser, for the explanation for the rationale behind this amendment. I am afraid that I must oppose it, for two reasons. The first is substantive and the second is technical.
The amendment would oblige the regulator to review its market power determinations at such intervals as it considers appropriate. Clause 7 provides that a market power determination is a determination by the CAA that an airport operator does or does not meet the market power test in relation to an airport area. Where it does, the operator is subject to economic regulation under the Bill. Where it does not, it is not subject to economic regulation.
Let me now turn to my reasons for opposing this probing amendment. The substantive reason is that the amendment is unnecessary. Clause 7(1) expressly empowers the CAA to make a market power determination,
“whenever it considers it appropriate to do so”.
I am mindful of the underlying purpose of Part 1 of the Bill which is broadly to further the interests of end users by regulating airport operators where necessary. I note also the CAA’s subordinate duty at Clause 1(4)(b) to have regard to the principle that,
“regulatory activities should be targeted only at cases in which action is needed”.
In answer to the question of the noble Lord, Lord Rosser, it is implicit that where changes in circumstances lead the CAA to believe that there are reasonable grounds to believe an operator presently subject to regulation should cease to be regulated, or vice versa, then it would investigate further. If appropriate, it would then conduct a full market power determination. I am reinforced in my view because Clause 7(2) obliges the CAA to make a market power determination in certain circumstances. Against this background, the noble Lord’s amendment adds little to the Bill
There is a further technical difficulty with the amendment, which I accept is a probing one. It is not wholly clear what is meant by a “review” of a market power determination. Presumably it is something short of conducting a full market power determination. Perhaps it may involve a consideration of whether the underlying circumstances have changed. However, no further provision is made to publish the results of the review or to take action in the light of its conclusions. In short, neither the purpose nor the effect of undertaking a review is made clear in the amendment.
My noble friend Lord Jenkin asked about competition between different facilities in an airport. The recommendation was made by the Competition Commission; we are implementing it.
Lord Jenkin of Roding
My noble friend must explain how it would work. I find it very difficult to see how it would if the facilities were under the same management.
Earl Attlee
My Lords, if they were under separate management there could be a competition situation. Under the current legislation, one simply cannot regulate because it does not provide for competition within one airport. Therefore, we are future-proofing the legislation.
The CAA’s functions under Chapter 1 comprise, broadly, deciding whether an airport operator should be subject to regulation—and if it should, regulating it accordingly. Clause 1(1) requires the CAA to carry out its functions under Chapter 1 in order to further the interests of passengers and freight owners in the provision of airport services. Under Clause 1(2) the CAA is required to promote competition when doing so, but only where it is appropriate to its carrying out its functions under Chapter 1. This is set out in Clause 1(2).
The concept of competition in provision captures competition in the provision of airport operational services between all airports, regulated and non-regulated, and competition in airport operational services within airports—for example, competition between terminals. However, the CAA must promote competition only where appropriate. It would not be appropriate to promote competition where the CAA was not carrying out its duty under Clause 1(1)—specifically, where promoting competition does not further the interests of users of air transport services in the range, availability, continuity, cost and quality of airport operational services.
Lord Berkeley
Perhaps I might seek confirmation of what the Minister said to the noble Lord, Lord Jenkin. Will he confirm that Clause 7(4) applies to airports where the number of passenger movements exceeds 5 million—I refer to a Written Answer of 20 June to the noble Lord, Lord Laird—and that therefore Heathrow, Gatwick, Stansted and Luton would all be covered by the clause?
Earl Attlee
My Lords, the large airport test certainly applies in Clause 7(2), which refers to areas located in large airports. It goes on to define a large airport. I suspect that the CAA can make a determination on any other airport at a later stage if it becomes apparent that it might be in need of regulation and meets the tests in the Bill. Therefore, I invite the noble Lord, Lord Rosser, to withdraw his amendment.
Lord Rosser
Perhaps I might ask the noble Earl one last question before I withdraw my probing amendment. The thrust of his response seemed to be that what I sought to achieve with the amendment was covered by other parts of Clause 7. Do other parts of Clause 7 allow the CAA to initiate a review of an earlier decision that it has made off its own bat, or only if it is asked to by a person listed in subsection (3)?
Earl Attlee
My Lords, my understanding is that as soon as the CAA realises that it is appropriate to initiate a review because circumstances have changed, it can do so.
Lord Rosser
That is a very clear answer. The Minister has said that the CAA can do it off its own bat. I will want to read the Minister’s response carefully but my initial reaction is that if the Minister is saying that my amendment is covered by other wording in Clause 7, the point that I seek to establish has been met. I will not go down the road of competition, which has been raised, since that will be dealt with by a subsequent amendment. I will wait for it to appear. I thank the Minister for his response and beg leave to withdraw the amendment.
Lord Davies of Oldham
My Lords, as the Committee will recognise, we are anxious about Clause 9 and the two succeeding clauses, which relate to the very issue that we discussed under the previous amendment. This gives us a chance to explore much more fully the kind of issues that were opened up by the probing amendment a few moments ago. It may be looked on as something of a blunderbuss to fire at the Minister at this stage, particularly when he was so generous in his response to a question that I asked earlier in the House today. However, the blunderbuss is there simply because, like the noble Lord, Lord Jenkin, we are not quite sure what the implications of the Bill as it is drafted are. Therefore, we want as full and wide a debate as possible about an extremely important area.
The first question that the Minister needs to answer is: where is the demand for this provision of inter-terminal competition from the industry? All submissions that noble Lords will have received on this issue are, for a very good reason, critical of and hostile to the proposal that the Government have put forward. Airports require substantial investment. They need the confidence of investors in the resources that they intend to utilise. However, here there seems to be a proposal that the authority could promote competition between terminals when the whole structure of an airport’s finances is on the basis that such competition does not exist and, for very good reasons, ought not to exist. I shall elaborate on those reasons in a moment. However, what is more, the Bill says that if a decision is taken on this, it will be done through secondary legislation. We all know the limitations of secondary legislation in debating the fundamental principles of how an airport is to operate.
The noble Lord, Lord Jenkin, referred to the one airport that most us know has inter-terminal competition at present, namely JFK International Airport. He was quite mild in his assessment of the position there. Many other people are pretty critical of just how expensive that airport is, its lack of efficiency and the competition between terminals. It has the features to which the noble Lord, Lord Jenkin referred—a wide expanse of differentiation between terminals and a large number of them. However, that still does not mean that many of us, and much of informed opinion, cannot see the advantages that have been derived there from such competition. Representations from the industry show that it is extremely critical of this proposal. The Minister used the phrase “future-proofing” as the reason for this potential development, but the trouble with that is that it might cause disruption, consternation and anxiety here and now against a most uncertain future. When airports have made their representations on this issue, they have been pretty forthright about the disadvantages.
First, they foresee the potential for a substantial increase in operating costs because the economies of scale that airports are able to realise in their present arrangements through their ability to optimise capacity across all their terminals will be lost. That would be a substantial disadvantage to passengers. Secondly, inter-terminal competition is conceivable only where there is significant spare capacity. If one target for this is London Heathrow, “spare capacity” is just about the most inapplicable concept one could think of. The Minister should tell us where he thinks there is a large airport with more than one terminal that has sufficient spare capacity to be able to adapt to this situation. Where there is any spare capacity, the airport operator has an element of freedom to deal with the exigencies of particular situations. The Minister will have to explain the rationale behind Clause 9.
Moreover, the Minister will be all too well aware that airlines have very different needs. The reason an airport has different arrangements in its terminals is because it seeks to cater for the range of different needs of the various airlines. It will want to be in a competitive position so as to attract airlines through these differences. It is clear that no-frills operators have different needs from those who operate a full service on long-haul scheduled carriers. A single operator can accommodate these differences. I shall give one example. One of the terminals at Manchester airport is set up for holiday traffic. Because of the nature of the arrivals and departures of those flights, Manchester has made specific provision in the terminal to cope with it.
It must be recognised, of course, that difficulties can arise when airlines move. They have the freedom to do so and they exploit it to move to different airports. Gatwick made representations to the Committee and the Government indicating that when Delta, a large airline, quit Gatwick, that had a significant effect on its traffic and accordingly it had to make considerable changes. To adapt terminals to accommodate all sorts of traffic would be expensive. It would run counter to the investment that has already been made in our major airports.
There are other anxieties about the Government’s proposals. Obviously, when planning is carried out for airport development, it will not be easy to put forward proposals which envisage the possibility of a substantial section of the airport—one of its terminals—being sold off and therefore being subject to a different strategy from that in which people have invested. It also affects the airport in dealing with its suppliers. Airports can strike deals with significant suppliers of the very large amount of commerce which is transacted within them. Under the proposal which is envisaged here, these arrangements could be severely disrupted. One terminal would potentially deal with one group of suppliers and another could deal with another group of suppliers.
We do not feel that the Government have taken on board the industry’s anxieties about a piece of future-proofing which appears to be of potential benefit to the Government in terms of legislative time but has very little to do with the actual operation of airports. The Government are clearly not able to identify it as a demand within the industry. It would cause severe difficulties. There have been difficulties just on the relatively minor, if still important, issues of airlines choosing under the free market, as they are entirely entitled to do, to change their requirements and move to another airport. The concept of competition between terminals takes us a massive stage further.
The Minister indicated in the debate on Amendment 17 that he thought that it was unnecessary, and that the clause provided an opportunity for action when it is needed. I am not at all clear that a case has been made for action in terms of competition between individual terminals. I cannot see just where the demand is coming from at this stage. However, I am aware of airports’ anxieties about losing a great deal from the arrangements, and the fact that that the arrangements might prove largely unworkable.
Again, I apologise to the Committee for the fact that our amendments are not more precise on these issues, but this a pretty general problem. That is why we thought that it would be advantageous for us to speak against the clause standing part in Committee, in order that voice could given to the general issues which are raised by Clause 9 and the immediately subsequent clauses.
Lord Berkeley
My Lords, I shall expand a little on the comments of my noble friend Lord Davies of Oldham. A question needs to be asked: who will benefit from these three clauses? Will the passengers benefit? In my experience, when I want to go from A to B by air, I go to a website and look at the different airlines on different routes. Let us consider Stansted, for a change; we keep on talking about Heathrow. We are told that Stansted has lots of capacity. It has one terminal and one or two satellites from where the lower-cost airlines operate, and they make you walk a hundred miles to compensate you, presumably for paying lower landing fees. I suppose that those satellites, with a little engineering work, could be converted into a separate terminal, but how will the passengers benefit? When you book with an airline, you do so by considering price, timing or convenience. If you are going to book with easyJet to go to Dublin, for example, you do not have a choice of which part of the terminal, or which terminal, the plane will arrive at after landing. You are told where it will be. The passengers do not, therefore, have any choice over which terminal they can go to. They choose the airline and the airline tells you where you are going to end up.
I still cannot see who is going to benefit from these clauses. The airlines will not benefit, I imagine. Some of them pay lower landing charges than others and, as a result, are told to use a particular terminal—either close by or far away from convenient public transport and other facilities. You do not book with an airline because there is a better class of McDonald’s or a restaurant in some terminals. Are the airport operators going to benefit? I cannot see how. It will cost more, as my noble friend said. The suppliers will not get as big a volume of trade as they would if they were supplying a whole terminal. You could argue that they or someone might benefit from competition. And the passengers? I would be pleased to hear from the Minister about how they would benefit from these clauses.
Earl Attlee
My Lords, I thank noble Lords for their contributions but I am afraid that I must oppose the amendment and support the Question that these important clauses stand part of the Bill.
Inter-terminal competition may be some time off and the Bill makes no provisions about timing. However, it is important that we future-proof the legislation. The noble Lord, Lord Davies of Oldham, talked about disruption and consternation. Clearly, this would not be in the interests of passengers, and the CAA would therefore not allow such competition because it would be in conflict with its primary duty to the passengers and owners of cargo.
The noble Lord said that different airlines have different needs. He is, of course, quite right. Some airlines want to run a premium service and others want to be no-frills. However, the CAA will have to strike the balance between those differing requirements as well as replicate the effect of competition.
The Bill does not, in general, require inter-terminal competition but does accommodate the possibility. Promoting competition between terminals under the Bill would not happen if the cost implications of doing so meant that it would not benefit the passengers, again under the CAA’s primary duty. In the circumstances postulated, there is no question that the CAA would seek to require inter-terminal competition. If, however, an airport chose, say, to lease a terminal to a third party, the Bill would remain in service, and I will come back to that in a moment.
Clause 10 empowers the CAA to determine, by applying the criteria set out in Clause 9, including in cases where one or more separate entities have some form of management control over that area. Clause 11 contains provisions for the publication of operator determinations made under Clause 10 by the CAA. Clause 12 empowers the CAA to make operator determination in advance, on the basis of circumstances that may not yet have arisen.
The amendments to Clause 12 seek to remove the CAA’s powers to carry out an advance operator determination. However, before I get on to why the amendments are not desirable, I wish to reassure your Lordships on why “standard” operator determinations under Clauses 9, 10 and 11 are a necessary part of the legislation. These clauses are important for regulatory certainty, enabling a person to know whether they are the operator of an airport area for the purposes of Part 1. Otherwise, in difficult cases it will be uncertain who the operator is and who is not, and therefore who is and who is not subject to economic regulation. This means that they cannot be clear as to their legal obligations, and neither they nor their financial backers can know with certainty whether they will be subject to economic regulation.
The clause is not focused solely on the possible future scenario where intra-airport competition can be introduced. For example, it could apply where a whole airport was leased and some management functions were split between lessor and lessee. However, noble Lords have rightly pointed out that these clauses are important for ensuring that the Bill allows for the regulatory regime to work in a scenario where there are multiple operators of different airport areas at one airport—in other words, where there is inter-terminal competition. Inter-terminal competition is more likely to lead to more complex ownership arrangements.
I have already mentioned that it was a recommendation of the Competition Commission in its BAA Airports Market Investigation report of 2008 to allow for the regulatory regime to function where inter-terminal competition is present. The present legislation, the Airports Act 1986, does not allow for this possibility. If we, the Government, had not made these provisions, no doubt noble Lords would suggest that we should have done so, praying in aid the Competition Commission’s recommendations. It is important to note that these clauses do not empower the CAA to introduce inter-terminal competition; they merely ensure that if inter-terminal competition becomes a reality, the regulatory regime can accommodate the scenario.
Clause 10 empowers the CAA to make binding operator determinations on the basis of the circumstances at the time the determination is made. However, this is considered insufficient where a person wants to know whether they will comprise the “operator” in the event that they take some control over an airport area. Against this background, to allow for greater regulatory and commercial certainty, Clause 12 empowers the CAA to make advance determinations—that is, determinations on the basis of circumstances that have not yet arisen. This would include a determination that, if a lease were executed with specified terms, the lessee would or would not comprise the operator.
The first amendment would deprive the CAA of the power to make an advance operator determination. The Government cannot agree to this because it would increase regulatory uncertainty and possibly stultify commercial transactions. I therefore urge noble Lords to withdraw their opposition to the clauses.
Lord Davies of Oldham
My Lords, the Minister made the best fist that he could of a fairly weak argument. Of course, I recognise the merits of the clauses, in that he made it clear that it is important to define the operator and to know whom we are talking about. Who could possibly gainsay that proposition?
In objecting to the clause, I am not objecting to the sense that lies behind the elements within the clause to which the Minister addressed some of his remarks. I indicated that in opposing the clause I recognised this to be a fairly blunderbuss approach and that we have not refined our opposition in amendments—something that we may do in due course, perhaps on Report. However, I say to the Minister that in this general debate anxieties have been expressed across the Committee, and he has not allayed those anxieties at all, apart from—
Lord Trefgarne
I am afraid that the noble Lord is mistaken. The Minister has very much allayed my anxieties about this matter. I see these clauses as facilitating competition between terminals at a particular airport. What is the matter with that? When the operator comes to choose the terminal from which he wishes to operate, he will select the one that offers him the best deal—maybe it has the best duty-free shops or is the cheapest—and these benefits will be passed on to the passengers. I am very much in favour of these clauses and I hope that the noble Lord will not press the question of whether they should stand part of the Bill.
Lord Davies of Oldham
I am delighted that the noble Lord had his anxieties allayed. They are obviously not as acute as those on this side of the Committee. In particular, if the noble Lord is all in favour of inter-terminal competition, perhaps he will ask the Minister to identify just where this is a raging success that we would want to encourage. The only specific example that we have so far is subject to considerable criticism. As the noble Lord indicated, airport operators are accurately defined in the legislation; I will not gainsay the necessity of that. None of them speaks well of future-proofing what they regard as a disadvantageous element of the Bill, which will introduce the possibility of inter-terminal competition. In particular, by putting it in the Bill in the way that they have, the Government limit parliamentary debate to secondary legislation. We know the limitations of that.
However, I seek to identify that this concept is a significant departure from how any British airport is run at present, and from how any successful airport is run elsewhere. Unless the Minister produces some evidence of how competition works to the benefit of the passenger—which he signally failed to do in his earlier contribution—the Committee will recognise that, far from my anxieties being allayed, they are more pronounced. Of course, I recognise that objecting to a clause standing part—or three clauses in this case, which is the first time that I have engaged in such an extensive operation—is something from which I shall have to resile fairly promptly. However, I do so to air a significant aspect of this debate. I say to the Minister that we are so dissatisfied with the response at this stage that he must assume that we will take this issue further on Report.
Earl Attlee
I am curious about the noble Lord’s attitude to the Competition Commission’s recommendation that we should provide for inter-terminal competition. Does he support that view or not?
Lord Davies of Oldham
Of course, I recognise the role of the Competition Commission and we applaud a great deal of its work. However, when it makes recommendations, one must also consider the industry’s likely response to the proposal that is being put forward. All I say is that the noble Earl has not identified any aspect of British industry that considers this to be an intelligent and sensible development. Nor is he able to identify any example from elsewhere in the world where this form of competition has redounded to the benefit of the consumer.
Lord Trefgarne
With the noble Lord’s permission, I will cite an example. Many years ago, I landed my aeroplane at Miami International Airport. I had not chosen the terminal at which to land. I negotiated with three different terminals over the radio, found the cheapest and in I went—very good, too.
Lord Davies of Oldham
My Lords, that is a very good illustration. If the noble Lord had also indicated that hurricanes were raging at the time and he was able to put down with the help of the airport, I have no doubt that we would all regard that as an extreme benefit.
However, airports always adjust to emergencies, so if the noble Lord is saying that as the pilot of a private plane he can see stupendous advantages in inter-terminal competition, how many people do I have to count in order to introduce into legislation a very significant development? Is it is the number of people who own and fly private aircraft? Our consideration of government legislation ought to be undertaken on a wider perspective than that and the Government’s defence of it ought to be a jolly sight wider too. But, of course, I shall withdraw my opposition to the clause standing part.
Earl Attlee
Earl Attlee
My Lords, in moving government Amendment 20, I shall speak also to government Amendments 21, 22, 23, 30, 32, 33, 35 to 45 and 61 to 63. These 20 amendments are being taken together because they all relate to appeals to the Competition Commission and the Competition Appeal Tribunal. Some 13 of the amendments give effect to our position that the Competition Commission and the Competition Appeal Tribunal should decide appeals on the same grounds. The other seven amendments ensure that both the Competition Commission and the Competition Appeal Tribunal have regard to the duties imposed on the CAA as set out in Clause 1 when deciding an appeal. For brevity, I will refer to the Competition Commission as the CC and to the Competition Appeal Tribunal as the CAT.
It has come to the Government’s attention that the current drafting in the Bill gives rise to inconsistency between the grounds on which the CC and the CAT may allow an appeal. In the present drafting, although the legal grounds on which an appeal may be allowed are the same, the CAT is specifically required to decide the appeal by reference to these grounds and “on the merits”. There is no equivalent provision for the CC to decide the appeal “on the merits”.
The Government are concerned that this inconsistency creates unnecessary and undesirable legal uncertainty. We wish to correct this to shut out any risk that under the current wording it could be interpreted that different powers are being conferred on the CC and the CAT. In summary, these amendments propose changes to the provisions about appeals to the CAT to align them with provisions about appeals to the CC.
Amendment 30 is to one of the grounds on which the CC may allow an appeal under Clauses 24 or 25 which relate to appeals against conditions of new licences and modifications to the licence conditions. The amendment would change the ground on which the CC may allow an appeal from,
“that the decision was based on the wrong exercise of a discretion”,
as it is currently in the Bill, to,
“that an error was made in the exercise of a discretion”,
as per the amendment. This amendment is being made to clarify the current drafting.
The remaining amendments are specific to appeals brought before the CAT. Amendments 35, 36, 37, 40, 43 and 61 delete the subsections that contain the current grounds on which the CAT may allow an appeal in Schedules 1, 3, 4, 5 and 13. Amendment 20 deletes a provision stating that an appeal may be brought on only one of the current grounds. Amendments 21, 38, 41, 44 and 62 replace these grounds with the same grounds as provided for in Clause 26 concerning appeals to the CC from,
“that the determination is based on the wrong exercise of a discretion”,
to,
“that an error was made in the exercise of a discretion”.
In particular, Amendments 21, 38, 41, 44 and 62 ensure that the CAT’s consideration of appeals is consistent with the CC’s by, first, removing the phrase “on the merits” from the grounds on which the CAT must decide an appeal, as just discussed; secondly, introducing an overall requirement that the decision appealed against was wrong on specified grounds—error of fact, wrong in law, and error in the exercise of discretion; thirdly, restricting the grounds for determining the appeal in the same way as for the CC; and, fourthly, reflecting Amendment 20 which, as I have just mentioned, clarifies the grounds of wrong exercise of discretion.
The overall result of these 13 amendments is that both the CC and the CAT may allow an appeal only to the extent that they are satisfied that the decision appealed against was wrong on one or more of the following grounds: that the decision or determination was based on an error of fact; that the decision or determination was wrong in law; and that an error was made in the exercise of a discretion.
These amendments are important to deliver the Government’s policy intention that the grounds on which the CC and the CAT decide appeals should be the same. They are also in keeping with our wish to deliver an efficient and effective appeals regime. These amendments allow the CC and the CAT to take a decision that offers something more than judicial review but does not extend to a potentially lengthy full rehearing of the case. The remaining seven amendments again ensure consistency between the two bodies. Amendments 32 and 33 to Clause 30 specify that when the Competition Commission is carrying out its functions as specified under subsection (4) of Clause 30, it must have regard to the matters,
“in respect of which duties are imposed on the CAA by section 1”.
Amendments 22, 39, 42 and 45 import an express duty on the CAT to have regard to the CAA’s duties as set out in Section 1 when deciding an appeal under Schedules 1, 3, 4 and 5. Amendment 63 imports an express duty on the CAT to have regard to the CAA’s duties as set out in Section 4 of the Civil Aviation Act 1982 when deciding an appeal under Schedule 13. My officials have engaged extensively with the CAT and the CC on this matter and they are content with the amendments. I commend them to your Lordships.
Lord Rosser
My Lords, perhaps I may take one of the amendments in the group to make my point. Government Amendment 30 deletes paragraph (c) in Clause 26, which says that the Competition Commission may allow an appeal under Section 24 or 25 only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the following grounds, one of which is that the decision was based on the wrong exercise of a discretion. That wording has now been replaced in government Amendment 30 with the wording,
“that an error was made in the exercise of a discretion”.
I endeavoured to listen carefully to what the Minister had to say about this group of amendments and, if he did cover my point, I would be grateful if he could repeat his explanation. He seemed to say that this was all about clarifying the current drafting as opposed to explaining what the difference was between the wording in the Bill and what is being proposed, bearing in mind that it is not the same wording and therefore presumably does not mean exactly the same.
It would be helpful if the Minister could explain what this change in wording means. I refer to government Amendment 30 to paragraph (c) in Clause 26. Does the change from “wrong exercise” mean that although a decision was made incorrectly, the process was fine and the options to choose from were correct, the proposed wording,
“an error was made in the exercise of a discretion”,
is meant to imply that the exercise itself was flawed, had the wrong information to hand, was conducted incorrectly and options were considered that should not have been? It is important that we do not just get told, “We are seeking to clarify the current drafting”, but that we have a full explanation as to what the current wording in Clause 26 means—this relates to,
“that the decision was based on the wrong exercise of a discretion”,
and how that differs in meaning from the wording with which Amendment 21 replaces it,
“that an error was made in the exercise of a discretion”.
I hope that the Minister can clarify the position.
Lord Soley
Before the Minister replies, I was looking at this with some interest. I cannot help feeling that the issue might be one of parliamentary drafting. I would like to know whether the CAA, the airlines or the Competition Commission asked for the wording to be changed. My noble friend Lord Rosser has already pointed out that there is a change of wording, with “the wrong exercise”, but it is also odd that the original wording from Schedule 1 is in the present tense, whereas the wording in the amendment is in the past tense. I cannot help feeling that the parliamentary draftsman who did it first was found to have got something slightly wrong; I am not sure what. It is puzzling why that wording has changed from the present to the past tense, unless it is just for a legal reason. If there is another reason, I would like to see where the amendment came from and why.
Lord Jenkin of Roding
My Lords, I am full of admiration for the textual criticism of the noble Lords opposite. I have a rather simpler question for my noble friend. As I listen to him, and I try to do so carefully, the main purpose of this large group of amendments is to ensure that the same rules apply to the Competition Commission and the Competition Appeal Tribunal. How is it that anybody ever thought that the rules should be different? Why is it only at this stage that we are making them all the same? Was there some purpose to the way in which the Bill was originally drafted? I would be most grateful for an explanation. I am sure that there is a perfectly good reason, but I do not know what it is.
Lord Soley
There is a reason I am picking up on this, of course. I am a member of the Delegated Powers and Regulatory Reform Committee. We are getting increasingly worried about the quality of drafting of government Bills. It looks like a case where the drafting has changed for some reason. I do not want to be critical of the parliamentary draftsman concerned without knowing the facts but, if we flag it up as rather odd, there might be an explanation. I do not know what it is, and I would quite like to.
Earl Attlee
My Lords, the Committee will recognise that parliamentary draftsmen work in peculiar ways. It may be helpful if I read out what I said on this particular amendment again. Amendment 30 is to one of the grounds on which the CC may allow an appeal under Clause 24 or Clause 25, which relate to appeals against conditions of new licences and modifications of licence conditions. The amendment would change the grounds on which the CC may allow an appeal from,
“that the decision was based on the wrong exercise of a discretion”,
to,
“that an error was made in the exercise of a discretion”.
The view was taken that the drafting in Clause 26(c) could have been better expressed. There was no external request to change this wording, but the Committee will understand that officials go over the drafting again. It seems to me that it is better drafting. Originally, the grounds of appeal were based on statutory precedent, based on retrospective appeals to the CC and the CAT. The wording varied slightly. That is how the inconsistency first arose.
Lord Soley
Perhaps I may come back briefly. In a way the Minister has answered the question. The Delegated Powers Committee—not just the parliamentary draftsmen—worries about the quantity of legislation and the way in which it is often hastily drawn up. We end up making changes of this type which do not seem to come anywhere other than in Bills that are brought out by the Government in a state of incomplete readiness. We end up having an awful lot of amendments on the Floor of the House. This has happened under successive Governments and therefore successive parliamentary draftsmen. I suspect that the fault lies both in the way we manage government and in the expectations we place on parliamentary draftsmen. It is an indication of how things can go wrong. My guess—it is only a guess; I am not a lawyer—is that the interpretation by a court of the original wording in the Bill would have been different from the interpretation by a court of the amendment tabled by the Government. On that basis I understand it but I am glad that the Minister clarified it.
Lord Rosser
Perhaps I may ask the Minister to clarify what the wording means. When I made my contribution a few moments ago, I asked whether the current wording,
“wrong exercise of a discretion”,
meant that if a decision was made incorrectly, the process was fine and the options to choose from were still correct. I then asked if the new wording,
“error … made in the exercise of a discretion”,
was intended to imply that that the exercise itself was flawed, that it had the wrong information to hand or was conducted incorrectly, and that options had been considered that should not have been. Does the wording we now have mean one of those two options—and, if so, which one?
Earl Attlee
My Lords, it is probably best if I write to noble Lords; this is a very technical point.
Lord Jenkin of Roding
I have not heard an answer to my question. Why were there different rules for the Competition Commission and the Competition Appeal Tribunal? What was the original reason for having different rules? I entirely support the proposition that the rules should be the same; it makes a great deal of sense. However, I am puzzled by why somebody at some stage thought they should be different.
Earl Attlee
My Lords, as I said, originally the grounds of appeal were based on statutory precedent and retrospective appeals to the CC and the CAT. The wording varied slightly; that is how the inconsistency arose.
Earl Attlee
“( ) The Competition Appeal Tribunal may allow an appeal under paragraph 1 only to the extent that it is satisfied that the market power determination or operator determination appealed against was wrong on one or more of the following grounds—
(a) that the determination was based on an error of fact;(b) that the determination was wrong in law;(c) that an error was made in the exercise of a discretion.”
“( ) When deciding an appeal under paragraph 1 (including giving directions) or making a market power determination or operator determination, the Competition Appeal Tribunal must have regard to the matters in respect of which duties are imposed on the CAA by section 1.”
“( ) When deciding an appeal under paragraph 1 relating to a market power determination (including giving directions) or making such a determination, the Competition Appeal Tribunal must have regard to the notices, guidance, advice and information described in section 6(10).”
Lord Davies of Oldham
“( ) A licence must include an obligation on licence holders to procure and publish annual surveys of passenger satisfaction, including but not limited to—
(a) baggage handling services, and(b) arrangements for delays to affected air passengers.”
Lord Davies of Oldham
My Lords, I shall speak also to Amendments 25 and 26 in this group. Amendment 24 is fairly straightforward. We should remember that a principle of the Bill is ensuring customer satisfaction and the welfare of passengers. We seek through the amendments in this group to make the possibility of those satisfactions greater by ensuring that there is an annual survey of passenger satisfaction that would include baggage-handling services, which we recognise are outside the control of the airport operator because they are under private contract, and arrangements after delays to air passengers.
All forms of transport can produce their irritations and even the most trouble-free journey can attract criticism. However, dissatisfaction with air transport hits the headlines from time to time—regular travellers, given their experience, probably feel that it does not hit the headlines often enough. Amendment 24 would require the airport authorities to carry out regular surveys in order better to inform them on the nature of consumer dissatisfaction. The surveys would cover all delays and the arrangements made as a consequence, because there is no doubt that delay is an all-too-common feature of air travel and causes a great deal of disturbance to passengers.
There are commendable parts of the Bill and the Minister appreciates that we are broadly in favour of it. As we indicated on Second Reading, we accept its principles. One of the principles is the value of open data and publishing information that will advance the service provided by airports. There is no doubt that information about delays and the experience of the services offered at airports can do two things: improve the performance of the airport that is subject to criticism through these reports and inform the passenger of comparative performance. Given that airports can be competitive in terms of the services that they operate and the airlines that fly from them, this information for passengers should be welcomed.
I put forward these principles in the knowledge that other Members of the Committee are likely to be well disposed towards something more than just freedom of information requests and consider that accurate information on performance should be volunteered to the general public. We all know that when things go wrong, they often go very badly wrong indeed. In its pre-legislative scrutiny of the Bill, the Select Committee on Transport in the other place said that, where possible, airport licences should be structured to address key areas of passenger satisfaction. The surveys that are carried out demonstrate, in the main, a positive attitude to the flight experience, because people are successful in getting from one point to another. Not many people do that on a daily basis, although I have no doubt that a few benighted souls are forced to depend on air travel to that extent. However, levels of satisfaction show less than optimum agreement on baggage handling, which can often prove to be a massive irritation, and on delays at border control, which is a substantial issue.
I am conscious that in the other place it was indicated that the Bill cannot impact directly on government policy on immigration control and the Home Office’s operational control of UKBA. I respect that limitation. However, we cannot discuss issues about airport delays without making reference to the obvious fact that security considerations often prove to be the source of some of the most irksome delays. Therefore, when the Minister replies, I hope that he will not just fall back on the point that I have already conceded—that this legislation can deal with them directly—but that he will appreciate, when considering the issue of the welfare of passengers and the satisfaction that they derive from their flights, because problems occur because there has not been sufficient anticipation of the demands made of the border force, because there are insufficient officers on duty, or because a decision is taken, for security reasons, that every single passenger, whatever their category, should be subject to exactly the same controls. We are bound to acknowledge that this is of concern to us. We all have the welfare of the industry at heart, but this is a subject of very considerable anxiety among passengers.
I have discussed this issue externally in order to get a slightly more objective view, rather than just being critical of the arrangements in the United Kingdom. I have friends who regularly experience the delights of entering the United States of America—delights that often translate into great appreciation of the country once they are there but scarcely describe the experience they often encounter at US airports. British people enter as aliens, of course, and are subject to what often looks like a somewhat arbitrary operation on the part of the American authorities. Huge queues develop and it is not unusual for people disgorged from aircraft to have to wait for several hours in queues for entry into the country. I take it that we seek to make representations on behalf of British citizens when these problems arise, so we ought to pay the same due consideration with regard to flights into Britain.
Amendment 25 would require,
“the holder of a licence to develop passenger welfare plans”.
This was a recommendation made by the Transport Committee following its pre-legislative scrutiny of the Bill. We pay tribute to the fact that the Civil Aviation Authority has made some constructive moves in this direction. It has established a consumer panel to act as a critical friend. We certainly would like to buttress the position of the Transport Committee, which is that the consumer panel ought to focus on the welfare of passengers. The panel was established recently and, as I say, its purpose is to act as a critical friend. It provides a consumer perspective on all aspects of the CAA’s work, which is very welcome, and in particular it is meant to concentrate on the passenger experience and the enforcement of consumer protection legislation. The panel members are looked to to provide a source of challenge to the Civil Aviation Authority on how to identify consumer interests and to ensure that they are reflected in the authority’s work. However, in this legislation the Government have not included passenger welfare plans as part of a licence for airports. They simply claim that the CAA will draw up licences to cover such welfare.
