Grand Committee
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Arrangement of Business
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
The Deputy Chairman of Committees (Baroness Fookes)
My Lords, if there is a Division in the House, as noble Lords know very well already, we shall immediately adjourn for 10 minutes.
Behaviour Change: Science and Technology Committee Report
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Neuberger
That the Grand Committee takes note of the Report of the Science and Technology Committee on Behaviour Change (2nd Report, Session 2010-12, HL Paper 179).
Baroness Neuberger
My Lords, I wish to thank the members of the Science and Technology sub-committee, many of whom are here in the Moses Room, for their excellent contributions to this inquiry and to the report and for making it such fun. I also thank our specialist adviser, Professor Charles Abraham, for his advice and our secretariat, who were superb throughout.
The Science and Technology Committee chose to begin an inquiry into behaviour change because understanding behaviour and how to influence it is an integral part of effective and efficient policy-making. So much of what the Government do or want to do involves influencing human behaviour, so their success will depend on their ability to change people’s behaviour in ways that will help them bring about their goals.
We know, of course, that government can influence behaviour in many different ways using a broad set of tools, from the provision of information at one end of the scale, through persuasion, be it by a GP or a marketing campaign, the provision of financial and other incentives and disincentives, to regulation, including taxation, at the other end. We were prompted, in particular, to start the inquiry by the rise in popularity of nudging, and the considerable interest in the book of that name, Nudge, by Richard Thaler and Cass Sunstein, which draws on findings from behavioural economics. The committee sought to explore how understanding better the sciences of human behaviour and disciplines including neuroscience, psychology, sociology and behavioural economics can help Governments choose the best tools for the job.
I shall try to give an overview of our principal findings, and I know that many of my colleagues will say more, and I will say something about our reaction to the Government’s response to our report. Perhaps the single most striking thing to come out of this inquiry was the discovery that although scientists can tell us quite a lot about the theory of behaviour—the interaction between different internal and external influences which causes people to act in different ways—there is very little hard evidence about how to develop this into policy interventions that will influence behaviour on a large scale.
It seems that this lack of practical understanding is a result of barely any properly evaluated large-scale behaviour change interventions. The notable exception to this is smoking cessation services in the United Kingdom, which are not only very successful but, because of good evaluation that has been there since the beginning, are continually improving. Insufficient allocation of departmental budgets to research is a big part of the problem, but the problem has also arisen because previous government policies that have aimed to change behaviour have often not been evaluated to a sufficiently high standard. You might argue that the rollout of government policies is perhaps the most obvious location where applied research in how to change behaviour can be carried out. It became increasingly clear to the committee, however, that there simply is not a strong enough culture of evaluation within government. A number of our recommendations were targeted at rectifying this fundamental problem.
Of course, there is some evidence available about how to change behaviour. That evidence points very strongly to one important, though perhaps unsurprising, conclusion: usually the most effective means of changing the behaviour of the population, or a significant group within the population, is to use a whole range of policy tools in order to influence a number of the many factors which impinge on or cause our behaviour simultaneously. Each intervention must be designed based on what we know about the different factors that influence the behaviour we are seeking to change.
As part of our inquiry, we undertook two case studies, the first into changing behaviour to reduce obesity and the second into reducing car use. Other members of the committee will speak in more detail about these.
On the whole our findings in these more specific areas reflected what we had heard more generally. Strong disincentives to discourage particular behaviours and changes to the environment in which decisions are made will often be required in addition to other interventions in order to effect significant behaviour change when important societal challenges, which require a change in the behaviour of the population at population level, are being addressed. Although the use of disincentives or restrictions are more controversial than nudges and have to be justified to, and accepted by, the public we believe there is a need for a proper debate within wider society about how to intervene appropriately to change behaviours in order to tackle some of society’s biggest challenges.
We were pleased to read in their response that the Government agree with the majority of our conclusions and recommendations. I much look forward to hearing from the Minister about how the Government will be taking them forward. The committee welcomes the coalition Government’s attempts to raise the profile of behavioural science. We hope that their efforts, together with our report, will result in a greater emphasis on social science research within a whole range of departments. We were particularly comforted to note that the Government agreed that nudges in isolation will rarely, if ever, achieve the desired effect. We hope we will begin to see this translated into policy. We were told in terms by Ministers that nudging is good because it is cheap, and therefore efficient. We would argue that, however cheap it is to roll out, a policy is only good value for money if it works.
I hope that the Minister will be able to clarify in his response just how the Government intend to ensure that policy-makers are aware of the range of interventions available to them, not just nudging. There are, however, some outstanding areas of concern following the Government’s response. In particular, I would ask the Minister to explain more fully the Government’s decision not to make traffic-light food labelling mandatory, nor to reconsider their position in relation to extending the ban on marketing unhealthy food to children. I also seek some clarification on the outcomes expected of the public health responsibility deals.
We have also thus far heard nothing about the recommendation to appoint an independent government social scientist to champion the importance of social science research and to improve the quality of social science advice across government. I look forward to hearing from the Minister what progress has been made towards this appointment.
Regarding obesity, excess weight costs the NHS more than £5 billion a year. A study by Cancer Research UK published in December 2011 showed that nearly half of all cancer cases could be wiped out if we followed healthier lifestyles. The Government published their strategy on obesity, Healthy Lives, Healthy People in October 2011. We were delighted to see that the Government’s strategy was grounded in the available evidence on changing behaviours to tackle obesity, and that it emphasised the importance of evaluation and building the evidence base on the effectiveness and cost-effectiveness of different interventions. We will watch with interest to see how these initiatives develop.
However, we were really disappointed that the Government still failed to address the wider environmental issues that affect obesity, or to outline how the effectiveness of the responsibility deals would be assessed. Many witnesses felt, as Dr Ian Campbell, medical director of Weight Concern put it, that,
“confronting the real commercial and environmental stimuli of obesity has not yet been achieved”.
We found two areas in particular in our obesity case study where there was promising evidence about how to change the obesogenic environment: food labelling and marketing to children. We were particularly struck by what we heard from Asda and Sainsbury’s on food labelling, and it is really important that people realise just what was said. Justin King, the chief executive of Sainsbury’s, told us that on the introduction of multiple traffic light labelling, against a comparable 12-week period during which fresh ready meal sales grew by 26.2%, sales of a Be Good to Yourself salmon meal, mostly green labels, grew 46.1% and sales of a moussaka, mostly red labels, decreased by 24%. Even over a relatively short period, the majority of the evidence at the moment shows that people definitely understand labels with traffic lights far better than percentages of recommended daily allowances and other such information.
It is important to note that not much research has yet been done on the extent to which better understanding translates into different behaviour for any labelling, but better understanding in the first instance is arguably more likely to result in success. We thought that was really important and were surprised that not more is being done about it. The Government do not appear to be acting on this evidence, or seeking to carry out further research to test these potentially important effects. In fact, their response to our report did not engage with the question of why they failed to pursue these policies around labelling. We were particularly disappointed to see that traffic light labelling was not adopted throughout the EU in the new EU regulation on provision of food information to consumers. We were pleased to see that the Government are currently consulting on the inclusion of traffic light labelling, but it is as an additional form of expression under the regulation. As the Government themselves note, business will not be compelled to follow the recommendation, if adopted. How is that supposed to work, and what plans do the Government have to ensure that such labelling is used consistently across industry?
On marketing of unhealthy products to children, the Government again fail to justify not expanding the current restrictions on such advertising. For instance, they did not say why they had not accepted NICE’s report on the prevention of cardiovascular disease at the population level and its recommendations to extend the regulations restricting advertising during children’s programmes of products high in fat, salt and sugar to cover a greater number of programmes and types of advertising. Why are the Government not putting more effort into tackling the behavioural issues surrounding these preventable diseases, interventions which would save them money in the long term in costs of NHS treatment?
Our other big concern was voluntary agreements to help tackle obesity, particularly through the public health responsibility deal network. Certainly, the evidence suggests that getting businesses to change what they do will make a real difference to our behaviour; we know that our environment is a major influencing factor in our behaviour and that, in turn, businesses have a significant impact on shaping that environment. But concerns were raised by a significant number of witnesses about attempts to change behaviour through agreements with businesses when potential conflicts of interest may exist. We recommended that to guard against conflicts of interest. First, we said that engagement with businesses should be on the Government’s terms and should outline specific outcomes that are expected within any given timescale. Secondly, agreements should be evaluated properly to establish their effect. Thirdly, agreements should be backed up with contingency plans for further intervention if the voluntary approach does not work after a given length of time.
We received a disappointing response from the Government about how this will be taken forward, and perhaps the Minister can clarify what measurable outcomes the Government have agreed with participants in the responsibility deals, how their success will be measured, and over what timescale.
In the committee’s report, the Government were criticised for their policy on minimum alcohol pricing. It was stated that there was good evidence about the effectiveness of alcohol pricing on reducing alcohol-related harm but that it had not fed through to government alcohol policy. Subsequently, the Home Office announced a ban on the sale of alcohol below the rate of duty, plus VAT. This policy has been criticised, because NICE guidance on preventing harmful drinking published in 2010 shows that at the minimum price level proposed by the Government of 21p per unit for beer and 28p for spirits, a reduction in consumption of between 0.1% and 0.4% could be expected. However, a minimum price of 40p per unit would reduce consumption by 2.4%, while minimum prices of 50p and 60p would reduce consumption by 6.7% and 11.9% respectively.
In March this year, the Government published their alcohol strategy, which stated that they would,
“introduce a minimum unit price … for alcohol meaning that, for the first time ever in England and Wales, alcohol will not be allowed to be sold below a certain defined price”.
The Government committed to consult on the level in the coming months with a view to introducing legislation as soon as possible, and to consult on a proposed minimum unit pricing of 40p. This is to be welcomed, but is at a level below that passed in the Scottish Parliament, which will introduce a minimum unit price of 50p per unit. Could the Minister respond and clarify whether the Government are also considering a minimum unit price of 50p per unit, given the situation in Scotland?
The last point concerns organ donation. One nudge recommended by the Behavioural Insights Team in government has been to opt out of organ donation rather than opt in. Once again, I am puzzled by the lack of evidence base for this because it is clear from the House of Lords inquiry into organ donation in EU Sub-Committee G, and other evidence that is around everywhere, that it is the organisation of organ donation, harvesting and transplant services that are the key elements in changing behaviour, rather than opting out or opting in. It would be good to know whether the Government’s Behavioural Insights Team at the heart of government is subject to peer review in respect of its policy recommendations as the key to much of this is evidence, or indeed the lack of it. I commend the report to the House. I beg to move.
Lord Giddens
My Lords, I congratulate the noble Baroness, Lady Neuberger, and her colleagues on the production of this report. It is excellent work and right up there in the top echelon of reports produced in your Lordships’ House. It is a shame that it has not drawn in more noble Lords to discuss it. However, the saving grace is that the ones who are here are notably distinguished and therefore we can anticipate a high-level debate.
The topic is manifestly extremely important as there are so many areas in which Governments want to promote behaviour change. Public health, as mentioned in the report with the case study of obesity, is a good example, but there are dozens of other fields. Today one might want to include bankers, for example, as all parties now want to produce a new culture of responsibility in the City. If that is not a massive behaviour change, I do not know what it is.
The work of Richard Thaler and Cass Sunstein is quite rightly given central place in the report because of the impact that their work has had, especially the book Nudge, which has been mentioned, which was a bestseller in the United States—it was right at the top of the New York Times list. Since then, Cass Sunstein has been working in the Obama Administration trying to debureaucratise American business, among other things. As noted in the report, the book has had a strong influence on the coalition Government here.
I find Sunstein’s work, in particular, interesting and I have followed it for many years. As most people here will know, he is a distinguished legal theorist. For example, he wrote a devastating critique of the precautionary principle in environmental politics which, for anyone who is interested in that, shows why there is no such thing as a precautionary principle.
I think everyone here will agree that the book Nudge is packed with provocative ideas and vignettes. For example, there is one about estate agents. If you are buying a house you should watch out because one of the things that estate agents do is first of all show you two rather crummy properties before they show you the one they want you to buy. This establishes a frame of tolerance, in Sunstein’s language. It demonstrates what they are writing about because it implies some degree of covert behaviour influence. In other words, if you knew what the estate agent was doing you would be in a position to block off that influence. The covert element of their work has received a great deal of critical attention in philosophical literature, as has the notion of their philosophy, which they describe as libertarian paternalism. Many people think that that is an oxymoron but they vehemently deny that it is. I do not share that political philosophy, even though I recognise the wealth of examples that have developed in their writings. I agree with the fairly heavy objections to it, which are developed in the report. They are more consequential for the Government than the noble Baroness implied, for reasons that I will come back to.
The report took a lot of evidence and concluded that the Committee,
“were given no examples of significant change … having been achieved by non-regulatory measures alone”.
The report also rightly questions whether non-regulatory measures are more respectful of the freedom of the individual than ones involving regulation.
The Government have often taken an activist and interventionist role to secure beneficial behaviour change. The one thing that we can all agree on is that purely informational approaches—this is documented in the report and many other sources—do not really work. For example, ads or literature spelling out the dangers of unhealthy diets do not work by and large, or they have only a marginal impact on those whom they are supposed to help. The report is lacking in a kind of analytical pattern, so I offer my own on why it is so difficult to change lifestyle habits, as it is almost always difficult to do so.
I have three points to make. First, most lifestyle patterns are not individual traits; they are embedded in wider cultural settings. We cannot persuade people to change their behaviour without altering the cultural traits that drive it. This is often extremely hard to do and almost always takes time. To my mind it universally involves regulation. If we go back to the case of corporate culture in the City when talking about a big deal, it is obvious that you will not do much nudging there; you need systematic restructuring of what happens in the City and it has to be pretty penetrating. It is true that in lifestyle patterns such as alcohol consumption or smoking there are ordinarily strong cultural factors involved in the groups in which the individual is a member. Not many individual traits of behaviour are individual at all.
Secondly, some forms of behaviour that Governments may wish to change are deeply addictive. As someone who has a long–standing interest in addictive and compulsive behaviour, I know that these elements apply to many lifestyle traits in contemporary culture. It is true, for example, of most harmful eating habits. Some are involved in obesity, or in its opposite, anorexia in which I have had a lot of interest through all the phases of my career. People starve to death in the middle of a society in which there is too much food to go round. The compulsive element of that habit system is very apparent. It means that the underlying emotional sources of such lifestyle forms of behaviour have to be grappled with. For that reason nudging might be useful in certain specific contexts, but it will not allow someone to change such behaviour. In my view, obesity has a strong addictive as well as a cultural component to it. It is true of many traits of behaviour that a Government might want to try to change.
Thirdly, in trying to change behaviour we often have to confront systems of power and established interests. By and large only Governments can do that. Smoking is an interesting example as it is one area in which we have made a difference. There has been a substantial reduction in the proportion of people smoking—not in the world, where it still goes on, but in several of the industrial countries. However, it took 30 years to achieve that and about 24% of the people in this country still smoke, nevertheless. One reason for this is the resistance of the tobacco industry and the long-standing battle that it fought, and that is very true of a whole range of areas where we need to secure behaviour. If we do not confront established interests and do not recognise that there is a power system involved, we are not going to get very far.
The report calls for more effective connections between policies in the social sciences. As a social scientist, I very strongly support that and this leads me to a couple of questions for the Minister. First, I repeat the question that was asked: what happened to the famous chief social scientist? It seems to be an important position to reinstate, as I understood it would be. Secondly, in spite of what the noble Baroness, Lady Neuberger, says, this report demolishes a good deal of the Government’s ideological position in that the reason why Nudge was so attractive to the Government was that it seems to indicate that you can downplay the roles of government and legislation and yet achieve significant change by other means. The report shows that, by and large, this is not the case and I do not therefore see how the Government can really endorse it with equanimity.
Finally, on obesity and other dietary concerns, I return to the issue of power. We live in a society where there is highly developed corporate power, which takes the form of corporations influencing people through advertising, especially children. Corporations do not pick up the social and medical costs of what they do. It is the NHS that picks up the costs of the obesity epidemic, which is staggering in its consequences for type 2 diabetes and a whole range of other disorders. Should not the food industry be taxed more substantially, in order that it makes a bigger contribution to the very harmful forms of behaviour over which it has so much influence?
Lord Alderdice
My Lords, like the noble Lord, Lord Giddens, I pay tribute to the chairman of our committee, the noble Baroness, Lady Neuberger, for her enthusiasm and for keeping us to the task, which was not easy because it wa s a very broad task. As she did, I also thank Professor Charles Abraham and the secretariat, who served us extremely well. I also declare my own interests as noted in the register and in the report: as a retired consultant psychiatrist and as president of ARTIS Europe, a research and risk analysis company.