Lord Bradshaw
I ask my noble friend to consider very carefully the arrangements now in place in the bus and rail industries for taking care of passengers. These have been built up over a long period, although they are certainly not completely fair. Statistics on performance are very regularly published but this issue goes very much wider than performance; it relates to things such as looking after people who miss their connections or trains. When I was chairman of the bus users’ council, I was concerned about people who were left in draughty old bus stations because the last bus did not run, or something of the sort. These are all people who need protection. I am slightly surprised, but I am perhaps better advised, by what the noble Lord, Lord Davies, has said: people at airports should at least be protected as well as passengers who use buses or trains.
Lord Soley
I am broadly sympathetic to this group of amendments tabled by my noble friend Lord Davies, and to the recommendations of the Transport Select Committee. It is always dangerous to put too much in a Bill, but on this we need to start with the recognition that when a person comes into an airport, particularly to a major airport such as Heathrow, it is their first impression of the United Kingdom. If they are coming here from any of the emerging countries—especially China, India or Brazil—the image for someone who is thinking of setting up a business and investing here is not good. It has got a lot better since Terminal 5 opened at Heathrow. I readily accept that there is a much greater desire to do things about this. I also accept that, as my noble friend Lord Davies has pointed out, a lot of the recent problems were not caused by things that the Bill will cover; they were caused by immigration control and so on. The image of vast queues moving very slowly—which is what were seen, even if that issue will not be covered by these amendments—is very bad for Britain. It is less true for other airports but it is still true; so we need to get our act together and do rather better on this.
I was trying to envisage someone who had just emerged from one of these long queues taking part in one of these surveys, whether for immigration purposes or anything else. They might give some short, sharp answers to the questions. We have to do better. That is the thrust of these amendments and of what the Transport Select Committee was saying. I urge the Minister to look at this matter sympathetically and see whether he can come up with some way of constantly emphasising the importance of the passenger having a good experience. It does not do our business or general tourist travel any good at all to have the images we have had.
I dread to think of what will happen if we have problems of runway availability at Heathrow during the Olympics. You can see what will happen if there is a severe weather event that causes a back-up because there is no alternative runway space. You then have the inevitable position of all the other problems at the airport, and you will have some very disappointed people coming into Britain. This is rather important and the airports and the Government need to look at this whole area.
Lord Empey
My Lords, I am sure that most of us travelling through airports have been approached at one time or another by the person with the dreaded clipboard. No doubt all noble Lords here were free and giving of their time and answers to help these people establish their true feelings.
Whether the particular methodology contained in these amendments is right, I am not sure. No one wants to add to the difficulties of getting a licence or to the bureaucracy involved. Nevertheless, underneath all that, the noble Lord, Lord Davies, is making a fundamental point that we all share. There have been a number of cases in recent years where the whole image of this country and the welfare of many thousands of passengers have undoubtedly been put to the test. Unfortunately, on some occasions, the relevant airports have failed that test. One constantly hears that there is an absence of information being fed back to the passenger.
Of course, these emergencies obviously come out of the blue in many cases. Sometimes the airports are not properly prepared, they do not have enough staff or facilities and one understands that this is not easy to cure. Nevertheless, it should be at the core of what we are trying to do. We are trying to make aviation more efficient but, in parallel with that, we have to make it a more pleasurable experience.
In so many walks of life—we are talking mostly about finance—consumer welfare and consumer benefits are put at the core of many of the things that we do in this country. That is right and there is therefore some merit in these amendments. Whether this methodology is the right one is not necessarily the issue today. The point is that there is a fundamental issue, and I hope that the Minister will refer to it in his reply. Should there be a broadly understood standard that would apply to all airport operators in the event that an emergency will arise, as it inevitably will; and how are people to be treated? Are we to continue to see our television screens covered with images of passengers complaining about their treatment, delays and lack of information?
In order to raise standards, which is our general objective, there should surely be some methodology. I have an open mind as to whether or not it should be this precise mechanism but I hope the Minister will at least acknowledge that this must be at the core of what we do.
Lord Berkeley
My Lords, following the comment of my noble friend Lord Soley about immigration, by coincidence I have in the Crime and Courts Bill an amendment about the immigration service which may be discussed later tonight. The service is woefully inadequate, as my noble friend said. The delays are reflecting very badly on the country.
Passenger satisfaction should be measured in respect of immigration delays as well as many other things, because they are quite significant. My suggestion that I shall probably put tonight is that the immigration service should be given targets. I am not sure that this Government like targets but there might be a target for people with EU passports to wait for not more than 10 minutes, and for those from third countries to wait for not more than half an hour. We can debate what the targets should be. The crucial thing is that the immigration service should be required to pay some kind of compensation to the airlines if they exceed those targets, unless there is an emergency or something like that.
As several noble Lords have said, the key is to have this information. I would much rather see it come from the licence holder than from the immigration service, which might be tempted to massage the figures slightly. My noble friend Lord Davies can think about whether it should go in as a further amendment on Report, but we ought to measure this matter along with some of these other issues to get independent information on passenger satisfaction regarding everything they see when they arrive at or leave an airport.
Earl Attlee
My Lords, I am aware that similar amendments were tabled in the Committee and Report stages in the House of Commons. These amendments provide us with a welcome opportunity to return to some important issues for passengers.
The noble Lord, Lord Bradshaw, talked about comparisons with the bus and rail industry arrangements. There is no reason, however, why the CAA cannot look at those rules and regulations when devising licence conditions and learn from what happens in another industry. The noble Lord, Lord Soley, talked about first impressions. They do matter and I have been impressed with the work going on at Gatwick to improve the appearance of the airport and the way it works.
The noble Lord, Lord Empey, touched on the issue of a market survey and said that passenger satisfaction is at the core of what we are trying to do. It is, but it is the duty of the CAA to achieve the desirable outcomes by means of the licence conditions.
The noble Lord, Lord Berkeley, talked about immigration issues, as did other noble Lords. A few years ago, I declined to visit the United States, even at public expense, because, frankly, I thought that the immigration arrangements there were so awful that I did not want to do it. I just said, “No, I will stay here and be with your Lordships”.
Earl Attlee
We will see what happens in the next reshuffle.
My honourable friend the Immigration Minister is reviewing what additional data may be published by the Home Office and shared with port operators. Meanwhile, the border force has responded to recent problems in a number of ways. It is tackling short-term peaks with a pool of trained staff, working with airports and airlines to ensure that they provide more accurate passenger manifests and flight schedules so that the border force can flexibly deploy staff at the right times and places, creating a new central control room for the border force at Heathrow that uses mobile teams for rapid deployment, and implementing new rostering and shift patterns. The border force is also working with Gatwick and Heathrow airports to improve passenger flows, using more specific measures such as e-gates and other biometric checks.
There can be no doubt that passengers want efficient baggage-handling services when they travel by air. The experience of recent years has also demonstrated how vital it is that airports prepare effectively for potential disruption. It is clear that the aviation sector as a whole needs to have effective means of dealing with passenger welfare during disruption of services. While I can therefore understand and agree with the sentiment behind these amendments and what noble Lords have said, I cannot recommend accepting them into the Bill. The text of the Bill already provides the most effective means of protecting passenger interests in relation to the matters raised.
Clause 18 and the licensing regime as a whole will give the CAA the flexibility to tailor licence conditions to the specific circumstances facing individual airports with substantial market power. This flexibility is an important means of minimising the distortions associated with regulatory intervention and ensuring that action taken by the CAA is proportionate. However, we also believe that giving the independent expert regulator flexibility and discretion in deciding the content of the licence is the most effective way to protect the interests of present and future passengers. If Parliament chooses to use this legislation to hard-code certain points in licences, it would constrain the regulator’s freedom to decide what priority should be afforded to different passenger concerns and what costs should be allowed for the delivery of competing consumer priorities. As the Minister of State said in Committee in the House of Commons, amendments such as these would make the licence system unbalanced because passengers care about a whole range of different issues. Moreover, a prescriptive approach in the Bill is likely to make it more difficult for the regulator to adapt its approach to the changing concerns of passengers. In 2005, who would have thought that volcanic ash would have been a major problem later on?
If we were to adopt these amendments, they would oblige the CAA to give greater weight to these factors than other matters that might become equally or more important to passengers in the future. This danger was recognised by the noble Lord, Lord Soley. Your Lordships can be very confident that the CAA will already use the new licensing powers proposed in the Bill to focus on, for example, operational resilience and passenger welfare in the event of extreme disruption—not least because of the CAA’s Clause 1 duties, as the noble Lord, Lord Davies, recognised. And why it would it not do so?
As we have discussed in Committee, in response to a request for advice from the Secretary of State, the CAA published an indicative licence in January to assist Parliament in its scrutiny of the Bill, and a copy has been sent to the House of Commons Library. At the request of the Department for Transport, the draft licence includes provisions on operational resilience. The proposals in condition 7 would require the licence holder to operate the airport efficiently and use its best endeavours to minimise detriment to passengers arising from disruption. The noble Lord, Lord Davies, mentioned disruption due to winter. When I visited Gatwick Airport before the most recent winter and saw all the new equipment in place, I was absolutely confident that the winter would be very mild.
It would also require the airport to draw up, consult on and gain the CAA’s approval for an annual resilience plan setting out how it would secure compliance with its obligations under the condition. The licence holder will then be obliged to comply with the commitments it has made in its resilience plan. The CAA sought initial views from industry in drafting the indicative licence. However, since Parliament has not yet concluded its consideration of the Bill, the CAA has not yet started to consult on proposed licence conditions for each airport that will be subject to regulation.
If the system proposed in the Bill is implemented, the CAA will consider the extent to which it is necessary or expedient to include conditions in a licence for operational resilience and other matters such as passenger welfare. The CAA expects that activities that might be expected to be part of the new licence regime would include taking into account other obligations on service quality standards, and the success of codes of conduct and voluntary arrangements being adopted by industry. Against this background we believe that putting specific requirements in the Bill on issues such as baggage handling and operational resilience could prove to be a disproportionate response that would place an unnecessary restriction on the CAA’s flexibility to develop proportionate and effective ways to address passenger concerns—and might even lead it to address the wrong ones.
In summary, the Bill provides the CAA—the body with the relevant operational expertise—after appropriate consultation, with the flexibility to determine appropriate and effective licence conditions. The amendments in this group could undermine our goal of giving the specialist regulator a flexible toolkit to protect the passenger. Therefore, I hope that the noble Lord will withdraw his amendment.
Lord Davies of Oldham
My Lords, I am grateful to noble Lords who introduced significant points, to which the Minister paid due regard—about as much regard as he paid to the points that I made in my opening speech. If through the amendments in this group I had sought to introduce microscopic instructions to the CAA on what it ought to do that would limit its capacity to fulfil its duties, I would quite understand the thrust of the Minister’s response. However, the first of the three amendments to which I addressed my remarks requires publication of an annual survey. This is not desperately specific but merely indicates that it would be a very good idea if the licence holder—the airport authority—gave some account to the general public of the effectiveness of its operation.
The second amendment suggests that the licence holder should develop passenger welfare plans. That is not specific; it merely indicates that it should be incumbent on the licence holder to fulfil the obligation that apparently underpins the Bill, which is to provide a better service to passengers. The third amendment merely suggests that support is necessary and should be provided for stranded passengers at airports. There is no Member of this Committee—including the Minister—who does not agree that action must be taken in this area. The Minister went so far as to indicate that strenuous efforts had been made to ensure that the numbers of such stranded passengers would decrease. I am not sure that Gatwick has the equipment to affect the climate and make our winters milder, but I know exactly what he meant. It now has the equipment to keep aircraft manoeuvring and able to fly, whereas over the winter that caused so much distress the airports did not have that.
We are merely asking for provision to be made for stranded passengers—an objective that the Minister says he shares—and I cannot think that the actions of the Civil Aviation Authority are cabined, confined or constrained by including these amendments in the provision on how the licence is granted. However, at this stage, I accept that the Minister is not as warm about these amendments as he is about the forecast for future winters, and I beg leave to withdraw the amendment.
Lord Davies of Oldham
“( ) provisions requiring the holder of a licence to prevent users of air transport services buying preferential access to check-in and security processes on an outbound journey and immigration control and baggage reclaim processes on an inbound journey.”
Lord Davies of Oldham
My Lords, it is my approach today to produce completely uncontroversial amendments, and I am sure that this will be the least controversial. I am not entirely confident that the Minister will accept it but I know that the sentiments behind it will be shared by all Members of the Committee.
The subject of concern tackled by the amendment is obvious enough, such are the difficulties at our airports at certain times. Heathrow, being the largest and dealing with the largest number of passengers, inevitably has the longest passenger queues, which are the bugbear of people entering the country. The proposal is that, if some people pay enough, they can bypass the restrictions. Surely that is so contrary to the main principle on which the coalition works—that we are all in this together—that not a single Member of the Committee will beseech the Minister to accept the proposition.
It is proposed that substantial amounts of money can be garnered by the airport by offering preferential opportunities to those who are prepared to pay. It is suggested that £1,800 will enable passengers to avoid the queues. Heathrow is thus offering a back-door service for wealthy air passengers. This does not appear in any of the normal communications to passengers but is offered discreetly to the well favoured. Wealthy air passengers can pay £1,800 to bypass the passport check queues.
I have already indicated to noble Lords that I recognise the limitations of the Bill with regard to the UK border force but this provision relates directly to the way in which passport checks are operated. Whereas some people endure queues of up to three hours because passport control desks may be understaffed, or because the pressures and anxieties surrounding the security position justifiably lead to more intensive scrutiny of passengers coming in, rich passengers can get through in minutes.
Border staff may be taken away from their regular duties to process this arrangement for the privileged, which is a VIP offering that Heathrow sought to keep secret. The airport should not pursue such strategies. It should come to an end. However, the best way of guaranteeing that neither Heathrow nor any other airport contemplates this heinous practice is to put it in legislation. I beg to move.
Lord Trefgarne
My Lords, while I am sympathetic to the noble Lord’s wish to ensure that there is no corruption through people buying their way through the airport, there are some people whom I would wish to have preferential treatment—for example, members of the Royal Family and the heads of state of other nations. How does the noble Lord think they should be accommodated if the restrictions that he proposes are put in place?
Lord Davies of Oldham
My Lords, I do not think that the issue of payment is likely to arise with members of the Royal Family or diplomatic staff because the arrangements for how they should be treated are agreed with the airport authorities. That is very different from saying that you can enhance the value of your ticket with extra money to get through the queue quickly. That is the practice to which I object. I am not saying that the Royal Family fit into that category. I imagine that it is also not the case for diplomats. We also have control over the process of entry to the country for air crews, but we do not expect them to take their turn in the queue because we recognise that special arrangements should be made for them. I do not want to exclude some special arrangements; I object to a scheme that enables those who are wealthy enough to purchase privilege.
Lord Berkeley
I suppose my noble friend is thinking in particular about those bankers who are now all over the press for possibly having committed criminal acts to fiddle the LIBOR. They are probably the only people who could afford to spend an extra £2,000 or so to save five or 10 minutes—or maybe several hours—coming into the country. There is just one thing that I would add to this. There is some benefit in having famous people who are prepared to speak out going through the same process as everyone else. Occasionally, they get so fed up that they go to the media and complain about it. I suspect that part of the reason why things are getting better at immigration in airports is that one or two people have had the guts to speak out and say, “This is iniquitous”. If these people were tempted to jump the queue by paying £1,000 or £2,000, we would lose that. My noble friend has made a very strong argument for having this in legislation on the basis that people should not pay extra for special treatment.
Lord Jenkin of Roding
I should like to be reassured that the noble Lord, Lord Davies of Oldham, does not seek to insist that everyone must stand in the same queue for check-in. If you buy a first-class ticket, many airlines have special check-in counters for such travellers. That seems entirely appropriate and entirely different from going through immigration, either outwards or inwards. The amendment specifically mentions check-in. However, it seems entirely appropriate that if you buy a first-class ticket you can go to a first-class check-in desk and not wait as long as you would if you had bought a standard fare.
Lord Trefgarne
Perhaps the noble Lord will tell us how he proposes that disabled people should be handled. They often have special provision at airports, which is necessary and very proper.
Lord Davies of Oldham
On the latter category, we are shortly to debate the arrangements for the disabled, and I hope to provide reassurance. I accept what the noble Lord is saying; of course there are special arrangements for the disabled. We all know why it is necessary for the law to be strengthened in that area, and I shall be proposing an amendment to deal with that matter.
The situation that I have identified is not concerned with people going through different routes according to their ticket, but the question of how one goes through the state’s immigration controls. The contention that you are less of a security risk because you are wealthy is dubious. After all, I seem to remember Bin Laden did not come from a totally impecunious family. It is not the case that those who have a great deal of money are better security risks. Why on earth should everyone else, for the necessary security of the nation, be obliged to suffer some of the privations that occur from time to time? I fail to understand how one can market a package that guarantees that one is whisked through security.
Lord Berkeley
Does my noble friend agree that the key to the amendment is the word, “buying”. There is nothing to stop the provision of different queues for first-class passengers or others at check-in or security. The question is: have they paid extra to go through that facility rather than for the facilities on the flight?
Earl Attlee
My Lords, I am aware that a similarly worded amendment was tabled in Committee in the House of Commons, but that related to Clause 83, on provision of:
“Information for the benefit of users of air transport services”.
The stated aim of that amendment was to close a perceived gap in the information that will be published under that clause on what passengers can expect to experience when departing or arriving at an airport, especially in relation to how long they should expect to wait to have their passport checked. The Government supported the broad intention of that amendment. Giving consumers more information on the quality of service provided by airports and airlines will help to maximise the benefits that markets deliver to passengers. However, the Minister of State ultimately resisted the amendment on the basis that the Bill already enables the CAA to require the collection and publication of information on check-in, baggage handling and security queues. He further explained that the UK border force, the authority responsible for border controls relating to arriving and departing passengers and goods, is responsible to Ministers and Parliament, and said that this is a more effective and appropriate means to hold the UK border force to account than giving the CAA power to oversee its activities.
The amendment today goes further than the previous one by seeking to prevent users from buying preferential access to check-in, security, immigration control and baggage reclaim processes. In considering the amendment, the Committee should note the distinction between check-in and baggage reclaim processes, and aviation security and border-control processes—the latter being subject to exacting standards enshrined in legislation. For example, airports are required, pursuant to international standards and EU and domestic regulatory requirements, to ensure that all passengers undergo security screening to specified levels. This is subject to monitoring and enforcement through security inspections and tests by the regulator. Legislation also requires full travel document checks to be conducted on all passengers, including all British citizens, arriving at the UK border. As the Minister of State made clear in the House of Commons, the security of our borders and the checks that need to be undertaken to protect us from those who would enter our country to do us harm are treated with paramount importance.
I am aware that the BAA runs a VIP suite scheme at Heathrow. The UK border force does not charge BAA or the VIPs any money for the provision of this service, nor does the BAA cover any border force costs. I will write to the noble Lord, Lord Davies of Oldham, with full details of the number of years that these arrangements have been in place. As long as standards of security and immigration are maintained at all times and in respect of all passengers, the Government do not wish to prevent the market offering access to these services, which are tailored to the needs of passengers. However, there is no question of reduced security, as suggested by the noble Lord, Lord Davies.
Your Lordships will no doubt be aware that a number of airlines offer faster check-in services to premium travellers who are willing to pay a premium for the service. The Government do not wish to prevent passengers benefiting from such products. If the concern is that the purchase of preferential access to check-in or baggage control processes would be an impediment to competition, the Bill already provides the CAA with the necessary powers to address that.
In summary, aviation security and immigration processes at UK airports must comply with exacting standards that are enshrined in legislation. There is no scope for passengers to pay to avoid these processes. The Government believe that the amendment goes too far in attempting to prevent the market offering access to these and other services that are tailored to the specific needs of users. I hope, therefore, that the noble Lord will consider withdrawing the amendment.
Lord Davies of Oldham
I am grateful to the Minister for his response, although I still believe that he is failing to recognise the context in which we find ourselves. That answer might have sufficed a decade ago, but as he knows only too well, we are operating a very stringent security regime at our airports. We all know the privations that occur from time to time. We know that people have to queue for hours on end because of the necessary requirements. The Government say that it is about security and the market has the right to provide preferential treatment for some. It seems to me that the concept of security is an obligation for every citizen. I do not see why there are favoured circumstances for a few, nor do I think it is conducive to the implementation of the security requirements if people believe that there is an inherent unfairness. The noble Earl made no reference whatever to that. Of course I recognise that no payment has been made by the airport to the Home Office with regard to this. However, if people are being transferred from heavily pressed desks to facilitate entry for those who have paid a premium, one should not be at all surprised that the difficulties occurring at airports are growing acutely. I beg leave to withdraw the amendment, but the Minister may come to rue the day.
Lord Jenkin of Roding
Lord Jenkin of Roding
My Lords, we can also discuss Amendments 28A, 28B and 29A. I can deal with this fairly briefly because I made a point about it at Second Reading. No doubt noble Lords will recognise that this is the amendment which raises in Committee the issue that I described to the House on 13 June at column 1379. The problem is relatively simple. Appeals can be made by anybody who considers himself disadvantaged as a result of decisions affecting the airports.
The British Airports Authority raised the question of whether it could be to their huge disadvantage if they were trying to raise the large sums of money that they invest every year. I quoted the figures at Second Reading. It is investing very large sums in our airports. That investment depends entirely on confidence and a degree of certainty, otherwise the markets will be less likely to advance money, or will charge more, which of course would immediately affect the costs of the operation and therefore the charges to passengers.
Lord Trefgarne
My Lords, I shall not detain your Lordships for more than a moment. I very much support what my noble friend Lord Jenkin of Roding has been saying on this matter. There is a serious problem here. As my noble friend explained, it is a very unlikely circumstance but, if it did happen, it could be catastrophic, and I do not think that the Bill can be allowed to proceed to the statute book with this difficulty identified.
Lord Soley
I shall be similarly brief and just wish to add to what the noble Lord, Lord Jenkin, said. The figure involved for investment at Heathrow alone is £100 million a month. Putting that into context, you raise that on the bond market and you secure it against the airport in just the same way as someone buying a house secures a mortgage against the house. If there were appeals of the type indicated by the noble Lord, Lord Jenkin, they could have a very disruptive effect on the financial markets. I think that there is a question about whether the bankers entirely agree with BAA about the risk involved but the point is that, if the risk is there and we can deal with it fairly easily, then frankly we should. If there were an appeal, it would be a severe and difficult embarrassment, particularly if the fight became bitter. The risk of a challenge to £100 million a month investment at our major airport is not funny. I suspect that the CAA would not allow an appeal but, again, this is a case of being sure that we have the safeguards in place, as the noble Lord, Lord Jenkin, indicated, and I certainly support his amendment.
Lord Berkeley
My Lords, I, too, support the noble Lord, Lord Jenkin, and others on this amendment. An appeal may be very unlikely but, as other noble Lords have said, the consequences would be bad. I cannot see how anyone appealing under Clauses 24 and 25 would find it relevant to question the financing of BAA—or any other operator, for that matter. That would seem to have nothing to do with any appeal but one occasionally gets vexatious appeals. Given the size of the sums and the disaster that would ensue if investments did not go ahead because the bankers became uncertain about an appeal, this would seem to be an extremely sensible set of amendments. I, too, shall be interested to hear what the Minister has to say in response.
Earl Attlee
My Lords, I have listened very carefully to the points that have been raised. As my noble friend Lord Jenkin pointed out, I have met BAA to discuss this issue in some detail, and since that meeting I have considered its concerns.
First, I assure the Committee that the Government remain of the opinion that there are good reasons to include derogations to financial resilience licence conditions where these would otherwise cut across existing financing arrangements. The CAA, which will be issuing the first airport licences, has also confirmed that it supports the broad principle that ring-fencing licence conditions, which does not cut across existing financial arrangements, could bring benefits to users.
The practical effect of the amendment would appear to shut out an airline’s right of appeal in respect of an entire licence condition, even if only a small part of it contained an exception relating to financial arrangements. Therefore, the scope of the amendment appears to be wider than the reason advanced for its inclusion. None the less, it is a perfectly good amendment for us to debate. The Government remain of the opinion—
Lord Soley
The point that the noble Earl makes is a fair one but it is perfectly possible, with the government draftsmen, to make a more refined and specific amendment, if necessary.
Earl Attlee
I absolutely agree with the noble Lord, Lord Soley. It is my duty to point out a drafting error in case my noble friend wants to run the amendment on Report. If I had not identified the problem in Committee and suddenly jumped up on Report and said, “Actually, the amendment is defective”, I think I would be a little unpopular.
The Government remain of the opinion that the broad rights of appeal provide an effective means of improving the accountability of key regulatory decisions. The process enables the interests of both airport operators and materially affected airlines to be taken into account. We therefore believe it is correct that this right of appeal should extend to licence conditions that relate to financial arrangements. An airline seeking to appeal a financial resilience condition, or the absence of such a condition in the first licence granted to an operator, will need to satisfy the Competition Commission that it is, in this context, a person whose interests are “materially affected” by the decision.
Any dispute over whether a derogation would cause a breach of existing financial arrangements would be most likely to arise from legal questions about the true construction of the loan agreement and/or the licence condition. These could ultimately be resolved through judicial review and, in the mean time, an airport operator could seek an injunction to preserve the status quo. Further comfort may be drawn from the fact that, subject to a government amendment that has been tabled being agreed, the Competition Commission, in deciding an appeal, will be obliged to have regard to the duties imposed on the CAA. Markets should therefore be reassured that the risk of existing creditor protection in an airport operator’s funding structure being unintentionally removed and triggering an event of default is extremely small.
We acknowledge that there is a possibility that the uncertainty created by an airline making an appeal to the Competition Commission on a licence condition relating to financial arrangements could affect an airport operator’s ability to access capital markets to raise finance while the appeal is being considered. However, as the timing of an application for leave to appeal is predictable, we consider that this is something an airport operator could successfully manage by pre-funding its financing requirements. We remain of the opinion that the right of appeal for airlines would not have significant negative consequences for an airport operator’s ability to raise debt in the capital markets.
Lord Trefgarne
Will the noble Earl say how long the appeals will take? He said that they would be of no consequence and could be temporarily ignored while the appeal process continued, but how long would that take?
Earl Attlee
My Lords, it may be helpful to the Committee if I outline the process. The initial consultation stage is a reasonable period set by the CAA. The period to bring an appeal, and the earliest date that licence modifications could come into force, is six weeks. For regulated representations the length of time is eight weeks. The appeal period is 24 weeks. Therefore it could be quite a long period. However, the appeal can be rejected because it is frivolous, vexatious or unlikely to succeed. The Competition Commission can make that determination quickly—but if it thought that there were good grounds for an appeal, the process would take longer. Frivolous or vexatious appeals, or those unlikely to succeed, could be determined quickly.
While the government position is clear and we have already communicated it to BAA, I have listened very carefully to noble Lords’ concerns and will communicate them to my right honourable friend the Minister of State for Aviation. I do not see that it would be in the airlines’ interests to attempt to overturn financial derogations determined by the CAA to be in passengers’ interests, where to do so would cause an event of default. The appeals regime has been designed to deter frivolous or vexatious appeals, as I mentioned. Furthermore, where the CAA proposes to grant a licence, including a condition furthering a financial derogation, or proposes to modify a condition containing a financial derogation, special conditions will apply.
Lord Soley
I am grateful but the Minister seems to be heading in the direction of neither moving on this nor looking at it again. He has described an appeal process that could take longer than six months. So it is a six-month possibility. He said earlier that the amendment put down by the noble Lord, Lord Jenkin, was too extensive. I understand that but I do not believe it is beyond the wit of the Government to come back with an amendment that is more specific. It should be possible and I do not see why it cannot be considered.
Earl Attlee
My Lords, noble Lords suggested that the appeal process would take six months. I am suggesting that the Competition Commission will very quickly be able to determine whether the appeal is frivolous, vexatious or unlikely to succeed. I do not believe the CAA would grant a derogation unless it was absolutely certain that it would pass scrutiny from the Competition Commission. There is also the point that the licence condition does not come into effect until the appeal is heard.
I reiterate that I am not taking this away and I am not reflecting on it. I will, however, discuss the matter in detail with my right honourable friend.
Lord Trefgarne
I am bound to tell the noble Lord that his answer has been wholly unconvincing on this matter. I hope he will undertake to reconsider and bring forward amendments if he thinks fit at the next stage.
Lord Jenkin of Roding
When my noble friend started his reply by talking about the amendment being too extensive, I thought he was going to move on to say that a redrafted one that was not quite so widely drawn might meet with his approval. As my noble friend proceeded, however, that possibility seemed to disappear over the horizon until we got to the end when he said that he will continue to discuss this with his right honourable friend the Minister of State at the Department for Transport. I hope that will be a serious reconsideration. This is not a frivolous point and it is not covered by saying that the Competition Commission could dismiss appeals as being frivolous or pointless.
Of course, the financial markets would be totally spooked by the threat of an interruption which, as the noble Lord, Lord Soley, said, might last for more than six months. They would not be prepared to go on lending and the whole investment programme would be threatened. This could not be in the interest of passengers. I understand that my noble friend has to be cautious about what he says, but when he said at the end that he would not reconsider it but would discuss it with the Minister of State, I paid more attention to the second point than the first. Perhaps we are making progress. If it is a question of drafting something that removes the risk only so far as is necessary, I am sure that the lawyers working for BAA—perhaps with the department lawyers or parliamentary counsel—would be able to find a form of words. In the mean time, Ministers must be willing to recognise that this problem has to be dealt with and cannot be put off.
Lord Soley
Another way of approaching it is to allow the CAA to take into account the risk to investment before coming forward with any appeal. That is another way of coming at the same problem.
Lord Jenkin of Roding
I am grateful to the noble Lord, Lord Soley, who has been extremely supportive throughout this, raising a number of useful points. This has been a valuable debate. The point that was raised at Second Reading has now been exposed here. My noble friend met the BAA people and it seems that we are making some progress. However, it takes two to tango. I am not sure I would want to tango with my noble friend, although it might be rather fun, but I hope that what he has said indicates that minds are not closed and that the Government will be prepared to consider this between now and Report stage.
The Government would lay themselves open to criticism if they put anything in this Bill which was liable to put at risk the huge investment programme that BAA has at its airports. That is the point. However unlikely, the damage could be immense. Having said that, I am sure the Minister has recognised the support around the Committee and I beg leave to withdraw my amendment.
Amendment 27A withdrawn.
Amendment 28
Lord Rosser
“( ) that the appeal does not demonstrably show that it is in the interests of users of air transport services”
Lord Rosser
My Lords, as we have just been discussing, Clauses 24 and 25 deal with appeals to the Competition Commission in respect of, first, the conditions of new licences and, secondly, modification of licence conditions. Under the Bill, persons who operate a dominant area at a dominant airport require a licence to levy charges. An appeal lies to the Competition Commission against a decision by the Civil Aviation Authority to include, or not to include, a condition in a licence when it is granted, and an appeal also lies to the Competition Commission against a decision by the Civil Aviation Authority to modify a licence condition.
An appeal can be brought only with the permission of the Competition Commission and the Bill states that the Competition Commission may refuse permission to appeal only on one of the following grounds: that the appeal is brought for reasons that are trivial or vexatious, or that the appeal does not have a reasonable prospect of success. Clearly, from the wording in the Bill there is a concern that trivial or vexatious appeals should be stopped. I am sure we would all agree with that objective, and my amendment seeks to add in a further ground on which permission to appeal can be refused—namely, that the appeal does not demonstrably show that it is in the interests of users of air transport services, in order to further minimise the potential for frivolous or vexatious appeals.
The primary duty of the Civil Aviation Authority, as set out in Clause 1, is that it must carry out its functions in a manner which it considers will further the interests of users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services. Surely, then, there must be an argument for saying that in any appeal to the Competition Commission against a decision by the Civil Aviation Authority to include, or not to include, a condition in a licence, or in any appeal against a decision by the CAA to modify a licence condition—both instances relating to persons who operate a dominant area at a dominant airport—it should also have to be shown quite clearly that the appeal is in the interests of users of air transport services, bearing in mind that that is the primary duty and responsibility placed on the Civil Aviation Authority, whose decision is being appealed.
Clause 30, on the procedure on appeals, states that subsections (1), (2) and (5) of Clause 1 apply to the carrying out by the Competition Commission of its function of deciding an application for permission to appeal under Clauses 24 and 25. Clause 30 refers to subsections (1) (2) and (5) of Clause 1, and subsection (1) refers to the Civil Aviation Authority having, where appropriate, to carry out its functions in a manner which it considers will promote competition in the provision of airport operation services. In a debate on an amendment when we were previously discussing the Bill in Committee, the Minister said that subsection (1) of Clause 1 would take priority over subsection (2) as far as the Civil Aviation Authority was concerned if promoting competition in the provision of airport operation services conflicted with its duty under subsection (1) to carry out its functions in a manner which the Civil Aviation Authority considers will further the interests of users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services.
However, it is not clear whether the giving of priority to subsection (1) over subsection (2) in Clause 1 where there is any sort of conflict applies also to the Competition Commission under Clause 30. Without it apparently being clear that it does, the Competition Commission, bearing in mind its name, might well give greater weight to promoting competition when deciding whether or not to refuse permission to appeal, rather than wanting to satisfy itself that the appeal is in the interests of users of air transport services, which is clearly stated in this amendment and is in accordance with the primary, overriding duty of the Civil Aviation Authority as laid down in Clause 1(1).
I hope that the Minister will either accept the amendment or be able to provide an assurance that giving priority to subsection (1) over subsection (2) in Clause 1 applies equally to the Competition Commission in Clause 30 as to the Civil Aviation Authority. I beg to move.
Earl Attlee
My Lords, I thank the noble Lord for explaining the concerns that his amendments seek to address. However, I believe that the Bill already takes those concerns into account. The proposed appeals process has been carefully designed to ensure that where an appeal is brought, ordinarily for it to succeed, the appeal body should consider whether it is in passengers’ interests in the provision of airport operation services. It is our aim to have in place an appeals process that facilitates transparency and a timely manner of resolution of appeals, and that permission to appeal should be granted only where appropriate. However, we do not wish to stop those whose interests are materially affected from appealing. In meetings with airlines and airport bodies, my officials have sought to assure parties of this.
Clauses 24(5)(b) and 25(5)(b) as currently drafted already ensure that permission to appeal a licence condition or licence modification would be refused if the appeal did not have a reasonable prospect of success. Where an appeal had a reasonable prospect of success, it would be unjust and wrong in principle to refuse permission. In answer to the important question put by the noble Lord, Lord Rosser, I refer the Committee to Clause 30, which contains provisions stating that the Competition Commission “must have regard” to the same duties as the CAA in the discharge of stated functions. Included in these is the determination for permission to appeal under Clauses 24 and 25.
The Bill as drafted empowers the Competition Commission to refuse to grant permission to appeal so as to avoid parties bringing an appeal as a “spoiling” tactic. Nor can appeals be used as a delaying tactic. The default position is that the CAA’s licence condition or modification comes into effect while the appeal is being heard. Therefore, I do not believe that the inclusion of a further subsection in Clauses 24 and 25, as suggested by the noble Lord, would add anything of further substance to the Bill.
In the light of those assurances, I hope that the noble Lord will be willing to withdraw his amendment.
Lord Rosser
Before I do so, while I think that the noble Earl has probably given me the assurances that I seek, perhaps I may ask him again directly whether he is saying clearly that, under the terms of Clause 30 where it states—as I indicated and the noble Earl has repeated—that subsections (1), (2) and (5) of Clause 1 apply to the carrying out by the Competition Commission of its functions, which include determining appeals brought under the two clauses that we are talking about, in carrying out those functions the Competition Commission is bound in the same way under Clause 1(1) and (2) as the Civil Aviation Authority is itself. Will it have the same general duty in respect of determining whether those appeals should be heard? In other words, it is to give priority—and see as its primary duty as the Competition Commission—to making the decision to furthering,
“the interests of the users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services”,
thus ensuring that that duty overrides the duty to promote competition in the provision of airport operation services. I think that that is what the Minister said to me, but I should be grateful if he could confirm that that is the case.
Earl Attlee
My Lords, the Competition Commission must have regard to the CAA’s general duty under Clause 30, as per the set of amendments accepted earlier today. We do not believe that it would be sustainable for the Competition Commission to promote competition where to do so would be inimical to the interests of users of air transport services, as described in Clause 1(1).
Lord Rosser
I do not seek to play with words; I am just anxious to be clear. The Minister said that the Competition Commission must “have regard”. Does that mean that its general duty in hearing these appeals is the same as the CAA’s general duty under Clause 1, which states that its primary and overriding responsibility in determining whether those appeals should be heard is to,
“further the interests of users of air transport services”,
rather than, where there is a conflict, to promote competition? I do not know whether we are playing with words over “have regard to”. In the Minister’s view, does that mean that the Competition Commission is bound in the same way as the CAA is in its general duty under Clause 1(1) and (2)?
Earl Attlee
My Lords, the short answer to the noble Lord’s question is yes.
Lord Rosser
In that case, since the Minister’s very specific answer makes it clear that the Competition Commission has the duty in the same way as the CAA has the duty under Clause 1(1) and (2), I beg leave to withdraw the amendment.
Earl Attlee
“(c) that an error was made in the exercise of a discretion.”
Lord Rosser
Lord Rosser
The amendment relates to Clause 29, which deals with appeals determined by the Competition Commission under Clauses 24 and 25, which we have just discussed. Clause 29 states:
“A determination made by the Competition Commission … must be contained in an order”.
Later, it states that the Civil Aviation Authority,
“must take such steps as it considers requisite for it to comply with the order”.
It then goes on to say:
“The steps must be taken … if a time is specified in the order or is to be determined in accordance with the order, within that time, and … otherwise, within a reasonable time”.
The effect of the amendment would be to remove “within a reasonable time” and insert,
“within the period of 24 weeks beginning with the day on which the Competition Commission published the relevant order”.
This is a probing amendment, which seeks to find out what the Government mean by “within a reasonable time” and how they believe those words should be interpreted. Do they mean more or less than 24 weeks and, if it could be more than 24 weeks, will the Minister give some examples of where it might be reasonable for the Civil Aviation Authority to take longer than 24 weeks to comply with an order made by the Competition Commission when no specific timescale is laid down by it? It would also be helpful if the Minister could say who will be responsible for deciding whether the Civil Aviation Authority has taken steps to comply with an order within a reasonable time. Will it be the Civil Aviation Authority itself, the Competition Commission, the Secretary of State, the courts or some other individual or body?
As I say, this is a probing amendment. I hope I have explained the motive for tabling it and the issue that we hope the noble Earl will address. I beg to move.
Earl Attlee
My Lords, the amendment seeks to amend subsection (7)(b) of Clause 29. The clause contains provisions relating to the publication of, and other matters connected to, the determination of appeals.
The current drafting provides that the CAA must take steps to comply with the appeal determination within any time period specified in the order. When none is specified, it must do so within a reasonable time. I am unable to support the amendment for two reasons. First, we do not think that it is necessary. Under subsection (7)(a) of the clause, the Competition Commission may specify a time limit in the order. We would expect it to do so if and whenever appropriate. Why would it not do so? Secondly, in circumstances where it is not appropriate to specify a period, it will be necessary to afford the CAA a reasonable time within which to comply with the order. What will comprise a reasonable time depends upon the context. There may be cases where action should be taken in fewer than 24 weeks and others where it is not reasonable to expect the CAA to take action within that period.
The noble Lord, Lord Rosser, asked me to give examples. I do not have any to hand but there may, I suggest, be a requirement to provide IT facilities or some capability that might require the CAA to procure something. It simply would not have time to take the necessary procurement action, although it might have every intention of doing so and perhaps give assurances that it would do so.
Against this background, to set an arbitrary time limit of 24 weeks is not appropriate and may cause injustice. Therefore, it is prudent to retain the flexibility that subsection (7)(b) provides the CAA. This flexibility is consistent with our wish for the CAA to be an efficient regulator but to allow it appropriate periods of time to comply with orders. I hope that in the light of my explanation the noble Lord will be willing to withdraw the amendment.
Lord Clinton-Davis
I have a certain amount of sympathy with what has been said but the trouble with this provision is that it lacks specificity. That is desirable in legislation. I have some doubts—perhaps the Minister can remove them—as to whether these sorts of provisions are capable of determination without difficulty. Perhaps I am wrong about that. The Minister ought to take another look at this matter. We are on the same wavelength on this. There is no doubt that we are in agreement about the provision that the Minister has in mind but I am doubtful about the wording.
Earl Attlee
My Lords, I am not a lawyer but I do not have any difficulty in understanding the provisions. I do not understand why the Competition Commission or the Competition Appeal Tribunal would not set a time limit if it were appropriate to do so. If it were inappropriate—the CAA might have said that it was already complying and had no intention of stopping complying—it would be totally unnecessary to impose a time limit. However, I would expect the Competition Commission to impose a time limit if it were desirable.
Lord Rosser
I thank the Minister for his reply. I also thank my noble friend Lord Clinton-Davis for the points he made. Obviously it is my intention to withdraw the amendment since it is probing in nature, but will the Minister respond to the other point I made about who will determine whether it has been done within a reasonable time? The clause provides that it should be done “within a reasonable time” if no time limit is set. Who makes the decision as to whether it has been done within a reasonable time?
Earl Attlee
My Lords, I do not know the answer to that question, but I imagine that if it was not done within a reasonable time, there would be a mechanism for the appellant to go back to the Competition Commission or the Competition Appeal Tribunal. However, if I have got that wrong, obviously I will write to the noble Lord.
Lord Clinton-Davis
I would have expected the Minister to say that the phrase “within a reasonable time” is used repeatedly in other legislation. Will he consider that?
Earl Attlee
My Lords, the terms “a reasonable time” and “a reasonable person” are frequently found in legislation. The noble Lord is absolutely right.
Lord Rosser
I am happy to leave this in the context that if the Minister finds that the response he has given to me on who will determine whether it has been done within a reasonable time is not the position, he will write to say that. As I say, it is a probing amendment to try to find out more about the Government’s intentions so far as the definition of “within a reasonable time” is concerned, and what kind of cases might come within that category rather than in subsection (7)(a), which provides that,
“if a time is specified in the order”.
I thank the noble Earl for his response and I beg leave to withdraw the amendment.
Earl Attlee
Earl Attlee
Earl Attlee
My Lords, this is a minor and technical amendment and as such I do not expect it to be controversial. It seeks to make the drafting in sub-paragraph (2)(a) of paragraph 22 of Schedule 2 consistent with the rest of that paragraph. It corrects the omission of the words “information or evidence” from the phrase “matter, information or evidence”. This phrase can be found elsewhere in paragraph 22. So this amendment makes sub-paragraph (2)(a) consistent with the other provisions in paragraph 22 of Schedule 2, which delineates the circumstances in which the Competition Commission may allow new matters, information or evidence to be adduced in appeals brought before it. Paragraph 22 of Schedule 2 generally prohibits the Competition Commission from considering any matter, information or evidence in an appeal that was not in the appeal before the Civil Aviation Authority.
However, in common with other appellate jurisdictions, there are limited circumstances where, in the interests of justice, this general rule needs to be capable of being displaced. It is necessary for the power to displace this rule so as to be co-extensive with the scope of the general prohibition. I beg to move.
Lord Davies of Oldham
My Lords, I agree with the Minister. Try as I might, I can find nothing controversial in his amendment.
Earl Attlee
“( ) The Competition Appeal Tribunal may allow an appeal under paragraph 1, 2 or 3 only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the following grounds—
(a) that the decision was based on an error of fact;(b) that the decision was wrong in law;(c) that an error was made in the exercise of a discretion.”
“( ) When deciding an appeal under paragraph 1, 2 or 3 (including giving directions), the Competition Appeal Tribunal must have regard to the matters in respect of which duties are imposed on the CAA by section 1.”
Earl Attlee
“( ) The Competition Appeal Tribunal may allow an appeal under paragraph 1 only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the following grounds—
(a) that the decision was based on an error of fact;(b) that the decision was wrong in law;(c) that an error was made in the exercise of a discretion.”
“( ) When deciding an appeal under paragraph 1 (including giving directions), the Competition Appeal Tribunal must have regard to the matters in respect of which duties are imposed on the CAA by section 1.”
Earl Attlee
“( ) The Competition Appeal Tribunal may allow an appeal under paragraph 1 only to the extent that it is satisfied that the decision appealed against was wrong on one or more of the following grounds—
(a) that the decision was based on an error of fact;(b) that the decision was wrong in law;(c) that an error was made in the exercise of a discretion.”
“( ) When deciding an appeal under paragraph 1 (including giving directions), the Competition Appeal Tribunal must have regard to the matters in respect of which duties are imposed on the CAA by section 1.”
Lord Empey
“Directions to airport operators in the interests of national air infrastructure
(1) The CAA may give to any airport operator a direction requiring him (according to the circumstances of the case) to do, or not to do, a particular thing specified in the direction, if the CAA considers it necessary to give such a direction in the interests of modifying competition to ensure sufficient national air infrastructure between hub and regional airports.
(2) The Airports Act 1986 is amended as follows.
(3) In section 34 (matters to be taken into account by CAA), after subsection (3)(a) insert—
“(aa) the need to ensure adequate services between hub and regional airports;”.(4) In section 82 (general interpretation), after the definition of “functions” insert—
““hub airport” means an airport used as a transfer point for passengers from one flight to another in order to complete a route”.”
Lord Empey
My Lords, I shall speak also to Amendment 74. Members will, I am sure, recall that we had a debate in this Room in November last year on transport links between the regions and London. Subsequently, in December last year, I tabled a Private Member’s Bill, the Airports (Amendment) Bill, which was given a Second Reading in the House on 16 March.
The amendment’s fundamental aim is to deal with the situation whereby the regions of the United Kingdom do not have guaranteed air access to our principal airport at Heathrow. As your Lordships are aware, the issue of landing slots is controversial, with their ownership in some cases disputed. What is not disputed is that, particularly as far as Heathrow is concerned, airlines have the use of the slots and even put the value attached to them on their balance sheets.
There is no doubt that there has been a significant improvement in air access between the Greater London area and many of the regions, which is to be welcomed. However, the reality is that, while a number of airports have tried to expand their portfolio of destinations, Heathrow is currently the principal hub airport for the United Kingdom. As a consequence, when we consider the amount of money that the Government have put into regional policy, as well as the considerable resources which continue to be put in by the European Union—indeed, in many cases providing funds for infrastructure at airports to promote links between the regions and our national hub airport—it seems an anomaly that the Government have no powers to intervene to ensure that air access exists between the national hub airport and the regions.
That is a serious weakness. Things are changing that quickly in the airline industry. To take an example from my own city, Belfast, Members will be aware that British Airways took over British Midland Airways Ltd recently. A lot of controversy was created because people said that that could theoretically put the principal route between Belfast City Airport and Heathrow under threat. People argued that, as the slots are more valuable to airlines for international routes than domestic routes, there would be a long-term temptation to switch to those sorts of routes.
There was a second development a few weeks ago when Aer Lingus, which runs three flights per day between Belfast International Airport and Heathrow, decided to move to Belfast City Airport. That means that all the Heathrow to Belfast routes are now going from the one airport. If that was not enough, Etihad Airways put in a bid for a percentage of Aer Lingus and only two weeks ago Michael O’Leary said that he wanted to buy the whole of Aer Lingus. When we look at the profile of Etihad Airways and of Mr O’Leary, I am not confident that we could see a guarantee of our air access to Heathrow.
There is a major European Union dimension to this. As the Minister knows, I have been to Brussels twice in the past few months pursuing issues there because, by coincidence, they are looking at the same issue. In December of last year, the Commission produced draft regulations of the Parliament and the Council on common rules for the allocation of slots at European Union airports. They are looking at this and a number of issues at the same time.
If that were not sufficient, the European Parliament has produced an own-initiative report which was passed by the Parliament in May of this year, paragraph 23 of which says that it,
“considers it essential for regional airports to have access to hubs”.
That is exactly what I am trying to achieve through these amendments, because there is a serious weakness. It cannot be right that, as a nation, we invest heavily in trying to develop the commerce and tourism of our regions and at the same time leave in question one of the principal points of access, particularly for an area like mine where there is not the alternative of a train or of road. There is only travel by ferry or air. If you are trying to develop a region to be commercially attractive, it needs air access to the main hub.
Air access is entirely at the mercy of the airlines. The Minister has repeatedly said that the Government are not able to intervene. That is not satisfactory. It puts regions at risk. I have quoted one example of the significant changes in my own region in the past few weeks. That fills people with concern and creates doubt. Doubt creates a potential obstacle to investment, which we do not want to see.
I understand that the Minister has to have regard to the European dimension, which is critical. I visited the European Union two weeks ago and went to the office of Commissioner Kallas, who is responsible for transport, and discussed issues there, and on a number of occasions with Members of the European Parliament because they are engaged in a co-decision process. We happen to have a legislative vehicle passing through at the moment and they, by coincidence, are doing the same thing and looking at slots. There seems to be a unique opportunity to do something to ensure that the regions will not be left out in the cold.
I know that these are difficult issues. You are effectively interfering in the natural competition process, in so far as these slots are attributed by value and if you interfere with them you affect their value. That is why I met with people in Brussels who have specific responsibility for competition issues as well. All of these things we have to deal with. While there are perfectly good connections, and under EU Council Regulation 95/93 a public service obligation can be given to assist transport between one region and another should there be market failure, there is no provision to link a specific city to a specific airport, which is precisely what we need in our case. While there is no market failure at the moment, and I hope that no market failure will ever occur, the fact remains that a principal instrument of government policy—the promotion and economic welfare of the regions, which is also held as a common view by the European Union—is now entirely at the whim of whatever commercial operation happens to be going on within or between airlines. That is not a satisfactory situation, which is why I tabled Amendment 46.
Amendment 74 deals with the point that introducing my proposals would be against European Union regulations. Amendment 74 merely points out that the powers would reside with the Secretary of State but could not be implemented until they became compliant with European Union regulations. That, in essence, is what I am trying to achieve: that the regions are guaranteed access to the principal hub airport at Heathrow, and that we become compliant with European Union regulations, where Parliament has already expressed that it is essential for regions to have access to hubs. As for its part in the co-decision process, I hope that over the next year or so in Brussels we will be able to make the arguments that will make us compliant with European Union regulations. I beg to move.
Lord Davies of Oldham
Briefly, I have considerable sympathy with the case put forward by the noble Lord, Lord Empey. We appreciate that Belfast and Northern Ireland have a particular interest in air travel. I also draw the attention of the Committee to the fact that Scotland, and Edinburgh in particular, is also concerned about the reduction in services that may be attendant on commercial transactions on slots.
I recognise that this is a difficult issue for the Minister, particularly as we are divided on much of the guidance on what government aviation policy is in the round. This dimension of it therefore explores an area on which the Government are likely to say that we could come back next month, or perhaps the month after. Unfortunately, time and tide wait for no man and neither does legislation, because the Minister has to try to get his legislation through. Here is a clear case of where it would be helpful to have a clear view on government policy.
I am sure that the Minister will do his best on this amendment. I have no doubt that it is quite critical in the development of aviation policy. I therefore very much look forward to hearing what the Minister has to say.
Earl Attlee
My Lords, just in case the issue about the Competition Commission comes up again during our debate today, I would like to clarify what I said in response to the point made by the noble Lord, Lord Rosser, about the CC having regard to the CAA’s general duty. As an appeal body, the CC must have the flexibility to decide an appeal justly and according to law. A duty to “have regard to” is not the same as a case where the CC must apply exactly the same duty as the CAA, but the primary duty will have great weight in the CC’s decision. It seems very unlikely, having regard to the constrained grounds under which an appeal may be made—an error of law, fact and so forth—that the CC would allow an appeal that was inimical to passengers’ interests.
Flexibility arises from Clause 1(5). Where there is conflict between the interests of different classes of passengers, the CAA is generally free to choose whose interests it prefers. The CC would also have regard to this provision. I will write to noble Lords so that any interested parties can pick up this clarification.
I welcome this debate about the slots and thank the noble Lord, Lord Empey, for explaining his concerns. I also pay tribute to the work that the noble Lord has done not just in Westminster but in Brussels. It is an object lesson in how to achieve these objectives. The new clause is intended to allow the CAA to take actions to help protect the provision of regional air services to congested London airports, such as directing airports to ring-fence slots for regional services or structure their charges so as to favour regional services.
The Government take the matter of regional connectivity very seriously. The noble Lord, Lord Davies, mentioned the problems of regional airports, for example some of those in Scotland. As I said before, we recognise the vital contribution that regional airports make to local economies, and that high-quality regional connectivity is hugely important. For remoter areas of the UK, regional air services are not a luxury but a vital means of connectivity. As the Committee will be aware, and as I confirmed at the first Grand Committee sitting, European Union regulations govern the allocation, transfer and exchange of slots at Heathrow and other slot co-ordinated airports in the UK.
EU slot regulations follow the Worldwide Slot Guidelines determined by the International Air Transport Association, reflecting the fact that commercial aviation is a global business. Council Regulation (EEC) No 95/93 on common rules for the allocation of slots at community airports provides common rules throughout Europe for slot allocation. These are aimed at providing airlines with fair and equal access to airports across the EU through independent and transparent slot allocation procedures. Members are required to ensure that independent airport slot co-ordinators are appointed to manage slot allocation at airports where capacity problems occur.
EU law does not allow either the Government or the CAA to have any role in slot allocation apart from the limited exception provided by the public service obligation procedure. EC Regulation No 1008/2008 allows member states to impose public service obligations to protect air services to airports serving a peripheral or development region or on thin routes to any airport on its territory where such a route is considered vital for the economic and social development of the region.
It would be open to regional bodies—for example, local enterprise partnerships and the devolved Administrations—to apply to the Secretary of State for Transport to impose a PSO on an air route if they feel that a case can be made which satisfies the EC regulation. If approved, this would permit slots to be ring-fenced at a relevant London airport. However, one of the important principles of the PSOs is that they can be imposed only when it is necessary to ensure adequate services between two cities or regions, rather than for the purposes of linking individual airports—a point recognised by the noble Lord, Lord Empey. Importantly, that means that when judging whether a region has adequate services to London, it will be necessary to take into account the level and nature of services to all five of London’s main airports, as well as surface transport connections.
Unfortunately, I have to repeat what I said before: there is no other mechanism for the Government to intervene in the allocation of slots at Heathrow or other London airports. Under European law, the potential for the ring-fencing of slots at Heathrow to protect regional services is to be dealt with by the rules on PSOs only. Therefore, any proposals to override the strict criteria and processes by which European Governments can intervene in route operations would be incompatible with EU law. I think the noble Lord understands that but still seeks a solution.
Lord Berkeley
On the basis of the noble Earl’s argument, it would seem that there can be no grounds for having a third runway at Heathrow until all four of the other airports that he just mentioned are full.
Earl Attlee
My Lords, this is not a debate about the third runway. Whether we have a third runway at Heathrow is not relevant. If we got a situation in which we had a third runway and then ran out of capacity at Heathrow, we would still have the same problem.
In addition, the application of traffic distribution rules—the TDRs—is also governed by EU law, which prohibits the implementation of discriminatory rules, including on geographical grounds. As a result, the introduction of TDRs to protect particular regional air services is not an option as it would also be incompatible with EU law. If the amendment seeks to empower the CAA to give a direction to the airport to structure its charges so as to discount airport usage for regional services, I regret that this would not be possible for a number of reasons. If it is not in the interests of users of air transport services on the grounds of the range, availability, continuity, cost and quality of airport operation services, it would not be consistent with the primary duty for the CAA to give such a direction.
In addition, EU directive 2009/12/EC on airport charges introduced common principles on the levying of airport charges at community airports above a certain size to ensure transparency and consultation. That directive was transposed into UK law through the Airport Charges Regulations 2011. Airport charges must not discriminate between users but charges can vary in the interests of the public and in the general interest, provided the reasons are relevant, objective and transparent. The CAA has an enforcement role regarding the Airport Charges Regulations, so it would not be consistent for it to direct on the structure of airport charges. However, as your Lordships are aware from the opening remarks of the noble Lord, Lord Empey, the EU slot regulations are in the process of being reformed in Europe at present. The European Commission’s “Better Airports” package includes proposals to amend the EU slot regulations, which provides an opportunity for the UK to highlight this issue with the European Commission and to explore the inclusion of measures to help secure the ongoing provision of air services between UK regions and congested London airports.
I fully understand the concerns behind the noble Lord’s proposed new clause, but I am unable to support it for the reasons given. Nevertheless, I assure the Committee that the Government are committed to supporting regional airports and regional connectivity. We will also consult on a new aviation policy framework, which will include a focus on regional airports. We will also issue a call for evidence on maintaining the UK’s international connectivity. I would welcome the contribution of the noble Lords and their constituents to that debate and I hope that the noble Lord, Lord Empey, will consider withdrawing his amendment.
Lord Bradshaw
Before the noble Lord, Lord Empey, speaks, I have to say that that is one of the most convoluted answers that I have ever heard. We say in these debates that we will read Hansard, but we shall do so with a wet towel around our heads this time. I believe it is incumbent on the Government here in London to find a method by which the air services to Belfast, of which I was a regular customer, can be maintained. They are incredibly expensive now compared with similar flights elsewhere. The customer is being short-changed. I hope that the Minister and his colleagues will bear it in mind that this must be put right in any review of aviation legislation.
Earl Attlee
My Lords, I could paraphrase what I have just said by saying that we cannot do what the noble Lord wants because of EU regulations but the EU is working on it.
Lord Empey
I am grateful that I needed no wet towel for that answer. I thank the Minister for his response. It is a very convoluted issue with all these parallel processes taking place. However, at the end of the day, there is a problem that could exist in the future, although it does not exist right now, and we should not be in the position of being entirely at the mercy of a particular airline or of being involved in some kind of commercial tug of war that can isolate a region. This is deliberately not a Northern Ireland-only issue.
To sum up, I thank the Minister. I shall continue to work on this and I believe that there is an appetite to do something about it. I will take the advice of the noble Lord, Lord Bradshaw, and read Hansard, and I will keep open my option of returning to this matter on Report. However, in response to the Minister, I beg leave to withdraw the amendment.
Lord Rosser
“(11A) An order under this Part is to be made by statutory instrument.
(11B) A statutory instrument containing an order under subsection (11) must not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.
(11C) Subsection (11B) does not apply where an order made under subsection (11) substitutes a greater sum for the sum specified in subsection (4)(a) to take into account an increase in the general level of prices, in which case it is subject to annulment in pursuance of a resolution of either House of Parliament.”
Lord Rosser
My Lords, the amendment addresses a recommendation from the Delegated Powers Committee. Paragraph 2 of Schedule 8 enables the Secretary of State to increase by negative order the £1 million threshold specified in sub-paragraph (4)(a) of Schedule 8 as the amount of annual turnover above which an airport operator is eligible for certification by the Civil Aviation Authority as a relevant airport operator.
When the Delegated Powers and Regulatory Reform Committee looked at the Bill, it apparently had in front of it a memorandum from the Department for Transport, which the department had prepared for the committee, explaining the delegated powers in the Bill. The report on the Bill that we now have from the Delegated Powers and Regulatory Reform Committee states that paragraph 64 of the memorandum—which must be the memorandum from the Department for Transport—explains that the purpose of the power in Schedule 8 to increase the £1 million threshold,
“is to enable the amount to be increased, for example to take account of any inflation”.
The Delegated Powers Committee said:
“If it is the Government’s intention that the purpose of the power … is to enable the Secretary of State by order to increase the threshold in line with inflation, this should be specified on the face of the Bill, in which case the negative procedure is appropriate. But if the threshold is to be increased for other reasons, the affirmative procedure should apply”.
My amendment seeks to specify that the Secretary of State can increase the threshold figure only by the affirmative resolution procedure unless the increase is made to keep in line with inflation, in which case the negative resolution procedure will be used.
I hope that the Minister will accept the amendment, which, unless we have misunderstood it, seeks to put into the Bill the views that the Delegated Powers Committee expressed in its report. Although the memorandum from the Department for Transport indicated that it would enable the amount to be increased to take account of any inflation, in which case the negative procedure would be appropriate, clearly if the Government were going to do rather more than simply seek to increase the figure in line with inflation, I would share the view of the Delegated Powers Committee that the affirmative procedure should apply. The purpose of the amendment is to seek to achieve that objective. I beg to move.
Earl Attlee
My Lords, I am grateful to the noble Lord, Lord Rosser, for tabling the amendment. An amendment of this kind would address a recommendation of the Delegated Powers and Regulatory Reform Committee in its helpful report on the Bill, which was published four days before the start of Grand Committee. I have no complaint, but we will need a little more time to determine which way to go. However, I agree with the general aim of the amendment and have much sympathy with it.
The current drafting of the amendment is not technically correct. It would need alternative drafting to make a consequential amendment to the Airports Act 1986, where the provisions are to be inserted. I therefore wish to consider the matter further, with the intention of bringing forward a government amendment on Report. However, I do not anticipate having any difficulty with accepting the advice of the DPRRC. I hope that this reassures your Lordships that my intention is for a government amendment to be brought forward on this, in order to respond effectively to the DPRRC recommendation that if the purpose of the order provided for in sub-paragraph (11) of paragraph 2 of Schedule 8 is to ensure that the threshold can be increased for reasons other than inflation, the current negative procedure should be amended to an affirmative procedure to give Parliament greater scrutiny. With this assurance, I hope that the noble Lord will withdraw his amendment.
Lord Rosser
I thank the Minister for that very helpful reply. I fully accept that the amendment might not be worded in the appropriate manner. It appears from what he said that he intends to take the matter away with a view to producing an amendment that is in the right place in the Bill and says the right things to achieve the recommendation of the Delegated Powers and Regulatory Reform Committee. On that basis, I beg leave to withdraw the amendment.
Earl Attlee
“( ) Section 74 (restriction on disclosure of information) is amended as follows.
( ) In subsection (3)”
Earl Attlee
My Lords, the amendments in this group are minor and technical amendments to paragraph 3 of Schedule 9, which contains the consequential provisions for amendments to be made to other Acts. In particular these are amendments to the consequential provisions relating to Section 74 of the Airports Act 1986. Their purpose is to tidy up the consequential amendments in the Bill to Section 74(4) of the Act. The current Bill does not provide for amending Section 74(4) of the Airports Act 1986 and the amendments seek to correct this. Section 74(4) provides that the restriction on disclosure of information does not limit the disclosure of information in reports of the Competition Commission under Section 45 of the Act, and does not apply to information that has been made public as part of such a report.
Section 74(4)(a) will be redundant once Part 4 of the Airports Act 1986 is repealed. This is given effect to in Clause 76(1) of the Bill. However, paragraph (b) will continue to be relevant to information previously disclosed in Competition Commission reports under Part IV of the Airports Act 1986. If Section 74(4) were left as it is, it would not be technically incorrect. However, it is desirable to make this minor amendment to ensure that redundant references are removed, while ensuring transparency over the effects of past reports published by the Competition Commission. I beg to move.
Earl Attlee
“( ) In subsection (4)—
(a) leave out paragraph (a), and(b) in paragraph (b), for “such a report” substitute “a report of the Competition Commission under section 45”.”
Earl Attlee
Earl Attlee
My Lords, this is another minor and technical amendment to paragraph 7 of Schedule 10. The schedule contains the main transitional provisions for the regulation of operators of designated airports under the Airports Act 1986. Paragraph 7 provides the power to amend the schedule. The amendment is being made because sub-paragraph (1) of paragraph 7 is no longer required following the minor and technical amendment made to Clause 107 during the Commons Committee stage which contains a power with the same effect. The amendment deletes sub-paragraph (1) of paragraph 7 because it repeats what is set out in Clause 107. Doing so, however, requires sub-paragraph (2) to be amended to make reference to Clause 107. The amendment does not alter the effect of sub-paragraph (2) of paragraph 7 because we believe that it is important to maintain that certain provisions in Schedule 10 should not be able to be amended through paragraph 7, such as the interim period ending at 31 March 2014. This is the last day of the current regulatory settlement known as Q5, and we do not wish to disturb the current regulatory settlement period. I beg to move.
Earl Attlee
House of Lords
Civil Service: Training and Development
(12 years, 5 months ago)
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Baroness Tyler of Enfield
To ask Her Majesty’s Government, in the light of reductions in Civil Service numbers and training budgets, and the closure of the National School of Government, what steps they are taking to ensure that civil servants receive the necessary training and development to provide high-quality policy advice to Ministers.
Lord Wallace of Saltaire
My Lords, as the House will be aware, we published the Civil Service reform plan on 19 June, which set out recommendations on training and development, among other proposals. Civil Service Learning is now in place to provide greater choice, flexibility, quality and value for money. It ensures that the current and future skills requirements of civil servants are met. Civil servants can access more than 130 e-learning resources, 75 classroom-based courses and 4,000 learning resources through the Civil Service Learning website. The new policy curriculum is also available through Civil Service Learning. It provides a comprehensive range of policy training and was developed in consultation with people currently working on policy and with subject matter experts in specific policy areas.
Baroness Tyler of Enfield
I thank the Minister for his helpful reply. Given that these reforms are coming at a time when the Civil Service is reducing in size by some 23%, thereby putting a premium on sharper and more agile policy advice, which as the reform plan itself says should be clearly based on “robust evidence”, will the Minister explain what evidence exists to show that opening up the policy development process to external competition, including from the private sector, will lead to higher quality, more cost-effective and, above all, impartial policy advice?
Lord Wallace of Saltaire
My Lords, it is not entirely the case that all Civil Service training was provided by the public sector before this. The evidence is to be found in particular in the rather critical NAO report of last year. Among other things, it quotes the Civil Service people survey of 2010, which said that,
“only 48 per cent of civil servants said that the learning and development they had received in the last 12 months had helped them to be better at their job”.
A lot in the NAO report was critical of the inefficient and divided provision of training, particularly between different departments. It discovered among other things that the cost of comparable courses in different departments varied by a factor of four.
Lord Peston
My Lords, do we not have to be extremely careful in going down this kind of path? We have a first-class Civil Service that is actually the envy of the rest of the world. Certainly, when I was a special adviser, although I had my disagreements, they were disagreements at a level that enabled me to appreciate both the integrity of civil servants and how excellent they are. Are we not in danger of undermining the Civil Service with this kind of approach, rather than appreciating the excellent people who work for us?