One could pick up on many things in the report itself, but I would like to pick up two or three of its broad principal outcomes and apply them to areas that were not referred to in the report. In particular, I will look at the important work of government in foreign and Commonwealth affairs and in the Ministry of Defence. My reason for doing so comes out of the very principles that emerge from the report.
First, there was remarkably little research into how one might affect population behaviour change, as distinct from the behaviour change of individuals. I came to understand this over a number of years. My own background and training was in the understanding of individual psychology and psychopathology and in attempting to bring about behaviour change with individuals, but when I tried to apply some of those understandings to the political field, particularly in conflict resolution, while there were important elements of read-across there are also differences in the way that groups function. One of these was referred to in passing by the noble Lord, Lord Giddens, when he said that culture was an important element. Culture is important for the individual but it is essentially a shared phenomenon. I sometimes liken culture in the group to the personality of an individual, but the same rules do not apply in an absolute read-across. Unless we do research that demonstrates an evidential outcome, we simply operate by our own prejudices and rule of thumb. I will come back to that, because we may come to wholly wrong conclusions on that basis.
The second thing that the report pointed out was that it is unlikely that change can be brought about by non-regulatory interventions on their own—that regulation is relevant and important. That is clearly true and cannot be ignored. That takes me to the question of defence and foreign and Commonwealth affairs. Why? One thing that has become manifestly clear, if it was not clear before, is that the capacity of this country and others to create real change in the international community by the use of force is limited, at best, and ever more limited. It is not at all clear that we yet have an international process of law that can enforce itself, despite considerable efforts which I very much hope continue.
The capacity of the most powerful country in the world, the United States of America, to bring about its wishes by the use of hard power has been strikingly unimpressive in a whole series of events. Even if they had been successful, the strategic defence and security review and the more recent announcement of the reduction of our armed services to something like 80,000 full-time persons demonstrates that even if it were possible to make those changes, those possibilities are no longer open to this country because we do not have the capacity to enforce. That means that, however much in principle we would like to include regulation and force, in matters of defence and particularly in diplomacy and foreign and Commonwealth affairs, we are forced to look at non-regulatory methods—nudge, sometimes weaker than nudge, sometimes stronger than nudge but certainly non-regulatory and non-force elements must be brought to the fore.
I found it surprising when I started to look at these matters that the United States of America, which has much the strongest capacity to use force, spends enormous amounts of money—directly through the Department of Defense and through the various establishments of the navy, the air force, the marines and the army—commissioning external research. I remember, when I was training, being struck by the attributions at the bottom of many psychological papers that they were paid for by American defence organisations. However, in this country, where we do not have the capacity to use force, almost no money is spent on commissioning external research by the Ministry of Defence or other organisations. At best, it is modest and, in many cases, it is internal. One thing that we know scientifically is that if we do the research internally and do not share it with the rest of the scientific community, validation is doubtful.
It is critical, particularly in those areas of governance where enforcement is at its weakest, that we undertake research to find out what is the best that we can achieve in that way. Here I come to the non-intuitive outcomes of the limited research that has been done. Let me give a couple of examples.
In the Middle East, there are those who believe that change can be brought about by economic improvements for the population. For example, if we take Palestinians who seem highly unlikely to be able to achieve right of return, if they were given some resource—perhaps even a lot—would that help them to get over their problems? A couple of my colleagues went to do some research on the matter. They interviewed people at all levels of the community on the Palestinian side and the Israeli side and inside and outside the community and asked them some questions. First, if they did not get right of return, would some economic reward pay them for that? Secondly, if they did not get right of return, would lots of economic reward help them? Thirdly, if they did not get right of return, but the Government of Israel said: “We understand the pain that you have gone through as a community because of the decisions that we have taken and felt that we had to take”, what would their response be?
The realpolitik—those from outside such circumstances—would likely say, as they frequently have, that economic development in such a circumstance is bound to be helpful. The results of the research, however, were that when economic betterment was offered as an alternative to right of return, the response was anger; when substantial economic benefit was offered instead of right of return, the anger was much increased; and when no economic benefit was offered but there was a degree of apology and understanding, the response was that that was the basis for a conversation. There are many other examples of research that have demonstrated that the rule-of-thumb, rational approach that we might adopt may not always be correct and may even be counterproductive.
I know that the Minister has a particular interest in defence, development and foreign and Commonwealth affairs. Given the report’s clear indication that research into how we change populations rather than individuals is lacking and should be funded, and that in the areas that I am speaking of, force and regulation are not serious options, are the Government prepared to look more thoughtfully at how the Ministry of Defence and the Foreign and Commonwealth Office might address questions of population and behaviour change?
Lord Krebs
My Lords, I, too, wish to thank the noble Baroness, Lady Neuberger, for chairing the committee and for leading us to produce an excellent and important report.
The idea of using insights from behavioural science to affect public policy is by no means new. Back in the middle of the last century, the influential American psychologist, BF Skinner, wrote a utopian novel, Walden Two, in which he described a society in which, to use a phrase often quoted by the Prime Minister, everyone was persuaded to do the right thing through what Skinner called behavioural engineering. So we are not talking about new territory but about a different approach to the territory of using insights from behavioural science to affect public policy.
As has already been mentioned by the noble Baroness, Lady Neuberger, a traditional approach, apart from banning activities, is to use financial incentives, taxes or subsidies to persuade people to do the right thing—carrots or sticks—or to use information campaigns to appeal to our sense of reason. If we are told it is bad to smoke or bad to drink and drive, the reasoning human being will perhaps stop doing so. Certainly taxation, in the right setting, has an effect; information campaigns have a rather limited effect, as has already been said.
However, the newer approaches that we looked at, as the noble Baroness, Lady Neuberger, said, draw on insights from disciplines such as marketing—how companies persuade consumers to buy more of their products—insights from behavioural economics and insights from psychology, all of which converge on tapping-in not to our thinking mind but to our reflexive, semi-automatic responses and inbuilt biases. For example, all of us in this Room have a bias discount into the future: rewards now are more valuable than rewards in the far distant future. All of us are more averse to losses than we are to gains. It is more painful to have someone take £100 away from you than to have someone never give you £100 in the first place.
All of us are influenced by social mores. Why did I buy an iPhone two or three years ago? It was not because I needed an iPhone but because all my friends had an iPhone—apart from my noble friend Lord May—and I felt that I had to have one.
Another aspect on which this new area of research into human behaviour has focused is identifying barriers. We live in a society in which we are confronted with choice, but choice is often illusory. Going back to mobile phones, how many noble Lords in this Room know whether they have the best phone tariff? The answer is that none of them does. There are estimated to be at least 7 million possible tariff combinations, so how can you possibly make an informed choice? We therefore use simple rules of thumb such as opting for a brand that is familiar. The question is whether these insights into human behaviour are effective in influencing public policy.
At lunchtime, I went over to talk to David Halpern, the head of the Behavioural Insights Team at No.10, informally known as the “nudge unit”. There are two bits of good news that I have to convey. First, the nudge unit is carrying out proper, randomised control trials through different government departments. One point that we drew out in our report on lack of good evidence is beginning to make progress. Secondly, there are some clear successes using these insights into human behaviour, such as increasing the proportion of court fines paid and positive responses to requests for income tax, as well as encouraging people to relicense their cars and take up loft insulation. So there are some success stories as a result of using these new insights into human behaviour.
I want to talk about one of our two case studies to which the noble Baroness, Lady Neuberger, has already referred, on obesity. Will the softer approaches using our subconscious biases, preferences and rules of thumb help to tackle this massive health problem? I do not need to repeat the facts, but I will. It is estimated by the Government that 40% of adults in this country will be obese by 2025; the estimated cost to the NHS, already referred to by the noble Lord, Lord Giddens, is £2 billion a year by 2030. Of course, the reason for that is that many non-communicable diseases are influenced by obesity, and in the United States it is considered the second largest cause of preventable premature death after smoking. So it is an immense public health problem, not just in this country.
Our report highlights two things. First, not just this Government but successive Governments have made little or no progress in tackling this major health problem at the population level. So it is a huge challenge, which we have not yet managed to conquer. Secondly, on a point that has already been summarised by others, we saw little or no evidence that the softer approaches—the nudges—will really have an effect on their own.
I refer to two examples that have been alluded to by the noble Baroness, Lady Neuberger—traffic lights and advertising to children. When I was chairman of the Food Standards Agency, I was involved in trying to persuade the Government and industry to behave responsibly on food labelling and advertising food to children. The mere fact that the food industry was averse to traffic lights gave me the answer. If the industry does not like traffic lights, they must tell consumers something that consumers would like to know but that the industry does not want consumers to know about its food. We did a review at the Food Standards Agency into the impact of advertising and promotion of food to children, and the food industry commissioned its own review to show that advertising has no effect. I said to people in the industry, “Then why on earth are you spending all this money doing it if it has no effect whatever?” I rest my case.
So what does work with obesity, if it is not going to be nudging and the softer approaches? There are three recent reviews in the British Medical Journal. One is on the effectiveness of different kinds of nudges, or providing information. One that may have some effect is the one that we have alluded to—simple nutrition labelling. Another that may have some effect is portion sizing. There is good evidence that if you serve smaller portions people eat less. Since part of the obesity problem is eating too much, that would be a good thing to do. There is some modest evidence on positioning, and that if you put sweets low down at the checkout counter, as Marks and Spencer does in Oxford, it encourages young children to eat sweets. There is some evidence that priming, or giving people alerting signals before they start to eat in a restaurant on what their dietary goals might be, can have modest effects. But all these are relatively modest.
Another review looks at a measure that does have a significant effect and is exactly parallel to a measure alluded to by previous speakers on alcohol—namely, taxation. Eleven countries have now introduced taxes on fattening foods that contain a lot of sugar or fat. These include Denmark, Hungary, France, Finland and 23 states in the United States. The review in the BMJ suggests that a tax level of at least 20% is required to have an effect, rather like the minimum price for alcohol to which the noble Baroness, Lady Neuberger, referred. One advantage of taxing unhealthy foods is that it would drive the industry to reformulate foods to avoid the taxes, just as the campaign that the Food Standards Agency started and the Department of Health has taken over to reduce salt in food has caused companies to reformulate their processed food to take salt out of it. Is the taxation of unhealthy foods a regressive tax? After all, those who consume these high-fat, high-sugar foods tend to be the poorest in our society. One could argue that if it dissuades them from eating such food, we are helping the less well off and furthermore, the Government could use the revenue to support the poorest in society. So measures could be taken to tackle the obesity crisis but they are tougher than nudging.
The noble Lord, Lord Giddens, referred to smoking. The change of prevalence in smoking in this country has been brought about by a combination of taxation, legislation and education. There are two other success stories of government policy in changing behaviour in the population, the first of which is drink-driving. When I was a student at Oxford University we would go to a pub in the country and the landlord would say, “Would you like to have one for the road, sir?”. That is inconceivable today. Why has our drink-driving culture changed? It is because of the introduction of legislation and the breathalyser as part of that legislation. The third example, on top of smoking and drink-driving is the wearing of seat belts. It was not just “Clunk Click, Every Trip” from Jimmy Savile, but people could be fined or penalised for not wearing a seat belt. Now most people when getting into a car wear seat belts without thinking about it.
Does the Minister consider that stronger measures will have to be taken to deal with the problem of obesity and would the Government consider following the 11 other countries in introducing a tax on unhealthy foods as an instrument to achieve change? Nobody has yet talked about transport but that is the other case study in our report. Does the Minister agree that softer approaches such as nudging will not really move people out of their cars on to public transport, their bikes or their feet? Success stories from other countries show that Copenhagen spent £40 per person year on year to achieve a modal shift in transport to get people on to bikes or walking. The average local authority in this country spends one-fortieth of that—£1 per person per year in providing alternative forms of transport. I hope that the Minister will answer those questions for us.
Lord Hunt of Chesterton
My Lords, I welcome this report and the discussion with esteemed colleagues. Outside colleagues are also quite impressed with this. I am sorry that I did not give evidence. I was asked whether I did not hear about it—I am not asleep all the time—but I wonder whether all Members of the House of Lords receive e-mails requesting evidence. I have never had an e-mail requesting that I give evidence to the committee.
Many branches of central and local government will use this report from the House of Lords Science and Technology Committee on how policies can be more effective in considering and influencing how people can change their behaviour. I commend the committee for taking a broad scientific look at this approach to developing and implementing policy. As always, a new catchphrase can usefully draw attention to old ideas, as we saw with tipping points and now see with nudge. Innovative decisions always show that quite small changes to governmental commercial practice can have quite large effects. Sometimes they can be predicted; sometimes they can be beneficial; sometimes they can have unintended adverse consequences.
The noble Lord, Lord Giddens, commented, as did outside colleagues, that this report has all sorts of worthy things in it, but there is a slight lack of an intellectual theme. Curiously, for the modern day, it does not particularly emphasise how data are an integral part of this whole approach, nor the use of modern telecommunications, the internet and so on.
From a scientific point of view, behavioural change can be considered as one component of the system dynamics approach to policy-making, to which behavioural scientists have contributed greatly, as have natural scientists, mathematicians and so on. For example, Sir Alan Wilson—a fellow of the British Academy and the Royal Society, and a former vice-chancellor of Leeds University—showed how system approaches could work for commercial purposes and many others.
The methodology referred to here—as is so common in Whitehall—is evidence-based decision-making, which is just one component of system analysis. The noble Lord, Lord May, might touch on this. From the first studies of models and statistics of complex systems, including societies, species and countries, such as the one in the 1930s by Lewis Richardson on conflict using statistics and modelling, it was clear that behaviour can change quite suddenly. An example is when some threshold is reached or barrier is formed, as the noble Lord, Lord Krebs, pointed out, or a particular disturbance is introduced.
To give a parliamentary analogy, I have an Icelandic friend who tells me about the Icelandic Parliament: it is the earliest in the world, founded in 1000. A bored parliamentarian used to throw gold coins in the air. He was blind and getting bored in the debate so everybody got out their sword and had a tremendous sword fight on the floor of their House of Commons. He enjoyed that. The trouble is that now they do not know where he stored all his gold coins—that is still a problem for Iceland. That example is not totally dissimilar to changing expenses rules in this House, but that is another point.
To come back to systems thinking, many of the recommended policies here involve people in networks,— for example, WeightWatchers. Networks, as we can see, lead to beneficial effects or problematical ones, as we saw last night with the secret Conservative vote, which is a new network that suddenly appeared on the scene. Therefore, networks are an important part of this process.
I wanted to emphasise that the European Commission is sponsoring several projects around Europe about the use of system thinking and system dynamics as a general framework for governments and organisations. I hope that we will have more connection in that way.
I want to make four points and to illustrate them from my own experiences as a scientist acting variously as a city councillor, an environmental consultant and an executive. The first is how to find good ideas for economical ways to encourage behaviour change for the purposes of policy-making and implementation. This is also particularly valuable in developing countries, as the noble Lord, Lord Alderdice, pointed out, where local innovation can be very effective and indeed extremely ingenious methods are often found. DfID should be part of the discussion taking this forward.
The next point concerns obtaining effective data and the communication of data to the public, and from the public, to help policy through behavioural change, which is not much emphasised in the report. With modern electronic methods you can give information and receive it back and the many possibilities of social media are only just beginning to be used. The other important point that is touched on in the report on page 49 is the use of pilot schemes to explain in a sort of vivid, practical way how behaviour change can work, particularly in local areas, and then to demonstrate the effectiveness of unfamiliar ideas. Local pilot schemes often enable people to understand the wider implications of policy. We should make a greater connection between local pilot schemes for energy saving and the global importance of climate change.
Here is another story. In Cambridge in 1971 we had double-decker buses in tiny medieval streets. They knocked bits off the buildings as they went down the road and were responsible for incredible levels of pollution. What could be done? As a scientist I suggested we first measured the air pollution in these narrow streets and publicised it. That got people interested and then, being a scientist, I said there would be arguments about it and that we should have an experiment. The city council closed the street for a month and then, following the instructions of this report, we did a survey. The survey was done by students and we had a Stalinist result of 99% in favour and so the process went ahead. The other point made by the noble Lord, Lord Giddens, was that culture changes slowly. It took the taxi drivers in Cambridge 20 years before they decided that pedestrianisation with preferential arrangements was a good idea. That was a top-down initiative, but surveying was essential.
Over the past 40 years, many small initiatives in local communities in Britain have transformed family life, particularly on housing estates—which are, after all, probably where most people live. My wife is a landscape architect. One curious thing is that by the choice of planting schemes—having prickly bushes in some areas and green grass in others—you can guide or move people. That can transform the behaviour level and behaviour patterns on housing estates, as can the use of roads and dead ends. That is remarkable. You can go to many areas of Britain where you see quite different social behaviour as a result of those small, extremely inexpensive and economical methods.