Lord Wallace of Saltaire
My Lords, I would have loved to have met the noble Lord when he was a special adviser to observe his skills. We are working with Ashridge, Roffey Park, Westminster Explained and a number of other providers. As we have been working with them, we do not see that this in any sense endangers the impartiality or quality of the Civil Service. Roffey Park, as noble Lords know, is a non-profit making organisation that provides top-class skills. We think that there are advantages in having central control of the Civil Service buy-in, which is Civil Service Learning, but with a variety of provision by a variety of providers.
Lord Hennessy of Nympsfield
Could the Minister explain to the House exactly what was wrong with the National School of Government?
Lord Wallace of Saltaire
My Lords, the National School of Government provided extensive residential accommodation for extensive residential courses. The Civil Service and other providers are moving away from extensive residential courses to shorter ones, very often for one day each. It is intended that the different mix will be better met and more efficiently provided by a range of different providers.
Baroness Fookes
My Lords, are civil servants given any training in the precise workings of this place and, indeed, the other place? Sometimes, the impression is given that the ignorance is complete.
Lord Wallace of Saltaire
My Lords, certainly there are training courses for civil servants in how to work with Parliament, particularly for those going into private offices. I have met a number of civil servants who have been through such courses.
Lord Anderson of Swansea
Does not the Minister protest too much? Is not the key driver of this move away from the school and a return to learning on the job simply cost saving?
Lord Wallace of Saltaire
It is not the key driver, but it is one factor. The National Audit Office report’s discovery led from the next generation human resources proposals of 2009, so we are talking about some continuity from one Government to another. The discovery that the provision across different departments was so remarkably unco-ordinated and could be provided much more cheaply should naturally be taken into account by any Government—the previous one or this.
Lord Hunt of Wirral
My Lords, I warmly welcome these reforms. I declare an interest as a former Civil Service Minister and underpin the remarks that have been made. Does the Minister appreciate the importance of recognising the integrity, independence and impartiality of our Civil Service, while embracing the need for further education and training?
Lord Wallace of Saltaire
My Lords, I am very happy to put on the record yet again our deep commitment to a high-quality and impartial Civil Service. I remind everyone that the challenges to the Civil Service at the moment—the data revolution and a whole set of new ways of working—are such that we need to look on a regular basis at the balance of training provided and the way in which one may necessarily have to change to adjust to different circumstances.
Baroness Hayter of Kentish Town
My Lords, I am tempted to ask whether the Government are now training civil servants to deal with ministerial U-turns, but I will not. I have a serious question. Last week, the Prime Minister set out a new programme of welfare reform: not for this Government, but for after the next general election. Will civil servants now be working on that policy agenda and preparing policy advice for the ideas set out by the Prime Minister?
Lord Wallace of Saltaire
My Lords, that was a good joke. The Prime Minister’s speech set out proposals for what he thought the Conservative Party should do post-2015. That is rather beyond my brief.
Lord Cormack
My Lords, what is being done to ensure that civil servants communicate in plain, concise English? Will he arrange for all civil servants to be given a copy of Sir Ernest Gower’s classic work, The Complete Plain Words, so that they write and speak English and we get rid of the appalling jargon that disfigures so many public documents?
Lord Wallace of Saltaire
I thought that the noble Lord was going to pay attention to Civil Service spelling mistakes. Perhaps I should inform the House that I discovered some rather bad spelling mistakes in Hansard last week, which I have reported to the Hansard writers.
Baroness Symons of Vernham Dean
My Lords, perhaps the Minister could answer the question put by my noble friend on the Front Bench. Is the Civil Service now being asked to work on the welfare reforms spelt out by the Prime Minister the other day? It is a simple question.
Lord Wallace of Saltaire
My Lords, the Prime Minister was setting out some long-term thoughts on how the policy should be developed after 2015. I have no knowledge of the Civil Service being asked to work on that at present.
National Offender Management Service: Indeterminate Sentences
(12 years, 5 months ago)
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Lord Ramsbotham
To ask Her Majesty’s Government what progress the National Offender Management Service prisoner co-ordination group is making in preparing individual release plans for those serving Indeterminate Sentences for Public Protection.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, the role of the indeterminate sentence prisoners co-ordination group is not to prepare individual release plans. It is for the prisoner’s offender supervisor and offender manager to draw up a sentence plan to assess the prisoner’s risk factors and then to propose a risk management plan to the Parole Board once the prisoner has completed his tariff.
Lord Ramsbotham
My Lords, I thank the Minister for that reply. The problem is that 6,500 prisoners are serving indeterminate sentences, with 3,500 over their tariff and 311 more than four years over it. The problem was put into sharp relief last week at an inquest in south Wales into the death of an indeterminate sentence prisoner who was a year over his tariff. Two weeks before he took his own life he was told at the prison to which he had just been moved that not only was the course that the Parole Board required him to complete before release not available in that prison, he was told that no such course would be available for two to three years. This problem needs to be tackled with urgency. Whether I have the name of the board right or not, I hope that the Minister will be able to assure the House that someone in NOMS is tackling individual problems with urgency.
Lord McNally
As I explained in my original reply, there is an individual case manager for each prisoner. However, I understand the noble Lord’s point. One of the original criticisms of this method of sentencing was that it created a Catch-22 whereby although you have to carry out a range of courses in order to make yourself available for parole and to convince the Parole Board that you are ready for release, those courses are not always available. Part of the reform programme that we have put in place, in parallel to the changes in the LASPO Act, is to try to make sure that prisoners are able to undertake reform training, and also to give the Parole Board greater flexibility in making its judgments on whether other aspects, rather than specific training programmes, can be taken into account in order to justify freedom. It is a difficult and delicate business. We are dealing with people who are in prison for serious offences and there must be a proper process to assess whether they should be allowed to go back into the community.
Lord Dholakia
My Lords, the Government were right to abolish IPP sentences—they were bad for the criminal justice system and bad for the prisons. As has been said, more than 6,000 inmates are currently in our prisons under IPP. If there is such a considerable delay in providing offender reform courses for inmates, could not the Prison Service use volunteers to help deal with it? Many prisoners also often find that despite assurances from the Parole Board about open conditions and release, the Prison Service is not meeting those assurances.
Lord McNally
That is why, in answering the noble Lord, Lord Ramsbotham, I referred to the fact that the Parole Board can now take into account other aspects of prisoner activity that might contribute to the assessment of whether prisoners can be safely released. We are also making sure that there is much more co-ordination of the policy so that there is an understanding in the various prisons of what is available and so that much greater use is made of compulsory intervention plans. However, it is a difficult problem. As the noble Lord, Lord Ramsbotham, said, there is a build-up of more than 6,500 prisoners on IPP sentences, and it will take time to unwind the system. We are unwinding it, and more prisoners are being released after proper assessment. However, we cannot simply release prisoners who have received such a sentence because of the severity of their crime or the assessment that they are a long-term danger to the public.
Lord Lloyd of Berwick
My Lords, the noble Lord has clearly taken on board that this is a very serious question for those who are beyond their tariff. Can he give any indication of when the Parole Board is likely to see them? Can he suggest whether there is not some way that those who have committed less serious crimes could be released by some form of executive action?
Lord McNally
The LASPO Act provides for the possibility of executive action on this matter and for a change in the balance of judgment to be made by the Parole Board. For the moment the Government are waiting to see the impact on overall numbers of the new systems that we have put in place. About twice as many IPP prisoners are being released now than were released two years ago, but we are also facing the problem that judges are still imposing IPPs. I believe that we will have the first net reduction this year, with more people being released than are coming in under the new system. We hope to be able to announce later this year when the new sentencing system included in the LASPO Act will be introduced.
Transport: Road Traffic
(12 years, 5 months ago)
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Lord Sheldon
To ask Her Majesty’s Government what action they have taken to improve the flow of road traffic in the United Kingdom.
Earl Attlee
My Lords, the Government provide funding and guidance to local authorities to support them in managing congestion on the local road network, including reducing the impact of roadworks. We have made better regulations to allow pioneer lane-rental schemes, are consulting on plans for roadworks permit schemes, and are increasing roadworks overrun charges. On the strategic road network, measures are being introduced to shorten the length of time that motorways are closed following incidents.
Lord Sheldon
I thank the noble Earl for that very useful Answer. However, the improvement of road traffic is much limited by more than 90% of all passenger transport. When there are rounds of crossroads, they reduce crashes by more than 50%, and stop signs at intersections have also reduced crashes dramatically by more than 50%. The other means that the noble Earl has put forward are very useful, but can he suggest how we are going to handle all these problems?
Earl Attlee
My Lords, I did not quite catch the proposal that the noble Lord was making. I think that he was talking about roundabouts as a means of reducing accidents. Roundabouts indeed reduce accidents because the collisions are less brutal and therefore any injuries are less serious, but they increase congestion a bit because the throughput is not as high as with a grade separated junction, which is even safer. In my initial Answer I talked about a range of measures to reduce congestion, which I know can be infuriating for all motorists.
Baroness Chalker of Wallasey
My Lords, can my noble friend persuade more boroughs to use lane rental than are currently doing so? Some are good at using lane rental; others are very limited in using it. In the past it has been a good way of speeding up repairs, thus reducing road congestion. Some activity needs to be taken with individual boroughs.
Earl Attlee
My Lords, my noble friend makes a good point. Through the Traffic Management Act 2004, all local authorities have a “network management duty” to secure,
“the expeditious movement of traffic”,
including pedestrians, on their highway network, and to facilitate the same on the networks of other authorities. Local authorities are required to appoint a traffic manager to oversee this obligation and must monitor their own performance, but my noble friend will understand that we also have the spirit of localism.
Lord Broers
Does the Minister agree that the Technology Strategy Board has made a wise decision in assigning one of the new catapults to transport? One of the main aims of that catapult will be to develop a comprehensive, UK-wide model for transport that will operate in real time and be able to react to emergency situations. I declare my interest as chair of the Transport Knowledge Transfer Network that led to this proposal.
Earl Attlee
My Lords, the noble Lord makes an important point about what we can achieve with technology. It is particularly important for the Highways Agency to be able to measure where congestion is and then to use its variable message signs to advise motorists to seek another route. In addition, although satnav navigation systems are in their infancy, we are starting to get the full benefit from them.
Lord Davies of Oldham
My Lords, is the Minister aware that during this past year the Mayor of London has pursued a smoothing traffic flow priority, which prioritises motorists over safety? Is he further aware that pedestrian deaths are up by 33% during this period and cyclist deaths by more than 21%? I express the hope that, in answering this question, the Minister’s brief will be more secure than it was last week when he answered a question of mine on fares to and from the Scilly Isles.
Earl Attlee
My Lords, I am confident about the accuracy of this brief, but regret that during our discussions last Monday I stated that the return fare on the “Scillonian III” for Scilly Isles residents was £20.50. However, this is in fact the single fare and there may be other qualifications. I am very sorry about this, since it made my position appear stronger than it really was, to the detriment of the noble Lord’s.
The noble Lord asked me detailed questions about the management of traffic in London. He will appreciate that that is a matter for the mayor. It is disappointing that overall fatalities have increased slightly, the reasons for which we have not yet examined fully.
Lord Bradshaw
Part 6 of the Traffic Management Act 2004, to which the Minister has referred, gives local authorities powers to manage traffic—for example, yellow box junctions and right turns—which they can enforce through their own staff. However, is the Minister aware that the regulations have never been extended outside London? He should take it from me that bus services would be immeasurably improved if local authorities could discipline people who block the highway.
Earl Attlee
My Lords, I shall draw my noble friend’s point to the attention of Mr Norman Baker, the Minister responsible.
Lord Tomlinson
My Lords, during this Question Time, we have heard reference to catapults and lane rentals. I am aware of the injunction that we heard from the noble Lord, Lord Cormack, for us to use plain, simple English. Can somebody please advise us what a catapult and a lane rental are?
Earl Attlee
My Lords, I said to the noble Lord, Lord Davies of Oldham, that my brief was accurate, but it does not include anything about catapults. However, I agreed that technology would provide benefits.
Lord Crickhowell
My Lords, is my noble friend aware that, while the British public have been content to face disruption due to the jubilee and are perhaps slightly less content about disruption due to the Olympic Games, they would find it intolerable to have the whole of central London brought to a standstill, perhaps for several weeks in preparation and afterwards, for a grand prix to be held?
Earl Attlee
My Lords, I anticipated an Olympics question. My first advice to all users of transport is to visit http://www.getaheadofthegames.com, which provides extremely good advice on how to avoid congestion. It is inevitable that there will be some congestion if we are to have a successful Games.
NHS: Definition of Exceptional Case
(12 years, 5 months ago)
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Baroness Masham of Ilton
To ask Her Majesty’s Government what is the definition of an exceptional case needing surgical and medical care through the National Health Service, and who makes the decision.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, the department has not issued definitive guidance on this difficult issue. Indeed, there is a paradox in the whole concept of defining an exception. However, good practice in the NHS suggests that a patient can be considered for treatment which is not normally provided locally if the patient has exceptional clinical need or is likely to derive exceptional clinical benefit. The decision is made by the local commissioner.
Baroness Masham of Ilton
My Lords, I thank the noble Earl for that reply. However, is he aware that there is a young doctor in Northallerton, North Yorkshire, whose PCT has denied her a vital operation for a genetic pancreatic condition? If she does not have this operation, she will remain in excruciating pain all the time, she will not be able to work, and there will be a risk of cancer.
Earl Howe
My Lords, I hasten to reassure the noble Baroness that I have every sympathy with the individual in question, and I was aware of this particular case. The chief executive of the NHS will shortly be writing to her clinical tutor to suggest a possible way forward. However, I should put on record my view that the commissioner is acting reasonably in insisting that its decision on exceptionality should depend solely on the clinical need of the patient, and not on any broader social factors. If there is now good clinical evidence to support the use of this particular treatment, commissioners should be considering whether to make it available to all patients with similar clinical needs, and not just to a few individuals.
Lord Ribeiro
Is my noble friend aware that the pancreatic unit at Leicester is not able to do any islet cell transplantation operations because the PCT refuses to fund them? The excuses used to justify not funding these operations are that these may be “procedures of limited value” and “experimental surgery”. There are, in fact, four clinical units throughout the UK doing islet cell transplantation, with good records and good outcomes. I want to know whether the PCTs are not funding these operations in order to present a clean sheet to the incoming CCGs in April 2013, or whether there is another reason.
Earl Howe
My Lords, no, that is not the reason. My noble friend is quite right that this treatment has been around for a little while. However, it is not yet in mainstream practice. It is expensive, it is not routinely available in the NHS, and indeed NICE has published interventional procedure guidance which concludes that it,
“shows some short term efficacy, although most patients require insulin therapy in the long term”.
That does not seem to me to be a resounding endorsement of this treatment.
Lord Winston
My Lords, will the Minister be kind enough to help us by defining what is meant by exceptional clinical needs?
Earl Howe
There is no clear-cut answer to that question. A patient might be suffering unusually severe symptoms from a given condition, or they might suffer from some comorbidity, with the result that in the absence of treatment his or her quality of life would be unusually severely affected. The underlying principle should be that the patient has some exceptional characteristic which would justify more favourable treatment being given to them than to the average patient with that condition.
Baroness O'Loan
Given the vulnerability of the patients, the exceptional nature of the illness in such cases, and the consequential problems in terms of access and capacity to appeal, will the Minister tell the House what arrangements exist to scrutinise the fairness and consistency of decisions by PCTs and by their exceptional cases review processes?
Earl Howe
My Lords, under the NHS Constitution, all patients have the right to an individual review of a decision not to fund a particular treatment if they and their doctor believe that it would be appropriate. They also have the right to an explanation of the basis of the decision. The commissioner must in turn have a process to enable such individual funding requests to be considered, so the watchwords here are transparency and publishing an explanation.
Baroness Gardner of Parkes
Does the Minister agree that there are other decision-making bodies? I refer in particular to the UK National Screening Committee. Is he aware that, probably correctly, it makes its decisions only on research results? Why does it claim that it does not have the money to spend on research into Streptococcus B infections, when international research shows a clear choice for screening as opposed to risk assessment? That change that has been made in other countries has resulted in reductions of strep B infections in children of 80% in the USA, 60% in Spain, 82% in Australia and 71% in France. The screening of pregnant mothers could prevent that very serious condition, which can be fatal, being passed to a small number of babies.
Earl Howe
My Lords, the UK National Screening Committee advises Ministers and the National Health Service in all four UK countries on all aspects of screening policy, including for group B Streptococcus carriage in pregnancy. The committee is currently reviewing the evidence for screening for that condition in pregnancy against its criteria. It will take into account the international evidence and a public consultation on the screening review will be opening shortly.
Lord Collins of Highbury
My Lords, the Minister said that this treatment is not routinely carried out. The doctor concerned, who works in the NHS, is aware that pancreatectomy is carried out in other PCTs. Can the noble Earl explain where it is being carried out so that we can understand what is routine and what is not?
Earl Howe
My Lords, I hope that my earlier answers gave a clear indication of the definition of exceptionality, which should demonstrate to the House that something that is exceptional is not routine. Our advice is that that treatment is not routinely available in the NHS. There is a handful of centres in England with doctors who are trained to carry out the operation, but although the technique has been in use since 1977, it is available only in a few centres worldwide, which does not suggest to me that other countries are ahead of us in this area.
Delegated Powers and Regulatory Reform Committee
The Chairman of Committees
That Lord Marks of Henley-on-Thames be appointed a member of the Select Committee in place of Lord Carlile of Berriew, resigned.
Lord Foulkes of Cumnock
Can the Chairman of Committees give us a clear assurance that the removal of the noble Lord, Lord Carlile, from this important committee is not connected in any way with his excellent article in the Telegraph describing Mr Clegg’s House of Lords reform proposals as third rate?
The Chairman of Committees (Lord Sewel)
My Lords, I have to be a bit careful here. I am sure that the generous comments of the noble Lord, Lord Carlile, on Mr Clegg’s proposals were not at all a consideration in this effect.
Northern Ireland Act 1998 (Devolution of Policing and Justice Functions) Order 2012
(12 years, 5 months ago)
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Lord Cormack
I would like to point out to those who are concerned with the future of this place that we have on the Order Paper today a number of things, each one of which could be debated at length. However, because we are such a restrained, responsible House, we shall not be debating them at length, but an elected Chamber at odds with the other place might well choose to do so.
Earl Attlee
My Lords, this is a very simple Motion. It refers the instrument to a Grand Committee and that has been agreed by the usual channels.
Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2012
(12 years, 5 months ago)
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Local Authorities (Mayoral Elections) (England and Wales) (Amendment) Regulations 2012
(12 years, 5 months ago)
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Lord Wallace of Saltaire
That the draft regulations be referred to a Grand Committee.
Electoral Registration Data Schemes Order 2012
(12 years, 5 months ago)
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Lord Wallace of Saltaire
That the draft order laid before the House on 9 May be approved.
Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 June.
Statutory Auditors (Amendment of Companies Act 2006 and Delegation of Functions etc.) Order 2012
Baroness Wilcox
That the draft order laid before the House on 15 May be approved.
Relevant documents: 2nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 June.
Crime and Courts Bill [HL]
(12 years, 5 months ago)
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Lord McNally
“Transfer of immigration or nationality judicial review applications
(1) In section 31A of the Senior Courts Act 1981 (transfer from the High Court to the Upper Tribunal)—
(a) in subsection (2), for “, 3 and 4” substitute “and 3”,(b) omit subsection (2A),(c) in subsection (3), for “, 2 and 4” substitute “and 2”, and(d) omit subsections (7) and (8).(2) In consequence of the amendments made by subsection (1), section 53(1) of the Borders, Citizenship and Immigration Act 2009 is repealed.”
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, this amendment will remove restrictions contained in Section 31A of the Senior Courts Act 1981. It will enable applications for or permission to seek judicial review in immigration, asylum and nationality cases to be transferred from the High Court in England and Wales to the Upper Tribunal.
As noble Lords will be aware, this House has considered this issue before. In 2009, the House thought it appropriate to allow the High Court to transfer fresh claim judicial reviews to the Upper Tribunal. These are judicial reviews that relate to a refusal by the Home Secretary to treat further submissions as fresh asylum or human rights claims on the basis that they are not significantly different from the material previously considered. These cases have been heard in the Upper Tribunal since October 2011 and the process is working well. This amendment would potentially enable any class of immigration, asylum or nationality judicial review to be heard in the Upper Tribunal.
The further categories of cases that would be transferred to the Upper Tribunal would have to be set out in a direction, or directions, made by the Lord Chief Justice with the agreement of the Lord Chancellor under the provisions in the Constitutional Reform Act 2005. We envisage that the transfers will take place in a staged fashion to increase slowly the types of judicial review dealt with by the Upper Tribunal. The ability to transfer such cases would play an important role in improving access to justice. Immigration and asylum judicial review cases currently form a high proportion—around 70%—of the caseload in the administrative court. The total number of these cases has doubled in the past five years, with around 8,800 being received in 2011. Many of these cases are relatively straightforward. This volume of cases is unsustainable for the administrative court. It keeps High Court judges from other complex civil and criminal cases that they should be hearing. It has created a backlog and has added to waiting times for all public law cases heard by the administrative court.
I recently met the president of the Queen’s Bench Division and the president of the Upper Tribunal immigration and asylum chamber to discuss the progress that has been made in the Upper Tribunal since it was created in 2010. I am persuaded that it now represents the most appropriate venue for the majority of judicial reviews of this type. As the avenue for appeals against a decision of the First-tier Tribunal, the Upper Tribunal deals with thousands of appeals each year. Since acquiring this jurisdiction it has received nearly 200 fresh claim judicial reviews, which have been dealt with more quickly. Fresh claim cases are on average dealt with in seven weeks, compared to an average of 11 weeks for the administrative court. This has not been at the expense of quality. The judges who sit in the Upper Tribunal have a high level of expertise, particularly in relation to in-country conditions and human rights implications, and are regularly joined by judges of the administrative court.
The Upper Tribunal’s expertise in the field of asylum and country guidance cases has been recognised by the higher courts in the UK and the European Court of Human Rights. It is able to make well informed decisions that will deliver justice in these types of judicial review cases, in the same way as the High Court has done in the past. I beg to move.
Lord Avebury
My Lords, this amendment would allow judicial reviews of immigration and asylum cases and nationality matters to be transferred from the High Court, where judicial review is currently heard, to the Upper Tribunal, as my noble friend has explained. To many of your Lordships, this must feel like Groundhog Day. Parliament made clear its views on whether JRs should be transferred from the High Court into the tribunals once in 2007, during debate on what is now the Tribunals, Courts and Enforcement Act 2007, and again in 2009, during debates on what is now Section 53 of the Borders, Citizenship and Immigration Act 2009. It has said no and has said so powerfully. The arguments against the Upper Tribunal being entrusted with this responsibility still hold good.
The 2007 Act established a new regime, bringing together several tribunal jurisdictions into one structure comprising the First-tier Tribunal and the Upper Tribunal, or UT for short. The Act allowed for the transfer of certain JR applications from the High Court to the UT but, as a result of amendments made during its passage, excluded immigration and nationality JRs from the cases that could be transferred. Parliament returned to this matter, as my noble friend has reminded us, in 2009 during debates on the then Borders, Citizenship and Immigration Bill and again rejected a proposal that would permit the wholesale transfer of immigration and nationality JRs.
The compromise reached was that a JR concerned with a decision on a fresh claim for asylum—that is, one made after an earlier claim and any appeals against its refusal had finally been rejected—was made transferable. Since 2009, the once separate Asylum and Immigration Tribunal has been transferred into the two-tier structure, with an immigration and asylum chamber in the First-tier Tribunal and in the UT. Meanwhile, on a case-by-case basis, the High Court has transferred a few JRs against local authorities concerning the age of separated children seeking asylum to the UT where they have ended up in the immigration and asylum chamber. However, age-dispute JRs can be transferred because they are not decisions about immigration or nationality and are therefore not affected by the 2007 Act. These cases start in the administrative court, but can be transferred to the UT on a case-by-case basis. There have been only four reported cases to date.
Fresh-claim JRs are transferred as a class. There are no reported cases yet and only one case that the tribunal was to hear. The UT has no experience of hearing JR cases so there is no way of assessing whether it is likely to cope well or badly with them. Meanwhile, although there is power to transfer fresh-claim judicial reviews from the Outer House of the Court of Session in Scotland to the UT, that power has never been exercised. I can do no better than cite the comments of the late Lord Kingsland on Report on the Tribunals, Courts and Enforcement Bill. He said,
“first, the Government have broken their promise to your Lordships’ House not to introduce primary legislation permitting the transfer of judicial review matters in asylum and immigration cases until we have sufficient evidence that the system for judicial transfers in other classes of case are working well. Secondly, the Opposition and the noble Lord, Lord Thomas of Gresford, would be extremely unhappy to permit such transfers unless we were satisfied that the transferred AIT single-tier regime to the Upper and Lower Tribunals did indeed have the effect of leading to much fairer and more timely decisions, thus reducing substantially the overall number of judicial review cases … Thirdly, as I have indicated, judicial review is a crucial component in the struggle to protect the individual. Many of these cases raise issues, at best, of the freedom of the individual and, at worst, of torture and death. It is vital that it remains open to someone in such cases to have the application heard by a High Court judge”.—[Official Report, 1/4/09; cols. 1126-27.]
There is no such evidence yet. Powers to transfer JRs into the UT are being sought when it has done only a handful of age assessment cases and has not built up any track record whatever in dealing with fresh-claim JRs. High Court judges have sat in the UT, but there are also judges in that chamber who were adjudicators and special adjudicators of the former Immigration Appellate Authority and its successors. They have never heard cases outside the immigration and asylum tribunal jurisdiction, but the amendment would allow them to deal with JRs on which they have zero experience.
Speaking for the then Government in 2007, the noble Baroness, Lady Ashton of Upholland, accepted that JRs in immigration cases were particularly sensitive. The point was underlined by a forceful observation from the noble and learned Baroness, Lady Butler-Sloss, in Grand Committee in 2006. She said:
“I support my noble and learned friend Lord Lloyd of Berwick in relation to the requirement to have someone of the level of a High Court judge to hear a judicial review in the tribunal. It would be invidious for there not to be a judge of that rank dealing with it. I support my noble and learned friend very strongly”.—[Official Report, 13/12/06; col. GC 68.]
Then there was the noble and learned Lord, Lord Lloyd of Berwick, who said at Second Reading of the Borders, Citizenship and Immigration Bill:
“If the effect ... is that the administrative court would be bound to transfer judicial review applications in all immigration cases, I would be strongly opposed to it”.—[Official Report, 11/2/09; col. 1142.]
The then Minister, the noble Lord, Lord West, winding up that debate, said that,
“the senior judiciary are very supportive of the clause”—[Official Report, 11/2/09; col. 1211.]
that is, the clause providing for the transfer—which he said was shown by the responses of the President of the Queen’s Bench Division, the Master of the Rolls and the Senior President of Tribunals to the consultation on immigration appeals. However, the Master of the Rolls had merely indicated that he supported the views of the President of the Queen’s Bench, who in turn stated that proposals for transfer of JRs in general were welcome, but emphasised that:
“Some of them are plainly suited to the Administrative Court and should remain there”.
The Senior President of the Tribunals agreed with him. The Court of Session judges did not welcome the proposal. They said that,
“any decision as to a more general transfer of judicial review jurisdiction in this area—
immigration—
“should be made only once the Upper Tribunal has gained extensive experience of implementing its proposed remit”.
No such extensive experience has been gained. Others, including the Immigration Law Practitioners Association, the Constitutional and Administrative Law Bar Association, the Glasgow Immigration Practitioners’ Group, the Law Society, the Refugee Legal Centre, the Refugee Council and individual lawyers, have expressed views similar to those of the judges of the Court of Session.
Lord Woolf
As the noble Lord has made clear, there is a considerable history here. When he is referring to the bodies that have indicated their objections, could he help the House by indicating whether the objections are indeed to the present amendment or to an earlier one?
Lord Avebury
As I understand it, my Lords, these representations and views have been expressed by the bodies that I have mentioned in response to this particular legislation. I am relying particularly on the excellent briefing that we have received from ILPA, which quotes all those authorities.
The amendment would allow for the transfer of any immigration or nationality JR by decision of the High Court, the Northern Ireland High Court or the Court of Session in the individual case, and empower the Lord Chief Justice, with the agreement of the Lord Chancellor, to direct that all immigration and nationality JRs or any specific class of these JRs must be transferred. The temptation would be to exercise the powers in an effort to reduce the load on the higher courts, but the right solution is to improve the quality of decision-making so that there are fewer litigants seeking JRs. The number is likely to fall in any case because of the LASPO Act provision that legal aid is no longer available for ordinary immigration cases.
ILPA has set out constructive suggestions for reducing the number of JR applications and indeed the burden on the appeals system as a whole. In 2009, for instance, it requested that UKBA disclose information on the number of immigration and asylum JRs that are conceded by the agency or in which the agency has agreed to make a fresh decision without the need for the process to be seen all the way through. The agency told ILPA that it was too expensive to retrieve this information, but it gave some data on the very large number of immigration JRs that are withdrawn: 1,185 cases in 2006 and 1,532 in 2007. We do not have more recent figures but I hope that my noble friend will tell us what the latest figure is for 2011, to compare with a total of some 9,000 given by my noble friend Lord McNally in his letter to the chair of the JCHR on 12 June.
As was recognised in 2006-07, immigration and asylum JRs are particularly sensitive. It remains the case that the tribunal has not demonstrated the same ability to deal with UKBA’s conduct as a litigant as has the High Court. The agency’s failures to respond in a timely manner to directions from the tribunal to disclose relevant matters or adequately to plead its case are problems that continue to beset all too many cases.
I will not try the House’s patience by going through all ILPA’s suggestions, but there is one that I think will particularly appeal to your Lordships. The Home Office could address the many hundreds of Zimbabwean cases that have contributed substantially to the workload since 2005 by reviewing and, where appropriate, conceding. Many of these cases will include findings of fact justifying a grant of refugee status in the light of the country guidance determination in RN (Zimbabwe), which has just been held not to have been overturned in JG and CM (Zimbabwe), the text of which is awaited.
In conclusion, the reasons given in your Lordships’ debates in 2007 and 2009 for not transferring more JR cases to the UT—that immigration and asylum JRs were the most sensitive cases, and the new chambers’ handling of JRs required testing first—still hold good. The number of cases going to the High Court and Court of Appeal could be reduced by other means, and restricting access to the higher courts would merely encourage or allow for poor decision-making. Decisions of the Court of Appeal on appeals from the UT show that it continues to be the higher courts, rather than the UT, that call for the UK Border Agency to account for its conduct as a litigant.
Lord Woolf
My Lords, I will say a few words in support of this amendment. In order to understand its importance, one has to take into account the matters that were so clearly outlined by the noble Lord, Lord Avebury, just before I rose to my feet. The history that he has described indicates that this is not an amendment that should be lightly accepted. Time has moved on since some of the matters to which he referred arose, and the experience so far of the quality of the tribunals, particularly the Upper Tribunal, has been particularly good.
The other important matter is the resource of High Court judges. The demands for the services of High Court judges are extensive. At present, there is the grave danger that judicial review will not be able to achieve one of its most necessary characteristics, which is to deal expeditiously with the urgent applications that come before it. This is critical because sometimes the very fact of the application for judicial review can and does delay matters of great importance—I hope am not overstepping the mark in saying matters, often, of national importance. The information that is available as to the pressure on High Court judges makes clear that they are overstrained. That is one side of the picture.
The other side of the picture is that the Upper Tribunal has huge expertise, which except in a very small number of cases is not available to High Court judges. Therefore, it is not apparent that they have the ability to deal with these cases as expeditiously and effectively as the tribunal. The danger in not accepting this amendment is that the desire for excellence could be the enemy of the good, and I urge the Committee to be sympathetic to it. It is my belief that justice can and should be ensured, as it always is in this country when these matters are dealt with by the tribunal as proposed here. I know that those who are responsible for arranging the proper dispatch of business in the different parts of the High Court attach the greatest importance to this amendment. They see it as a lifeline.
Lord Beecham
My Lords, I was not a Member of your Lordships’ House at the times when, as the noble Lord, Lord Avebury, reminded the Committee, similar matters were debated at some length. Therefore, I come to this amendment with an open mind, which creates something of a precedent in my case. I listened very carefully to the Minister’s explanation and justification of the amendment and, of course, to the critique of it from the noble Lord, Lord Avebury. Although many of us have received extensive briefings about various aspects of this Bill and other legislation, I have not received any particular briefing from any of the organisations referred to by the noble Lord, Lord Avebury, on this point.
I initially leant towards his line of argument, but am comforted in the first instance by the fact that the Lord Chief Justice’s role will be critical in initiating any further transfers, as well as by the wisdom and experience of the noble and learned Lord, Lord Woolf, of course, who commends the amendment to the Committee. Perhaps when he replies the Minister will indicate whether it is the Government’s intention to review progress at some stage, perhaps in conjunction with the Lord Chief Justice, to see whether the fears that the noble Lord, Lord Avebury, enunciated are grounded in relativity, and if they are to create an opportunity for a change in policy, either slowing down the additional transfers or possibly rethinking the policy.
As we have been reminded on previous occasions, it is the Government’s policy to conduct a post-legislative review within three to five years. Perhaps an indication that that will also be the case in relation to this matter might satisfy—for the time being, at any rate—some of the doubts that have been raised. If it is necessary to step back in the light of experience, that could then happen. For the moment, I am disposed to accept the Government’s amendment and rely very heavily on the support given to it by the noble and learned Lord, Lord Woolf.
Lord McNally
My Lords, I am very grateful to the noble Lord, Lord Beecham, for that indication of the Opposition’s support for this amendment. I gladly give him, and the noble Lord, Lord Avebury, an assurance that what we are doing will be kept under review in close consultation with the judiciary.
It is true that this matter was discussed in 2009, as the noble Lord, Lord Avebury, said, but we have now had three years’ experience of the workings of the Upper Tribunal in these areas and we have also had representations from the senior judiciary about how the present system is clogging up the High Court and bringing some of the pressures to which the noble and learned Lord, Lord Woolf, referred.
I have not taken lightly the decision to bring this back to the House. In a meeting, the president of the Queen’s Bench Division and the president of the Upper Tribunal convinced me of two things: first, that we would be taking some pressure off the High Court and High Court judges by doing this; and, secondly, that by moving these cases to the Upper Tribunal we would in no way diminish the quality of justice available. On the contrary, as the noble and learned Lord, Lord Woolf, indicated, a great deal of the expertise for judging these cases is in the Upper Tribunal.
I take the point that the noble Lord, Lord Avebury, made about the UK Border Agency’s withdrawals. There are varied reasons for cases being withdrawn but, coupled with other government reforms, we are getting a better system for dealing with these cases from the UKBA. The senior judiciary is broadly in favour of the amendment as a sensible solution to the backlogs in the High Court and an opportunity to transfer cases to the most appropriate part of the justice system. There has been strong judicial involvement in the discussions preparing for this amendment, and the judiciary is keen to ensure that it is successfully introduced. As the noble Lord, Lord Beecham, said, the Lord Chief Justice will be closely involved with the Lord Chancellor in gauging the pace of movement on this so that we get the twin benefits of faster, efficient, high-quality justice in immigration cases and some elbow room in the High Court to deal with the important cases that the noble and learned Lord, Lord Woolf, mentioned.
I hope the noble Lord, Lord Avebury, will be content to take those assurances and to accept that this decision has been taken on the basis of the experience of the past three years, which we believe is entirely favourable to the move that we are making. That is coupled with the assurance that we will keep the matter under review and will be in close contact and consultation with the senior judiciary to ensure that the move is completely in keeping with the access to good justice that is the aim of this amendment.
Lord Avebury
My Lords, can my noble friend answer the question I put to him about how many cases were withdrawn by the UKBA—to correspond with the figures I gave for 2006 and 2007? If a very large number are being withdrawn, and thus the UKBA is conceding that the original decision was wrong, surely that proves that there are other methods of reducing the pressure on the High Court rather than transferring all these cases to the tribunal.
The Earl of Sandwich
My Lords, I am not sure that the Minister answered the point made by the noble Lord, Lord Avebury, about the relative inexperience of the Upper Tribunal in immigration. He quotes the wise and the good, and we have heard from the noble and learned Lord, Lord Woolf, but surely we are not making a decision on the basis of advice only but on the actuality of the court over the period.
Lord McNally
The point was made that the Upper Tribunal over the past three years has demonstrated very clearly that it has both the experience and the expertise to deal with these matters. The Upper Tribunal’s expertise in reducing backlogs in the Administrative Court has been demonstrated. I do not have the most up-to-date figures on UKBA withdrawals, but in my closing remarks I accepted that one issue was the UKBA’s tendency in the past to withdraw objections. Reforms that are being taken forward by my right honourable friend the Home Secretary aim to deal with some of those criticisms of the UKBA.
However, that does not take away the central thrust of this proposal that since 2009 the Upper Tribunal has shown itself to be working well, and we are not rushing our fences in this case. Both the Lord Chancellor and the Lord Chief Justice will be closely involved in gauging the movement of cases to the Upper Tribunal, but no one has seriously doubted its competence or expertise to deal with these matters. On the contrary, it has shown itself to be remarkably efficient at cutting time for dealing with cases, which must be in the interests of justice.
Lord McNally
Lord McNally
Lord McNally
My Lords, these amendments all relate to the provisions on the deployment of the judiciary. Of particular note is Amendment 140, which introduces an emergency procedure regarding the appointment of deputy judges of the High Court when there is an urgent need to do so. The Bill introduces a Judicial Appointments Commission process for appointing deputy High Court judges and authorising circuit judges and recorders to sit in the High Court. This is an important reform to increase transparency regarding these appointments.
Amendment 140 would deal with situations where there is an urgent and unforeseen demand for a deputy High Court judge and it is not practicable to draw on any judges of the High Court or any of those who have been selected previously by the Judicial Appointments Commission, or to deploy any other judge who is authorised to sit in the High Court or Crown Court in the time available.
The amendment inserts new Section 94AA into the Constitutional Reform Act 2005. The purpose of this new section is to specify clearly circumstances in which the normal Judicial Appointments Commission selection exercise may not be applied in the appointment of a deputy judge of the High Court for a definite period. This may be needed in exceptional circumstances, such as a number of judges being unwell or suffering some other unexpected misfortune, meaning that a particular area of expertise is required at short notice. The amendment specifies what criteria must be applied if the Judicial Appointments Commission is not to select deputy judges of the High Court. It also clearly limits the duration of the appointment to the disposal of the particular business that gave rise to the use of the power.
Amendment 145 inserts a new Part 3A into Schedule 13 of the Bill. The new part deals with the deployment of judges to the Court of Protection. Our new deployment policy has been applied in this jurisdiction and all judicial officeholders are now able to be nominated to sit in the Court of Protection, including deputies and temporary appointees. Of course, in this and all jurisdictions, judges may be deployed only if the Lord Chief Justice determines that the judge possesses the necessary expertise and experience and deems in all other circumstances that it is appropriate for that particular judge to be deployed to that specific jurisdiction. In this jurisdiction, there has been a particular difficulty in ensuring that the court is fully resourced with judges that have the necessary skills and ability to hear these complex and often difficult matters. The amendment enables the Lord Chief Justice to provide appropriate judicial resources from a broader pool of candidates; it also widens the group of judges who can be appointed to act as the senior judge of the Court of Protection, handling certain administrative functions to that court.
The other amendments in this group on judicial deployment are either consequential or drafting amendments to ensure that we have made all the necessary changes and adjustments to Schedule 13 of the Bill. I will not detain the Committee further with this group of amendments, but I can provide further details of these amendments if needed. I beg to move.
Baroness Butler-Sloss
Perhaps I could ask the Minister what may be a rather stupid question. Unfortunately, I do not have the Mental Capacity Act in front of me, but I assume that the President of the Family Division and the judges of the Family Division and the Chancery Division are still on the list of those who will be trying these cases, as they are usually the judges who do it.
Lord McNally
I tread on very thin ice, but I think that I can assure the noble and learned Baroness that that is the case. If not, I shall make sure as soon as possible that the Committee knows that I am wrong.
Baroness Hamwee
I want to ask my noble friend a question about Amendment 140. He described the circumstances and need for flexibility in the ability to appoint temporary High Court deputy judges. I would like to ask about the business for which they would be needed, in proposed new Section 94AA(2)(a), which refers to both an “urgent need” and the “disposal of particular business”. He mentioned the need for special expertise, but has he any further examples of what the “particular business” might be? I take it that we are not being asked to agree to temporary appointments to deal with urgent business per se. It is the term “particular business” that interests me. I could have pictured this clause better if it did not refer to “particular business” but to “business” in general. I am sorry that I did not give the Minister notice of the question. He may wish to come back to it at a later point.
Lord McNally
I, too, am rather sad that my noble friend did not give me notice of the question. I am pleased that we are bringing in a role for the Judicial Appointments Commission in the appointment of deputy High Court judges. To put it bluntly, there was a suspicion in some areas that the appointment of deputy High Court judges was the last surviving remnant of the “tap on the shoulder” system of appointments. Therefore the proposals to bring the appointments commission into the process are important.
However—I say this in the presence of the noble and learned Lord, Lord Woolf, with all his vast experience—we were determined not to put the Lord Chief Justice of the day into a straitjacket. He has to be responsible on a day-to-day basis for deploying the judiciary and, if there is a need to appoint a deputy in an emergency, we should have the ability to do so. Hence, in introducing the provision, there are many references to exceptional circumstances and a definite period so that this emergency procedure would not lead, again, to a way of appointing deputy High Court judges by a tap on the shoulder. It leaves the Lord Chief Justice of the day with the wriggle room to deploy efficiently but makes sure that the main appointment of deputies now comes within the ambit of the Judicial Appointments Commission.
As for specific examples, the best I can do is to write to my noble friend giving her some examples, which I hope will reassure her. I shall, of course, put a copy of the letter in the Library of the House for the benefit of the Committee.
Baroness Turner of Camden
Fairly recently I asked questions in the House about employment tribunals and I was told by the Government that an investigation into them was currently proceeding and that we would be told the results in due course. Does the change of title listed in Amendment 146 from “chairmen of employment tribunals” to “Employment Judges” form part of that general investigation?
Lord McNally
Yes, my Lords, it is part of the general process of reform at both the tribunal level and in other parts of the judiciary. So there will be employment judges from now on.
Lord Thomas of Gresford
Perhaps I may help my noble friend by illustrating the kind of particular business there could be. In the old days it was not so much a tap on the shoulder as a ring-round by the Lord Chancellor’s Department to find someone who could go and do particular cases on very short notice. I recall being asked to go to Leeds with the inducement that I could stay in the judges’ lodgings—not much of an inducement, I may say—to try three large medical negligence cases. They said, “Don’t worry, they’ll all settle”. In fact, they all stood up. That is the sort of instance when counsel on both sides are all ready to go ahead on a fixed date but there is no High Court judge to take it. Everybody assumes that the cases will settle but they do not.
Lord McNally
Not for the first time when I find myself out on the thin ice, my noble friend supplies a plank for me to walk back to dry land. I thank him for that intervention.
Lord Beecham
I am glad that the noble Lord is not emulating Rasputin in terms of his trips across the ice.
The Opposition do not take issue with the amendments but it is interesting that in a move to simplify the system we have a complex series of amendments. They add several pages to Schedule 13. By sheer chance today, a Mr Patrick O’Brien, a research associate of the Constitution Unit, has written a blog—I suppose that is what it is—about the issue of judicial appointments under the Bill. He makes the point:
“The new system in its entirety will, if anything, be even more complex than the present arrangements. It will be a hydra with three heads—the Lord Chancellor, Lord Chief Justice and the Senior President of Tribunals (and indeed five heads if you include the formal roles of the Prime Minister and the Queen), all of whom will have roles in approving appointments of various types—and at least five variants of appointment commissions/panels in addition to the JAC. There is the potential for further variations on these commissions/panels though the use of regulations. As things stand, the use of regulations in the Bill adds complexity and uncertainty to the CRA rather than removing it”.
Can the noble Lord give an indication of when, if at all, regulations will be introduced and what they might cover? Mr O’Brien goes on to say: “The CRA”—Constitutional Reform Act—
“is not just addressed to civil servants”—
or Members of your Lordships’ House or indeed the other place. He continues:
“It has constitutional significance and”,
should be,
“comprehensible to the general public”.
The noble Earl, Lord Attlee, referred to improvements in satnav technology when he was answering a Question on transport earlier. The implication of Mr O’Brien’s article is that we need the equivalent of satnav to navigate through this complex field of appointments. Having said that, we do not object in principle but it would be helpful if a guide were available to the public as well as to the practitioners so that they can see how the new system is supposed to work. Again, as with the previous amendment, I assume that the Government will be monitoring developments and will ensure that problems are dealt with in due course.
Lord McNally
My Lords, I am extremely grateful to the noble Lord, Lord Beecham, for his indication of support and for some sensible suggestions that I hope will assist the Committee. We will be publishing draft regulations before Report. The idea of a simplified guide on how these will impact is very sensible and I will take that back to my right honourable friend the Lord Chancellor. Amending existing legislation can be extremely complex when fitting in new proposals to existing legislation.
The noble and learned Lord, Lord Falconer—I was going to say my noble friend—along with the noble and learned Lord, Lord Woolf, showed a certain pride of authorship in the new disposition of our legal system after the reforms of the earlier part of this century. What we are trying to do, in our different ways, is build on reforms that have given us an effective system. These include promoting greater diversity in our judiciary. As we were discussing the other day, we are also conscious of the important nexus of the system, with the President of the Supreme Court, the Lord Chief Justice and the Lord Chancellor.
Lord McNally
(b) paragraph 38 of Schedule 12 has effect—(i) as if a reference to the office of deputy judge of the High Court were inserted at the beginning of the list in sub-paragraph (4) of that paragraph, and(ii) as if “second” were substituted for “first” in sub-paragraph (5) of that paragraph”
“(3) After section 94A of the 2005 Act (appointments not subject to section 85: courts) insert—
“94AA Appointments not subject to section 85: High Court deputy judge
(1) Where this section applies to an appointment, section 85 does not apply.
(2) This section applies to the appointment of a person as a deputy judge of the High Court if it appears to the Lord Chief Justice, after consulting the Lord Chancellor, that—
(a) there is an urgent need to take steps in order to facilitate the disposal of particular business in the High Court or Crown Court,(b) it is expedient as a temporary measure to make the appointment in order to facilitate the disposal of the business, and(c) there are no other reasonable steps that it is practicable to take within the time available in order to facilitate the disposal of the business.(3) An appointment to which this section applies is to be made—
(a) so as not to extend beyond the day on which the particular business concerned is concluded, or(b) so as not to extend beyond the later of—(i) the day on which the business is concluded, or(ii) the day expected when the appointment is made to be the day on which the business is concluded.”(4) In section 85(2A)(d) and (4) of the 2005 Act after “94A” insert “, 94AA”.”
“Part 3ADeployment of judges to the Court of Protection5A (1) Section 46 of the Mental Capacity Act 2005 (judges of the Court of Protection) is amended as follows.
(2) In subsection (2) (persons who may be nominated as court’s judges) omit the “or” at the end of paragraph (d) and, after paragraph (e), insert “,
(f) a District Judge (Magistrates’ Courts),(g) a judge of the First-tier Tribunal, or of the Upper Tribunal, by virtue of appointment under paragraph 1(1) of Schedule 2 or 3 to the Tribunals, Courts and Enforcement Act 2007,(h) a transferred-in judge of the First-tier Tribunal or of the Upper Tribunal (see section 31(2) of that Act),(i) a deputy judge of the Upper Tribunal (whether under paragraph 7 of Schedule 3 to, or section 31(2) of, that Act),(j) the Chamber President, or Deputy Chamber President, of a chamber of the First-tier Tribunal or of a chamber of the Upper Tribunal,(k) the Judge Advocate General,(l) a Recorder,(m) the holder of an office listed in the first column of the table in section 89(3C) of the Senior Courts Act 1981 (senior High Court Masters etc),(n) a holder of an office listed in column 1 of Part 2 of Schedule 2 to that Act (High Court Masters etc),(o) a deputy district judge appointed under section 102 of that Act or under section 8 of the County Courts Act 1984,(p) a member of a panel of Employment Judges established for England and Wales or for Scotland, (q) a person appointed under section 30(1)(a) or (b) of the Courts-Martial (Appeals) Act 1951 (assistants to the Judge Advocate General), (r) a deputy judge of the High Court,(s) the Senior President of Tribunals,(t) an ordinary judge of the Court of Appeal (including the vice-president, if any, of either division of that court),(u) the President of the Queen’s Bench Division,(v) the Master of the Rolls, or(w) the Lord Chief Justice.”(3) In subsection (2)(b) for “Vice-Chancellor” substitute “Chancellor of the High Court”.
(4) In subsection (4) (a judge nominated under subsection (2)(d) or (e) must be appointed senior judge of the court) for “or (e)” substitute “to (q)”.
(5) In section 4(5)(f) of the Human Rights Act 1998 (things done by certain judges in Court of Protection) for “Vice-Chancellor” substitute “Chancellor of the High Court”.”
“Part 7Amendments following renaming of chairmen of employment tribunals12 (1) In the following provisions for “chairmen”, or for “chairmen of employment tribunals”, substitute “Employment Judges”—
Constitutional Reform Act 2005: section 3(7B)(d) and (e),
Courts Act 1971: Part 1A of Schedule 2,
Courts and Legal Services Act 1990: Schedule 11,
Employment Tribunals Act 1996: sections 3A, 5A, 5B(4), 5D(2)(e) and 7B(6),
Judicial Pensions Act 1981: section 12(1)(c),
Judicial Pensions and Retirement Act 1993: section 26(12A)(i), and
Tribunals, Courts and Enforcement Act 2007: sections 4(1)(e) and (3)(d) and 47(5)(c)(iii), paragraph 12(1)(c) of Schedule 1 and paragraph 7(1)(a) of Schedule 2.
(2) In the following provisions for “chairman of employment tribunals” substitute “Employment Judge”—
Constitutional Reform Act 2005: Part 3 of Schedule 14, in both places,
Tribunals, Courts and Enforcement Act 2007: paragraph 6(1)(e) and (4)(b) of Schedule 7, and
Judicial Pensions and Retirement Act 1993: Schedules 1 and 5.
(3) In sections 10(4) and 30(2B)(b) of the Employment Tribunals Act 1996 for “Chairman” substitute “Employment Judge”.
(4) In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 for “or member of a panel of persons appointed to act as chairmen or other members of employment tribunals” substitute “Employment Judge, or member of a panel of members of employment tribunals that is not a panel of Employment Judges”.
(5) In paragraph 5(2)(g) and (5)(vii) of Schedule 7 to the Judicial Pensions and Retirement Act 1993 before “chairman” insert “Employment Judge, before 3 November 2008 called”.”
EU Council
(12 years, 5 months ago)
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The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, this may be a convenient moment to repeat a Statement made by the Prime Minister about the European Council. The Statement is as follows.
“I am sure that the whole House will be deeply saddened by the death of three British servicemen in Afghanistan yesterday. These brave soldiers were demonstrating great courage to prevent Afghanistan once again becoming a haven for international terrorists and helping to keep us safe here in the United Kingdom. The suspected perpetrator is in custody and we will do everything in our power, with the Afghan national security forces, to ensure that justice is done. This tragic incident again demonstrates the very real risks that our soldiers face every day and we will learn all the lessons that arise from it. I know that everyone in this House will want to send their support to our brave troops and their families at this difficult time.
Turning to the European Council, Britain had three objectives at last week's European Council. The first was for eurozone members to take the urgent action needed to deal with the immediate crisis. The second was to secure a comprehensive growth package firmly focused on Britain's priorities and the third was to send a clear message to the rest of Europe about what Britain expects from the budget negotiations to come.
Under the previous Government, we could have been liable for financial support for these measures, as members of the EU bailout fund. But this Government have repatriated that power, so the British taxpayer is not involved.
On longer-term issues, eurozone members agreed important steps towards closer integration following a discussion of a report by the president of the European Council and others. It is vital for Britain—and for the strength and prosperity of the whole European Union—that they do this in the right way. I secured agreement that as this work goes ahead the “unity and integrity of the single market” will be fully respected. On the specific proposal of a banking union, I ensured that Britain will not be part of any common deposit guarantees or under the jurisdiction of any single European financial supervisor. I am very clear that British taxpayers will not be guaranteeing any eurozone banks and I am equally clear that, while we need proper supervision of our banks, British banks will be supervised by the Bank of England, not the ECB.
The original draft of the growth compact included a whole section on economic and monetary union which implied that a banking union might apply to all 27 countries. A number of countries worked to ensure that that whole section was removed.
We want a budget that is focused on growth not a focus on growth in the budget. EU members as a whole are €3.5 trillion more in debt now than when the last budget was negotiated and we have to face up to that tough reality. I made it clear that without the British rebate we would have the largest net contribution in the EU as a share of our national income. Without the rebate, it would be double that of France and almost one and a half times bigger than that of Germany. So the British rebate is not up for renegotiation. It is fully justified.
On foreign policy, the Council welcomed the EU oil embargo against Iran which came into force yesterday. On Syria, we called for united action by the UN Security Council to add more robust and effective pressure on Assad’s regime, including the adoption of comprehensive sanctions.
Europe is changing rapidly and fundamentally, and this presents real challenges for all countries. Those inside the eurozone have to face fundamental choices about whether to limit their national democracy and provide financial support to the weaker members, and like others outside the eurozone, in Britain we also face big choices too.
As Europe changes to meet the challenges of the eurozone, so our relationship with Europe will change too. There are those who argue for an in-out referendum now. I do not agree with that because I do not believe that leaving the EU would be best for Britain. But nor do I believe that voting to preserve the exact status quo would be right either. As I wrote yesterday, I do not believe that the status quo is acceptable. But just as I believe it would be wrong to have an immediate in-out referendum, so it would also be wrong to rule out any type of referendum for the future.
The right path for Britain is this. First, we must recognise that in the short term the priority for Europe is to deal with the instability and chaos. Secondly, over time we must take the opportunities for Britain to shape its relationship with Europe in ways that advance our national interest in free trade, open markets and co-operation. That should mean, as I argued yesterday, less Europe not more Europe: less cost, less bureaucracy, less meddling in issues that belong to nation states.
Thirdly, all party leaders will have to address this question. But it follows from my argument that far from ruling out a referendum for the future, as a fresh deal in Europe becomes clear, we should consider how best to get the fresh consent of the British people.
Finally, as I have said, as the eurozone moves to a banking union, we must ensure that Britain can take responsibility for sorting out its own banking sector. On the unfolding banking scandal here in the UK, we need to take action right across the board, introducing the toughest and most transparent rules on pay and bonuses of any major financial centre in the world, increasing the taxes banks must pay, ensuring tough civil and criminal penalties for those who break the law, and above all, clearing up the regulatory failure left by the previous Labour Government.
The British people want to see two things. They want to see that bankers who act improperly are punished and they want to know that we will learn the broader lessons of what happened in this particular scandal. On the first, the Serious Fraud Office is looking at whether there are any criminal prosecutions that can be brought, and it is using the full force of the law in dealing with this. On the second, I want to establish a full parliamentary committee of inquiry involving both Houses and chaired by the chairman of the Commons Treasury Select Committee. This inquiry will take evidence under oath, have full access to papers, officials and Ministers, including Ministers and special advisers from the previous Government, and it will be given, by the Government, all the resources it needs to do its job properly. The Chancellor will be making a full Statement, but this is the right approach because it will be able to start immediately, it will be accountable to this House, and it will get to the truth quickly, so we can make sure this never happens again.
I commend this Statement to the House”.
Baroness Royall of Blaisdon
My Lords, I thank the Leader of the House for repeating the Statement by the Prime Minister on the outcome of the European Council meeting.
On the tragic news from Afghanistan, all our thoughts are with the families and friends of the soldiers concerned. This news reminds us once again of the risks our troops face daily and of our duty to do everything we can to protect them.
The Prime Minister in the other place included in his Statement on Europe a statement on banking. Leaving aside the admirable vote of confidence in his Chancellor, who is following the Prime Minister's Statement with his own Statement on banking, we on these Benches believe that it is right that the Prime Minister has reconsidered the position that he set out last week on the need for a full inquiry. However, we are not convinced that the way forward on this issue is the Joint Committee that he is proposing. It does not suggest that the Government have grasped the scale of the problem. We know that politicians investigating bankers will not convince the people of this country; nor is it the way we can build the consensus that is needed for real change. After all, there have already been a number of Select Committee reports into the banking crisis.
The crisis surrounding the banks now demands an inquiry similar to the inquiry into press behaviour currently being carried out by Lord Justice Leveson. We appreciate that the Leveson inquiry has been uncomfortable for politicians on all sides, but that is exactly how it should be. We will continue to argue for a full and open inquiry, independent of bankers and politicians, and we will table an amendment to the Financial Services Bill to this effect in order to get a proper inquiry that will be trusted by the people. We do not believe that we will rebuild public trust by having politicians investigating bankers. Like the Leveson inquiry, an inquiry needs to be searching, to expose what has been happening and to get to the truth. Furthermore, as we on these Benches hope will be the case with the Leveson inquiry, it needs to bring forward remedies to stop the practices, whether in journalism or in banks, that the public and all Members of this House oppose. That is how eventually trust will be rebuilt.
I turn now to Europe and the European Council meeting. On Syria, let me associate these Benches with what the Statement said. There was an agreement reached at Geneva on Saturday, but in truth there was little progress. The divisions within the international community on this issue mean that too little is being done to bring the escalating violence to an end. In that context, can the noble Lord, the Leader of the House, update your Lordships’ House on the position of Russia regarding a future for Syria without President Assad?
The European summit took place against a backdrop of the continuing crisis in the eurozone, a global recovery faltering, and a double-dip recession here in the UK. The central challenge is how we can have a Europe not of austerity and unemployment but of jobs and growth. On that central issue, the Government cannot be part of the solution because the Government are part of the problem. They have no answers and nothing to offer. On growth, the Prime Minister used an instructive phrase in his post-summit press conference. He said that,
“just as we had to tackle the euro crisis, so we have to tackle the growth crisis”.
He then added:
“Britain has been driving this debate”.
That really does suggest someone getting increasingly out of touch with reality because as the Prime Minister was speaking figures were coming in showing that the double-dip recession, created in Downing Street, was worse than we thought. The UK is one of only two countries in the G20 to be in a double-dip recession, with long-term youth unemployment having doubled during the past year. The summit agreed extra resources for the European Investment Bank for youth unemployment. Why do the Government appear to support action on this crucial issue in Europe while failing to act here at home? There can be no solution to the growth crisis unless we tackle the crisis of demand in the European economies and globally. Did the Prime Minister advocate any measures at the summit to bring this about?
On the banking regulator, what specific legal safeguards will the Government seek to secure between now and December’s final proposals to protect Britain’s interest in the single market? On the eurozone and bank recapitalisations, it is welcome that direct help can be provided to eurozone banks, but do the Government really believe that the funds that eurozone countries are making available are adequate? On the Patent Office, the Prime Minister says that the outcome is a sign of his success, but, as he argued for the office to be headquartered in London, how could the decision to base it in Paris be a diplomatic triumph?
I turn finally to the Prime Minister's position—or should I say positions?—on Europe. On Friday, the Prime Minister ruled out a referendum on Europe, saying:
“I completely understand why some people want an in/out referendum … I don’t think it’s the right thing to do”.
However, hours later, 100 Conservative Back-Benchers in the Commons and the former Defence Secretary called for an in/out referendum. Then, mysteriously, on Sunday, the Prime Minister hinted that he was ruling in a referendum. The Foreign Secretary then went on television and said:
“The Prime Minister is not changing our position”.
Three days, three positions. First, it was no; then it was yes; now it is maybe. Can this House have some clarity about the Government’s stance? First, has there been a change in the Government's position? Secondly, the Prime Minister spoke about a referendum being connected to the renegotiation of powers. Are the Government now saying that they might be in favour of withdrawal from the European Union if they do not get these powers? That would be a new position. Is it the Government’s position? Thirdly, can the Leader of the House explain the following? The Prime Minister said last October that,
“there is a danger that by raising the prospect of a referendum … we will miss the real opportunity to further our national interest”.—[Official Report, Commons, 24/10/11; col. 27.]
Why is the Prime Minister doing precisely that now?
Will the Leader of the House confirm that the Prime Minister’s raising this issue has nothing to do with the national interest? He is doing so not to sort out the crisis of growth here at home or across the EU, or to tackle the disgrace of youth unemployment, but in an effort to manage the divisions in the Conservative Party.
Five years ago, then in opposition, the Prime Minister said that his party should stop banging on about Europe, but now he is the man getting out the drum. The country is confused about this Government and Europe—a veto that never was, a referendum which may happen, but not now. This is a party, the party opposite, talking to itself and not to the country. Britain deserves better. It is time that the Government started doing better for the people of this country.
Lord Higgins
My Lords, could my noble friend make it clear whether we are having one Statement or two?
Lord Strathclyde
My Lords, perhaps I may clarify to my noble friend that there will be two Statements this afternoon, the second of which will be repeated by my noble friend Lord Sassoon, as is laid out on the screens, and will come immediately after Back-Bench time on this Statement.
As ever, I thank the Leader of the Opposition for her remarks. She asked plenty of questions and I shall try to deal with them fully. She expressed dissatisfaction at the Prime Minister having said that there should be an inquiry into banking and the LIBOR problem, because it was the wrong sort of inquiry. She said that her party would put down an amendment to a Bill before this House. She expressed disappointment with what the Government were doing, which is a pity, because I would have thought that one place where there is a good deal of expertise was in Parliament. To have a Joint Committee of both Houses looking at this matter, with Members of our Economics Affairs Committee sitting with their colleagues in the House of Commons, should surely be enormously welcome. It should also be able to respond quickly. We hope that it will get to work straightaway, call witnesses over the next few months and report by Christmas so that recommendations can be included in the Vickers Bill in the New Year. That seems to be an appropriate way forward.
The noble Baroness asked for our thoughts on Syria. She correctly recognised what a difficult situation it is. The situation remains grave, with hundreds of people dying every week. However, the Foreign Secretary was engaged this weekend in intensive talks in Geneva on a transition plan which included the Foreign Ministers of Russia, China, and other countries. The result is one step forward, which is worth having. We agreed with Russia and China that there should be a transitional unity Government in Syria, which should be made up of people from the present Government, the opposition, and other groups on the basis of mutual consent. It would of course exclude President Assad. We must now try very hard to bring this about. We are putting a great deal of energy into doing so, but nobody is under any illusions of just how complex all of this going to be, given the situation that exists in Syria.
The noble Baroness, the Leader of the House—
Lord Strathclyde
Sorry, the noble Baroness the Leader of the Opposition, the former Leader of the House, also talked about the Europe of jobs and growth. She said that the Prime Minister could not deliver this in the United Kingdom, and asked why he therefore thought he could deliver it in Europe. That is to completely misunderstand what this Government have been doing, and, of course, to misunderstand quite deliberately. We want to rebalance the economy, with private sector growth taking the place of government deficits. We want prosperity shared across all parts of the UK. We want to become a world leader in advanced manufacturing and knowledge-based industries and services, and to remain the world’s leading centre for financial services. We have done this by cutting corporation tax, ensuring access to finance, dealing with the red-tape challenge, and many other brave and sensible pieces of action which will take the Government forward, from where we were under Labour’s misrule towards long-term growth and prosperity based on real jobs.
The noble Baroness asked about the European Patent Office. She said that it was not going to be based in London. This has been discussed and debated for over 23 years. It is an area in which Britain excels. The Council has decided that the patent office should be based in three parts of the European Union: in London, Paris and Munich. The most significant part of it as far as we are concerned—pharmaceutical and life science industries—will be based here in London. It will bring a turnover of over £100 million-worth in legal services into the United Kingdom.
Much of what the noble Baroness asked about concerned the referendum. I have believed for a long time that the real muddle on European policy lies in the party opposite, and not in our party at all. We said that an in/out referendum is not the answer right now, and we stick to that. A referendum on a choice between the status quo and coming out completely when Europe is changing would be the wrong choice. It would be a bad time to make a decision. Europe is changing a great deal, probably more so currently than it has done for very many years. Indeed, it is entirely right for my right honourable friend the Prime Minister to look at how we want to change our relationship with Europe, and as the end point becomes clear, to consult the British people either in a general election or a referendum. I regard that as a very strong position. If the Labour Party disagrees with consulting the British people, they should say so.
Lord Dholakia
My Lords, first, I welcome the sentiment expressed by the Leader of the House and the Leader of the Opposition about the death of the three British soldiers in Afghanistan. Our prayers and thoughts will remain with their families and friends.
I have two questions for the Minister. On the compact for growth and jobs, which will release €125 million for immediate investment, the noble Lord was broad enough to explain the area that may benefit Britain. Could he be more specific about what the real benefit to Britain will be from that money? Secondly, it is proposed that a group of eurozone members might pursue various measures, such as a financial transaction tax, through enhanced co-operation among themselves. If they do, will the Government ensure that Britain’s rights under the single market are maintained?
Lord Strathclyde
My Lords, my noble friend’s last point is crucial. There was real concern at the European Council and suggestions from other countries that a European banking supervisory system would be precisely that—for all the banks in Europe, including those in the United Kingdom. My right honourable friend the Prime Minister and others said that that should not and could not be the case, and we ensured that the final terms of the agreement ensured that British banks would not be a part of that but would continue to be regulated by the Bank of England. Within the eurozone area, it is of course entirely appropriate that they look at ways to improve banking supervision, ensuring deposits and working more closely together. That, too, should be welcomed.
As for growth, we are all pointing in the same direction. We want deregulation. We want a clearer completion of the single market, particularly in digital and energy. That will have an important impact on the European economy and, in particular, on the United Kingdom economy.
Lord Hannay of Chiswick
My Lords, does the Leader of the House accept my welcome that the lessons of last December seem to have been learnt on this occasion and that the Prime Minister has recognised that the right way to protect British interests is to stay at the negotiating table, not to reject any participation in negotiations? In my view, that is highly welcome.
As the Prime Minister begins to dance with wolves on referendum issues, does the noble Lord agree that it does not make much sense to parody the situation and the choice before us by talking about more Europe or less Europe? If we read the European Council conclusions, which I am glad the Prime Minister subscribed to, we see a great deal of more Europe in them in relation to the single market. There are references to patents, to the digital single market and to the single market in services, all of which require more Europe. It makes no sense at all to say that the British position is in favour of less Europe.
On Syria, does the Minister recognise that the Russian situation may not be one that we can work our way around? I am not criticising for one minute the attempt made in Geneva to achieve common ground, but it is doubtful whether that achievement is real or just apparent. If it is not real, it will surely be necessary to go to the Security Council to table a resolution imposing measures on the Syrian regime if it does not observe and honour the provisions of the Annan plan and put it to a vote, come what may. The only way you can find things out in the Security Council is by eventually putting it to a vote. If the Russians wish to veto it, they will do so, and that will be their responsibility.