The other important point is that many of those small changes can now be tested electronically. You can ask people on the internet. There was a good example in the east end of London, reported in a book that I edited on London’s environment, which noble Lords can find in the House of Lords Library. Increasingly, communication of information in a timely and local way changes behaviour and is a vital part of public policy. London leads the world—other countries are following—in providing detailed forecasts of air pollution sent to individuals. For example, adverts on the No. 73 bus say that if people are having breathing difficulties and want information about air pollution, they should ring this number to obtain it. That is an example of using sophisticated data, coming from satellites, models and fine linear data. It enables people to use their drugs appropriately and change their exercises. Some of those ideas have also been tried in the United States.
Now that approach is being extended to local temperatures. Another important example is the question of heatwaves in cities; that is not a problem for us this summer but, in 2003, 20,000 people died in France. Mortality varied from one kilometre to another depending on the exact temperature in an area of Paris. It is therefore important to be able to inform people about the temperature but also to find ways in which you can control it. The Lord Mayor of Westminster, who is a green Tory—I admire her greenness—explained to me how, on very hot days in the street where she lives, she draws her curtains so that, when she comes back in the evening, her house is cool. Most people do not draw their curtains and they remain very hot. That is an example where the nudging process can have a considerable effect. Now that such people all have air conditioning, it is a question of whether you turn your air conditioning on. That is an example where energy behaviour could be changed.
Finally, the noble Lord, Lord Krebs, mentioned transport, which is covered by the report. I have had very unsatisfactory communications with the Department for Transport on the question of nudging of information. The UK Government are much less ready than those in France or Germany to use information on roads to change behaviour. On French motorways, the electronic notices inform drivers that excessive speed is not only dangerous but leads to greater carbon emissions. In Germany, notices on motorways near housing inform drivers about noise. The DfT refuses absolutely to put environmental data on our screens. Indeed, it does the reverse: it encourages drivers to go at 70 miles an hour. It says, “If you go at 70 miles an hour, you will get to Bristol in 25 minutes”, or some damn thing. Excuse me, that is unparliamentary language. That is a case of negative behavioural change produced by government. I hope that that can be changed.
My conclusion from those examples and those in the report is that there could be a more systematic approach to optimal behaviour change: first, by studying through models and experience how different nudges and types and levels may be effective—or ineffective, if not dangerous; secondly, by evaluating the data provided and the feedback of information; and, thirdly, by assessing what kind of pilot schemes are necessary and how best to design them.
Lord May of Oxford
My Lords, the idea of government seeking to change our behaviour is inherently controversial. I should begin by saying what a pleasure and privilege it was to be associated with this inquiry, so ably led by the noble Baroness, Lady Neuberger, with that expression being no less sincere for its conforming to established ritual. The report begins by asserting that, in any instance, the Government should always explain why and what the problem is. They should then go on to make it clear what the evidence is about the problem—what we know and what we do not know—and to make it equally clear what the evidence is for the efficacy of the proposed actions, which is perhaps the most important and difficult thing. All that is a lot easier said than done.
Some of the difficulties have been exposed in an interesting report by the MORI poll organisation, which although it was begun in 2010 was published after our report. It was a study of 18,500 people in 24 different countries and found some paradoxical things. For one, and this is not surprising, public support for intervention is much higher if it is seen to be a problem that directly affects lots of other people—for example, smoking in public places. There is much less support if the problem seems personal—for example, obesity, which is so often seen, although inaccurately, to have just a personal cost as distinct from the large cost that there is to the National Health Service. In another kind of paradox, it found large majorities of public support for many different kinds of specific interventions. However, more than half of those same people then said that they did not think governments should get involved in people’s choices.
To give another example, about one in three of those 18,500 people who filled out the study said that governments should take tougher actions. Yet they also said that the state should not get involved in individuals’ choices about the four particular things being surveyed: eating/obesity, saving for retirement, smoking or sustainability. The report had a wonderful phrase for this, which I was unfamiliar with. It called it cognitive polyphasia, which is more simply summarised as saying that people want their Government to stop the bad behaviour of other people but not necessarily their own behaviour. I should emphasise that there was in those 24 countries a good deal of variation. For example, distinct affirmation for outright prohibition as a measure commanded assent at a level of 87% in Saudi Arabia and India, while at the other extreme it was less than one-third in the United States. In the UK, it was intermediate. In all countries, there was more support for actions and policies aimed at businesses and corporations than those aimed at individuals, forgetting ultimately that businesses and corporations are made up of individuals.
I turn briefly to the report itself to reiterate some things that have already been said and one that has not. As the noble Lord, Lord Alderdice, reminded us it is often hard to get good evidence at the population level for how effective an action will be. Such information as we have is often ambiguous and cloudy. That should not stop us from rigorously following the advice on scientific advice in policy-making that was formally articulated in this country in 1996. It was subsequently reviewed in a report that has grown from a few pages to a semi-fat book and reaffirmed several years later by a Select Committee chaired by the noble Lord, Lord Jenkin.
The advice emphasises that you should always make it clear what the evidence is and how you have consulted widely and openly, and that you acknowledge openly the uncertainties as well. It points in the direction, as the report does, that this should always deliberately involve the Government’s Chief Scientific Adviser and the chief scientific advisers in the individual departments. In particular, it points out that we should renew the position of the chief social science adviser—and with a really good person this time. These people have to be outsiders who are now insiders, not cosy appointments of civil servants from within, as happened with the Treasury.
The Government also have an obligation, as the report emphasises, to explain how the proposed actions relate to the science advice. This is made especially difficult when they do not. We had some examples of that recently. The dissonance between the expert scientific advice on drug classification and the political decision, with which I have some sympathy, should have been handled much better. The policy direction we are heading in with badgers and bovine TB is basically in flat contradiction of the best scientific advice, so it is very difficult for the Government to explain how they have taken the advice and why they are doing what they are doing when in that case too many people were after policy-based science rather than science-based policy.
Against this background, I re-emphasise how you need to be aware of the state of the science, which often is very partial and incomplete, and, even more importantly, you need to be aware of and explain the evaluation that you are planning for the intervention. One of the things that we found in the inquiry is that all too often the ex post facto evaluation of the measure set in train was not carefully planned in advance. It has to be part of the initial plan.
Finally, a point that deserves revisiting yet again is the question of partnerships between government and business in pursuit of particular interventions. We need to be much more frankly aware of the conflicts of interest involved. In the report, we identified a particular example, the public health responsibility deal network—a wonderful example of the networks my noble friend Lord Hunt referred to—where the pledges that were mooted about marketing alcohol gave explicit priority to the industry’s views, as a result of which six of the health organisations failed to sign up as they were explicitly dissatisfied with that issue and, frankly, I think more health organisations should have refused to sign up.
Rather than end on a rousing peroration, I thought I would read Recommendation 8.24, to which many speakers have already alluded, verbatim because it is a particularly important recommendation about which nothing much has happened yet:
“We invite the Government to explain why their policy on food labelling and marketing of unhealthy products to children is not in accordance with the available evidence about changing behaviour. Given the evidence, we recommend that the Government take steps to implement a traffic light system of nutritional labelling on all food packaging. We further recommend that the Government reconsider current regulation of advertising and marketing of food products to children, taking a more realistic view of the range of programmes that children watch”.
I look forward to the Minister’s reply to this point, and I have sympathy for him. I spent five years of my life as chief scientist in the strange culture of the Civil Service and five years in the Royal Society. I dealt with good conscientious people, but I never ceased to marvel at the confusion that you find there between having a report and lots of committees and actually doing something.
Baroness O'Neill of Bengarve
My Lords, I, too, thank the noble Baroness, Lady Neuberger, our special adviser and, of course, the secretariat. This was a complex report to get together. The evidence was unusually disbursed, and I cannot say that we got together all the sorts of disbursed evidence that would be relevant. Here and there, I caught a note of disappointment that certain sorts of evidence had not been covered. I think that that is right. We took, if I may put it this way, a dipstick approach. We were looking for evidence and where it has not been collected there is no systematic picture of evidence. We did not look at what is delightfully called “renorming”, where you tell people what is the proper thing to do about something—what is the norm. For example, noble Lords have no doubt stayed in hotels where they are informed that their guests use their towels on average X number of times, as opposed to throwing them on the floor for the laundry. That is said greatly to reduce the demand for laundry and reduce laundry bills and energy expenditure because people think that the respectable thing to do is use their towel for three or four days and not throw it on the floor immediately.
In one way the Government’s response to the report is rather gratifying as they agree to a fair number of the central recommendations, but in another way it is not at all gratifying because, although they agree, they do not then explain clearly what they will do or suggest a timetable. The disappointment is that the Government have not specified what action they will take on the very measures that they agree are relevant within a specified timeframe. I have every sympathy with the Government on one point. Behavioural changes might—I say “might”, not “will”—provide an excellent solution to many problems from smoking to obesity or the excessive use of cars to the excessive drinking of alcohol. The question addressed by the Committee was the rather sobering one of whether and how well they actually work. We should remember that behavioural solutions are nevertheless appealing because if they work individuals will change their behaviour to some degree without the need for enforcement or penalties and the problem goes away. Choice is preserved, harms and ill health are avoided and costs are minimal—if it works. It is said that all that is needed may be a nudge, a minimal intervention that leads people to view a different, less harmful or healthier way of behaving as the default option—indeed, ideally as their preferred option—and they will change their behaviour accordingly. However appealing it may be it is not very useful if it does not work.
The patchy evidence that the committee heard, and the two detailed case studies of obesity and car use that it undertook, repeatedly showed two things. First, there was a dearth of evidence about the effectiveness of many behavioural interventions and, with that dearth of evidence a lack of robust evaluation. Secondly, there was insufficient evidence of the staying power of behavioural interventions, either taken individually or in interaction with other interventions. That was particularly marked in some of the evidence about the efficacy of exercise in addressing obesity.
The Government have pointed out in their response that they are funding the Policy Research Unit on Behaviour and Health, based at the University of Cambridge and directed by Professor Theresa Marteau to undertake rigorous evaluations. This work is admirable, but it is on a small scale. Often an intervention shows promising results but unless its cost and its efficacy are carefully compared with other approaches across various contexts in combination with other interventions, and its staying power after the intervention is monitored, promising initial results may turn out to have limited staying power. I hope that we will find policies that use behavioural interventions but provide robust and generalisable evidence of the efficacy of those interventions across situations. We need a broad and systematic approach, as other noble Lords have said.
Moreover, as others have also said, the report did not find much evidence of the efficacy of behavioural interventions taken in isolation. I make no apology for quoting that it noted that,
“the evidence supports the conclusion that non-regulatory or regulatory measures used in isolation are often not likely to be effective and that usually the most effective means of changing behaviour at a population level is to use a range of policy tools, both regulatory and non-regulatory”.
I suppose that that is hardly surprising. We have huge experience of the sheer difficulty of changing entrenched behaviour when we consider the more than half a century of strenuous efforts to reduce smoking. So far they have had a marked yet still incomplete effect, despite deploying a complex combination of behavioural, fiscal and regulatory interventions. This difficulty of achieving change, even using a mix of measures across a long time, is despite the reality that, as an editorial in the Journal of Public Health of February 2011 nicely put the matter:
“Tobacco is clearly an exceptional product; no other consumer product kills one in two users when used exactly as intended”.
Many of the changes in behaviour that the report discusses are of comparable complexity to giving up smoking. Although the harms they address appear less straightforwardly lethal, they are very significant harms. The same editorial in the Journal of Public Health suggests that while smoking and alcohol in combination account for fewer than 20% of deaths in high-income countries, the six most serious diet-related risk factors account for 17.5% of deaths in high-income countries. The figures are not as different as you might expect. This is not an area in which there is reason to hesitate about using fiscal or regulatory interventions if behavioural interventions are known not to be sufficient. The matter is urgent, and rising obesity and diabetes are heralds of a public health tsunami.
The Government’s response argues:
“It is not a question, therefore, of the use of regulation being ruled out altogether, rather that regulation is only used when satisfactory outcomes cannot be achieved by alternative approaches, or where alternative approaches would involve much higher costs”.
Evidently the Government are pinning quite a lot of hope on the efficacy of behavioural interventions or on finding effective ones, but they have also pinned quite a lot of hope, as others have mentioned, on the so-called responsibility deal with the food industry, by which it agrees to reformulate products to make them healthier. Yet the committee was told by Mr Justin King of Sainsbury’s that voluntary agreements were sometimes unsatisfactory. He said:
“There was an attempt by the industry to coalesce around a voluntary agreement together with the FSA … and we felt very strongly that it was coalescing around a lowest common denominator, when our customers had clearly told us they expected something more and better. And when we made the change”—
because Sainsbury’s did make a change—
“we were not the most popular people in the industry”.
How long are we to wait to establish whether behavioural approaches work? How much faith can be put in responsibility deals that have to be sold to the least as well as the most responsible companies in the food industry? The public health problems created by overeating an affluent diet are grave, and delay in taking effective steps to prevent these problems would be serious.
I shall finish with two questions for the Government. First, what steps are Her Majesty’s Government taking to ensure that food served in public institutions, where the available menu in any case limits consumer choice, does not contribute to the obesity and related epidemics? In particular, what steps are they taking to ensure that meals in schools, in prisons, in the armed services and in canteens catering to public services do not contribute to these epidemics? Will they rely on behavioural interventions in these contexts where more direct interventions are readily available and are, in effect, being made every day when menus are chosen? If not, what reasons can they give for offering unhealthy meals when healthy meals can provide equivalent choice, and need be no more expensive? A lot of meals are eaten in public canteens in this country every day.
Secondly, what steps are Her Majesty’s Government taking to evaluate the efficacy of the public health responsibility deal with the food and retail industries, and what benchmarks and timeframe have they set for the industry to demonstrate that the deal is effective? It would be unfortunate if the responsibility deal turned out to have created one more last chance saloon, in this case for the food industry rather than for the media, allowing the less scrupulous performers to spend a decade pretending to produce healthier food while continuing to peddle excess fat, sugar and salt.
Baroness Smith of Basildon
My Lords, I think I should start my contribution with a confession: I arrived at this debate as both a novice and a sceptic, to start with. I found the report and the debate itself absolutely fascinating. It has been extremely enjoyable and interesting. When I first heard about the Government’s new Behavioural Insights Team, I was very sceptical—partly, as today’s debate has drawn out, because it is very difficult to assess what factors influence behaviour. First, on an individual level, which I appreciate is not what the Behavioural Insights Team is about, what people say the factors are that influence their behaviour are often not the ones that influence them but the ones that they want the questioner to think influence their behaviour. Because any policy initiative is unlikely to involve just one intervention, it is also difficult to isolate different policy interventions and decide which one has had the impact and what that impact has been.
For this nudge theory to have any real credibility and weight it needs effective evaluation, as the report makes very clear. I pay tribute to the committee chaired by the noble Baroness, Lady Neuberger, and to her team because I found this report to be very readable and enjoyable. It illuminated as much in what it did not say as in what it did, which I think was the point that the noble Baroness drew out a moment ago. The committee has been extremely helpful to the Government on behavioural change in its recommendations, and helpful also to the Government’s Behavioural Insights Team or nudge unit. Clearly, the Government were very attracted by the Thaler and Sunstein book, Nudge, which argued that a range of non-regulatory interventions can influence individual and public behaviour. Given that the Government have set up the unit, this is an extremely welcome contribution and not just to a debate, because it has to be more than that. It has to be something practical. The report brings a kind of detailed scientific analysis to what can become a very theoretical debate.
Part of my scepticism at some of the press reports that I read before on the value of Nudge—or nudge alone, which the report drew out as well—was the problem of evaluation. When the National Audit Office was looking at this even the Minister, Oliver Letwin, told it that it was,
“open to question whether any of this will have any effect whatsoever”.
He continued,
“I don’t want to pretend that behavioural science is a sufficiently developed science to give us complete confidence or even sort of 95% confidence that any given technique will produce given results”.
I am pleased to hear that the BIT is now looking at evaluation, because to move any further forward without evaluation would be a big mistake. However, the National Audit Office itself found that there was no evidence that government departments were taking up the theory or the background of nudge, so this debate is very timely and will bring some clarity to the issue.
For me, the report emphasises that the need for evaluation has to be evidence-based. There are recommendations on the way forward, but I have to confess to your Lordships that part of my scepticism is about what is meant by a nudge and how it is defined. I appreciate that the debate has different facets on different issues. However, if I have understood correctly, it is essentially about what the levers are that drive and lead behavioural change, and what the relative merits or otherwise are of rules and laws to lead and force that change—as regulatory intervention or as campaigns, provision of information, et cetera, which is non-regulatory intervention. My understanding is that the provision of information, advice and knowledge can lead individuals or society as a whole, or groups in society, to make those changes.