Lord Strathclyde
I shall take those points in order. The noble Lord welcomed the fact that the Prime Minister wants to work together with his European partners. Of course, that has always been the case, including last December, when my right honourable friend was ready to support treaty change for the 27 in return for specific and practical proposals, which we put forward to safeguard the integrity of the single market. These proposals were not an opt-out for the UK, as some have suggested; they would have applied to the EU as a whole. However, other countries blocked them, and without those protections it was entirely correct that my right honourable friend used his veto.
Of course, there are some vital parts of the EU that have a positive impact upon the United Kingdom, and we should seek to preserve these. Equally, it is right for the Government to conduct a national audit of what the EU does and what the implications are for this country. Extensive preparatory work is progressing, and when that is complete we shall make a further announcement to Parliament.
As for Syria, I see entirely the force of what the noble Lord has said about putting down a UN Security Council resolution. It is, of course, a delicate matter. I do not think that the issue has advanced as far as that, but the option must be open to the Security Council to put forward a resolution.
Lord Lawson of Blaby
My Lords, is it not clear that the present situation in the eurozone is unsustainable, that it remains unsustainable despite the changes agreed with the European Council, and that sooner or later—sooner better than later—countries that are part of the monetary union will have to decide whether they are going to enter into a full-blooded political union or whether they should dissolve the single currency altogether? If the former, which I do not think it will be, there is no way this country can remain part of the European Union. If the latter, as I hope, and the single currency is dissolved, we can remain in the Union and I hope they will have learnt their lesson.
On the LIBOR scandal, I welcome a proposal to set up a Joint Committee of both Houses under the chairmanship of my excellent former special adviser. I am particularly glad that it will be a Joint Committee that includes Members from this House.
Lord Strathclyde
My Lords, on the first question, I do not know whether the eurozone is unsustainable. I do know that there is a crisis that needs to be resolved, and the sooner it is resolved the better. Our view is that at the end of last week a bold step was taken in the direction of trying to solve the crisis. Certainly, the financial markets liked it. Whether it is going to be enough, quickly enough, it is too early to tell. As the Government have said, there is a remorseless logic to how the eurozone operates, which is why we decided not to join it.
I am glad that my noble friend welcomes the Joint Committee on LIBOR and the banks. I think he is a member of the Economic Affairs Committee of this House, so he may well find himself a member of that Joint Committee, which would see a reversal of the roles between its chairman and him.
Lord Barnett
My Lords, could I clarify the Prime Minister’s position on an in/out referendum? My noble friend the Leader of the Opposition asked the question and the Minister did not seem to be clear in his answer. Is the Prime Minister’s position that he is opposed to an in/out referendum, full stop?
Could I also, I think, congratulate the Government? The Minister seemed to confirm what was reported in the Times last week, but which I did not see anywhere else, that the Government and the Prime Minister have agreed to give €1.3 billion to the European Investment Bank to help growth in Europe. It seems an odd thing to do, given that I would have thought that the Prime Minister’s primary consideration was to promote growth here. However, I would welcome such a proposition. Could the Minister confirm this?
Lord Strathclyde
First, my Lords, I thought I had made it pretty clear that the Prime Minister and the Government are not in favour of having an in/out referendum now. It is not the answer right now, but who knows? I would not support one, and I do not think that the Government would, because it is not the right choice to make. The right choice to make is that since Europe is in flux we should see where it ends up and where the relationship changes, if it does. We already have provision, agreed by Parliament, that when power moves from the United Kingdom to Europe there should be a referendum, so referendums should not concern us very much. However, if that relationship changes, perhaps the right thing should be to consult the British people, either in a general election or in a referendum.
As for growth, we were very much part of the group that called for a credible EU growth agenda. The European Council endorsed our growth priorities on Friday. For instance, we secured agreement for the immediate implementation of actions to eliminate unjustified barriers on services. This alone could add 1.6% to EU GDP over the next few years.
Lord Ryder of Wensum
My Lords, is not the use of “growth” incredibly mistaken in the context not only of my noble friend’s Statement but of the European Council’s conclusions, which I have before me? Indeed, the first paragraph of the Council’s conclusions states:
“The European Union will continue to do everything necessary to put Europe back on the path of smart … and inclusive growth”.
Perhaps my noble friend can explain the difference between growth and “smart … and inclusive growth”. Furthermore, I would be very grateful to know precisely what the Prime Minister’s definition of growth is, because I have been confused in recent weeks by his understanding of it. Growth in the long term in the European Union can be sustainable only by continuing to liberalise every country within it and by introducing supply-side measures. If my noble friend agrees that the Prime Minister accepts this principle, can he please let us know what supply-side measures the Prime Minister has been trying to persuade his European colleagues to implement in recent weeks?
Lord Strathclyde
My Lords, I, too, read those words from the conclusions of the Council’s meeting, which say:
“on the path of smart, sustainable and inclusive growth”.
I suspect that in different countries within the EU, it means rather different things. The conclusions go on to say that it should provide,
“a coherent framework for action at national, EU and euro area levels, using all possible levers, instruments and policies”.
It then directs the reader to the annexe.
That leads me to my noble friend’s second question. I entirely agree with him that growth in Europe will come from sustaining, liberalising measures within the European economy. Again, we have been at the forefront of that by arguing for sound money, for spending European money better and more wisely, and wasting less of it, for decentralisation and for reducing bureaucracy. All these measures are the kind of things that have worked in the past and will work again.
Lord Stoddart of Swindon
My Lords, the Statement refers to the British rebate. If there are proposals for changes to Britain’s rebate, can the Leader of the House say whether they would they have to be agreed by veto or QMV? My second question concerns the growth arrangements that four countries agreed on before the summit. Will Britain be making a contribution to that and will it add to the £150 billion to which we are committed through the ECB and the European Investment Bank? Finally, does he agree with Dr Liam Fox that Britain should negotiate a new relationship with the European Union and, indeed, that,
“life outside the EU holds no terror”?
Lord Strathclyde
My Lords, on that last point, there is no proposal for the United Kingdom to leave the EU, so the whole question simply does not arise. No analysis has been made, nor is likely to be made, of what life would be outside, and my right honourable friend has no intention of proposing a referendum on whether we should be in or out of the EU. There are substantial benefits to our remaining a member.
Yes, we are committed to funding aspects of the European Investment Bank. Many of these have been debated and discussed in the past.
Finally, the British rebate is absolutely fundamental to our monetary relationship with the EU. We will not agree to giving it up. The noble Lord asked me whether, if it were to be changed, it would be under unanimity or under QMV. I think that I am right in saying that it would be under unanimity; if that is not the case, I shall write to him.
Lord Deben
Does my noble friend accept that we will be more likely to get the rest of Europe to help us, and do the things that we want in terms of growth, if occasionally we emphasise the advantages of our membership instead of constantly suggesting that all sorts of things have to be changed? Will he please ask for a bit more positivity in our discussions about Europe?
Lord Strathclyde
There are many of us on all sides of the House who no doubt would like to be positive about the EU, but there a number of aspects to change over the course of the past 15 years that we do not believe should be dealt with at a European level; we would like to repatriate some of these things back to the United Kingdom. I know that my noble friend Lord Deben may not be entirely in agreement with all of that, but dare I say that when we have seen this audit of competences, there may be more agreement around the House as to what should be done at a national rather than a European level than seems to be the case at the moment?
Lord Grocott
My Lords, I have listened very carefully to the Leader’s explanation of the Prime Minister’s position on a referendum. I think that I am an average member of the public and I still have not got the faintest idea what his position on a referendum is. Does he seek a fundamental renegotiation of the terms and conditions of our membership of the European Union, which he would then like to put to the people in a referendum? In which case, I ask the Leader what shred of evidence his leader has from his prime ministership of two years’ standing that any other member of the European Union is prepared to agree to a fundamental renegotiation of Britain’s position within the European Union. Should he fail to get a fundamental renegotiation, will he then put that failure to the British public in a referendum? Presumably, his recommendation then would be that we should say no, and come out.
Lord Strathclyde
My Lords, I do not think that the noble Lord was trying to be helpful there at all. He was making his own case and asking questions on his own terms. The plain fact of the matter is that there is currently a fundamental reorganisation within Europe, a reappraisal of different relationships, particularly within the eurozone, which is inevitable, given the crisis that has engulfed the eurozone countries. It may, therefore, lead to a renegotiation; whether or not that is fundamental, it is too early to say. All that my right honourable friend the Prime Minister was saying is something that I think is glaringly obvious: if, under those circumstances, we wanted to change our relationship with Europe, and if that end point became clear, why on earth would we not wish to consult the British people, either in a referendum or at a general election?
Arrangement of Business
(12 years, 5 months ago)
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Lord De Mauley
My Lords, in view of the fact that the second Statement has not yet started in the other place, I am afraid that I am going to have to beg to move that the House do now adjourn during pleasure, I suggest for 10 minutes.
Baroness Falkner of Margravine
My Lords, in the 20 minutes that we have had for this European Council Statement, not a single female Member of this House apart from the noble Baroness, Lady Royall, was able to subject the Government to scrutiny. I therefore wonder whether the House will consent to hear me put a question to the noble Lord the Leader on the European Council. My question is to do with the banking union.
Lord Stoddart of Swindon
My Lords, the Motion is whether the House should adjourn.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, the point is that the debate that we are now on is about whether or not the House should adjourn during pleasure for 10 minutes. I suspect that it is probably my fault that we are in this position. I said that the first Statement should not start before 4 pm; it started pretty much on the dot of 4 pm, and perhaps if we had delayed it for another 10 minutes we would have been able to continue without a gap at all. I am in a bit of a quandary because I would have hoped that the Statement in the Commons from the Chancellor of the Exchequer would have already begun.
Baroness Hayman
Perhaps I could offer a potential solution to this. If, on the debate on whether the House should now adjourn during pleasure, the noble Baroness were allowed to make the point that she had not been able to put certain questions to the Leader of the House on the previous Statement and to explain to the House what those questions would have been, and perhaps the feminist dimension to them, and then the noble Lord the Leader were to answer that, we might even find ourselves in a happier position regarding the second Statement.
Lord Strathclyde
That is an astonishingly good idea. Although we are still on the Question of whether or not the House should rise during pleasure for 10 minutes, perhaps my noble friend Lady Falkner could reconsider what she was going to say.
Baroness Falkner of Margravine
My Lords, I am extremely grateful to the House and to the noble Baroness, Lady Hayman, for coming up with that ingenious solution. My question would have been to do with the banking union and the lack of clarity about the relationship between the enhanced powers of the ECB, as it will be the banking regulator and supervisor, and the Bank of England, because significant issues of UK banking priorities would be affected by banking union. I wonder if the noble Lord might have been able to tell the House, had he had the opportunity, whether Section II of the report on EMU, which says that,
“Member States will be closely associated … and regularly consulted”,
would also apply not to the 17 countries that are not in the eurozone or the eight that are applying to be in the eurozone, but to those that are neither applicants nor in the eurozone in terms of the relationship between the banking authorities.
Lord Strathclyde
My Lords, if that is the question that my noble friend would have asked, perhaps I can crave the indulgence of the House in giving her the answer that I would have given if she had been within the 20 minutes for Back-Bench time. I am not entirely sure whether it makes a difference that we have not had a female Member of the House asking a question; I think that it is a wonderful thing that my noble friend has asked a question, but I would hate to be in a position where we reserved a certain amount of questions for either male or female Members. For my part, I think that the female Members of this House play a most valuable role, and in some debates rather a bigger role than some of the male Members.
My noble friend’s question was to do with the common regulatory regime for EU banks; in other words, what the relationship will be between the ECB in its new role in relation to regulators, supervisors and banks in non-eurozone countries. The euro countries have agreed to establish a single supervisory regime involving the ECB. Throughout this whole process, we have been entirely clear that the UK will not participate in that. The details need to be worked out over the coming months but we are very clear that any supervisor must not undermine the single market or UK financial services. The European Council has agreed that any proposals must include,
“concrete proposals on preserving the unity and integrity of the Single Market in financial services”.
I see that the Chief Whip has arrived on the Front Bench. We have an unusual convention that we repeat Statements and do not pre-empt them. I was rather hoping that the Prime Minister would have finished his Statement by now and that the Chancellor of the Exchequer would be on his feet. I wonder if it would be appropriate, even though we are still discussing this Motion as to whether or not we should adjourn for pleasure for 10 minutes—
Lord Foulkes of Cumnock
I will try, as usual, to be helpful by saying a few words on this Motion about adjourning for pleasure. I do not think that we should. At least the Leader of the House was candid enough to confess that this timetabling was his mistake, but it is not the first mistake he has made in relation to the business of the House. In fact, in this instance, he is a serial offender. He ought to be very grateful to the noble Lords, Lord Hamilton and Lord Myners, to myself and others for insisting—and putting it to a Division, which was won, with the support of the Opposition—that the Committee stage of the Financial Services Bill be held on the Floor of the House. Given the events of the last few days, it would have been outrageous if it had been taking place in the Moses Room, hidden from public attention. Now, we can be sure that all of it, including the amendments, will be taken here on the Floor of the House.
When we have that debate, I hope that we will have, for once, the presence of the Minister of State at the Department of Trade and Industry, the noble Lord, Lord Green, who is never here, never answers Questions, never participates in debates and leaves it all to the poor noble Lord, Lord Sassoon, who does a wonderful job under the circumstances. It would be particularly helpful to have the noble Lord, Lord Green, here, because on 28 November 2005, it was announced that he was to become group executive chairman of HSBC. He has more knowledge from the time when all of this took place. He was chairman of one of the biggest banks and so can give us some inside information, if he is allowed to. I hope the Leader of the House will confirm—
Lord Myners
I wish to be helpful to the House. It is also worth pointing out that the Minister, the noble Lord, Lord Green of Hurstpierpoint, was chairman of the British Bankers’ Association when these manipulations of the BBA’s LIBOR rate were taking place. It is reported that the executive of the BBA was aware that manipulation was taking place but took no action. How can this allow the noble Lord, Lord Green of Hurstpierpoint, to continue to be a credible adviser to the Chancellor of the Exchequer on banking, a role that he seems to have taken over from the poor noble Lord, Lord Sassoon, for whom we all have a great affection?
Baroness Royall of Blaisdon
My Lords, I wish to apologise. I am grateful to my noble friend Lord Foulkes for bringing these issues to the attention of the House. We have had a very worthwhile discussion but I wish to place on record my thanks to the government Chief Whip. As I understand it, it was at the Opposition’s request that the Statement was promptly at 4 pm, for the convenience of some Members of my Benches and of the whole House. I do not wish to cast aspersions on the Leader of the House when, in fact, I should be the one taking the blame.
Lord Strathclyde
I am very grateful for that. I have very broad shoulders on these things, but it demonstrates that I made yet another mistake in giving way to the noble Lord, Lord Foulkes.
As for the noble Lord, Lord Myners, let everybody just remember what his role was in all this as a very senior Minister in the Treasury in the previous Government.
Lord De Mauley
My Lords, in view of the fact that the Chancellor of the Exchequer has now started, I beg leave to withdraw my Motion.
FSA Investigation into LIBOR
(12 years, 5 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I shall now repeat a Statement made by my right honourable friend the Chancellor of the Exchequer in another place. The Statement is as follows.
“Mr Speaker, on Thursday I updated the House on the Financial Services Authority’s investigation into Barclays and the attempted manipulation of the LIBOR market in the years running up to and during the crisis. The House has just heard from the Prime Minister, and I would like to give more details of the steps we are taking.
This morning, I spoke to Marcus Agius, who confirmed that he was resigning as chairman of Barclays because of the unacceptable standards of behaviour within the bank. The Treasury Select Committee is calling the chief executive of Barclays to account for himself and for his bank on Wednesday. I look forward to hearing his answers.
As I also said last week, every avenue of possible criminal investigations for individuals involved in attempted manipulation of LIBOR is being explored. However, in the view of its chairman, the noble Lord, Lord Turner of Ecchinswell, the powers that were given to the authority do not allow it to pursue criminal sanctions. People in the country ask why it did not have the necessary powers. Those who set up the tripartite system must answer for that. People ask whether these gaping holes in the existing law mean that no action at all is possible. After all, fraud is a crime in ordinary business; why should it not be so in banking? I agree with that sentiment, and I welcome the Serious Fraud Office’s confirmation that it is actively and urgently considering the evidence to see whether criminal charges can be brought, particularly in relation to the current Fraud Act and in relation to false accounting. It expects to come to a conclusion by the end of this month. We would encourage it to use every legal option available to it.
I would like to address three further issues today. First, what happens to the money we get from the fines; secondly, urgent changes to the regulation of LIBOR and other markets to prevent such abuse occurring again and to ensure the UK authorities have the powers they need to hold those responsible to account; and thirdly, the wider issue of what went so badly wrong in the culture of our banking system and the way it was regulated which allowed such fundamental failures of basic standards of conduct to go unchecked and unchallenged.
Last week, I said that we wanted to ensure that fines paid by the financial services industry in future go to the Exchequer. Today, I can confirm we will propose amendments to the Financial Services Bill in the autumn to make this happen. This will remove a long-standing anomaly and bring the regulator into line with regulators in other sectors of the economy. The new arrangement will apply to fines received from 1 April 2012 so that it includes the Barclays penalty. From now on, the multimillion pound fines paid by banks and others who break the rules will go to the benefit of the public, not to other banks.
That brings me to the second question of the urgent changes we need to make to the regulation of LIBOR to prevent this ever happening again and to ensure that in future authorities have the appropriate powers to prosecute those who engage in market abuse and manipulation. I have today asked Martin Wheatley, the chief executive designate of the Financial Conduct Authority, to review what reforms are required to the current framework for setting and governing LIBOR. This will include looking at whether participation in the setting of LIBOR should become a regulated activity, the feasibility of using of actual trade data to set the benchmark, and the transparency of the processes surrounding the setting and governance of LIBOR.
The review will also look at the adequacy of the UK’s current civil and criminal sanctioning powers with respect to financial misconduct and market abuse with regard to LIBOR. It will assess whether these considerations apply to other price-setting mechanisms in financial markets to ensure that these kinds of abuses cannot occur elsewhere in our financial system.
We need to get on with this and not spend years on navel-gazing when we know what has gone wrong. I am pleased to tell the House that Mr Wheatley has agreed to report this summer so that the Financial Services Bill currently before Parliament or the future legislation on banking reform can be amended to give our regulators the powers they clearly need.
The review is essential to ensuring that we mend the broken regulatory system introduced by the previous Government, which allowed these abuses to happen. But the manipulation of the most-used benchmark interest rate reveals that there is a broader issue of the professional standards and culture in some parts of the financial services industry that was allowed to grow up in the years before the crisis and which may still need change.
I do not think a long, costly public inquiry is the right answer. It would take months to set up and years to report. We know what went wrong. We cannot wait until 2015 or 2016 to fix it. In just six months’ time we will be bringing forward the banking reform Bill that will implement the recommendations of Sir John Vickers’s Independent Commission on Banking. This will bring far-reaching, lasting change to the structure of British banks, ring-fencing retail banks from their investment banking arms. Let us see whether we can use this banking Bill to make any further changes needed to the standards of the banking industry, and the criminal and civil powers needed to regulate it and hold people to account for their behaviour.
As the Prime Minister said, we propose that Parliament establishes an inquiry into professional standards in the banking industry. The Government will, in the coming days, lay before both Houses a Motion to establish a Joint Committee drawn from the Commons and the Lords. It should be chaired by the chair of the Treasury Select Committee, the honourable Member for Chichester. He and his committee have already been quick off the mark in investigating the issue, and we certainly await their hearings this week to proceed.
I propose that the terms of reference should be these: building on the Treasury Select Committee’s work and drawing on the conclusions of UK and international regulatory and competition investigations into the LIBOR rate-setting process, consider what lessons are to be learnt from them in relation to transparency, conflicts of interest, culture and the professional standards of the banking industry. I propose that it should be able to call witnesses under oath, including current Members of Parliament and Lords. I can confirm that we will provide the committee with the resources it needs to do the job. I would suggest to the House that we ask the Joint Committee to report by the end of this year, 2012. That is enough time to do the job—and to do it well—but not so long that this issue drags on for years, and it means, in very practical terms, that we can amend our banking Bill to take on board its recommendations.
I hope that all parties will support the Motion we put forward. The failure to regulate the banks in the boom years cost this country billions. The behaviour of some in the financial services has damaged the reputation of an industry that employs hundreds of thousands of people and is vital to the economic prosperity of the country.
We are changing the failure of regulation; reforming the banks. Now it is time to deal with the culture that flourished in the age of irresponsibility and hold those who allowed it to do so to account.
I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Eatwell
My Lords, I am most grateful to the noble Lord, Lord Sassoon, for repeating the Statement made by the Chancellor of the Exchequer in the other place. I welcome the content of the Statement as far as it goes, but it does not go far enough.
It is difficult to exaggerate the seriousness of the LIBOR scandal for three reasons. First, because of the manipulation of this key benchmark rate, a London standard recognised throughout the world has accordingly affected financial transactions worldwide, directly impacting on the financial well-being of millions of families and firms.
The Serious Fraud Office has powers to investigate and to bring prosecutions in cases of fraud defined as,
“an act of deception intended for personal gain”.
This includes publishing false information to mislead investors as well as fraudulent trading. I am no lawyer, but common-sense interpretation of those words would suggest that the people with whom we are dealing have indeed been practising deception for personal gain. But they are not simply persons with some sort of criminal bent; they have been moulded by the environment in which they work and by what is regarded as acceptable practice on a day-to-day basis—fine for the firms for which they work, just so long as they make money for them.
Secondly, their actions have done enormous damage to our financial services industry in general and to the City of London in particular. They have not merely undermined but blown up the City’s hard-earned reputation for integrity and fair dealing and, most of all, destroyed the trust without which no honest financial system can operate. Every honest firm should welcome effective regulation. I am sick of hearing that regulation limits the operations of free markets and that if legislation results in more effective regulation banks will leave the country. Now we know just how free those markets actually are. We should not be held to ransom.
Thirdly, the financial services industry is, I am afraid, an industry with form. In the same week as we learnt of the manipulation of LIBOR, we learnt of the mis-selling of interest rate swaps, following on from the PPI mis-selling scandal. As the Chancellor commented, all of this is on top of the irresponsible lending practices at home and abroad that brought about the international financial crisis—practices in which British banks played a leading role, inflicting huge economic costs on the British people.
In the light of those three factors, an inquiry should meet the following criteria. First, it must address the culture of banking and the financial services industry as a whole in relation to the internal organisation of industries and the regulatory framework in which they operate. Secondly, it must address the key question of the boundaries of civil and criminal culpability. Thirdly, it must fundamentally reassess the scope of regulated activities. The inquiries that have been announced today meet only one of those criteria—the second, on the boundaries of civil and criminal culpability. I am delighted to hear that Martin Wheatley will conduct a speedy investigation into the narrow issue of the setting of LIBOR and the related issues of criminal sanctions.
The proposal for the parliamentary inquiry fails on the following grounds. First, the scope of the terms of reference, although it sound quite broad, is in fact limited to the lessons learnt from,
“regulatory and competition investigations into the LIBOR”.
So it is just about the lessons learnt from that particular problem, not the broader issues of professional standards in the industry as a whole and the structure of the industry. Secondly, it fails to address the overall question of the scope of regulated activities. Thirdly, a parliamentary inquiry will fail to restore public trust by creating a national consensus about what has got to be done. I have great respect for the chairman of the Commons Treasury Select Committee, not least because of the excellent critique of the Financial Services Bill by his Select Committee. Let us note that the most important elements of that critique have been pointedly ignored by the Government. A parliamentary inquiry is bound to appear to the public to be too introverted—a closed, establishment shop to which they have limited access, working within terms of reference that are far too restrictive. That is why there must be a full public inquiry that addresses all the issues at stake. As the Chancellor said, we know what has gone wrong. Yes, indeed, we do—but, at the most fundamental level, we do not know why or how.
I quite understand the argument that a proper inquiry might take too much time, but that can be easily dealt with by instructing the public inquiry to deal with issues sequentially. After Mr Wheatley’s report there could be an interim report on the immediate LIBOR issue, described in the terms of reference for the parliamentary committee. Following on from that, a much more considered report on corporate failings in compliance, culture, governance and organisation throughout financial services is the only full answer to the question: why did this happen? We owe the honest, committed people in the financial services industry that inquiry to lift the cloud that will otherwise hang over them.
The development of the financial services industry in this country has been guided by great public inquiries: the Macmillan Committee in the 1930s and the Radcliffe Committee in 1958 produced landmark reports. Now is the time for another. The reforms of the 1980s, while bringing many benefits, have had potentially disastrous, unintended consequences. There is a need for fundamental reform to the structure, style and content of the financial services industry to provide a framework for successful development in the future.
The Government have been bold in establishing the Vickers inquiry and bringing forward the current proposals and they deserve credit for that. However, the current proposal for a parliamentary inquiry, I regretfully say, by its very limitations—and especially the limitations of the terms of reference—can only do harm.
I should like to ask the Minister a couple of brief questions. First, why have the Government limited the scope to lessons drawn from international regulatory and competition investigations into the LIBOR rate-setting process? Why does it not go wider? Secondly, when did the Treasury first know of the substance of the FSA inquiry into LIBOR-fixing at Barclays?
Lord Sassoon
My Lords, I am grateful for the welcome that the noble Lord, Lord Eatwell, gave to the Statement. However, I am sorry that he thinks that the immediate action that the Government have taken is not appropriate and that he would like it to go further.
I cannot think of a better way of getting a national consensus and getting rapidly to the heart of these issues than through a Joint Committee of the two Houses—not least because, as we saw two weeks ago in the Second Reading of the Financial Services Bill, there is extraordinary and relevant expertise that can be brought to bear from this House alone. There was a remarkable debate on that Bill in which two former Chancellors, three former Treasury Permanent Secretaries, former members of the Court of the Bank of England, other former Treasury Ministers and leading financial journalists all spoke. We should not undersell the great expertise that can be brought to bear through the Joint Committee, which will have public hearings and be able to call, under oath, whomever it chooses to call. I do not agree with the noble Lord that we should go through some other route.
I remind your Lordships that recent public inquiries and those that are still live have taken an extraordinary amount of time and cost a huge amount of public money. Leveson, established in July 2011, has so far cost £2.8 million; Baha Mousa, started in May 2008, ran for more than three years at a cost of £13 million; the Mid-Staffs inquiry started in June 2010 and is still running—it is nearly finished—and so far has cost £11.8 million. These are expensive and long inquiries. For the safety and good order of our financial services markets, we need to get on with the inquiry and a Joint Committee is the appropriate way to do so.
The proposed terms of reference will come back to your Lordships’ House via a Motion that will go through both Houses. I do not read them as being limited in the way that the noble Lord, Lord Eatwell, seeks to limit them. The proposed terms of reference refer to drawing on and building on both the Treasury Select Committee’s work and the conclusions of the UK and international regulatory and competition investigations into the LIBOR rate-setting process. Then I read what follows, which states,
“consider what lessons are to be learnt from them in relation to transparency”—
that is LIBOR and the work of the Treasury Select Committee—
“conflicts of interest, culture and the professional standards of the banking industry”.
I read that as the committee being able to go extremely wide in its investigation and I am sure that it will do so. I certainly do not believe that there is a problem of the sort identified by the noble Lord.
As to when the Treasury first knew about the substance of the LIBOR-fixing allegations and investigation at Barclays, naturally Treasury officials have been in contact with the FSA during its investigations to consider LIBOR policy as it is in contact with FSA officials about many other things that they do. As was the case under the previous Government, it would be inappropriate to disclose the details of meetings while this is an area of developing policy.
Baroness Kramer
My Lords, I said last week that there was public outrage, and that outrage has only been growing. Mr Diamond remains in post; he just does not get it. That now raises questions about the fitness of Barclays’ board, which also just does not get it. Does the Minister agree that this matters? I very much welcome the review that Martin Wheatley will lead. Whatever changes are made to the rate-setting of LIBOR will always depend on engagement with the major banks. Therefore, there must be confidence that the banks fully understand their role in providing that information.
The other area of outrage, as I recognise it, is the perceived impotence of the FSA in being able to pursue sanctions for activities that are so widespread that, according to the Telegraph, they have their own technical term—the,
“dislocation of Libor from itself”.
Will the Minister explain why there is no scope under Clauses 397 and 400 of FiSMA, which I can quote if he wishes, to pursue individuals and the officers who supervise them? Surely an amendment could be put into the Financial Services Bill. It would be welcome if there was any way for it to be retrospective. Can he also explain why it was the CFTC in the United States that jumped on the issue in May 2008, based on information from whistleblowers, whereas with the same information the FSA did not become engaged until 2010? Obviously, I am dependent on media reports. Can we please look at the powers, resources and capacity of the FSA to ensure that it is never again in such a position?
Lord Sassoon
My Lords, first, I will not comment further on the senior executives of Barclays. Clearly the chief executive is coming before the Treasury Committee later this week and will be asked a lot of questions that will further elucidate those aspects.
On the question of prosecution, the basic flaw is that the setting of LIBOR was not and is not a regulated activity, so the FSA does not have a direct way in. My noble friend is right to be quizzical and shake her head but that is the position as it was under FiSMA and the construct put in place by the previous Government. If the FSA wanted to bring criminal prosecutions, as it has done with the civil settlement, the attempted fixing of LIBOR is an activity that is ancillary to a regulated activity. The construct is difficult and the chairman of the FSA has pointed out the difficulties.
As I said in repeating my right honourable friend’s Statement, most normal people would assume that there was a prima facie case to look at the Fraud Act and false accounting and that is precisely what the SFO was doing. Through the inquiries that are going on, we will look at what needs to be done to plug gaps in the financial services legislation. For the avoidance of doubt, I should tell my noble friend that there will certainly be no retrospective legislation in respect of criminal action because—before anybody else jumps up—it would be against the European Convention on Human Rights. I am sure that my noble friend would not want us to go there—and she acknowledges that.
As to which regulator started work when, I would not rely too much on what the newspapers say. As with all these things, I am sure that in due course the regulators will look into their conduct and the lessons to be learnt. I certainly would not take as gospel the newspaper reports of who started when.
Lord Barnett
My Lords, the Minister is obviously aware that this has not just started. It has been going on for years and it could not have involved only Barclays but virtually every major bank, not only in the UK but elsewhere. Barclays could not have been handling this on its own. Listening yesterday to the chairman of the FSA, the noble Lord, Lord Turner—who unfortunately is not in his place—the FSA knew nothing whatever about it, nobody in the Bank of England seems to have known anything about it, and now the noble Lord, Lord Sassoon, tells us that the Treasury has known about it apparently for only a short while. We obviously recognise that to be the truth, but should there not be criticism of some of the people involved here? The sheer incompetence of not knowing anything about it deserves some kind of criticism.
I appreciate that the Minister cannot say that he will listen and change anything, because it is a matter for the Chancellor. However, my noble friend Lord Eatwell put a lot of serious points to him and I hope that he will take them back to the Chancellor to ensure that there are some changes. There should be some changes now.
Lord Sassoon
My Lords, first, as we discussed last week, there are a significant number of other banks under investigation. Secondly, we could debate the history of this for a very long time, but this Government are moving extremely fast on a number of fronts to plug the gaps through one or both of the pieces of legislation that are or will shortly be before Parliament. We need to get this right, which is what we are doing.
Lord Blair of Boughton
My Lords, could I ask about the statement that the FSO will begin to consider criminal charges in the next month? I follow the noble Baroness, Lady Kramer, in referring to the level of outrage in the country about these events. The SFO could announce today that it is launching a criminal investigation. It is about not criminal charges but a criminal investigation into conspiracy to defraud, because if this is not a conspiracy to defraud, then I have never seen one—and I have seen a few.
Lord Sassoon
My Lords, just to repeat: the SFO is actively and urgently considering the evidence to see what criminal charges can be brought. It expects to come to a conclusion by the end of this month. That is exactly where it should focus its efforts.
Lord Marlesford
My Lords, unlike the noble Lord, Lord Eatwell, I see much merit in a parliamentary inquiry, especially if, as has been suggested, it includes people of the talent and experience of my noble friend Lord Lawson. There are many from all sides in this House who can do this. It is an inquiry that needs, above all, practitioners and people from the financial world rather than lawyers, and it does not prevent further inquiries in due course.
However, four points of action were put forward by the Prime Minister under the heading of banking in his Statement. Three of them are quite clearly covered by the Chancellor’s Statement but one is not. That is a confusing matter and I would like enlightenment. In the four actions proposed by the Prime Minister, one was,
“increasing the taxes banks must pay”.
What was the Prime Minister referring to?
Lord Sassoon
I am grateful to my noble friend for confirming that a Joint Committee is the way to take this forward. We have already increased the tax on the banks by putting a special levy on them so that the big banks effectively do not take any advantage of the lowering of corporation tax, which other parts of industry have already benefited from. This tax on the banks is enduring and will raise far more than the one-off tax that the previous Government brought in. So we have already done that.
Lord Myners
My Lords, I broadly welcome the Chancellor of the Exchequer’s Statement, and in particular the appointment of a Joint Committee, the report to be produced by Mr Martin Wheatley and the timetable to which both those reports are working.
I would like to return to the point I made to your Lordships’ House earlier about the BBA. It is increasingly clear that the British Bankers’ Association was very aware of what was going on—the collusion that was leading to fraud. The chairman of the BBA at that time is now a Minister in Her Majesty’s Government. Will the Minister assure us that the work being done by Mr Wheatley will look at the BBA’s role? It appears that there is a prima facie case that the BBA colluded in and supported a corrupt act. I am grateful that the Minister and the Chancellor have confirmed that there is no lacuna in legislation that prohibits criminal prosecution of the quite monstrous things that appear to have occurred here.
I have two further short questions. There was no suggestion by the Minister that any action would take place to lead to an inquiry and the payment of compensation to those who lost out as a result of this systemic collusion and manipulation of an important rate. That includes taxpayers, because there were a number of arrangements between the central bank, the Treasury and banks that were based on the LIBOR rate. Will the Minister confirm that there will be an appropriate investigation about whether the taxpayer was disadvantaged? Finally, will the Minister explain why the FSA’s fine was so small compared with the fines imposed by the American regulators?
Lord Sassoon
My Lords, on the first point, presumably if there is evidence that the BBA colluded in criminal activity, that will be well within the scope of the work that the SFO might do. As for the wider question about the role of the BBA, the review of LIBOR will look comprehensively at governance, which comes very much back to the BBA role and what, if any, that should be in the future framework.
On the question of whether there should be compensation, our difficulty at the moment is that we do not know whether LIBOR was successfully manipulated as opposed to there being an attempt to manipulate it. From the evidence that has already been made public, we know—
Lord Myners
The American regulators were very clear that LIBOR was manipulated. They were unequivocal in that statement. They understand the subtleties of the issue.
Lord Sassoon
My Lords, if the noble Lord will hear me out, we know that there was attempted manipulation from the evidence that has already been made public. I do not know on what basis the American authorities have come to that conclusion, and it may just be semantics, but the authorities are currently investigating whether LIBOR was actually manipulated.
It is also worth bearing in mind that, in the case of Barclays, it was the dollar LIBOR rate and not the sterling LIBOR rate that was the subject of the attempted manipulation that has come out. I completely agree with the noble Lord, Lord Myners, that these investigations need to carry on, but we cannot come to any conclusion about the answer.
Lastly, I answered a question about the fine last week, but I will repeat it in summary. This is the largest fine that the FSA has ever handed down, which indicates the seriousness of this matter within a UK context—the US has a completely different approach to the way it imposes penalties. The most important and relevant point is that this is the largest ever fine in the UK handed down by the FSA.
Lord De Mauley
My Lords, there is plenty of time. Perhaps we can hear from the Cross Benches and then from my noble friend.
Lord Elystan-Morgan
My Lords, if I may, I will make a point in support of the very pertinent submission made by the noble Baroness, Lady Kramer. This is not a question of who should prosecute or who can prosecute. A simple, straightforward criminal offence was created in Section 397 of the Financial Services and Markets Act 2000; I checked it. That provision deals with a false statement or declaration that is made deliberately or misleadingly and that distorts a market. It is an offence that is punishable on indictment with a maximum of two years’ imprisonment. There would seem to be ample prima facie evidence that such an offence has been committed. In the circumstances, bearing in mind the damage done and the ruthlessness with which such practices were conducted, is there any reason why persons responsible should not stand trial?
Lord Sassoon
My Lords, I am sure that the FSA will listen to the analysis given by the noble Lord, Lord Elystan-Morgan; and if it has not already got to the bottom of it, it will take his points on board. The authority is acutely aware that it needs to press on, but the noble Lord, Lord Turner of Ecchinswell, has made it clear that it is very difficult, which is why the FSA seems to be taking the lead on this.
Lord Higgins
My Lords, it would seem that Barclays’ defence is, “We had to cheat in order to preserve our reputation”. That suggests that the bank is seriously misguided in the way it looks at these matters. Certainly there is a case for a parliamentary investigation, which I support. It is equally true that we should be absolutely clear that the terms of reference are the right ones for such an investigation.
If I may, I will make a very narrow point. As I understand it, the proposal is that the Joint Committee should be chaired by the Member for Chichester, Mr Tyrie, for whom I have the very greatest respect. However, as I was myself chairman of the Treasury Committee for some 14 years, I question whether it is appropriate that his energies should be diverted from the Treasury Committee, where he is doing an excellent job, by being chairman of this authority. This is too heavy a burden for one person, however talented, to take on, and we ought to consider that point.
Lord Sassoon
My Lords, on my noble friend Lord Higgins’ first point, there were two distinct periods during which Barclays was found to have attempted its manipulation. The first period was before the financial crisis, when its traders appear to have been driven by pure greed and tried to drive rate up. The second period was during the financial crisis when the preservation of Barclays’ reputation seemed to be the main driver and it was attempting, it seems, to move the interest rate down. I think there were those two distinct motivations.
Regarding the committee chair, notwithstanding the suggestion that the chair of the Treasury Committee chairs the Select Committee, I would guess that the formal position is that the committee itself will decide who the chair will be. I imagine that this will be taken up either in the Motion itself, in which case your Lordships will have a chance to take a view on it, or the committee will decide who the chair will be in due course.
Baroness Williams of Crosby
My Lords, I want to pursue for a moment the sheer seriousness of the situation that the noble Lords, Lord Eatwell and Lord Blair, and my noble friend all pointed to. I can think of nothing more likely to undo the prospect of this country’s return to prosperity from the crisis than the present, huge doubts about the trustworthiness of the financial system. When I extensively read newspapers from the United States, what comes out very loud and clear is the view that as a result the major beneficiaries will be countries that are in direct rivalry and competition with the City and that hope to gain from what they regard as an extremely dangerous problem that we have brought upon ourselves.
I am satisfied with the prospect of a parliamentary inquiry and I accept what the noble Lord said about the necessity for speed and getting on with it. The noble Lord, Lord Eatwell, and my noble friend Lord Higgins asked about the terms of reference. The missing term of reference that troubles me is the inquiry’s relationship to the role of the regulators. The Daily Telegraph may not be a very good source, but it is becoming completely clear that there were seminars, discussions, meetings and debates throughout 2007 and 2008 about LIBOR, and if anything is likely to be true about those rumours and suggestions it is vital that we explore whether our present regulatory structure is adequate to deal with an issue as serious and as far-reaching as this one. I therefore, with great respect, suggest to the Minister, probably with the support of the Opposition, that the terms of reference should at least extend to the roles of regulators, to the reasons why they failed to probe into this matter at an earlier stage and to what steps could now be taken to give them the confidence and the resources to enable them to do better in future.
Lord Sassoon
My Lords, I certainly agree with my noble friend that these are all relevant and important questions. It is equally important that the proposed Joint Committee’s terms of reference should be clear and should focus on transparency, culture and professional standards. The role of the regulators is rather different, but I am sure that the Treasury Select Committee, in the normal course of its business, will want to ask questions about those matters in due course. However, I take on board what my noble friend has to say.
Crime and Courts Bill [HL]
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Touhig
“( ) In fixing such an amount, and subsequent additions, account must be taken of the person’s relevant weekly income, excluding housing benefit and child benefit, and allowance must be made for the protection of a reasonable financial subsistence level, in the manner used to determine the initial fine.”
Lord Touhig
My Lords, this amendment will extend the means-testing system currently used in the calculation of court fines so that it also applies to the calculation of additional costs which, under Clause 20, will be imposed on people as a result of late or incomplete fine repayments.
The rationale behind means-testing in the justice system is laid out clearly in the magistrates’ court sentencing guidelines, which make clear that while financial punishments should cause a degree of hardship, they should not force people below an income level required to meet their most basic needs. Furthermore, they should impact equally upon offenders regardless of their financial situation. On this basis, fines are set as a percentage of the offender’s relevant weekly income, minus child benefit and housing benefit.
However, as the Bill now stands, those who miss payments for whatever reason will be liable for extra costs that take no account of their means at all. Consequently they may be left owing significant sums that they simply cannot afford, even being forced to cover repayments using benefits that were protected in the calculation of the initial fine.
This has raised serious and urgent concerns among charities and others working with vulnerable individuals and families. The Catholic Children’s Society in Westminster has said that imposing costs on parents without taking account of their financial means presents a serious risk to their children. It states:
“Child benefit exists to support children’s basic needs and is quite rightly excluded from the calculation of fines … It would be iniquitous to undermine this by adding further non means-tested costs that could jeopardise children’s wellbeing … Ultimately, under the government proposals children will suffer because of their parent’s inability or failure to meet payment deadlines. This is neither a just nor acceptable situation”.
If the current system of means-testing is applied to the new financial penalties outlined in the Bill, such a situation can easily be averted. Offenders with dependent children will still be penalised for not meeting fine payments in full or on time, but the sanction will protect the amount required for meeting those children’s essential needs. Similarly, all those required to make extra payments, regardless of their family situation, will maintain the basic amount needed to cover fundamental costs such as food and housing.
It should be emphasised that, with basic subsistence levels being accounted for in this manner, the Government’s aims of incentivising timely payment and reducing the cost of recovering fines will not be undermined. In fact, with means-tested amounts as opposed to arbitrary or standard sums being imposed, repayment may be more likely, as people will be subject to payments that they can realistically meet rather than face mounting debts that they may have no real chance of ever paying off. Equally, by maintaining safeguards against forcing people into unsustainable financial situations, the public purse will be protected from potentially significant expenses in the long term.
In response to the points that I made at Second Reading, the Minister, the noble Lord, Lord McNally, said that,
“if the offender provides accurate means information at the outset of their engagement with the justice system and keeps to the payment plan set out by the court, enforcement action will not take place”.—[Official Report, 28/5/12; col. 1067.]
However, as those working on the front line know only too well, in reality a whole array of circumstances prevent people keeping to their payment plans.
I welcome recent government pilot schemes to aid compliance such as text-messaging reminders when payments are due, but these will not provide a universal fail-safe against offenders defaulting on amounts owed, nor are they intended to do so. As I have previously stressed, people should face up to their financial responsibilities and should not be exempt from covering any extra costs that the Courts and Tribunals Service incurs as a result of their deviation from their agreed payment plan. However, the principles of equality and basic subsistence that underpin other financial penalties must apply here. I hope, therefore, that the Minister will take that on board and consider extending the current means-testing system to apply to the new financial penalties as outlined in the Bill. I beg to move.
Lord Elystan-Morgan
My Lords, I support the amendment proposed by the noble Lord, Lord Touhig. Clause 20 as I understand it writes new Section 75A into the Magistrates’ Courts Act 1980. Under that new section, the costs incurred in the collection of a fine should be added to it. No discretion is given to a magistrates’ court, once the machinery has commenced, to decide whether to make an order. The Bill states quite baldly that those costs shall be added. There is no question, therefore, of a court saying, “Well, in the circumstances, we do not think that it would be appropriate to make an order here”. Once those basic facts have been proven, the machinery runs in a way that is less than fair.
Lord Ponsonby of Shulbrede
My Lords, I support my noble friend Lord Touhig in the detail of what he is proposing. I agree that when costs are added they should be means-tested as were the original fines when they were put in place.
I want to raise a separate issue which I raised also at Second Reading, and this is probably the best amendment with which to do so. When magistrates impose new fines, they very often do not know the level of the outstanding fines. It is not unusual for a magistrates’ court to go through hundreds of cases in a day when they are dealing with small matters and to put on hundreds of fines. They will never know, in my experience, what the level of outstanding fines is. This is clearly unsatisfactory because it can, and in many cases does, force people into an unstable financial situation. If the courts had known the level of the outstanding fines, they might have looked at other sentencing alternatives which were more appropriate for the person who is unable to pay their fines.
I have raised this issue with colleagues who are magistrates. It is feared that, if this provision were made mandatory, the administrative procedures would be brought to their knees because, as I said, literally hundreds of fines can go through in a single sitting. The administrative system should be set up so that magistrates and judges can get information on the level of outstanding fines in reasonable time before they go ahead and sentence. As I said, this is a slightly different matter from the burden of the amendment, but it goes to the heart of practicality of imposing fines.
Lord Beecham
My Lords, in speaking to my noble friend’s amendment, I shall deal also with my opposition to the question that the clause stand part. Before I do so, I am sure that your Lordships would wish to join me in extending to the noble and learned Lord, Lord Mackay of Clashfern, who is not in his place today, congratulations on his 85th birthday. It would be good to see that in the record of the House.
I support the amendment moved by my noble friend Lord Touhig and have little to add to it, save that the Minister will have received a letter from Mr Paul Nicolson of the Zacchaeus Trust which was sent to my noble friend and copied to a number of your Lordships. It illustrates the nature of the problem that my noble friend has addressed, but with particular reference to the outsourcing of the collections enforcements system under Clause 20(2). This proposes an amendment to the Magistrates’ Courts Act which prescribes that:
“All functions of fines officers may be contracted-out”;
my opposition to stand part refers to this.
Mr Nicolson’s letter sets out a case for doing that. The amendment went down before I had heard from him, so we were of a like mind without knowing it at the time. One of the concerns that he expresses—which has been touched on by my noble friend—is that the cost of enforcement is likely to rise significantly to the extent that it is contracted out: courts officers do not, of course, charge the same amounts as bailiffs. The Minister will have seen from Mr Nicolson’s calculations that whereas court costs and a fine officer might add £135 to a fine of around £200, where bailiffs are involved, that figure could rise very substantially indeed because they charge a great deal more. I will be moving an amendment in relation to bailiffs a little later.
The letter suggests that the privatisation, if you will, of enforcement is likely to aggravate the problem. It says that contrary to the Government’s view—and I do not know if the Minister will be able to comment on this—
“fines officers do make judicial decisions”.
If they were privatised, that would be effectively privatising an element of judicial discretion. The letter goes on to say that, at present:
“The magistrates will set the level of the fine and then issue a collection order. It is then the fines officers’ duty to collect the fine. They decide: a) the weekly/monthly level of payment; b) whether it should be changed if there has been a change of circumstances; c) to send out bailiffs to defaulters”,
and, importantly,
“d) whether to send the case to the magistrates for reconsideration”,
if it is found that the defaulter is vulnerable or the fine is disproportionate and should be reconsidered.
Mr Nicolson supposes that the Government will argue that these are purely administrative tasks; I do not know whether the Minister will be advancing that argument. However, from his point of view, and I guess that of the Zacchaeus Trust, these are effectively part of the judicial functions of the court and should not be privatised, with all the additional costs to defaulters that that would involve.
I therefore support the amendment. My opposition to clause stand part is designed to invite the Government to explain the rationale for further contracting-out of this function, how it might operate, and to what extent it is expected that this service will be privatised and at what cost to the public purse and to debtors. I hope that the Government will perhaps reconsider this. We may otherwise have to revert to it at Report. It seems a step too far in terms both of the burdens it will impose, and of the principle of contracting out a significant role like this beyond the court system.
Baroness Northover
My Lords, I thank the noble Lord, Lord Beecham, on behalf of my noble and learned friend Lord Mackay. The age of 85 is indeed the new 65, as he clearly manifests. I also thank the noble Lord, Lord Touhig, for his amendment.
Clause 20 enables the costs of collecting or pursuing unpaid fines to be recovered directly from the defaulting offender and ensures that there are strong incentives for offenders to pay fines promptly. Ultimately, collection costs, as the noble Lord has outlined, will be added directly to an offender’s fine if the offender fails to pay the fine to the agreed timetable and costs are occurred in pursuing payment.
Once a person has failed to pay their fine, much of the work that goes into pursuing that fine clearly involves labour intensive processes; for example, sending reminder letters, tracing offenders, validating offender information or arranging deductions from benefits or earnings. It cannot be right that a proportion of offenders do not pay their criminal fines in full or in a timely manner. This undermines the effectiveness of fines as a criminal punishment and costs millions of pounds per year to pursue. It cannot be right that the taxpayer should have to pick up the costs of pursuing unpaid fines from some.
We recognise that we must, of course, make allowances for the fact that some offenders lead chaotic lives and are vulnerable. Therefore, these costs will not apply to those who pay as ordered or who remain in contact with the court and comply with their payments plans which fines officers are more than willing to set up for those offenders struggling to pay their fine. This clause is aimed at those who deliberately evade payment.
We understand the concerns of the noble Lord, Lord Touhig, in this matter. Clearly we must make allowances for the fact that some people find themselves in hardship and find it difficult to pay their debts. That does not mean that the courts ought to permit those convicted simply to ignore the sentence imposed on them. Fines are a criminal sentence and taxpayers should not be subsidising those who avoid payment for whatever reason. If a person is vulnerable or is having difficulty paying their financial penalty, this needs to be discussed with the fines officer.
Under the fines collection scheme, much of the work of managing the payment of fines is the responsibility of the fines officer. Fines officers can arrange more manageable payment terms with offenders who have not defaulted and provide a key link between the offender and the court to ensure that the fine is paid as ordered by the court. Fines officers can also provide advice to offenders to help them understand what has been ordered by the court and can explain the implications of default. This includes advice on where offenders can get help with managing their finances where that is needed.
Indeed, as my noble friend Lord McNally said at Second Reading,
“if the offender provides accurate means information at the outset of their engagement with the justice system and keeps to the payment plan set out by the court, enforcement action will not take place”.—[Official Report, 28/5/12; col. 1067.]
Hence, no additional cost will be incurred. We really cannot emphasise strongly enough the need for offenders, especially those considered to be vulnerable, to keep in continuous engagement with the fines officers. In addition, if on experiencing financial hardship a person wishes to appeal or to be referred back to the court, the court will have the discretion to remit part or all of the administration costs following consideration of all the issues.
In setting the level of fine, it is the judicial responsibility of the court itself to evaluate the circumstances and seriousness of the offence against the financial means of the offenders. Under Clause 20, it is proposed that the administrative costs will be fixed and proportionate to the actual costs of collection, and will be applied where there is default in payment after sentencing. It would not be appropriate to give the fines officer the ability to exercise a judicial discretion when setting the level of costs in the same way as is done for fines.
Following sentencing, where a person’s financial information has not been supplied or verified, fines officers and administrative staff set about trying to engage with the offender, gathering further information, such as whether the person is in receipt of benefits, and verifying the person’s income and other details. Fines officers can then assess the best approach to assist the offender and enable payment. Our aim in the future is significantly to improve the level of information that a court has in order to fix the fine at an appropriate level in the first instance. That is an important step in ensuring that fines are more manageable for those in hardship while remaining an effective punishment for committing a criminal offence.
Lord Touhig
Would I be right in thinking that, without any form of means test for the additional fine, it could be greater than the original fine?
Baroness Northover
In theory, I suppose that that could be the case. The important issue here is that the offender stays closely in touch with the fines officer. If an offender has a very small fine decided because of their circumstances, ways to pay that should be sorted out and the offender assisted in that regard. Only a very small fine would be overtaken by the cost of pursuing it, one would imagine. As I said, it is extremely important for the offender and the fines officer to work through the implications of the decision taken by the court.
Lord Touhig
My Lords, I must say that I am somewhat disappointed by the Minister’s response. I entirely agree—I said it at Second Reading and I have said it today—that people should be responsible for paying the debts that are due. If they are fined for an offence, they should be responsible for paying those debts. However, as the Minister said, people often live chaotic lifestyles. We think that it is right that the guidelines of a magistrates’ court make it clear that, although the fine should provide a degree of hardship, it should not leave people with an income on which they cannot survive. Surely we should protect children and the person’s ability to pay for food and housing. Those are three basic things: children, food and housing.
Baroness Northover
I remind the noble Lord that I said that, if offenders find themselves in the circumstances that he describes, they can go back to the court and the administration cost, too, can be varied or set aside. It is not as cast-iron or concrete as the noble Lord suggests.
Lord Touhig
I apologise. I accept the point that the noble Baroness made in her earlier response. The point I seek to make is that if we think that the guidelines to the magistrates should take account of those elements, surely it is right that any additional fine should take account of those elements. At the end of the day, because of the lifestyles of some people, some fines will never be paid. That is wrong, but they will not. The taxpayer will end up paying more if children are not properly cared for. Social services will be involved. Someone will lose a house and have to go into emergency accommodation. The Government are storing up a problem here which could be avoided by simply saying, yes, if a form of means testing is used to determine the initial fine, any additional fine should have the same application.
I regret that the Government do not see it that way. There is clearly much work that we must do as missionaries to persuade the Government, before the Bill passes, of the error of their ways. With those few remarks, I beg leave to withdraw the amendment, but give notice that I shall come back to it at a later stage.
Lord Beecham
“75B Minimum size of charging order
The Secretary of State shall by regulation prescribe the minimum amount above which a charging order may be granted in respect of a judgment debt, which shall be laid before, and approved by a resolution of, each House of Parliament.”
Lord Beecham
This is a probing amendment dealing with the question of charging orders. Creditors may seek to obtain a charging order against the assets of a judgment debtor, including his or her home, and that can lead to an order for sale. In 2009-10, 566 such orders were obtained.
The Government have been consulting on a proposal to impose a financial threshold below which such action could not be taken in respect of unsecured debts, particularly in relation to consumer credit cases, where the debtor is in fact already paying a premium for the loan through higher interest rates affecting the risk to the creditor.
The whole process began with a report from Citizens Advice in 2009 called Out Of Order, which recommended just such a threshold and which led to the previous Government publishing a consultation paper in February 2010. That was followed in March 2010 by an OFT publication entitled Irresponsible Lending Guidance—in itself an admission of the seriousness of the problem. The key guidance called on creditors to make it clear that charging orders might be obtained which could lead to the sale of the property charged and therefore to the loss of the home at the time of the entry into the consumer credit agreement. It also, significantly, warned creditors not to harass or threaten debtors with the loss of the home if they did not in fact intend to enforce such an order. This, of course, underlines the fact that the problem is not just a financial one, but also encompasses the anxiety and stress caused to debtors and their families. As the evidence base for the recent consultation points out:
“In considering whether to make an order for sale, the court will balance, against the rights of the creditor to recover the debt, the rights of the debtor and his/her family in respect of the family home under Article 8 of the European Convention on Human Right … in all cases judicial discretion will be exercised”.
While the latter point is true, it is unlikely to assuage debtors’ fears of losing the family home pending a hearing and a judicial determination.
At present, the information about the number of relevant cases is limited. It would be reasonable to infer that in the past two years numbers will have risen in light of the recession—the “Breadline Britain” so poignantly portrayed in the recent Guardian series. However, the figures rely on monthly returns from individual county courts, so again in the words of the evidence base, there is “scope for collection error” in the statistics, both as to the total numbers and whether they are ultimately enforced. There is still less information about the cost to the public purse of the consequences of people losing their homes—for example, through re-housing, temporary accommodation and children being taken into care.
Given the move to a single county court, will the Government consider establishing a more robust system for tracking the data and costing the outcomes, so that policymakers, and indeed the public, are given a clearer view of the dimension of the problems? The coalition agreement pledged action to deal with this problem and at page 12 of the Government’s programme for government promised, among other things, that they would,
“ban orders for sale on unsecured debts of less than £25,000”.
Unsurprisingly, the credit industry opposed the principle of a threshold, both when the idea was first floated in 2009-10 and during the recent consultation. In the event, it appears that the Government have substantially backtracked and have announced an intention to apply a threshold of only £1,000, so that charging orders and the threat of losing one’s home will remain for debts of that very modest amount or above. This is surely a major breach of the pledge in the coalition agreement. By definition, it threatens homeowners, not people in social housing or in receipt of housing benefit whom the Prime Minister and other Ministers, regretfully, are too often at pains to vilify. It is another example of a policy that will hit the working poor hard, just as some of the other changes will hit this group as hard or harder than the very small minority who abuse the system.
The Government have pointed out that creditors who are thwarted under a threshold scheme might resort to bankruptcy proceedings. I suppose that risk exists. If they did, however, at least they would not rank above other creditors who had not priced for the risk in the first place by charging a premium for the credit.
I hope that the Government will reconsider the level of the threshold. This amendment does not seek to prescribe a particular level, but rather to establish the principle and a requirement for parliamentary approval of any regulation establishing such a level. That is what the Delegated Powers Committee recommended in its second report; an affirmative resolution procedure for the establishment or alteration of a threshold level. It is clearly necessary for the threshold to be realistic and proportionate, and £1,000 patently does not meet those criteria. It would be interesting to learn from the Minister—perhaps not today because this is not, after all, her departmental concern—the rationale behind the Government’s abandonment of its pledge in the coalition agreement and its reduction of the threshold from £25,000 to the nugatory figure of £1,000. I beg to move.
Baroness Northover
My Lords, I thank the noble Lord, Lord Beecham, for bringing to the Committee’s attention the issue of charging orders. The power to prescribe the minimum amount above which a charging order may be imposed already exists, although it has not yet been implemented. That power is enshrined in Section 94 of the Tribunals, Courts and Enforcement Act 2007, which gives the Lord Chancellor the power to make regulations to provide that a charging order may not be made to secure a sum of money below a certain amount. While differently expressed from the noble Lord’s amendment, it will achieve the same end.
It should also be borne in mind that a charging order is only a means of securing a sum of money ordered to be paid under judgment and that it requires an order for sale of the charged property for ultimate enforcement. Section 94 of the 2007 Act includes a second power for the Lord Chancellor to provide that an order for sale may not be made to enforce payment of a sum below a certain amount.
Lord Beecham
My Lords, I am grateful to the Minister for her reply. She has certainly supplied some information, but I am afraid she has far from convinced me that the Government’s stance is correct. The effect of this failure to set a minimum threshold is to put homeowners in a particularly invidious position. By definition, it is only they whose homes are threatened if they are in debt. As I say, it stems from a consumer credit arrangement that already insures the creditor because they charge more for credit. Effectively, they are getting two bites of the cherry; they receive more for the credit facility and will have the opportunity to take these proceedings. Of course, judicial discretion exists, but as I have already indicated, it will leave people in considerable fear of losing their homes, pending an outcome. That is deeply unsatisfactory.
The noble Baroness has referred to evidence that was received. Obviously the consumer credit industry would be opposed to the imposition of a threshold which should apply both to the charging order and to sale, but it would be interesting to know what other groups were against it.
For the moment, I am prepared to withdraw the amendment, but it is something to which I think we shall be returning on Report.
Lord Beecham
“36B Regulatory system for bailiffs
The Secretary of State shall establish a new regulatory system for bailiffs.”
Lord Beecham
My Lords, I am engaged in a series of probing exercises today. Not being a dentist, it is not a familiar role. This amendment deals with the thorny question of bailiffs. Again, this is an area of law on which the Government have been engaged in consultation with a view to strengthening the system of debt collection and debt enforcement. They have come up with some proposals, but rather than deferring action until the next Session of Parliament, I would urge them to take the opportunity to bring forward those proposals for inclusion in this Bill. We will, after all, still be in Committee when the House returns after the summer Recess. If it were delayed beyond then, there may well not be time in this Session of Parliament to deal with this issue. Admittedly, the consultation has only just ended—I think it ended last month—but I suggest that it is not beyond the Government’s capacity to seek to deal with it by an addition to this Bill after the summer.
There has long been concern about the law covering debt enforcement by bailiffs, whether under county court judgments, under a warrant for execution or under the magistrates’ court, to collect fines, council tax arrears, compensation or maintenance in family cases, when acting on a distress warrant or liability order. In the High Court, High Court enforcement officers are employed to enforce writs of execution. The whole area is, in the Government’s view, “complex, unclear and confusing”, with a history stretching back centuries and sometimes with language to match. It is understandable that, as the Ministry of Justice stated in its consultation paper of February 2012:
“This confusion can result in bailiffs and enforcement officers misrepresenting their … authority”.
I must stress that the concern is not, essentially, over the actions of employees of the courts but over private bailiffs. There are unfortunately many cases in which bailiffs have acted in unacceptable ways and beyond their powers, and there is widespread concern about their charges, which the debtor must meet. I cite one example, which was quoted by the Zacchaeus 2000 Trust—again, chaired by the Reverend Paul Nicolson—in its briefing on what was the LASPO Bill. It cited the case of a firm of bailiffs that, without going through the necessary procedure, seized goods from a single mother with an 11 month-old baby and another young child. She was on benefits and suffered mental health problems. She owed £2,365—a substantial amount. The goods seized included a kettle and a toaster. The firm said that it was permissible to seize the kettle and toaster because the mother had a pot and a cooker.
There are worse cases than that. Last September, a bailiff called on a pregnant woman, saying that she owed £58 in council tax. She had received no communication about this. When she asked the bailiff to hold on while she got dressed and moved to close the door, the bailiff kicked the door in, injuring her leg and hip. When the police were notified and sought information from the bailiff’s firm, they were denied on the rather spurious grounds of data protection. There was another case in Wales in which a bailiff obtained a walking possession illegally, harassed a woman in the street in front of her friends and contacted her through a social networking website. As a final example, in south-east England a 19 year-old woman failed to pay a £118 fine for improper use of a child’s train ticket and, although she requested a payment plan, was visited by a bailiff who threatened to seize her mother’s goods—not her’s but her mother’s—if the bailiffs were not paid £418. He abused the young woman’s mother, threatened to remove her car and said that he could take anything in the house and break the door down to do it.
These are matters of great concern and, in fairness to the Government, they have acknowledged that there needs to be considerable improvement in the whole system. The previous Government sought to address some of these issues in the Tribunals, Courts and Enforcement Act 2007, which was designed, inter alia, to improve the regulation and practices of bailiffs and change the way that debt collection and enforcement is carried out. Part 3 of that Act, which has yet to be implemented, would introduce a complete code setting out the bailiffs’ power of entry onto premises, what goods can be seized and sold, what fees can be charged and the whole process from the serving of notice to the distribution of sale proceeds.
One aspect of Part 3 of the 2007 Act would create a proper system for the independent regulation of bailiffs, which is at present sadly lacking. There is no nationally recognised qualification or standard of competence for bailiffs, who can merely be certificated by the county court in relation to certain types of debt enforcement, including road traffic debts, council tax and non-domestic rates. In addition, they need to be certificated to distrain for rent—although Part 3 of the 2007 Act, if and when it is implemented, would also limit that to cases of commercial properties and rents, rather than domestic rents.
The previous Government made some initial moves to improve matters by setting up an online register of certificated bailiffs—so that debtors could check whether the bailiffs were in fact recognised to that extent—a Criminal Records Bureau check for would-be bailiffs when applying for certification and some minimum training requirements. The present Government took matters forward in January, and I welcome that, by setting out the National Standards for Enforcement Agents to be adopted by councils and other authorities for use by those working for them. This is a voluntary code and requires, for example, that bailiffs refrain from using threatening behaviour or unlawful force to gain access to premises, or from discussing a debt with anyone except the debtor. They have to withdraw if only a child is present on gaining entry and have a duty of care to elderly, disabled or vulnerable people. So far as they go, those are useful measures and, to their credit, the Government seek to enshrine these principles and other measures in law, and to reply to the consultation that concluded in October.
However, it is critically important that the new regime includes rigorous criteria for the independent accreditation of bailiffs, backed by an effective regulatory regime with regular monitoring and an accessible complaints system. The courts and other statutory bodies must have a special responsibility both for staff they directly employ on enforcement and those with whom they contract. In my view, the Government are moving in the right direction but need to act to carry out the intentions of the 2007 Act and take them further, so that we can avoid the disgraceful behaviour of what are no doubt a minority of bailiffs, who were exemplified in the cases to which I have referred. I again urge the Government to clarify today what they have in mind, if they can, but certainly, if at all possible, to go beyond simply replying to the consultation in October by bringing forward amendments to this Bill so that the matter can be dealt with as part of this legislation and concluded in this Session. I beg to move.
Baroness Northover
My Lords, I am grateful to the noble Lord, Lord Beecham, for explaining his thinking behind this amendment. He described what are, indeed, horrendous accounts. There have been debates over many years about this problem. Let me start by saying that we understand the concerns about bailiffs. The Government have given a commitment to providing more protection against aggressive bailiffs and are working to this end. I thank the noble Lord for his welcome for the progress that we have been making.
In January, the Government announced the updating of the National Standards for Enforcement Agents, with a view to defining acceptable behaviour for bailiffs. This was the first step in the Government’s plans to change the way that bailiffs are regulated and to make sure that they operate fairly to all concerned. Then, in February, we launched a public consultation which set out how we plan to provide more protection against aggressive bailiffs while still enabling effective enforcement. The package of proposals seeks to restore balance to the system; to improve clarity so that both debtors and creditors know where they stand; to strengthen protections for the vulnerable; and to ensure that individuals, business and government are able to collect the debts that they are owed.
Our aim is to respect the competing rights of both the creditor and the debtor. Unless there is prompt and effective enforcement, the authority of the courts and public confidence in the justice system are undermined. Creditors are entitled to collect what they are owed, while debtors should be protected from the kind of oppressive pursuit of their debt that the noble Lord has just described. This consultation set out a number of specific proposals, which, among other things, seek to: set out to whom and under what circumstances reasonable force to enter premises will be available; set out when and how a bailiff can enter a property; create minimum entry standards and certification processes to ensure bailiffs are fit to operate; prohibit the use of force against a person, with additional safeguards to protect children; make clear which items an enforcement agent may not take from someone’s home; make clear what fees bailiffs can charge for the range of debts that they collect for local government, courts and businesses; and remodel and clarify the complaints process available to the debtor. I hope that all of those proposals would address the noble Lord’s points.
The consultation, as the noble Lord, Lord Beecham, acknowledges, closed only recently on 14 May and we are now carefully considering the responses, with a view to publishing our response in the autumn. This has therefore been a timely debate and we will certainly take account of the noble Lord’s views. I will make sure that what he has just said is fed into the MoJ.
Like the noble Lord, the Government are clear that aggressive bailiff activity is unacceptable. We are committed to bringing forward effective proposals in due course to protect the public and ensure that bailiff activity is proportionate. I hope that, with those assurances, and having had the opportunity to raise this important issue, which we fully recognise, the noble Lord will be prepared to withdraw his amendment and await the Government’s proposals later in the year.