That is the nudge concept theory, if I have understood it correctly. But in all that I have read, including this report and other information that I have sought there is still no definite answer as to what constitutes a nudge and what counts as a regulatory intervention. What does it really mean? I have seen different interpretations but, for me, if it is to be a non-interventory way of changing behaviour, it has to be about providing information, leading by example and giving the individual a free choice while seeking to influence that choice. It could be argued that it is more empowering for the individual to make that choice than for a wider group in society to make choices. I looked at table 1 in the report, where Nuffield takes the view that a regulatory intervention that is not directly aimed at the individual whose behaviour they are seeking to change is a nudge rather than regulatory change. I do not know whether noble Lords have looked at table 1, but I had some issues because of the examples used. It argues that changes to the physical environment would be a nudge, and gives the example:
“Altering the environment e.g. traffic calming measures or designing buildings with fewer lifts”.
To me that is more like an intervention, because action has been taken to change behaviour. The behaviour change is not a free choice—it is making one choice more difficult than another choice. If we install speed humps cars will go more slowly in that road. If we have fewer lifts in buildings, more people will walk. So it might be a nudge in changing an individual’s behaviour, but in making a collective difference I struggle to see that as nudge behaviour rather than something more interventory.
I have a new theory. I think that it is more like a shove; it does not give the individual the opportunity to opt in or out. I cannot see that it is giving information or empowerment to make a choice, but by regulation it limits choice to influence behaviour. So it is not a nudge but a shove, because I lean towards a nudge being about giving power for choices to be made. An intervention, whether targeted at an individual, a community or business, such as speed humps, removes choice. I am not saying that that is bad in any way, but I am trying to acknowledge the difference. I am not saying that one is less effective, but we have to clear up what a nudge is.
Business has to have legislation to inform customers, and we have heard about the traffic light system—and then there is information about obesity, which the report looks at as well. It has to be presented in a way that is easily understood, showing the potential danger of problems from a product. That becomes an intervention. When the noble Lord, Lord Krebs, was making the argument about phones, I looked at my iPhone. I have no idea whether I have the best tariff for my iPhone; I had a choice, but I was certainly nudged to make a certain choice. I suspect that I have not got a particularly good deal.
The issue of smoking was raised, as well, by the noble Baroness, Lady O’Neill. I am more likely to agree with her on that issue. Various warnings on packets of cigarettes over the years and numerous advertising campaigns have had a marked but incomplete effect, as she said. There have been interventions, saying that, “Smoking can damage your health” and “Smoking kills”. They are all interventions, however mild, to try to influence behaviour. We can argue that they had a limited impact or effect, but we cannot consider it a success at this stage, because we are still talking about what interventions to take. Although it was not referred to as a theory at the time, various evaluations that have taken place over many years have not said that those interventions on their own were a success because further interventions had to be taken. There has been initiative after initiative, and it is still going on. What really did influence and drive change was something that was very much an intervention from Governments banning smoking in public places. You could argue that levels of taxation have had an impact as well. It is far more regulatory than nudging.
The noble Lord, Lord Krebs, referred to drink-driving. The seriousness of the problem was recognised long before any significant action was taken; there were various awareness campaigns. I am told that when the breathalyser first came in, by those who were drivers at the time—I hasten to add that I was not—they were told that three or four or even five pints would put them within the breathalyser limits. So what was the influence on behaviour? It could be the thought that drivers could be prosecuted and lose their licences. That is what made a collective and significant difference. Part of the difficulty is that there needs to be a significant change in collective behaviour to make an effective assessment of whether an intervention is effective. It is also very difficult to isolate one specific aspect of a range of interventions to try to say which intervention was successful. We need a critical mass of change to indentify cause and effect.
I worry, and this was mentioned by other noble Lords, that at a time when the Government are making huge and very significant cuts in public expenditure the proposal of a nudge theory to change behaviour, without other interventions and without any real evidence base of success, could be a cheap alternative to effective and efficient actions by Government that could really make a significant difference. That is why I think the recommendation in the report for a social scientist is very important. Unless the Government make an assessment and know what works, then nudge interventions really have no value.
The report was very clear that to affect behaviour and make a difference, a range of interventions is needed, not nudge or even shove alone. The key points I took from the report were that non-regulatory intervention should be used when there is evidence that it works, not because it is cheaper or easier. It should not be used without any assessment of its effectiveness, nor because it fits somehow with the Government’s philosophy or policy to cut expenditure and look at ways of changing behaviour rather than having formal regulatory interventions. There has to be an independent, quantifiable, evidence-based assessment of the value of any non-regulatory intervention, particularly if the Government intend to use it to replace regulation or regulatory intervention.
I did not get from the Government’s report— I would not have expected it in the S and T report—where they see the balance, if they have ascertained that yet, between regulatory and non-regulatory intervention. The Government have to look at it and it is quite a serious issue for them—it is a wider issue than across one department. If the Government are seeking to influence behaviour in one area they have to recognise that actions taken across government as a whole, and other agencies, all contribute to the result and can often be contradictory. The reason for taxation on fuel has been to support the environment and to try to reduce car use. However, at the same time the Government support significant above-inflation increases in train fares and many people who would go by train are forced off the train and into their cars because it is cheaper for them. Governments have to work across departments to have a holistic policy that makes a difference rather than one department acting against another one.
We can accept that nudge does have some impact. Commercial organisations have used it for years alongside other strategies. However, they also recognise, as the Government have to in public policy making, that different problems require different solutions. One size does not fit all. One thing that I saw in this was the carrot-and-stick approach, I think the noble Lord, Lord Hunt, referred to that as well. If we look at traffic in London and our numerous attempts over the years to reduce the congestion, what has worked, it seems to me, is the carrot—ensuring that there are more buses and better public transport. That has an impact. The congestion charge had an even bigger impact initially. One of the problems with fiscal interventions is that their impact reduces over time as people get used to them. There has to be an assessment of whether regulatory interventions lead to long-term behaviour change or whether once the impact of the intervention is lost the impact lessens. We have to look at new ways of trying to influence behaviour.
I appreciate that I have added a new concept and am perhaps making it slightly more complicated, but at what point does a nudge become a shove and does it matter? If an intervention works does it matter if it is a nudge, a shove or a regulatory intervention? There seems to be an assumption, and I am not suggesting for a moment it was from the committee, that a nudge to influence behaviour is better than regulatory influence. I am not sure whether that works or is relevant. What matters is what works. If a change in behaviour is necessary, what is the best way to achieve that change? Without an evidence-based evaluation of the different approaches it is very difficult to make that judgment.
Several noble Lords referred to the fact that this is not new. Perhaps articulating the concept of nudge is new and different, but the idea that we are inventing a nudge theory is not: Governments have been using it for many years. The noble Lord, Lord Kreb, made a similar point about seeking to use it in a different, perhaps more conscious, way, but it has been used in the past and will continue to be used. However, the willingness to try to understand what works, and why is new.
I congratulate the committee and the noble Baroness, Lady Neuberger, in particular. The report brings clarity and common sense to the debate, which is welcome. The danger for the Government—I am looking forward to the Minister’s reply—is that this matter should not be allowed to become an academic discussion. There should be a practical response about whether or not there are interventions through nudge that the Government can make. I am not clear from the printed response about the degree of determination and clarity with which the Government intend to take this matter forward.
Lord Wallace of Saltaire
I thank the Committee for giving me the opportunity to read further and in more depth about this fascinating subject. I have met the team on many occasions; I know its director and admire a good deal of his work, much of which I have read.
I start by declaring an interest. I am a social scientist and I have spent my career between universities and think tanks arguing with others of my own discipline about how they needed to pay attention to their relationship with government. I remember as a young academic going to a meeting in Chatham House—it must have been 30 years ago—in which the chief inspector of the Diplomatic Service was asked to address the question of the relationship between the study of international relations and government. He began his speech with the wonderful statement, “I am not quite sure what the discipline of international relations—if indeed there be such a thing as a discipline of international relations—might contribute to the practical business of diplomacy”. Happily, in terms of government attitudes to social science, we have moved on some way from there and most, but not all, academic social scientists have become a little more open to having a constructive two-way relationship with government.
We see here an attempt to build on academic insights and government efforts to widen the use of evidence in policy-making by the establishment of the Behavioural Insights Team. As several noble Lords have said, this is not new—there is a reference in the report to the NICE report of 2007—but is something that Governments have been doing in practice in the past. What Thaler and Sunstein did, as did many social scientists, was to make more explicit what people were doing implicitly, make us think about it more systematically and, therefore, use it more systematically.
I am glad that the academic community is working with government and I note that the British Academy held a seminar with the Behavioural Insights Team last month on how we might take this further. We are now into the whole question of the relationship between science, broadly defined, and government and how evidence gathered by government-sponsored research in policy-making can be used.
There are a number of obstacles to this. I have taken part in debates on several occasions in the past year about how far you can allow the Government to use the data they collect across different departments for other purposes. On organ donation, for example, there have been some very delicate discussions on how far you can use evidence collected by the DVLA for Department of Health purposes. Happily, the Government have now secured a protocol for sharing the relevant data between the different agencies of government. We look forward to publishing our findings in this area, which we routinely do in each of our major work areas, as soon as we are able decisively to establish the impact of each of a number of changes that have been made to questions about organ donation on the DVLA site.
We also recognise that social science is softer than a number of other sciences. The problems of experimentation and evidence collection are often a good deal more complicated, and on obesity, the timescale over which one will establish that interventions have worked has to be measured in decades rather than in months. So there is a range of problems in assessing the utility of the evidence even when one has collected it.
There are a number of other obstacles. We have the most highly educated electorate we have ever had but it is often very resistant to evidence, as we see in the debate on climate change and in the resistance of the car-owing public to everything told to them about the greater benefits of walking and about why paying more for your petrol is good for you. It is not something that the public are particularly keen on. Road pricing is, of course, a highly desirable development. I well recollect that the previous Government left it to Ken Livingstone—and then pretty well hung him out to dry—to try road pricing in London, and only when it succeeded did they at least take it on. Local government elsewhere has been hesitant about imposing road pricing in cities because it is not popular.
Much of what we want to do in regulation is not popular, so part of what the new unit is doing is to expand on what the Nuffield Council on Bioethics calls the “ladder of intervention”. If there is an ideology for this Government—and I am not at all sure that I recognise a single ideological position for any Government, whether this Government, the previous Government or their predecessors—it is that you should look at the ladder of interventions, see how far voluntary measures can take you and only then move up to the harder end of the spectrum, regulation—the hardest end being prohibition—and financial disincentives when your voluntary interventions do not work. So limited government, working with social and economic actors as far as possible and recognising that all of those share responsibility, is the position from which we come.
As the noble Lord, Lord May, said, the idea of government seeking to influence behaviour is inherently controversial. Two generations ago, there were other moral leaders in society who helped to set the social norms. Part of what has happened in our society is that as the traditional moral leaders outside government have lost influence, so advertising, the media and the corporate sector have come to set social norms rather more strongly. That raises the difficult question of how far government should be attempting to prescribe and enforce behaviour. That is the area we are in. It is a fundamental issue about the role of government and how far it should be an active interventionist and an enforcer. I recognise that in the health area most of all—smoking, obesity and so on—there is a very strong lobby for enforcement among the professionals and a very strong resistance among the public to that.
The ladder of interventions and a range of policy tools are what this is all about. We are not saying that we do not want regulations; we are saying that where possible we want to investigate what works. In the debate, I was asked, I think by the noble Lord, Lord Giddens, whether there are any examples of behaviour being changed by non-regulatory interventions alone. There is the example of HMRC letters that were redesigned to say “most people pay their taxes”, which improved the extent to which people made their returns. We are having a debate in another context about electoral registration in which it is being urged on the Government that if you put at the top of each letter, “You must fill in this form. £250 fine”—I will not go into the fine—it will radically improve the number of people who fill in the form. This is a debate we are about to have in another sector but we all recognise that the way you design forms and convey messages has a positive or negative impact on behaviour.
Loft insulation is another instance in which you discover that, if you ask people why they have or have not gone along with the policy, there are interesting obstacles on the way. If you volunteer to empty their loft they are much more likely to say, “Fine, now you can insulate it”.
The Behavioural Insight Team is now looking at energy tariffs and mobile phone tariffs because it is clear that most people simply give up long before they have begun to investigate which tariff is best for them. It intends to work with industry and to talk about how simplification of tariffs might make choices easier.
I defend the attempts by the Government to limit how actively they intervene and the number of prohibitions we impose on society. That is a debate that we have all had to have, in the previous Government and in this one. We are talking about the range of intervention.
I was asked a large number of questions about obesity and the traffic light issue. As noble Lords will know, that is partly a question of what can be done compulsorily at EU level. If the EU has not passed a regulation that everyone must have traffic light interventions, we have to work voluntarily with the supermarkets. The Government are talking to supermarket companies and others, and some have responded differently from others. As a believer in limited government, we had to demand that companies behave responsibly. That is part of the dialogue that we must have. One way in which we change social norms nowadays is by having Commons committees which pull the heads of banks and companies up before them and ask them what are their social norms and acceptable behaviour. Not all of that has to be done by government prohibition.
I was also asked how the Behavioural Insights Team is itself monitored. It has an academic advisory council which monitors how it behaves. It was set up for a two-year period and is now coming up to its two-year review. It was entirely appropriate that it should be set up for a limited period—we do not necessarily want something that goes on forever—although I think that it is likely to be extended. On the question of the use of evidence, I hope that some Members of the Committee may have read the recent publication, Test, Learn, Adapt: Developing Public Policy with Randomised Controlled Trials.
Lord Hunt of Chesterton
The Minister has talked a lot about evidence and performance but there are people in Whitehall who say: “What has data got to do with policy?”. Data and information are very important. We receive very little information from government. They want to give us a good form but does not the Minister think that the programme of examples that I tried to give him of telling people much more about the information will help to make decisions? That is largely absent from the government response?
Lord Wallace of Saltaire
I take the noble Lord’s point that perhaps the government response should have taken more care with the question of data. There is another debate to be had—I encourage all Members of the Committee to participate in it more actively—about government data collection, government data sharing and access to government data which relates to the census and questions of privacy. We all need to engage in that debate because government is now collecting a great deal more data, as are private actors. Government behaves with much more caution about the use of that data than Tesco or Marks and Spencer. As with obesity, there are important questions as to how far we lower privacy issues in government in order to gain benefits in public health and elsewhere.
I mentioned the White Paper Test, Learn, Adapt, which has been recommended by Ben Goldacre and Tim Harford. That suggests to me that there are those in the media who recognise the importance of government data and at least think we are attempting to move in the right direction.
The noble Lord, Lord Giddens, talked about corporate power and how to confront it. That is also part of a much larger issue. We are left with business and the media setting a large amount of what becomes the social norm. The power of advertising—and advertising is absolutely about covert nudging as opposed to overt messaging—is an issue that again we cannot answer here. It is fundamental to our debate about the balance between government, society and market, in which that we all need to engage. I look forward to the noble Lord’s next written contribution on that fundamental issue.
The noble Lord, Lord Alderdice, talked about the international dimensions of behavioural influence and cultural change and whether we should be following US research. There is a fair amount of independent research in this area. The German Marshall Fund does some very good research, which I follow. There are some mildly puzzling outcomes. From the surveys that I have seen, the most pro-Western public in the entire Middle East is the urban population of Iran. Whether or not that suggests that the behavioural impact you should be having is to impose sanctions on the regime, it raises some very large questions about what policies and interventions you pursue and what you get back in return. I will feed that back in.
The noble Lord, Lord Hunt, raised a number of questions about transport, which I have touched on. Government studies have shown that cost, time and reliability are clearly very important factors. There is some evidence for providing better, simple information. The new signs at bus stops which tell you when the next bus will arrive increase the number of people who wait for the bus. That is another nudge if you like. Information helps.
David Halpern, the head of the Behavioural Insights Team, is very interested in the built environment and how far it impacts upon behaviour. That is a really difficult, long-term issue, the sort of thing that the noble Lord, Lord Hunt, was talking about. Redesigning public spaces and how you design footpaths and cycle ways help with this, but part of the answer to improving the urban environment and encouraging people to walk rather than use cars is persuading them to live more closely together and not to wish to live 10 to 20 miles from where they work.
Another area in which the provision of information would help—and here government has a great deal further to go—is on the concreting of front gardens, which over the past 20 or 30 years has contributed very substantially to the problems of urban flooding. The provision of information about the utility of digging up your front garden again and providing green spaces through which the water can drain is clearly something that government can do without enforcing it.
I love the term “cognitive polyphasia”. We are all stuck with that. As someone who, when in opposition, campaigned for the pedestrianisation of further squares in London and, in particular, of Parliament Square, I am conscious that there are a number of people who think that it is very good to have pedestrianisation so long as they can still get their limousine to take them to St Margaret’s for weddings and do not have to spend two to three minutes longer in their taxi from Smith Square. Individuals often resist things that in the long run will be to their advantage.
This is a broad initiative of government—I stress of government because it is not a partisan move from this Government. We all want to find ways in which the range of government interventions—from information through to pressures and financial disincentives to tighter regulation and, in some cases, prohibition and penalties, as in seat belts and some areas of health—will help to change behaviour. That is not something that the Government can do alone. We have to work with publics whose attitudes are often highly contradictory and whose willingness to accept evidence when presented as mediated through the media is sometimes relatively limited.
What I hope that the Committee is persuaded of, into which the report provided a useful insight, is that this is one of the many tools available for government which helps government to be more self-conscious. The Behavioural Insights Team is in the Cabinet Office to provide a resource across government and its many departments to encourage them to use more of those interventions to affect behaviour. On that basis, I give way to both noble Lords.
Lord Krebs
Will the Minister respond specifically to my question about the 11 countries that have introduced taxes on foods that specifically contribute to obesity—high sugar, high fat foods? Might the Government follow the lead of other countries in tackling the obesity crisis by that measure?
Lord May of Oxford
My question was going to be the same but adding the encouraging rider that, as I mentioned, studies show that the public is much more amenable to asking corporations and business to do something than to asking individuals to do something. In the specific case of Recommendation 8.24 about marketing garbage food to children, I should like to hear that something is to be done.
Lord Reay
The Minister said that the measures we want to take for public health are not popular and that is one reason why we do not have to do that. A lot of regulatory measures that have been taken have been popular by the time they are taken. You may have to work to get that popularity, as others have suggested. You have to give the public information as to why things are being done.
Lord Wallace of Saltaire
This is turning into more of a seminar than a debate. I felt when I was getting my briefing from the Behavioural Insights Team that I was attending a seminar rather than receiving a briefing. Let me attempt to answer the question on sugar, salt and so on. That is certainly an issue that the Government are considering. We have not yet come to any conclusion. Having a public debate on the options helps to considerably further the debate, so I encourage all those interested to pursue the issue and aid the Government in making our recommendations.
On the question of school meals, we are all aware, again, that we need a mixture of interventions. We need Jamie Oliver out there campaigning. We need schools that are experimenting, often against initial parental opposition. We can all remember the parents who came to bring chips for their children because the school was giving them this nasty healthy food. There, we are slowly moving things around
One final point and then I will have to sit down because I am well over 20 minutes. When I first joined the House of Lords, if I went into the Lords restaurant at breakfast time I saw many of our security staff eating enormous English breakfasts. I was in there the other day and I saw our security staff eating light breakfasts. In small ways, attitudes are changing and some of the message is beginning to get through. The full English breakfast is still provided in the River Restaurant but fewer of our security staff are taking it. That is an interesting example of where social norms are evolving in one way or another, but all of us in our position as social scientists or scientists, as well as politicians, need to address the question of how we shape the public debate and public attitudes in a range of different areas. Government has a role in that but not everything which government does should be done through taxation or prohibition. Where government can encourage and inform, it should do so first before it moves up the ladder of intervention.
Baroness Neuberger
I thank all noble Lords who have spoken. There have been some memorable phrases. I am particularly interested in behaviour change for bankers and interventions will clearly be programmed as a result of today’s debate. I was slightly disappointed with the Minister’s response, particularly given that he is a social scientist. He did not answer the question put to him about when, if ever, a chief social scientific adviser will be appointed within government. I hope that he will deal with and answer that point.
Lord Wallace of Saltaire
I apologise. I should have answered it but so many points were made in the debate that it was extremely difficult to cover all of them. This question is being discussed within government and will shortly be decided on. It is not a dead question; it is a live one.
Baroness Neuberger
I thank the Minister very much indeed. We are much encouraged to hear that and I hope that we will continue to be brief on that subject. Will he perhaps take back the question on traffic light labelling of food, which was asked again and again, particularly as evidence came from some corporations that they were doing something about this? It is something that could be pursued through a business network and the Government could lean harder on that. We would still like a serious response on advertising on foods harmful to children. I hope that the noble Lord will write to me and other Members of the Committee. I thank everybody who spoke and the Minister for his response. I beg to move.
Financial Transaction Tax: European Union Report
(12 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Harrison
That the Grand Committee takes note of the Report of the European Union Committee on Towards a Financial Transaction Tax? (29th Report, Session 2010-12, HL Paper 287).
Lord Harrison
My Lords, I am delighted to have the opportunity to introduce this debate on the report of the European Union Committee entitled Towards a Financial Transaction Tax? This report was based on work undertaken by the Sub-Committee on Economic and Financial Affairs, which I chair. The report was published in March and was based on evidence received from campaigners, representatives of the financial sector, academic experts, think tanks, MEPs, the Financial Secretary to the Treasury Mark Hoban MP and Algirdas Semeta, the EU Commissioner for Taxation and Customs Union, who appeared before the committee in February. I also thank all our witnesses who contributed to this inquiry and my clerk, Stuart Stoner, for mastering, as ever, a complex subject with consummate skill.
Since the global financial crisis erupted in 2008, there has been a continuing debate about the role of the financial sector within the economy. As recent events here in the UK have again brought into focus, many have criticised the perceived light-touch regulation of financial practices and of the markets. There is also a common perception that the financial sector does not pay its fair share, as well as widespread anger at the level of pay and bonuses in the sector at a time of economic austerity. In this context, there is an understandable desire to see the financial sector make amends for its perceived mistakes and shortcomings.
The proposal for some form of financial transaction tax is nothing new. Indeed, were the noble Lord, Lord Skidelsky, here, he would doubtless tell us the thoughts of John Maynard Keynes in that direction. In the early 1970s, the Nobel Prize-winning economist, James Tobin, brought forward an eponymous proposal to levy a tax on every amount exchanged from one currency to another to reduce short-term currency speculation. The idea was not adopted at the time, but it has returned to the agenda on a regular basis ever since. In the aftermath of the recent financial crisis, the European Commission has been actively considering the case for a financial transaction tax, or FTT. In September 2011, it published its proposals for a tax on the value of single transactions of a broad range of financial instruments, including equities, bonds, currencies and derivatives. EU leaders including Germany’s Chancellor Merkel and the former French President Nicolas Sarkozy advocated such a tax, while the Commission President Jose Manuel Barroso promoted it as a question of fairness. A wide-ranging campaign, spearheaded by the Robin Hood tax campaign here in the UK, has also called for a tax in order to tackle poverty and climate change.
Yet support for an FTT is far from universal. Leading economists have criticised the proposals, and several world economic heavyweight Governments, most notably the USA, remain implacably opposed to its introduction. The UK Government, while stating that they do not oppose a global tax, have remained consistently opposed to its introduction at EU level. The Prime Minister has called the tax madness, and the Chancellor of the Exchequer described it as,
“a bullet aimed at the heart of London”.
Even after we have published the report, we are still getting information, for instance from the City of London Corporation. It drew its own analysis of the tax, highlighting concerns and worries, and concluded that:
“This is not helpful to the European recovery and the jobs and growth agenda”.
It was in this febrile atmosphere that the committee’s inquiry into the Commission’s proposals took place. We were disappointed in what we discovered. We found the Commission’s proposed model wanting in many respects and unlikely to fulfil the objectives that the Commission had outlined. We found key elements of the Commission’s model to be fundamentally flawed, and advised the Government that they should refuse to agree to the proposal.
Why did we come to such a stern conclusion? We began by examining the Commission’s five stated objectives. The first was to avoid fragmentation in the internal market for financial services; secondly, to ensure that financial institutions make a fair contribution to covering the costs of the recent crisis and to ensure a level playing field with other sectors; thirdly, to create appropriate disincentives for transactions that do not enhance the efficiency of financial markets; fourthly, to create a new revenue stream for the EU budget; and, fifthly, to contribute to the continuing international debate on financial sector taxation and, in particular, the development of an FTT at global level.
We were not convinced that the Commission’s proposals would meet any of these objectives. Given the opposition to an FTT in the USA, the suggestion that the Commission’s proposal would pave the way for a global tax was, in our view, wholly unrealistic. We noted that the case for using an FTT as a new revenue stream for the EU budget was contentious even among its own supporters, many of whom favoured revenue being put to other uses, such as tackling global poverty and climate change. While we found there was a stronger case for asking the financial sector to make a contribution to the cost of the crisis or, indeed, for seeking to deter certain capricious transactions, in neither case did we find the Commission’s arguments persuasive. While we acknowledged the strength of public anger directed against the financial sector and the widespread view that those who contributed to the current financial crisis should contribute to its clean-up costs, we found that this FTT was the wrong way to meet such demands.
We next considered the detail of the Commission’s proposals. We concluded that the Commission’s model was impractical and unworkable. For instance, the proposed residence principle, defined as taxation in the member state of establishment of the financial institution regardless of where the transaction took place, was subject to widespread criticism, including from advocates of an FTT. There was, in our view, a significant likelihood that a tax so designed would lead to financial institutions relocating outside the European Union in order to avoid the tax. Only an FTT implemented on a global scale would prevent EU-resident institutions being placed at a significant competitive disadvantage in comparison with other leading global competitors. Yet, for the reasons I have outlined, the chances of a global tax being introduced are extremely thin.
We also concluded that it was uncertain who would shoulder the burden of the tax incidence. We pondered what the impact would be on consumers who might have the tax passed on to them. In addition, although the headline rate of the tax was relatively low, there was a danger of a potential cascade effect increasing the potential tax burden by the tax being levied at each stage of the financial instrument’s journey.
Much criticism focused on the Commission’s impact assessment, which indicated that the proposals seemed destined to have a substantial detrimental effect on the EU-wide GDP. In the context of the current financial crisis and the economic pressures being faced by many member states, we found this undesirable. We concluded that if a proposal of such importance as this is to be seriously contemplated, it is imperative that any such proposed tax is as well designed as possible. In our view, the Commission’s proposal failed this test.
The consequences of such a poorly designed tax, both on the United Kingdom financial sector and the EU financial sector as a whole, could be very serious indeed. Divergent views were put to us concerning the potential impact. We found such uncertainty about the outcomes alarming and so, I repeat, we were deeply concerned that an EU-wide FTT could have a serious detrimental impact on the United Kingdom, in particular by giving financial institutions an incentive to relocate away, principally from London. We heard evidence that over 70% of the revenues from an FTT could come from the United Kingdom, and we questioned the appropriateness of a proposal that would have such a disproportionate effect and impact on one member state above all others.
The United Kingdom Government have made it consistently clear that they would oppose an EU-wide tax. Given that EU-wide taxation proposals require unanimity among member states, we found the likelihood of such a tax being introduced extremely remote. Speculation has therefore grown that an FTT might be adopted by a smaller group of member states centred on the euro area from which the United Kingdom would almost certainly stand apart. However, the impact of such a tax on the United Kingdom cannot be ignored. If, as is likely, a directive covering a smaller number of member states equates the UK with third countries, there would still be a significant effect on the United Kingdom financial sector. UK financial institutions entering into a financial transaction with euro area financial institutions would still be liable for the FTT, which could be collected through EU mutual assistance for the recovery of tax or as a result of the regular provisions of joint and several liability. We urged the Government to work to ensure that UK financial institutions are not so damaged and that the United Kingdom tax authorities’ workload is not increased by an FTT introduced by an advance pioneer group of member states.
The Government’s response to the committee’s report has been received, for which we are grateful. However, we found the response to that point complacent. It merely states that the Government,
“will continue to contribute to discussions on the proposal with these issues in mind, and will continue to highlight that unless applied globally, FTTs risk relocation of business activity to countries not applying the tax”.
The deleterious impact of a euro area FTT on the UK could be very serious. I should be grateful if the noble Lord, Lord De Mauley, could provide us with a more considered response to those concerns. How are the Government seeking to address them? Who are the Government currently talking to and canvassing? Which MEPs and fellow Council members inside and outside the euro area are the Government talking to?
We were dissatisfied with the Government’s position on an FTT in one other respect. In his evidence to us, the Financial Secretary to the Treasury argued that the Government do not support an EU FTT but do not object in principle to a global FTT. The Government’s support for a global tax has been lukewarm at best. If the Government support the introduction of a global tax, they should make a sound case for it. If, however, their true position is that they oppose a financial transaction tax in principle and in practice, they should say so in thunder. The Government’s response argues that their position is clear, but we found it as clear as mud and acting to the gallery of those who seriously believe in the benefits of a Robin Hood tax.
Beyond all that, it is imperative that Her Majesty’s Government remain fully engaged in the debate. Discussion on whether and how the financial sector should be taxed cannot be ignored. In our report, the committee considers other models, including a financial activities tax or an EU-wide tax on the model of UK stamp duty, which appeared to be gaining traction when the report was published. We found that such models may bear further exploration. Since the report was published, the debate has moved on further still. The Compact for Growth and Jobs annexed to the conclusions of the European Council meeting on 28-29 June states at paragraph 3(j) that the,
“proposal for a Financial Transaction Tax will not be adopted by the Council within a reasonable period. Several Member States therefore will launch a request for an enhanced cooperation in this area, with a view to its adoption by December 2012”.
What update can the noble Lord, Lord De Mauley, give us on the current state of negotiations on the adoption of an FTT?
The leaders of Germany, France, Italy and Spain are reported as remaining in favour of an FTT. Which member states are expressing an interest in pursuing its adoption under enhanced co-operation? Given the implications for the United Kingdom, to which I have referred, what role are the Government playing in seeking to influence these discussions? I look forward to hearing the contributions on this important proposal, not only from the noble Lord, Lord De Mauley, but also from noble Lords on all sides of the Committee. I beg to move.
Baroness Randerson
My Lords, I speak in this debate not as someone who participated in the production of this report and the discussions which took place among the committee, but simply as an interested and keen observer of the problem that the committee examined and as someone who has, of course, read the report and considered the matter in great detail. My noble friend Lady Maddock, who was a member of the committee, is unfortunately unable to be here this afternoon.
This is a very impressive report. I have rarely read a report where the committee appears so united and strong in its condemnation of the topic it was asked to examine. The report makes a compelling case for the Government to do all in their power to resist this tax, even if it were to be applied only to the euro area. It is understandable at a time of deep financial crisis—a world crisis where emotions are running high against the bankers, particularly in this country—that there are proposals to tax the financial services industry. The FTT or Tobin tax, or the Robin Hood tax—that last name giving you a flavour of how this tax is viewed—is that rare kind of tax, one which easily wins the hearts and minds of the public. Very few taxes are popular with the public but in the public mind, for many people, the Robin Hood tax will solve the problem they see. In my view, and I am very persuaded by the report, it is the wrong tax at the wrong time and in the wrong place.
It is the wrong tax because its design is so flawed. For example, the residence principle is, as the committee says, impractical and unworkable. We all know how difficult it is to stop companies moving out of this country and relocating to the country they see as being of most tax advantage to them. One company which has recently made the press in this respect is Amazon, locating its headquarters in Luxembourg and paying very little tax in this country despite doing billions of pounds of business here. That same principle applies to the financial services sector, especially where the companies concerned will have everything to gain and nothing to lose by locating outside the EU.
I felt that there were some extraordinary aspects to the details of this tax: the double incidence, for example, if both parties in the transaction are in the EU. It is an unusual tax if you pay it twice simply by accident of location. It is important to remember that FTT is not the only option. As the noble Lord, Lord Harrison, has stated, there are realistic alternatives, including the UK stamp duty option and the financial activities tax, so the urge to tax the financial sector can be achieved in other ways.
I stated that this is a tax at the wrong time. The Commission’s own impact assessment states that there would be a long-term total decrease of EU GDP of between 0.5% and 1.76%. I note that the Government’s letter in response to the committee’s report points out that, at the top end of that range, that would equate to a reduction of more than €200 billion in EU GDP and would mean the loss of nearly half a million jobs. Possibly the Government’s estimate of jobs is quite light—it could be more than that. Therefore, it is pretty extraordinary that the Commission is proposing what is, effectively, a tax on growth at a time when the EU is uniformly suffering from very low growth and, in some cases, negative growth. If you could identify the problems of the EU, at the very top of the list would be its problems with growth at this moment. It is a fairly extraordinary proposal to come forward with in this situation. Imposed suddenly—and by its nature it must be imposed suddenly—it could reduce liquidity and have the adverse effect of increasing market volatility. The Commission is talking about using it to reduce the high-velocity trading, but it could increase market volatility. The noble Lord has already referred to the cascade effect, which could intensify these problems.