Lord Beecham
I thank the Minister for her very full reply. I am certainly prepared to withdraw the amendment. Can she give me an indication as to whether the Government will at least consider using the Bill as a vehicle for the welcome changes that she suggests will follow? I would have thought it feasible to do that, given that we will not have completed Committee by the time we return. When we return, we will have further work to do on the Bill as it stands and since there is likely to be very broad support across the House for the changes that she proposes, it would not be too difficult to add these matters to the Bill. I do not ask for a firm commitment but for an indication that the Government will at least consider doing that.
Baroness Northover
As an extremely junior member of the Government, that would be going way beyond what I am allowed to do, but the important thing is not to pre-empt consideration of the consultation. The noble Lord may assume as to what may emerge from people’s responses to that consultation, but it is appropriate for Government to give due consideration to what comes in, and we will make proposals in due course.
Lord Beecham
“(1A) Before issuing any order under subsection (1), the Lord Chancellor shall first report to Parliament that the following principles have been adhered to in any decisions made under subsection (1)—
(a) the protection of witnesses, victims, defendants, parties and jurors, who shall under no circumstances be recorded;(b) the promotion and proper administration of justice;and filming shall not be permitted if it would cause undue prejudice to any person involved in the proceedings.”
Lord Beecham
We now come to debate the broadcasting of court proceedings. This has already taken place in respect of certain proceedings of the Supreme Court. There is a suggestion in the Bill that this should be significantly widened. My amendments support the principle, but set out guidelines as to the way in which change might be made and also take into account—implicitly, I have to say, rather than explicitly—the recommendation of the Delegated Powers Committee that any changes should be made by regulation; again to be approved by parliamentary vote.
Amendment 147ZC proposes that in making an order as to which categories of case might be broadcast and when that might happen, the Lord Chancellor should apply principles that should be first reported to Parliament. The basic principle is surely that broadcasting of court proceedings is for the purposes not of entertainment but of promoting understanding of the judicial system and thereby reinforcing public confidence in it. It is not by any means to be a YouTube of incidents, as opposed to proper, sensible coverage of an important area of public life, the justice system.
Amendment 147ZC requires the Lord Chancellor, in making any order extending categories of broadcasting, to confirm that principles have been adhered to, including, most essentially, the protection of witnesses, victims, defendants, parties and jurors, who shall under no circumstances be recorded; the promotion and proper administration of justice; and that filming should not be permitted if it would cause undue prejudice to any person involved in the proceedings. That is a fairly straightforward provision designed to protect the integrity of the system.
The decision in an individual case should, of course, be a matter for the judge. There may well be cases in which the judge decides that it is not appropriate, in all the circumstances, to take advantage of the permission to allow broadcasting that the Bill, if enacted, would confer. Amendment 147B simply says that, in making a direction that broadcasting should be permitted, the court or tribunal should have regard to the principles that I have adumbrated, which would, if the amendment is accepted, apply to the Lord Chancellor in widening the range of potential broadcasts in the first place.
Clearly there are legitimate concerns about the extent to which broadcasting might impinge on people’s positions, particularly parties to the case. I do not think that the Government envisage extending coverage to the whole process of trials, rather to particular aspects. Some of these are mentioned in other amendments, in particular sentencing, remarks on sentencing, and perhaps arguments by a counsel. Such matters should be dealt with properly by regulation, taking into account the factors mentioned in Amendment 147A.
I hope that the Government will respond positively to these suggestions and I look forward very much to hearing the views of other noble Lords who have tabled amendments. This is an area of considerable public interest and concern. There is a way forward, the Government are on the right lines, and with some safeguards we would be prepared to support the principle of extension. The question, of course, is where one draws the line and that is a matter which we will no doubt be debating this evening and further on Report. I beg to move.
Baroness Hamwee
Amendment 147A is in my name and that of my noble friend Lord Thomas of Gresford. I do not take issue with the principles set out in Amendment 147ZC, moved by the noble Lord, Lord Beecham, except that I question the term, “undue prejudice”. I wonder whether filming should be permitted if it might cause any prejudice, but that is a minor point.
I am pleased to see the government amendment providing for the affirmative procedure; it will give us the opportunity to debate the extension of the subjects that can be broadcast. I have no doubt with my amendments that the Government intend to see how it goes, limiting the items as they have described. The two paragraphs listed in our amendment may look less than the Government had proposed for the initial—experiment is perhaps too loaded a term—experience of filming, recording and broadcast, but my noble friend Lord Thomas corrected my drafting and said that the term “judgments” covered everything that was needed in the first paragraph. However, this development seems to me to be so significant that I am not convinced that it should not be stated in the Bill and that any extension of it should not be the subject of primary legislation.
I agree with those who predict pressure from the broadcasters for an extension so that there is livelier material for the 6.30 news and so on. Even “Today in Parliament”, admirable though it is, chooses the livelier and racier exchanges, and that is entirely understandable—it seeks to balance those with the important items that get discussed in both Houses, and it has half an hour to do so. When one is looking for a clip of only a few seconds, one is bound to want something that will grab the audience’s attention. Of course, a wider understanding of the justice system must be a good thing. I do not want to sound too paternalistic, but there must be a danger that an extension that popularises and simplifies would lead to a loss of subtlety and complexity. The noble Baroness, Lady Kennedy of The Shaws—who has far more experience of the courts than I do—spoke powerfully about this at Second Reading.
At Second Reading I mentioned the issue of counsel playing to the gallery. It occurs to me that others may do so as well. The experience of the riots last summer, and what came out regarding the behaviour of some of those who were charged and what was prompting them, has made me wonder whether people in that situation might themselves seek to use proceedings that were broadcast in order to continue the political statements that they were making. The Government always say that we must beware of the lack of legislative opportunities but, as we generally get a criminal justice Bill each year, that does not necessarily seem to be the best argument.
When we have secondary legislation—I acknowledge that there have been improvements in the reporting by departments of consultation that has taken place before secondary legislation comes before your Lordships—it is likely that there will be a variety of views on the details of the extension and the parts of court proceedings that would be covered. These will be difficult to deal with because of the inability to amend secondary legislation. My general point is that this is so important a step that it should require the closest consideration.
As ever, when one looks at one’s own drafting immediately before standing up to speak to an amendment, one sees the faults in it. I should perhaps have included the word “only” after the phrase,
“an order may be made”,
but this is Committee so I hope that your Lordships will not hold that against me. I do not regard approval of the very limited recording that is currently proposed as amounting to approval in principle for recording and filming in court to such an extent as to avoid the need for the consideration, on the basis of primary legislation, of an extension to this.
Lord Thomas of Gresford
My Lords, I support my noble friend in the amendment that is also in my name. She referred to people using television for their own purposes. There has been an example of that recently in Norway, where your Lordships will recall that a defendant has made every use that he possibly could to carry his message to the public. Your Lordships may think that that is an example of the sort of thing that we wish to avoid.
The noble Baroness, Lady Kennedy of The Shaws, was somewhat caught today by the two back-to-back Statements and was due to preside over the important recognition of the anniversary of the 7/7 massacres. Consequently, she is not able to be here to promote her Amendment 147AA. She has no problem in relation to the higher courts and neither do I—there is no reason why the Court of Appeal or the Supreme Court should fear exposure to the cameras—but she is concerned, and I share her concern to a considerable degree, that the sentencing remarks can possibly lead to problems, as my noble friend Lady Hamwee has just pointed out.
I have no doubt that sentencing remarks would be used only in high-profile cases with salacious details or where celebrities were involved. It would not be long before there was pressure, when sentencing remarks were made, for the camera to show the face of the defendant as he received his sentence or, even worse, the faces of the victim or their families at that critical moment about which I spoke at Second Reading. I am very concerned about that. We must avoid the business of the court being made entertainment for people. Criminal court is a very serious matter and the parameters must be considerably restrained. I support the amendment in my name and that of the noble Baroness, Lady Kennedy.
Lord Pannick
My Lords, I welcome Clause 22. Broadcasting will enhance the public understanding of our justice system, which in general works efficiently and fairly. It is important that members of the public are able to see that this is so through modern means of communication. As is often said, justice should be seen to be done.
There is also, of course, the possibility that allowing the cameras in may illuminate areas of court proceedings that are in need of reform. I entirely agree with what has already been said about the fundamental undesirability of cameras showing the evidence or, as the noble Lord, Lord Thomas of Gresford, said, the reactions of witnesses or victims at any stage of the court proceedings. I am sure that the Minister’s intention is to have regulations that would prohibit any of that, and I look forward to hearing what he says about why that matter should not be addressed in primary legislation.
I am a bit concerned by the final words of Amendment 147ZC, moved by the noble Lord, Lord Beecham, which say that filming would not be permitted if it would cause “undue prejudice” to any person involved in the proceedings. I can well understand that a defendant in a notorious case, in which there was a very strong argument for broadcasting the sentencing remarks, may say that to single him out for broadcasting would indeed involve prejudice. It would be most undesirable if people were able to present such an argument.
I am very concerned about Amendment 147A in the names of the noble Lord, Lord Thomas of Gresford, and the noble Baroness, Lady Hamwee. As I understand their amendment, it would prohibit the broadcasting of any part of the argument in, for example, the divisional court or the Court of Appeal, despite the fact that the issues raised may be of considerable public importance. If that is the noble Lords’ intention, that seems highly undesirable.
Baroness Hamwee
Perhaps I could make it clear: in this amendment we aimed to set out what we understand the Government’s current intentions to be.
Lord Pannick
I am grateful to the noble Baroness. I would hope that the Government would allow, at the discretion of the judge, the broadcasting of the arguments in the divisional court and in the Court of Appeal—cases, of course, where there are no witnesses. There is no evidence; these are matters of law. Some of them—one could easily give examples—are matters of fundamental public importance. If, as is the case, the whole of the proceedings in our Supreme Court can be broadcast, including the arguments that are being addressed, it would seem highly desirable that the broadcasters should be allowed, at the discretion of the judge, to broadcast the arguments in the lower courts.
The noble Baroness, Lady Hamwee, expressed a number of concerns about broadcasting. I am sure the noble Baroness is right that the danger is that broadcasters may be looking at the most sensational cases, and will broadcast snippets of the proceedings and may sensationalise matters. However, that is already the case in relation to print journalism and I see no reason at all why Parliament should be more concerned to regulate the content of what is communicated to the public through broadcasting than through print journalism.
I also have to say, as someone who has appeared in a number of cases in the European Court of Human Rights and the Supreme Court that have been broadcast, that her fears that counsel will play to the gallery are unfounded. I am not aware of any evidence that, once the case gets started and the submissions are being made, those who are presenting the arguments do other than focus on persuading the court. Indeed, were they to do otherwise and present themselves as actors with a view to impressing a wider audience, they would undoubtedly soon suffer the unemployment that is endemic in the acting profession. They are also regulated by the Bar Council.
The noble Lord, Lord Thomas of Gresford, expressed understandable concern that there should be no risk in this country of any broadcast of the equivalent of the recent conduct of the Norwegian defendant. I suggest to noble Lords that a discretion for the trial judge would prevent that. In any event, witnesses, victims and defendants could not be broadcast.
We should welcome Clause 22. Many of the concerns that have been expressed, I submit, are unfounded, and I hope the Government will allow broadcasting at the discretion of the trial judge—certainly of sentencing remarks and judgments in the Court of Appeal but also, I would hope, of judgments in the lower courts such as the Divisional Court and the High Court generally, and arguments in the courts below the Supreme Court.
Lord Borrie
My Lords, after hearing my noble friend Lord Beecham on my own Front Bench and the spokesman from the Liberal Democrat Benches, I was a little anxious that we were going to be extremely restrictive on this opening-up of the courts to television, radio, et cetera. The noble Lord, Lord Pannick, has redressed the balance by putting an emphasis on what I might call “open justice”. The phrase, “Justice must be seen to be done” is not just one we trot out when dealing with matters of significance, in terms of enabling the public to know the arguments for this or that, it is a meaningful phrase that has its origins in the reality that people used to attend courts, especially the local magistrates’ courts, in great numbers. I remind your Lordships that in the 19th century, and to some extent the 20th century, newspapers, especially local newspapers, used to have journalists on tap who would report at great length—pages and pages—on the evidence, arguments and judgments given in the magistrates’ courts. That was the way in which the public could assess what was going on in their name in the courts of justice in this country.
As a matter of fact, sadly or otherwise, nowadays journalists on local newspapers very rarely go to magistrates’ courts and do that job that used to be done by their predecessors. It follows that people today know less about what goes on in their local courts than was the case, and the Government’s proposal in Clause 22 redresses the matter. I agree entirely with the noble Lord, Lord Thomas of Gresford, and found myself nodding as he said that we do not want such television performances as that of the Norwegian defendant in the case to which the noble Lord referred. The defendant was skilfully using the fact of being in court to retail political and other propaganda, for the benefit not of the justice system being better understood but of the kind of extreme views that he held.
As the noble Lord, Lord Pannick, indicated, it should be possible to broadcast lawyers and judges arguing legal matters or otherwise, or judges sentencing when a trial comes to an end. As the Government are making a relatively new and welcome advance in these matters, we should not be too restrictive. That does not mean I necessarily disagree with my noble friend Lord Beecham on the matter of detail to which he referred, but I had the feeling he might be a little too restrictive—or cautious, it might be sufficient to say—and preferred the open approach of the noble Lord, Lord Pannick.
Baroness Northover
My Lords, as we have heard, the amendments tabled by the noble Lord, Lord Beecham, the noble Baroness, Lady Kennedy, and my noble friends Lady Hamwee and Lord Thomas of Gresford seek to clarify, in their different ways, the circumstances in which court broadcasting is to be permitted. There are also a number of government amendments in this group, which I will explain.
The noble Lord, Lord Beecham, is right that this is about promoting understanding of our judicial system, as happens in various other countries, and I welcome what he and the noble Lords, Lord Pannick and Lord Borrie, said about the Government being on the right lines. We recognise the risks outlined by my noble friends Lady Hamwee and Lord Thomas of Gresford. We have considered this very carefully and I am sure the implementation of these changes will be carefully monitored by all. We have heard from both sides in this argument—from what the noble Lord, Lord Borrie, described as “open justice” to concerns that coverage should not have negative consequences.
Clause 22 will allow the Lord Chancellor, with the agreement of the Lord Chief Justice, to lift the ban on filming in courts in certain circumstances and set out the limitations surrounding those. The provisions build on the successful broadcasting of the proceedings of the Supreme Court. The Government initially plan to use the order-making power in this clause to allow the broadcasting of judgments and advocates’ arguments in cases before the Criminal and Civil Divisions of the Court of Appeal. Cases in the Court of Appeal normally deal with complex issues of law or evidence, and victims and witnesses rarely appear in order to provide new evidence. Given the complexity of legal issues in Court of Appeal cases, we believe that allowing advocates’ arguments to be filmed in addition to judgments would be more likely to improve public understanding than filming judgments alone. Over a longer period, we expect to allow broadcasting from the Crown Court, but to limit it to the judge’s sentencing remarks after the conclusion of the trial. We believe that this will help to increase the public’s understanding of sentencing, with low risk to the proper administration of justice.
Lord Beecham
My Lords, I reiterate that the Opposition support the thrust of the Government’s policy. We are glad that the Government have accepted the recommendation of the Delegated Powers Committee about requiring the affirmative procedure. We share the Government’s view that it is important to develop understanding of the judicial process and to promote public confidence in the justice system to which, in our view, their proposals would contribute.
The Minister referred to a triple lock. There is, in fact, a quadruple lock because, as she said in the latter part of her reply, the judge or tribunal can determine what can be shown on the occasion of the trial. That is fundamentally important. We all agree with the horror expressed by the noble Lord, Lord Thomas of Gresford, at the prospect of anything like the Norwegian experience being replicated in our courts. It is clear that that would not happen under these proposals. However, I hope I will not be accused of scandalising the judiciary if I point out that it is not necessarily just the parties to a case that might play to the camera. There was a Judge Pickles—I do not think he was related to the Secretary of State of the same name—who acquired a certain reputation for playing not to the camera but to the media during his judicial career and, emphatically, afterwards. I do not think any of our present judges would follow that course. I am sure they would resist the temptation to do so.
Lord Thomas of Gresford
I hope that we do not get to the American situation where lawyers come out on to the steps of the court and make submissions about the way the case is going and so on. That is something that the profession should stop. I do not know that it is necessarily a matter for the Government.
Lord Beecham
I entirely agree with the noble Lord but, as the noble Lord, Lord Pannick, pointed out, the profession would be in a position to stop that at both levels. It would clearly be very undesirable for that to happen. It is clearly also incumbent on the media to behave responsibly, but we expect that of the media and all too often find them wanting in that respect. However, I think the framework here would be adequate to deal with that situation.
I am caught between two views of Amendment 147ZC. The noble Baroness, Lady Hamwee, would prefer that the word “undue” was removed so that the amendment would read,
“filming shall not be permitted if it would cause prejudice to any person involved in the proceedings”.
The noble Lord, Lord Pannick, would prefer all reference to prejudice to go. That suggests that perhaps my formulation is better balanced than either of the other propositions. Fundamentally, how far to permit broadcasting will be a decision for the judge taking into account the interests of all parties present. We have to have confidence that the judiciary will discharge that duty.
It seems to me that there ought to be some guidelines on the way that this is approached, perhaps embodied with the wording of the amendment or something of an improvement upon it. Perhaps the Government would wish to consider that matter when we come to Report. In the mean time, I think there is broad support for these proposals, which we welcome, and I beg leave to withdraw the amendment.
Lord Pannick
“Scandalising the judiciary Abolition of offence of scandalising the judiciary
The offence of scandalising the judiciary under the common law of England and Wales and the common law of Northern Ireland is abolished.”
Lord Pannick
In the absence of the noble Lord, Lord Lester of Herne Hill, for which he has asked me to apologise to the Committee, I move Amendment 148, which raises the question of whether it should continue to be a criminal offence to insult the judiciary. The amendment is in my name and those of the noble Lord, Lord Lester of Herne Hill, the noble and learned Lord, Lord Mackay of Clashfern, and the noble Lord, Lord Bew, who I am very pleased to see in his place.
This area of the law has been the object of ridicule since Mr Howard Gray, the editor of the Birmingham Daily Argus, was prosecuted in 1900 for an unflattering article about Mr Justice Darling’s conduct at the Birmingham Assizes. That judgment is the foundation of the modern law. The official law reports state, somewhat sanctimoniously, that it was not necessary to set out the offending remarks but fortunately the Law Times informed its readers of the contents. In his newspaper article Mr Gray had described the learned judge as,
“an impudent little man in horsehair, a microcosm of conceit and empty-headedness”.
He added that:
“No newspaper can exist except upon its merits, a condition from which the bench, happily for Mr Justice Darling, is exempt”.
The editor suggested that the judge, assessed on his merits, would have been, “a successful bus conductor”.
Mr Gray’s invective—one might describe it as 50 shades of Gray—was not appreciated by the courts, although his comments are kinder than the view since taken by legal historians of Mr Justice Darling’s contribution to jurisprudence. Mr Gray was prosecuted, made a grovelling apology before the Lord Chief Justice, which kept him out of prison, and was fined £100 and ordered to pay costs.
When I was a law student in the 1970s cases such as Mr Gray’s from the early years of the 20th century were regarded as historical curiosities with little, if any, contemporary relevance. In 1984, in the Appellate Committee of this House, Lord Diplock described the application of contempt law to statements scandalising the judiciary as “virtually obsolescent in England”.
This area of our criminal law could, and would, have been left as a legal relic—a matter of concern only to historians and students—but it has recently had life breathed into it by the Attorney-General for Northern Ireland, Mr John Larkin QC. It is because of the recent case that this Committee is being asked to consider whether this area of the law should be reformed.
Lord Bew
My Lords, I rise briefly to speak on Amendment 148 and to express my support for the sentiments expressed so eloquently by my noble friend Lord Pannick. There is no doubt, as he made clear, that the case for this amendment has been dramatised by the events of April and May of this year, when the Attorney-General for Northern Ireland raised his intention to bring contempt of court proceedings against Mr Peter Hain, former Secretary of State for Northern Ireland, on the publication of his memoirs and observations that he made therein on a member of the Northern Ireland judiciary and a case of particular importance when he was Secretary of State. The reaction of Parliament was quite dramatic, with 120 MPs rallying to Mr Hain’s defence. In Question Time on 18 April, the right honourable Mr David Blunkett in the other place asked the Prime Minister:
“Should not respect for the independence of the judiciary be balanced with the rights of individuals to fair comment on that judiciary?”.
The Prime Minister replied, expressing sympathy for that sentiment, and said that,
“there are occasions … when judges make critical remarks about politicians; and there are occasions when politicians make critical remarks about judges. To me, that is part of life in a modern democracy, and we ought to keep these things, as far as possible, out of the courtroom”.—[Official Report, Commons, 18/4/12; col. 317.]
In mid-May, following a less than enthusiastic response in the political world to his original move, the Attorney-General for Northern Ireland effectively set aside the proceedings. There has been a tendency to regard the whole business as an explosion of provincial self-regard now thankfully passed, but that is a short-sighted way in which to look at what has happened. The Attorney-General made it clear that he would not have set aside the proceedings until the receipt of the letter from the former Secretary of State for Northern Ireland, Mr Hain. In that letter, Mr Hain effectively argued that it had not been his intention in any way to challenge the independence and fairness of the judiciary in Northern Ireland. This is an important point, because I think it quite likely that the Attorney-General for Northern Ireland had in mind the dictum of Lord Russell of Killowen, perhaps the greatest of all the Northern Irish judges of the last century. In 1900, as Chief Justice of England, he offered a dictum in this sort of case that intention was crucial and that there had to be a calculated and clearly deliberate attempt to challenge the independence of the judiciary. By his letter, the former Secretary of State for Northern Ireland, Mr Hain, put himself on the right side of that dictum by saying that he had no intention in any way to challenge the independence of the judiciary in Northern Ireland.
What this reveals is that the Attorney-General and Sir Declan Morgan, the Lord Chief Justice, as far as I can understand from the remarks that he made at the time that this was a public matter, believe that there was in principle a case in law here, and a legal case that could be taken. That is why we have proposed this amendment. If there is any possibility that there could be such a case brought, which I think would widely be regarded as absurd, we must do what we can to eliminate that possibility.
In this country, we have a long tradition of freedom of speech, from which the judiciary is not immune. John Bunyan’s The Pilgrim’s Progress is a classic example in the 17th century of how that tradition has operated. In the view of those of us who support the amendment, the common-law offence of scandalising the judiciary is obsolete and has an unnecessary chilling effect on free speech.
Lord Borrie
My Lords, some 40 years ago I co-authored a text book entitled The Law of Contempt. Some 50 pages were devoted to the subject now before us in this Committee of scandalising the court. I should add that the current edition of that book is written by a group of somewhat younger lawyers, and since my name appears only on the spine of the book I no longer receive any royalties and therefore have no interest to declare. However, I admit to a certain nostalgic interest for this curiously and rather charmingly worded crime of scandalising the court, which is the subject of Amendment 148. It is the opinion of a number of eminent lawyers; in addition to those who have spoken, we also have the noble Lord, Lord Lester of Herne Hill, and the noble and learned Lord, Lord Mackay, whose 85th birthday it is today. That has been recorded already by the Minister.
I accept from the noble Lord, Lord Pannick, that the offence of scandalising the court has somewhat dubious and ancient beginnings and that it has largely fallen into desuetude, at any rate in this country, although it is quite often used in ex-colonies of Britain that have adopted our law. The reason for its doubtful origins is that a Chief Justice in the 18th century gave a judgment that there was such an offence as scandalising the court but never actually gave that judgment in court. It was recorded and given as his view, but that to lawyers is a very dubious precedent.
As for the purpose of the offence, it is said to help to ensure that the authority of the courts is not undermined. Furthermore, potentially at least, as both proponents of the amendment, who have spoken already, have said, the offence or its existence has a chilling effect on freedom of speech and the freedom to criticise judicial decisions. However, I have to admit—this was not mentioned by the two previous speakers—that the 1974 Phillimore committee said that there was not much evidence that the press was unduly inhibited by this aspect of the law. In 1987, the Daily Mirror referred to the judges in the Spycatcher case as “fools”, alongside an upside-down picture of the Members of this House who were sitting in their judicial capacity. No prosecution followed.
It is over a century ago that in the case of Gray, to which the noble Lords, Lord Pannick and Lord Bew, referred, Lord Russell of Killowen said that,
“any act done or writing published calculated to bring a court or a judge into contempt, or to lower his authority, is a contempt of Court”.
I need not give the facts about the references to Mr Justice Darling, as they have been given by the noble Lord, Lord Pannick. In addition to the points that were made, one phrase used by the journalist there was that Mr Justice Darling was,
“a microcosm of conceit and empty-headedness”.
Lord Justice Sedley, a current judge of the Court of Appeal, to whom the noble Lord, Lord Pannick, referred, wrote recently that the reference to Mr Justice Darling was among the,
“finest passages of invective in the annals of British journalism”—
not a bad record, I suppose. I think I am right in saying that there has been no successful prosecution for this offence since 1931. That surely gives a great deal of emphasis to the point made by the noble Lords, Lord Pannick and Lord Bew, that this offence is out of date. There would be hardly any loss, and not much gain either in practical terms, if the crime were abolished.
Lord Goldsmith
My Lords, the Minister may have something to say in support of this offence and I look forward to hearing it. Subject to that, the case made by the noble Lords, Lord Pannick and Lord Bew, is unanswerable.
However, I wish to make one or two comments about it. I know all the individuals who were referred to in the almost prosecution by the Attorney-General for Northern Ireland, Mr John Larkin, including the would-be defendant. I am sure that the decision to proceed was taken in good faith—they are all people of good faith—but it is the first time that I recall the potential use of that offence. I was the Attorney-General for Northern Ireland for six years and I was never asked to, nor did I, consider that offence in Northern Ireland—or, indeed, in England and Wales, of which I was also Attorney-General. There does not seem to be any need for the offence and I never saw any need for it at the time. It will be also interesting to know whether the Minister has anything particular to say in relation to Northern Ireland and to what the noble Lord, Lord Bew, had to say. I see also sitting in his place today a former Lord Chief Justice of Northern Ireland.
In supporting the noble Lord, Lord Pannick, and subject to what the Minister has to say, I wish to draw attention to one point and to sound a note of caution. The noble Lord, in the course of his observations, asked why we should protect judges as we do not protect other public officials. However, I am concerned about allowing too much freedom in relation to attacks on judges. I do not mean that we should protect them through the criminal law—that is not appropriate—but I believe that a degree of self-restraint is important in retaining public confidence. Indeed, it is not members of the public or even former politicians who often pose the greatest risk. From time to time when I was in office I had to have conversations, as did other legal officers, with members of our own Government about their observations on cases they had lost; they rarely made them about cases that they had won.
Expressing that reservation, and making it clear that I do not believe that the criminal law is necessary to protect judges in those circumstances, I hope that if the amendment is agreed it will not be taken as invitation to a free-for-all in relation to criticism of judges— there is a proper place for that. However, there is a need for self-restraint so that the independence of the judiciary is maintained; so that judges do not have to be involved in slanging matches when responding to accusations made against them; and so that confidence in the judicial system is maintained.
Lord Carswell
My Lords, as your Lordships are aware, I was for some 20 years a judge in Northern Ireland. In that capacity, I had the function on many occasions of conducting criminal trials without a jury of very serious terrorist offences. It was a very responsible and difficult job and, in that capacity, I was scandalised more than once. I do not know whether that is a declaration of interest, but it certainly explains what I am about to say to your Lordships.
I did not consider for a moment instigating a prosecution or suggesting to the Attorney-General—who was not the noble and learned Lord, Lord Goldsmith, but a predecessor—that a prosecution should be bought. There were deeply scandalous assertions in a certain newspaper that I had come to the conclusions I had reached in criminal trials on the instructions of the Government, more or less, without saying it, as their cat’s paw. I was deeply offended and I deeply resented it. I was scandalised, but not for one moment would I have considered asking the Attorney-General whether he would consider bringing contempt proceedings—or, rather, a scandalising prosecution.
My reason is very simple: judges have to be able to take these things. There may be a point beyond which they should not have to lie down and put up with the slings and arrows, but there are other ways of dealing with it than this offence. That is the reason it has fallen into desuetude: it is not necessary in modern conditions; not necessary for a sophisticated society; and not necessary for judges who have to have the hardihood to put up with comments which sometimes may be unfair, badly based and just plain vulgar rudeness. However, that is part of what they have to do: they have to shrug their shoulders and get on with it. It is for that reason that, although I was very cross at the time about it, I certainly did not invoke the criminal law. I support the amendment.
Lord Beecham
We are addressing these issues in wonderfully archaic language. The “scandalisation” of judges; the “murmuring” of judges in Scotland, which puts me in mind of the murmuration of starlings—it is, apparently, the collective noun for starlings—and here we are in this High Court of Parliament considering this arcane offence.
Like the noble and learned Lord, Lord Goldsmith, I deprecate the tendency of politicians of all political colours and Ministers of different Governments publicly to criticise judges when decisions have gone against them. I also deprecate the tendency of the tabloid press in particular to denounce the judiciary for perceived leniency, or whatever it might be, from time to time. However, as other Members of the Committee have made clear, that does not justify applying a criminal offence and criminal sanctions to those who are critical, rightly or wrongly, of what the judiciary has done.
Scandalising the judiciary has not always been the province of politicians or the media. One of the most frequent scandalisers of the judiciary was that eminent Conservative lawyer and Lord Chancellor, Lord Birkenhead, known as FE Smith. He frequently clashed with judges. On one occasion the judge, in an irritated spasm, inquired, “Mr Smith, what do you think I am here for?”, to which he replied, “My Lord, it is not for me to question the inscrutable workings of providence”. That came as near as anything to scandalising that particular judge. I do not think it was Mr Justice Darling, whose reputation has been adequately canvassed tonight.
We certainly support this amendment. It is clearly timely to dispose of the revival of a procedure that is quite antiquated and unnecessary. I hope that the Government will accept the amendment.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, every so often this House produces a little nugget of a debate that is extremely important and that will bear further reading and study. I am grateful to all noble Lords for their contributions, and to the noble Lord, Lord Beecham, for his murmuring of starlings.
Lord McNally
Murmuration. We learn something new every day in this House. I also thank him for another good FE Smith story.
The noble Lord, Lord Pannick, introduced the amendment with his usual eloquence and well-structured argument, marred only by a terrible joke about Fifty Shades of Grey, but at least yet another book was plugged in this debate. We have all been rushing to eBay to get the remaining copies of Borrie on defamation, which will be worth getting; and of course Peter Hain’s memoirs, as has been rightly pointed out, have been given far greater coverage than I recall their getting when they were published.
Nevertheless, what has been discussed is extremely important. I very much welcome the contribution of the noble and learned Lord, Lord Carswell. As a judge in Northern Ireland, he and his fellow judges were so important in upholding the rule of law in the most difficult of circumstances, and in so doing he not only has our admiration but we are all in his debt for his courage and consistency. For him to say that he thought that the law was not necessary weighs heavily in making any judgment. I also share the views of the noble and learned Lord, Lord Goldsmith, and the noble Lord, Lord Beecham, about getting the balance right between politicians and judges.
I understand what the Prime Minister meant when he spoke in the other place about there always being a little bit of rough and tumble between the two in the modern age. I think I have said at the Dispatch Box that a little bit of dynamic tension between politicians and the judiciary in a democracy does not go amiss. The warning from the noble and learned Lord, Lord Goldsmith, is correct, and he will not be surprised to know that the present Lord Chancellor—I cannot speak for the present Attorney-General or the Solicitor-General—has not been slow to remind exasperated Ministers that it does not help to start opining on this. The balance of contributions was right that it will happen occasionally, but if it became too much of a free-for-all it would genuinely undermine public confidence in the judiciary and in the workings of our legal system. The warnings are well made.
Lord Pannick
I am grateful for the Minister’s positive response to this debate. I share the views of the noble and learned Lord, Lord Goldsmith, that self-restraint in criticising the judiciary is to be encouraged. Much of the criticism of the judiciary that we hear is ill-founded and unsubstantiated. This amendment is certainly not intended to encourage criticism, and certainly not unfounded criticism; its only point is that the criminal law is not the appropriate means of protecting the judiciary’s reputation. As the noble and learned Lord, Lord Carswell, recognised in his superb work as Lord Chief Justice of Northern Ireland and told the Committee today, confidence in the judiciary is not simply promoted by criminal proceedings. As the Minister said, it is significant that the noble and learned Lords, Lord Carswell and Lord Goldsmith, with their experience, have spoken in favour of this amendment, to which the noble and learned Lord, Lord Mackay of Clashfern, added his name.
The noble Lord, Lord Borrie, pointed out that the continuing existence of the offence of scandalising the judiciary does not inhibit the press much. There are two responses to that. First, it is not much of a recommendation for maintaining this area of criminal law if it has no effect, with no successful prosecution since 1932. Secondly, and more importantly, the recent conduct of the Attorney-General of Northern Ireland unfortunately may well have an inhibiting effect on others who are considering making critical comments about the judiciary. The noble Lord, Lord Borrie, teased me about wanting instant change. It is of course 112 years since the prosecution of Mr Gray, and if no one can present an argument for retaining this offence, I do not see why it is necessary to wait for a Law Commission report in years to come.
The Minister accepted that there is unlikely to be a gap in the law. I entirely accept that on a matter of this sort, before bringing forward any amendment of their own, it is right and proper that the Government would want to consult the judiciary and the devolved Administrations in Scotland and Northern Ireland. By Report, I very much hope that the Government will have formed a view in the light of such consultation. For the time being, with grateful thanks to the Minister, I beg leave to withdraw this amendment.