One point of concern is that the FTT is being seen as all things to all men. Different groups are clutching at it to fund their own, individual pet priorities, mostly things that we would agree are very worthy and worthwhile, and which need funding. However, out of one tax you cannot fund the EU’s main revenue stream at the same time as funding international development, assisting with international poverty or counteracting global warming. It is unrealistic and ill thought out not to have a clear process for deciding where this funding would go. Clearly, it cannot do all those things, but the danger would also be that the relocation of businesses out of the EU as a result of the tax would mean that the yield is much lower than expected. In any event, the government response argues that the incidence will be passed on to manufacturers and therefore, ultimately, to consumers.
Finally, I stated that this is a tax in the wrong place. I am an enthusiastic pro-European and sometimes get irritated that we in Britain always say that it is all right for the rest of Europe but we are different. However, in this case I am firmly convinced that this is a tax that will have particularly adverse consequences. The committee points out, absolutely rightly, that the impact on the City of London and the UK financial services sector in general is so disproportionate that it must be revisited. There is a great deal of concern in the coalition Government, and rightly so, at the unbalanced state of the economy and that we as a nation rely far too much on financial services. Yet one has to accept that that is where we are in our economy and that turning it into a different shape will take decades.
We want to grow the rest of the economy. We do not want to destroy the financial services that are so important to us. Therefore, the threat from this tax to the pre-eminence of our financial services sector is considerable. I remind noble Lords of the Commission’s own figures. If you derive the proportions from them, the revenue raised in the UK would be 4.6 times higher than the revenue raised in Germany and 10.9 times higher than that raised in France. That is how we get to the figure of 71.3% of all revenue from this tax coming from the UK, to which the noble Lord referred. This effectively means that it is a UK tax masquerading in EU clothes. Eighteen per cent of the revenue that would be raised from this tax within the UK would be transferred to other EU states if it were to be divided up in the process that the Commission suggests. That would not be fair, effective or wise.
I hope that this excellent report assists the Government in their efforts to resist this tax, whether it is proposed for the whole of the EU or simply for the euro area. Can the Minister assist us by giving us an updated assessment of whether the Government consider that the financial transaction tax is likely to go ahead in the way envisaged when this report was written?
Lord Hannay of Chiswick
My Lords, I pay tribute to the work of the noble Lord, Lord Harrison, and his colleagues. In recent months, their sub-committee has produced a string of reports on these financial issues that are so troubling the whole world but, in particular, Europe and the eurozone. We owe a debt of gratitude to them.
The Commission’s proposal for an EU financial transaction tax seems, alas, to have as many lives as Rasputin. No sooner is it pushed under the ice, as it was at a recent ECOFIN council, than it pops up again in the conclusions of the June Council, this time as a possible tax in the eurozone alone or perhaps, in the eurozone-plus if countries, such as Sweden, which burnt their fingers so badly on a single-state version of the tax in the 1990s are not more cautious on this occasion, so we certainly cannot afford to be complacent and assume that the problem has passed us by nor, as the Government seem to do—here I join the noble Lord, Lord Harrison, in his view—to assume that such a tax levied by the eurozone countries alone would have only positive consequences for us, no negative ones.
I should make it clear at the outset that, unlike noble Lords who have spoken before me, I am not a fan of even a genuinely worldwide FTT, such as the Tobin tax idea, to which the Government pay lip service without, it must be admitted, much sign of enthusiasm. Like the taxation of tobacco, its protagonists never seem able to decide whether they are really trying to to deter a nasty habit or to raise the maximum amount of money for good causes. In any case, a worldwide FTT remains a pipedream. Can anyone seriously foresee the US Congress, either the present one or one likely to be elected this November, voting in favour of an FTT? If that is the correct judgment, we need to face up, as the Commission lamentably failed to do, to the risk of displacement, of transactions simply moving off to New York, Geneva, Tokyo or Singapore, leaving Frankfurt, Paris and perhaps even London deprived not only of the proceeds of the tax but of the employment and corporate revenue tax benefits from the businesses carrying out the transactions.
Experience shows this to be no idle risk. Not only did Sweden, which I have mentioned already, suffer in this way in the 1990s, but the whole episode of the euro-dollar market which sprung up in London almost overnight when the Americans made an unwise fiscal decision is there as an awful warning. Europe needs a stronger, deeper capital market if its economy and single market are to prosper, not a shallower, feebler one, which it would be all too likely to end up with if any variant of an FTT on a Europe-only basis were to be introduced.
The Government are right to resist the Commission’s proposal for sound European reasons, not only British reasons. I wish that the Government would put the argument in those terms, not depict it simply as a heroic defence of the City of London. When the Minister replies to the debate, I hope that he will explain why the Government are so confident that there will be no negative consequences for the UK from a eurozone-only variant of the FTT. I am no banking expert but that proposition looks to me to be not entirely convincing.
As to whether there are alternative, less harmful ways of taxing at least some financial transactions—here I follow the course of the previous two speakers—of course there are. The stamp duty on share transactions such as we already levy in this country is one such. I do not see why the Government, in their reply to the excellent report of the noble Lord, Lord Harrison, felt the need to be so negative about such an approach at the EU level. I do not even see why we should jib at having an EU minimum rate for such taxes, as our rate is well above the level which any member state which currently does not have one is ever likely to impose. After all, that is what we have for value added tax.
The need to avoid a race to the bottom, or the creation of tax havens within the EU, deserves to be taken seriously. As long as the Commission’s even more unwise initial suggestion that the proceeds of an FTT should be earmarked as a resource for the EU budget—an idea which must, in any case, be dead in the context of a eurozone-only FTT—is not revived, would not the stamp duty on share transactions route be worth encouraging more?
The Government can rightly feel, from the trend of this debate and from the report we are discussing, encouraged by the support from the EU Committee of this House for their resistance to the Commission’s proposal for an FTT. That case would be all the more persuasive if it was not so often linked to references to Britain having a veto and being determined to use it. We would do much better to advance the case on the grounds of compelling logic and for the reasons that previous speakers have mentioned, such as the loss of GNI to the European Union at a time when it needs to gain it, and many other arguments of that nature.
Lord Giddens
My Lords, I also congratulate the noble Lord, Lord Harrison, and his colleagues on the report. However, I have some disagreements with it and therefore my position is different from that of previous speakers.
A tax on currency transactions, as was noted by the noble Lord, Lord Harrison, was mooted by James Tobin in 1972 in a now famous lecture at Princeton shortly after the US dollar was no longer tied to gold. Tobin’s proposal was a tax operating on a global basis that would dissuade speculators from trying to profit from very short-term rate fluctuations. In perhaps one of the most famous phrases in economics, he said that the point was to throw some “sand in the wheels” of currency markets—a quotation that has been repeated many times since.
It is important to recognise that the notion of a Tobin tax has gone through many different versions since then. We are discussing one such version now, which has surfaced in the form of a generalised financial transaction tax—the FTT. It is a big mistake—although I recognise the motives involved—to call it a Robin Hood tax, because it was produced by a Nobel prize-winning economist with a view to having an impact on world financial markets and we should keep that in view.
There are basically two reasons why an FTT has come back on the agenda. The first is obvious—the need to cope with systemic weaknesses in international financial markets. I know that I am not a substitute for the noble professor of economics who was referred to, the noble Lord, Lord Skidelsky, but JM Keynes made this point very well when he said:
“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation”.
He was very good when writing about such issues.
The second contextual reason is obviously the one that we are here to discuss—the specific problems of the EU after 2008 when financial markets had homed in on real or perceived weaknesses of the euro. The report, as has been said, levels an array of criticisms at the proposals for a European FTT made by the Commission a while ago. The report was produced a while ago; it still refers to President Sarkozy, and so on, and a few things have happened since then. As such, it is a valuable contribution to the ensuing debate over those proposals and their subsequent elaboration within EU circles. However, I do not think that it is as conclusive in its critique as the noble Lords who are its authors seem to think.
It also worries me that, in the report, the views of individuals and groups who have clear special interests seem to be given the same weight as those who are likely to be more impartial. For example, in the summary near the beginning, it says that
“leading economists have criticised the concept—
of a European FTT—
“as fundamentally flawed”.
It then says that,
“the financial sector has been fervent in its opposition to the idea”.
Those two statements do not have the same status in my eyes. Moreover, many leading economists, such as Joseph Stilitz, have endorsed the idea of a European FTT, or have certainly stressed that it should be taken seriously.
I would therefore argue in contradistinction to the report that consideration of a European FTT will and should stay on the agenda. President Hollande and Chancellor Angela Merkel both endorse it, as do a number of other eurozone states’ leaders. It is right that the proposals should be further considered and developed and the risks and benefits scrutinised in detail before a decision is taken by the interested eurozone countries who might very well participate in such a tax. The issue of the FTT still needs to be scrutinised but it will stay on the agenda and it is still possible that it could be instituted.
I have one or two questions for the Minister in respect of these observations. First, near the beginning of the report, high frequency trading is discussed. What is the Government’s view on the desirability—which, after all prompted the original work of James Tobin—of throwing some sand in the wheels of high frequency trading? I found the discussion in the report rather inadequate. It does not offer evidence either way; it simply quotes one or two opinions. In my view, high frequency trading is, as the noble Lord, Lord Turner, says, largely socially useless and creates systemic risk in financial markets. I not think that the report discusses this adequately.
Secondly, there is the issue mentioned by the noble Baroness and stressed strongly in the report that if an FTT is introduced, businesses will move away from Europe. I spent some of my academic career studying this issue and I am not at all convinced that the evidence for it is strong. One has to look at it systematically, not just take specific examples. There are many reasons why it would be difficult for financial companies to move away from Europe and get a better financial position, wherever they went, because certain other taxes exist in other areas of the world to which they might move. In June, the Commission looked at this issue in detail and rejected the idea that there would simply be an outflow of companies from Europe. Speaking as a social scientist and an economist, I think that the issue is still much more moot than in the casual opinions which are mentioned in the report. I would like the Minister to comment on that. It is plainly part of the Government’s position but I do not see that there is systematic evidence either way, when one spends some time studying it.
Finally, I ask the Minister to respond to the same question that the noble Lord, Lord Harrison, raised. Do the Government support a global Tobin tax? That was where we started in 1972; Tobin said that it should be a global tax. There seems to be a certain contradiction, as the report says, between the Government’s view of this in regional and in global terms. It is obviously possible not to support a regional tax but to support a global tax but, as the noble Lord said, the Government should decide whether they are a strong advocate of a global tax of some kind. My view is that this debate still has a long way to go and that a lot of work is needed on it from academic economists. We have to look at the whole thing with more scrutiny before deciding on these issues, either regionally or internationally.
Lord Kerr of Kinlochard
My Lords, the national debate on the Commission’s proposal operated at a lower level of academic rigour than what we have just heard from the noble Lord, Lord Giddens. I thought that three myths infected the national debate. First, there was the myth that this was an EU tax, in the sense that it was a tax the proceeds of which would be used to help fund the EU budget. That was widely believed in this country and is completely untrue. There was a gleam in the Commission’s eye but it is clear from the preparatory text and the background that the proposal itself was for a series of national taxes collected by national tax authorities and going into national budgets. That myth produced a very adverse reaction in this country.
The second myth produced a strongly positive reaction. That was the Robin Hood myth: that it was to be a hypothecated tax, which was to be used for international development or to combat climate change. This was completely untrue and it was a bit implausible that at a time of concern about deficits, to put it mildly, Governments would be so altruistic. Anyway, no Government said that they would and the Commission did not propose that they should.
The third myth produced a strongly negative reaction in this country. It was the myth—fed a bit, I fear, by government—that the FTT proposal was a dagger aimed at the heart of London and that it was a malicious proposal from a malign commissioner and designed deliberately to damage the City. Usually, the Commissioner was said to be Barnier, although in fact he was not the commissioner involved at all. This was completely untrue but it was encouraged a bit—possibly because the more ferocious the dragon looks, the more valorous St George must be when he slays it. There was absolutely no doubt that we could slay this dragon whenever we chose, because unanimity is required for tax proposals.
I disagree slightly with the noble Lord, Lord Giddens, on his criticism: “Some FTTs could be quite good, so why were we so against an FTT?”. The members of the committee—I was lucky enough to serve under the noble Lord, Lord Harrison and we were unanimous in producing this report—were not attempting to argue that all FTTs are by definition bad; what we were unanimous about was that this proposal, this FTT, was unwise and unworkable, for reasons that are, to be fair, set out in some detail in the report.
The motivation of the proposal was none of those in our midst; it was, I think, a general wish to see the financial sector contribute in part to the cost of the crisis that it had caused and a particular wish to discourage high-frequency trading as inherently evil. I do not want to cross swords with the noble Lord, Lord Giddens, on high-frequency trading and whether it is indeed inherently evil. I do not think the committee reached a view on that. In fact, I do not think we attempted to reach a view on that issue in this report.
Lord Giddens
The report quotes someone from the Treasury who says that it is not harmful and it appears to endorse that. It is just an opinion from someone in the Treasury.
Lord Kerr of Kinlochard
I do not think we addressed the issue of whether high-frequency trading is or is not a good thing in this report, but there is no doubt that in the Commission’s mind it is a bad thing and that one of the purposes of this tax is to reduce it.
As the noble Baroness, Lady Randerson, said, the proposal was extremely oddly timed. I do not need to repeat the argument she made so eloquently. Setting out deliberately to reduce EU GDP by, it says, 0.5% seems an odd thing to do at a time of sharp recession. I think that 0.5% seriously underestimates the effect on GDP because the relocation effect was not taken into account in that part of the calculation.
Where are we now? First, I would like to consider whether St George fought well. I fear that I am in the school of the noble Lord, Lord Hannay, on this. I do not think we fought terribly well. I think the arguments we should have used were European Union arguments: arguments about the possibility of having one great financial market between the Asian market and the American market; arguments about London being the candidate; or arguments about damage to London being damage to the EU. I find such arguments play pretty well in many parts of Europe, although not in all. The best argument against a financial transaction tax that we should have used was the EU argument. Instead, we tended to wave the Union Jack, invoke Dunkirk, denounce Barnier and then, on 9 December, tried to make a UK opt-out from an FTT that the others could have if they wanted, a carve-out for us, a condition for our agreement to their move to the fiscal union to which we were urging them to move. It struck me as a really odd position to have got ourselves into.
However, that is all in the past. What do we do now? The dragon is not dead. I can reassure the noble Lord, Lord Giddens, on that. The dragon is alive and well. The noble Lord, Lord Hannay, has read out the European Council conclusions. Since the proposal would not be adopted EU-wide, several member states would instead seek to bring it in among themselves under the enhanced co-operation procedures—that is Article 20 of TEU and Article 329 of TFEU. So the Commission will produce a new proposal, presumably very similar to the one it produced for the Council as a whole. Those who wish to introduce such taxes will aim to agree a common scheme, and they have set themselves a target of the end of the year.
Should we mind? If they succeed, will they just damage themselves? Will the London market benefit at the expense of Paris and Frankfurt and anybody else who joins in? Should we, in the Prime Minister’s phrase, simply roll out the red carpet and cheer? I do not think so. Although our report was written some time ago, the Select Committee thought not. We noted that if the situation, which is now foreseen by the European Council, came about, UK financial institutions entering into transactions with institutions in FTT levying states would still be liable for the tax and if financial institutions from FTT levying states conducted transactions between themselves but in the City of London, they would be liable for the tax. In both cases, it would be for the UK authorities, HMRC, to collect the tax and forward it to the appropriate national fiscal authorities. We did not much like the sound of that. We would land the costs of collecting the tax but no revenue from it and, more seriously, the relocation effect would still be real. There would be a deterrent to transactions here and hence damage to the City. That is why, in our report, we said:
“We urge the Government to work to ensure that UK financial institutions are not damaged, and that UK tax authorities’ workload is not increased, by an FTT introduced by certain EU Member States”.
That seems to me to be the key message we should still be conveying to the Government. It was a point not really addressed, as the noble Lord, Lord Harrison, has noted in the reply we had from the Financial Secretary to the Treasury. In particular, he did not address our concern at the UK having to collect in London a tax from which we would not benefit. I hope the Minister will deal with that point more substantively tonight.
Is the die cast? Are we now out of the game? Is it all over? Can we go home? No. Under the enhanced co-operation procedures which they intend to use we have a seat in the room. Only those proposing to introduce the tax will have a vote but everybody will be entitled to speak and if we want to we can seek to influence what we do. In my view, provided we make EU arguments, not exclusively UK ones, they are likely to listen because the health of the City, as a lot of them recognise, matters to them too. We need to be there, sounding constructive, influencing the debate. I hope the Minister will assure us that is what the Government intend to do as this enhanced co-operation is pursued. I really hope we do not just climb onto our charger and ride off.
I have one additional point. Under Article 20 we do not have to leave the others to devise the tax without any advice from the representatives of the biggest financial market. As the others, possibly a slightly different group of others, go ahead with trying to work out some form of banking union, and they are proposing to do that under Article 127, precisely the same arguments apply. Article 127 is the Council as a whole. We would not be able to vote but we would be able to speak. We could be there. We cannot be the banking capital of Europe and let a negotiation about a banking union in Europe go on without our being there. You have to be in to win. We have got to be there.
The other day, Mats Persson of the Open Europe think tank—who is slightly more Eurosceptic than me and whom I would not normally cite—said of the risk of a eurozone banking union that it,
“is probably necessary in the long term, but is also a potential minefield for the UK. First, will it create barriers to UK financial firms doing business in the eurozone in turn fragmenting the single market? Secondly, will supervision spill over to regulation, with the eurozone effectively writing the rules for all 27 countries?”.
These are extremely good questions and the only way of making sure that the answers the European Union comes up with are the right ones is for us to be active participants. I was worried by the Prime Minister’s delight that he had he managed to strike out from the European Council conclusions all references to a common supervisory structure. They pop up in the eurozone annexe to the conclusions but they are to be discussed and negotiated in full Council with everybody there. I really hope we will occupy our seat and use it well.
Lord Monks
My Lords, I shall refrain from giving my usual congratulations to my noble friend Lord Harrison and his committee because this comprehensive demolition of the case for a European FTT is a demolition of the more general case for FTTs other than national ones. I am normally an admirer and fan of the work of the European Select Committee, but not quite so much of one this time.
After reading the report, with its relentless attacks on all the points made for a European FTT, I was reminded of a time in the Ministry of Labour during the Second World War when Ernest Bevin asked for a paper which set out the case for minimum wages in a number of key industries. He received a report from the Civil Service which gave 36 good reasons why it was totally impracticable. He said to the key civil servant, “You are a very clever person. Now give me 36 good reasons why this is a good thing”. He got his way in the end.
I do not know whether or not there are 36 good reasons for this proposal but the case is rather better than the one which is acknowledged by the committee. As others have said—I shall not repeat it—the FTT is not a new idea. After Tobin and as the century went on, the idea was put to one side. Things were going well—financial services were booming in the British and United States centres in particular—and “if it ain’t broke, don’t fix it” was very much the maxim.
However, the world changed in 2008 and that financial model has had a cardiac arrest. At the present time, much of the sector is kept on life support, courtesy of the taxpayer, with the cost of what has had to be done currently estimated at £20,000 per taxpayer and rising. It will cause problems for our children—and perhaps our grandchildren even—in years to come, and what were widely praised innovations and examples of Britain’s creative genius look rather more like seedy scams in the cold light of the experience of the past four years or so. A prized national asset is currently in danger of looking more like a liability.
I will not mention the scandals which seem to arise with some rapidity at the moment, but the sector must expect to come under close, intense, tough scrutiny and pressure. As Vince Cable recently acknowledged, we must recognise the strength of the lobbying that the City and other financial institutions are able to command, which is the subject of various newspaper reports at the moment. However, their trophy room is full of bright ideas that they have shot down which might have had an effect on the way in which the financial sector in London is regulated and works at the present time. I do not want the concept of a financial transaction tax to be put in that trophy room by the successful lobbying for which the City is noted.
Recent examples of successful lobbying include the weakening of the Vickers proposals, the cuts in UK corporation tax and taxes on banks’ overseas subsidiaries, and even the Financial Services Authority has been deployed to oppose the idea of a financial transaction tax.
I concede that the arguments are well set out in the report but perhaps I may address one or two of them briefly. There may be no chance of a global tax, but is there any chance of a global agreement on the environment? Are the United States Congress, the Australians and the Canadians likely to give in on that? I am not sure. They certainly were not at the start, but you have to keep on raising the issues and keep the pressure on. US supporters such as Warren Buffett, Bill Gates and so on continue to make the case for a global tax. I know it is very difficult, but do not give up, because things can change. It is important that we take a positive approach to the idea of a global tax, not a negative one.
The next point is: do not use the US Congress’s position as an excuse for European inaction. Europe still constitutes 30% of world GDP; it may be shrinking as other countries grow at a much greater rate than we do, but it is still the biggest single part of the world economy, if we can call it a single part. Giving a lead, as the EU can do, when it is well judged and well supported, is important. We in this House should not dismiss the argument with contempt but encourage its development in more practical ways.
There is already some development on the argument about how to spend the money raised, some agreements between President Hollande and President Barroso on global solidarity—it is a vague phrase, but we begin to see where it might go. Of the countries concerned, nine are committed, 10 are likely or possible and, as others have said, if we are not engaged they can go ahead without us. That poses all the problems which are the continuing story of the UK in the European Union: are we better inside trying to influence things or do we stand aside through opt-outs? I mention one area which is rather uncomfortable for the Labour side of the House, which is that when Britain was inside the social chapter, it was far more difficult from the union point of view to get anything through than when Britain was outside. I make that point with some discomfort about those years.
The next argument is about the role of London, which could lose a lot of prosperity and work through such a tax. That is a pretty powerful argument against any national tax or regulation. Those winning work are those with the least regulation and taxes. This week, my football club, Manchester United, located itself in the Cayman Islands. Thank you very much to the Glazers for that. They are the latest of many doing that. The search for the cheapest and least regulated jurisdiction is relentless. The concept of the Tobin tax or FTT is to stop that by having a world level playing field, at least to some extent. The quest needs to go on.
The final argument to which I shall labour some opposition is that such a tax will affect growth. That depends on its level. If it is a small tax, I agree that it may not be very effective in raising revenue, but if the levels are modest initially, I do not think that the effect on growth will be as lurid as painted in the report. The FTT is a good, simple idea—very complex to introduce, for sure. I hope that we will encourage work on that good idea rather than add to that list of moribund good ideas on display in some trophy room in the City. Where there is a will, there is a way, and we should not turn back in the search for a scheme that can work globally and that takes on the tax havens which are undercutting nearly all of us in the European Union. There may even be one or two in the European Union who are in the undercutting business.
I finish with a question which is similar to others which have been asked. In the Minister’s view, if there is an FTT in several big countries—Germany and France in particular—does he think that London will lose or gain?
Lord Flight
My Lords, I thank the noble Lord, Lord Harrison, for having chaired the committee so effectively and for having produced a clear report on a difficult and—dare I say it?—somewhat tedious subject. It is interesting that the membership of that committee has differing views on the whole Europe issue, but they were unanimous in their view on the FTT proposal. I think that most speakers, though not all, echoed that today, but I particularly appreciated the robust contributions of the noble Baroness, Lady Randerson, and the noble Lords, Lord Hannay and Lord Kerr.
In summary, it is economically flawed as a way of raising taxes, which John Chown, our tax expert, explained very clearly. It does not meet any of its five targets. We know what the residence issue is, and not all but many of the objections there are to a global version as well as to a particular country version. I think that it has now become part of what one finds in parts of Europe—blaming the Anglo-Saxon economic model for all the world’s horrors, such as the banking crisis and the collapse of the eurozone. This is an emotional stick with which to beat the UK. It is mistakenly seen as a form of moral cleansing when people know that the loss of GDP and tax revenue is greater than the FTT would raise, which is surely a foolish position.
It is ironic that the UK has stamp duty which, although it is not an FTT is a tax on securities that works. I happen to disapprove of it because it is simply a tax on everybody’s pension savings. Some time ago, in better days, the Government had a commitment of sorts to abolish it, and I wonder what the thinking is when better days return. There is the irony that the most efficient way of raising tax, at least from the banking sector, is bonuses, where income tax and employer and employee national insurance are a 62% tax charge and where banks are obviously paying little or no corporation tax, given their historic losses. I am not recommending that, but it is a great irony in the whole debate.
The noble Lord, Lord Kerr, made the most important point that this is unfinished business. The proposals for an EU-adjoined country-by-country tax seem to require that the UK, as a third country, collect and pay over the tax when an EU resident in a country that had this was the counterparty in London. That is absolutely not on. I understand that the USA would be treated as a third party in the same way and I think it would tell Europe where to go. I rather doubt that this will ever proceed because I do not think that individual member countries will want to sustain the loss of employment and GDP for very modest tax revenues. It is substantially a propaganda exercise, but the most important issue on which we have not had satisfactory responses from the Treasury is: how are the Government dealing with the potential proposal that there would be a burden, a liability, on the UK to collect the levy on qualifying EU parties?
Lord Dear
My Lords, I am grateful to noble Lords for allowing me to speak in the gap. I had intended to speak at greater length, but I knew that I would be detained in a committee elsewhere in your Lordships’ House, which was indeed the case. I shall keep my remarks very brief, as is the convention. I should also say that I am a Member of the European Union Committee which produced this report, and my thanks go to the noble Lord, Lord Harrison, for heading that inquiry and writing the report.
I will confine my remarks very much to headlines, bearing in mind the time constraint by speaking in the gap. First, I agree that the financial transaction tax design, as proposed by the Commission, is seriously flawed. It smacks of being hasty and not well thought through, and it is contradictory in places. It leaves us with doubts about its viability.
Despite the very strong case put forward by the noble Lord, Lord Giddens, I believe that there is a likelihood that financial institutions could migrate and relocate away from the EU to avoid paying the tax. Personally, I am especially concerned that the proposal might lead to a reduction in the GDP within the EU. In fact, the Commission forecast a negative impact of 1.76% of the total GDP in the EU, which it says equates to a loss of €200 billion or half a million jobs. That is not something that one should put aside lightly.
Moving from the general to the particular—and this is a point already made by noble Lords—the implications for the City of London are considerable. As we know, it is the largest financial sector in the whole of the EU and it is a core element in our own economy. In the Minister’s response, I believe that the Government should declare their position on this tax with greater clarity. There is already some ambiguity in this country and elsewhere in Europe; people have talked about “supporting the tax in principle”, and different variants of the FTT have been discussed which leads to confusion and doubt. I turn to the Minister to reassure the Committee that the Government will continue to play a constructive role in this debate. The implications for the EU in general and the UK in particular are too great to allow less than full attention to be paid to this issue. Here I echo the concluding remarks of the noble Lord, Lord Kerr of Kinlochard, in asking the Minister to reassure the Committee that that is the approach that the Government will pursue and that they will pursue it with greater clarity and vigour.
Lord Davies of Oldham
My Lords, I begin by thanking the noble Lord, Lord Harrison, for his chairmanship of the committee, which has produced such an incisive report, and for his opening speech today, which covered accurately the committee’s conclusions on the issue of the tax proposed in Europe. As has been said, some aspects of the presentation by the Commission on the tax have been clumsy in the extreme, giving the committee a fairly straightforward and easy target. But I side with those noble Lords who have spoken today who have indicated that we ought not to drown the concept of this form of taxation, usually termed the Tobin tax, because this particular proposal has relatively few merits.
The noble Baroness, Lady Randerson, mentioned the emotion in Britain about the financial and economic situation in which we find ourselves. She even indicated that it was more intense in Britain than elsewhere. Are we really saying that we are not aware of the emotional responses of the Greeks, the Spaniards and the Italians, just to cite three countries where enormous popular concern has been shown—in Italy leading to the imposition of a Government on a democratic country? Is it surprising that from Europe comes an attempt at a condign punishment on bankers and a challenge to the financial system that has produced these circumstances?
Baroness Randerson
The noble Lord is really taking my words out of context. My very first sentence of significance related to my understanding that there was an emotional attachment to this tax. At no point in my speech did I say that I was opposed to it on a worldwide basis. I explained very clearly that I understood that there was a public popularity for this tax.
Lord Davies of Oldham
I accept that entirely from the noble Baroness. I am grateful for her intervention—but let me respond, if I may. I am merely indicating that this is not just a British reaction but is Europe-wide, which is why we have to put these proposals into some kind of context. People are responding to the crisis that was visited on us four years ago, for which all our fellow citizens, both here and elsewhere in Europe, are paying the price today.
Lord Flight
Does the noble Lord not agree that the problems of the eurozone are down to the faulty design of the euro, that the problems of public finances are largely about Governments having been spending too much and not taking a circular view of public spending, and that the problems of the banks are largely the result of money having been too easy for too long in the UK and elsewhere? History shows that banks always start doing foolish things if there is too much money.
Lord Davies of Oldham
If the noble Lord is suggesting that the banks carry no responsibility for the economic and financial crisis that we have suffered since 2008, I am surprised at the proposition. Is he really saying that we do not understand that the massive increase in short-term transactions that rendered the banks so very vulnerable when some of the debts began to be called in—those developments in which bank balances far outweighed the whole resources of the British GDP—did not create a situation of colossal instability? When the financial crisis broke, it is clear that Governments were caught out too and some had somewhat overreached themselves, but as for the British position the problem was the massive drop in tax receipts after the crisis rather than extra spending before it.
Lord Flight
The noble Lord seems to be accepting my point that mistaken monetary policy led to bank balance sheets and lending being excessive. These things can happen only when monetary policy is wrong.
Lord Davies of Oldham
Well, my Lords, then the noble Lord has to say that of each and every Government, because each and every society has suffered from this financial crisis and each and every Government were equally guilty of pursuing exactly the wrong framework of monetary policy. I have no doubt that it was the case that from deregulation onwards, Governments lost the capacity for some kind of control of the financial sector. I have no doubt at all that Governments rode the good years with light regulation, which was wished upon them by every area of political opinion in the countries involved. Certainly, that was the case in the United Kingdom. If it is suggested that Labour in government was too enthusiastic about light regulation, we have only to look at what the Opposition were saying to us at that time—that regulation was too tight.
Of course, I accept the strictures of the committee on the limitations of the proposals from the Commission. In particular, I am very grateful to the noble Lord, Lord Kerr, for demolishing some of the myths around that mistaken proposition by the Commission. A passing reference to the fact that the resources would go to the European budget was certainly not the core of the proposal; it was much fairer than that towards the Governments who would collect the taxation.
It has not been mentioned in the debate that the tax would produce vastly greater resources to the taxpayers of each country and the Governments representing them than the existing structures of taxation. Taxpayers think that the financial sector owes them a great deal in terms of the direction of resources. Given that we have had to rob money from our taxpayers in order to sustain banks that are too big to fail, it is obvious that taxpayers expect the Government to take the kind of action which will help to restore those resources to the taxpayer.
The financial transaction tax is at this stage a distant objective. We all know that it cannot be introduced in one country and that it is not likely to succeed within a limited framework of countries—certainly if it were within only the eurozone countries and certainly if it was based upon the principles that the committee has so effectively criticised. The likelihood of it being effective—and looking anything other than being directed at the City of London—would be fairly remote. However, that does not alter the fact that the arguments may change. The United States may change its perspective on this issue. If it were to do so, and if Europe reflected on the concepts of which the committee is critical, the United Kingdom would look very odd indeed if we said that, because of the significance of the City of London and our financial institutions to our economy, we were staying outside any framework for the development of such a tax.
I congratulate the committee because it has identified a rather forlorn initiative which I cannot see making successful progress in Europe because of the faults that have been accurately identified. However, I would be dismayed if the work of the committee led to a position where the whole concept of a financial transaction tax was regarded as completely outwith any government interest or action. I hope the noble Lord replying on behalf of the Government will at least give some hope in that respect.
Lord De Mauley
My Lords, I thank the noble Lord, Lord Harrison, and the Economic and Financial Affairs Sub-Committee for its work and its comprehensive report into a proposed financial transaction tax. I thank all noble Lords for their, in some cases unexpectedly passionate but in all cases interesting, contributions to the debate.
The United Kingdom remains firmly opposed to the European Commission’s proposals for an FTT. It would have significant negative economic impacts on the EU, damaging growth and employment at a time when it is critical for the EU to pursue policies which enhance the opportunities for that very growth and employment. The Commission’s own analysis suggests that relocation of the sector out of the UK, and therefore out of the EU, would, as the committee pointed out, be very significant. That is why we believe that broad-based financial transaction taxes could be contemplated only at a global level. As the noble Lord, Lord Harrison, said and the committee concluded, the proposal is flawed. It would damage our economy at a critical time and it would, as several noble Lords have said, damage the economy of the EU.
The Government agree with the EU that creating employment and delivering economic growth must be a priority during these difficult times. If an FTT were introduced, it would undermine the competitiveness of the EU. It would increase costs for manufacturers, savers and insurers. It would damage up to half a million jobs across the EU according to the Commission’s own analysis.
As several noble Lords have observed, the UK has the largest financial sector in Europe, so this EU-wide tax would disproportionately impact us. The UK would indeed face the most severe impacts, so we cannot support it. Supporters of the tax argue that it will stabilise financial markets and raise significant revenues, but both claims are flawed. As my noble friend Lady Randerson said, there is no evidence to back up the claim that an FTT would reduce market volatility or that it would effectively target the most speculative, risky activity. Like the committee, we are also doubtful of the revenue-raising potential of this tax. Its very significant negative growth impacts would lead to losses in other taxes. Income tax would raise less, as would corporation tax. The proposal requires the abolition of our stamp duty, so £3 billion would be lost to the Exchequer immediately. Overall it is possible that the tax might raise no money at all for the Exchequer. Not only that, it is inefficient. Based on the Commission’s own figures, every pound raised would cost 93p.
For these reasons the Chancellor said no to this proposal, and we will not accept it. Some member states wish to introduce an FTT through enhanced co-operation, as several noble Lords said. We will not join any such move, but before coming to a firm view about whether we should try to block it, we would need to see the detail of any proposal, what the scope of it will be and what would happen to the revenues.
The noble Lord, Lord Harrison, thinks we have been a bit mealy-mouthed in our response. The Government have been clear in our discussions with our EU partners. The UK does not and will not agree to the Commission’s proposal. There has been no ambiguity on the UK position. In answer to the question asked by my noble friend Lady Randerson, it is now accepted, as I think the noble Lord, Lord Harrison, said, that unanimity on this dossier will not be achieved, which is why there are moves by some member states to seek the introduction of an FTT through an enhanced co-operation procedure, to which I will return in a moment.
The Government fully believe—and perhaps in this, at least, I am in line with the noble Lords, Lord Monks and Lord Davies—that banks should make a fair contribution in respect of the potential risks they pose to the UK financial system and the wider economy. In his first Budget, the Chancellor introduced a bank levy with effect from 1 January 2012 that is designed to raise £2.5 billion each year. The UK has no objection to financial transaction taxes in principle. We have one in the shape of stamp duty, to which my noble friend Lady Randerson referred. We continue to be engaged with international partners on this issue. We would consider any proposal before forming a judgment. However, we think it is unwise to institute any FTT unless it is done globally due, as the noble Lords, Lord Hannay and Lord Davies, said, to the risk of activity relocating to jurisdictions not applying the tax, but it was clear from discussions at G20 meetings last year that the necessary international consensus does not currently exist.
The noble Lord, Lord Harrison, explored the impact on the UK of a euro area-only FTT. As I think I have said, no proposal for a euro area FTT has been tabled, but we are aware that France, Germany and Austria have outlined their support for using enhanced co-operation. Before taking a firm view, we would need to see the detail of any proposal, including its scope and what the revenues would be used for, so the Government continue to discuss this through the relevant EU fora. FTTs have been on the agenda at recent ECOFIN and European Council meetings. The UK has taken a full and proactive part in discussions, and yesterday the Financial Secretary affirmed the Government’s opposition at ECOFIN. Specifically to the noble Lord, Lord Kerr, I say, yes, we will continue to engage in a reasonable way. Nine or more member states can submit a proposal for enhanced co-operation to the Commission. We cannot assess how much the UK would be affected until we see what any proposals are. It is important, as ever, for us to be involved and to engage with the process to ensure that we are not disadvantaged.
The noble Lord, Lord Hannay, asked why the Government were so confident that there would be no negative impact on the UK and the noble Lord, Lord Monks, asked a similar question. The Government accept that a euro area FTT would impact the UK economy but, as I have said, no proposal has been tabled so we really cannot speculate yet on how it would impact on us.
I think it was the noble Lord, Lord Kerr, and it was certainly my noble friend Lord Flight, who asked whether we could be forced to collect a euro area FTT on behalf of other Governments. No, we could not be forced to administer a tax on behalf of another Government. As with any other tax, the UK tax authorities could be asked to assist other EU tax authorities in collecting known tax debts from specific taxpayers.
The noble Lord, Lord Giddens, asked whether such a tax would impact on market volatility or could be used to reduce it. There is no evidence that FTTs effectively reduce market volatility. In fact, a 2011 report from the Institute of Development Studies, reviewing academic studies on FTTs, concludes that they may in fact contribute to market volatility. He also asked about high-frequency trading, which is a very important and complicated area. In general, the evidence is mixed about the impact of algorithmic trading on financial markets; in fact, research identifies both risks and benefits. Early conclusions from the Foresight programme’s project on computer trading suggest that liquidity has improved, transaction costs are lower and market efficiency has not been harmed by computerised trading in regular market conditions. The project has so far found no direct evidence that high-frequency trading has increased volatility. However, the early work identifies various risks to market stability posed by potential positive feedback loops, as they are called. The Foresight programme’s final report is expected in the autumn of this year.
Lord Kerr of Kinlochard
I want to be clear that I have understood the answer that the Minister has just given to the point in paragraph 128 of the report. I drew attention to that and I was supported by the noble Lord, Lord Flight. In paragraph 128, the report says:
“UK financial institutions entering into financial transactions with euro area financial institutions”—
those that were applying the FTT—
“would still be liable for the FTT, which could be collected through EU mutual assistance for the recovery of tax or as a result of the provisions of joint and several liability”.
I recall that the committee took legal advice. That was not simply our view but our view on the best legal advice of the House. Is the Minister saying that that statement is untrue?
Lord De Mauley
No, my Lords, I do not think I was addressing that point but rather than delaying the Committee this evening, I will look into it and write to the noble Lord. It is a complicated area.
Lord Giddens
I would like to disagree, quickly, on high-frequency trading and what the Minister seemed to say about it. There is simply an ongoing debate among economists about how you best model it. I do not think it is at all the case that, as he said, the issue is resolved. It is still a matter of ongoing modelling and economists are reaching different conclusions about it.
Lord De Mauley
I hope that when the noble Lord reads my words, he will not see that I said that anything was resolved. In fact, I said that we are expecting a report this autumn, which is not quite the same thing.
Lord Flight
Could I mention that the noble Lord, Lord Boswell, the chairman of the committee, in fact wrote to the Financial Secretary on 20 June, posing precisely the question that the noble Lord, Lord Kerr, proposed and which I echoed? However, we have had no reply yet.
Lord De Mauley
I think I am aware of that. I apologise; the letter is still working its way through the system and a response will be sent.
I move on to the issue of relocation, on which the noble Lord, Lord Giddens, specifically challenged the concept that a tax, unless applied globally, would force relocation. The noble Lord, Lord Monks, gave a rather graphic example of how such things can happen—but I am being slightly frivolous. The committee’s report, at paragraph 64, itself refers to the experience of Sweden as an illustration of the risk of relocation. Sweden introduced a 0.5% tax on the purchase or sale of shares in 1984. By 1990, 30% of all Swedish equity trading had moved offshore—more than 50% of it had moved to London—and the volume of bond trading had declined by 85%. That is an interesting answer.
The noble Lord, Lord Kerr, asked about our approach to banking union. That is wide of these evening’s debate, but I will ensure that his comments are heard at the Treasury. I think that my noble friend Lord Flight asked whether we would do away with stamp duty.
Lord Flight
There was a commitment at the time of the Conservative Party’s policy considerations a few years ago which proposed to abolish stamp duty—not on property but on transactions—as a tax on savings and pensions.
Lord De Mauley
My Lords, we keep all forms of taxation under review, but compared to the proposed EU FTT, stamp duty is easy and cheap to collect and raises £3 billion a year.
We firmly believe that the financial sector should pay its fair share. That is why we have introduced a permanent bank levy. Our bank levy raises more than the bank levies in France and Germany combined and, as discussed, we already have stamp duty on shares. During these difficult times, the focus should be to deliver growth and jobs. The Commission’s proposal is inconsistent with that objective. It would damage growth and jobs in the UK and the EU; it would risk business relocating outside the UK and Europe; and we therefore continue to be clear in discussions.
I add my sincere thanks to the noble Lord, Lord Harrison, the committee and all noble Lords who have spoken this evening. I am very grateful for the points raised in the debate.
Lord Harrison
My Lords, I am most grateful to the Minister for answering all colleagues who joined the debate this evening. I am particularly grateful to two of my colleagues from Sub-Committee A, the noble Lords, Lord Dear and Lord Flight, for speaking in the gap. It is one of the joys of the House of Lords that no sooner is one professor of economics unavailable then another springs to his place and offers an adumbration of the points I was making about John Maynard Keynes and James Tobin. Therein lies the reason why this interesting examination of the FTT proposed by the Commission fell at the first hurdle, because in each case—that of Keynes and Tobin—a single objective was being attempted, not the suite of five ideas we were offered by the Commission.
Let me bring joy to the heart of my noble friend Lord Giddens and tell him that in our most recent report, published on Monday, Markets in Financial Instruments Directive II, on which I am sure that the Minister is looking forward to answering later, we analyse the question of high-frequency trading and algorithmic trading and make a distinction between the two. I am pleased that the Minister gave us some prior information about the Foresight group, from which we will hear later. The noble Lord, Lord Kerr, made the point that the committee rejected the proposition for FTT. Others may come to the fore which we will examine.
Finally, if noble Lords are interested in this area, they should read the Commission’s impact assessment, which was dreadful in the way that it castigated and condemned the proposals before us. In the mean time, I am particularly grateful to all those who have contributed to a debate to which we will need to return.
House of Lords
Farming Regulation Task Force
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Byford
To ask Her Majesty’s Government what progress they are making on implementing the recommendations from the Farming Regulation Task Force report.
Lord Gardiner of Kimble
My Lords, on behalf of my noble friend Lady Byford, and with her permission, I beg leave to ask the Question standing in her name on the Order Paper. I declare my noble friend’s and my own farming interests on the register.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Taylor of Holbeach)
My Lords, in February, we published our response to the Farming Regulation Task Force recommendations. This set out how we will address each recommendation. We are making good progress on meeting our priority commitments, which include reducing the burden of inspections and paperwork, and we have appointed an independent-led group to hold us to account in delivering them. However, this work cannot be rushed. It is important that standards in the farming industry continue to be maintained.
Lord Gardiner of Kimble
My Lords, on a day when over 1,500 dairy farmers are coming to London because of the crisis in their sector, should not more progress have been made by now on the implementation of the excellent Macdonald report? How can that best be achieved? Does the Minister agree that a culture of partnership and proportionate regulation is far more productive than a regime of excessive regulation?
Lord Taylor of Holbeach
I totally agree with my noble friend. It is a partnership arrangement. We can deregulate only in partnership with the farming industry. The dairy industry is no exception. However, it has a particular problem at this time. At Parliamentary Questions today, my right honourable friend the Prime Minister announced £5 million from the rural economy grant scheme to support innovation in the dairy industry for dairy farmers at this particular time. We understand their concerns and anxieties, and we need to strengthen their position in the marketplace.
Baroness Trumpington
My Lords, will that cover the cost of milk in the retail market? Why do some supermarkets appear to be happy to keep prices as they are while others put prices up? Surely this is the time for some form of regulation about milk prices, particularly in view of the extra costs to dairy farmers in other directions concerning their cattle.
Lord Taylor of Holbeach
I understand my noble friend’s question, but we are talking about deregulation rather than trying to regulate the market. The key thing, if I may say so, is to strengthen the role of the dairy producer in the dairy market, and that is where the Government’s efforts are going. I hope that my noble friend will understand that I want to stick to the principal theme of this Question, which is about deregulation.
Baroness Butler-Sloss
My Lords, will the money which I understand the Prime Minister has been offering get quickly to the farmers? This is extremely urgent at the moment. One of the problems is, of course, that the wet weather means that the cattle are indoors and the food for the winter is being used now.
Lord Taylor of Holbeach
I have to emphasise that this is not direct income support and therefore it is designed to strengthen the productive capacity of the dairy industry. The scheme will be launched in the autumn, so this is not immediate relief and I do not want to mislead the House by pretending that it is. I understand the difficulties that a lot of dairy farmers are facing with the very poor weather that we have had this summer.
Lord Grantchester
My Lords, while Defra has accepted the majority of recommendations that outline the new partnership approach between government and industry, we ignore the far more important matter of relationships in the supply chain between sections of the industry. Today, as we have heard, we see turmoil in the dairy sector. Surely regulation must have the objective of improving the workings of the industry. Regulatory proposals must make a difference to those on the ground. How will the Minister and his department measure and evaluate their success?
Lord Taylor of Holbeach
I hope that we can measure success by having a prosperous and successful agriculture in this country that is capable of expanding its market. There are huge opportunities for our high-quality agricultural products within the European Union and I hope that we can encourage the industry to look in that direction.
Baroness Parminter
My Lords, given the price cuts, which mean that many farmers are losing 4p per litre, can the Minister outline the progress in securing a voluntary code of practice to secure fair milk contracts, which the Government agreed to in their response to the Farming Regulation Task Force?
Lord Taylor of Holbeach
My noble friend is quite right; part of our strategy is to agree a voluntary code of practice with the dairy and the retail industry and to work with them to ensure stability within the market. Having said that, there is no market control or price control; the market is based on voluntary contracts between producers and the industry.
Baroness Farrington of Ribbleton
My Lords, will the Minister ensure that his department takes great care when deregulating agriculture? Does he not recall, as many in this House do, that the changes to regulation in heating food for pigs were one of the factors that were identified as a great risk for foot and mouth disease? Will his department ensure that it never again deregulates at the expense of the consumer?
Lord Taylor of Holbeach
The noble Baroness is quite right to remind us of our responsibility in undertaking this project. I said in my opening response that we need to work with thoroughness to ensure that situations such as she describes do not happen again.
Lord Morris of Aberavon
My Lords, what advice will the Minister give to the thousands of dairy producers who are leaving the industry? When I was a young man working for the farmers there were 6,000 milk producers in Carmarthenshire alone. Now there are probably fewer than 3,000 in the whole of Wales. He talks about strengthening the industry. How will the industry be strengthened, as opposed to the buyers?
Lord Taylor of Holbeach
The fundamental problem is currently that the productive capacity of the dairy herd has greatly increased. Until the industry is capable of expanding its market beyond the liquid milk market, which in itself is fairly inelastic, to use an economic term, we will not actually solve this problem. I hope that the answers that I have given today have given the House an indication of my view that the solution lies in creating new markets for processed milk and the infrastructure to provide that.
British Time Harmonisation
Viscount Montgomery of Alamein
To ask Her Majesty’s Government what plans they have to harmonise British time with that of the United Kingdom’s main European trading partners.
Lord De Mauley
My Lords, the Government have no current plans to harmonise British time with that of the majority of the United Kingdom’s main European trading partners. Nevertheless, following a debate on a Private Member’s Bill in the other place in the previous Session, the Government have commissioned an evidence-scoping study on advancing the clocks by one hour, to inform debate. However, the Government would not propose any change without UK-wide consensus.
Viscount Montgomery of Alamein
My Lords, that is quite interesting as far as it goes. However, has the noble Lord considered the benefit that lighter evenings would have for road safety and recreational activities?
Lord De Mauley
Yes, my Lords. A change of the sort proposed would create lighter evenings during the winter months and could therefore increase the opportunities for sport and outdoor recreation—although of course some people prefer to exercise in the mornings rather than in the evenings. Some research suggests that the adoption of daylight saving could also lead to a reduction in road traffic accidents, resulting in fewer deaths and serious injuries. However, evidence is needed, including evidence concerning the potential psychological effects involved. There are concerns, for example, that the impact of prolonged darker mornings during the winter may potentially see an increase in cases of seasonal affective disorder.
Lord Jopling
My Lords, does the Minister recall that this experiment was tried out around 40 years ago and proved so massively unpopular, not only in Scotland but right across the north of England and elsewhere, that it was terminated and thrown out by a vote in another place? Does he agree that it was a mistake then and it would be a mistake now?
Lord De Mauley
My Lords, there are arguments in both directions. Not only, as my noble friend said, did this country try it in the 1960s and then change back again three years later, but Portugal tried it in the 1990s and changed back again too. These are complex matters. The Prime Minister has said that there needs to be consensus before any change.
Lord Maclennan of Rogart
My Lords, when working on Wall Street I had to clear share offerings in five different time zones within the United States in 24 hours. Does the Minister agree that time zones are more appropriately determined by geography than by commerce?
Lord De Mauley
I think that I would, my Lords. On the subject of trade, it seems likely that there could be benefits for some businesses that trade with European states particularly that are not in our time zone, and indeed with other parts of the world further east. There could also be some losers from the trade perspective. One of our most important EU trading partners, the Republic of Ireland, shares our time zone, of course, so a rigorous analysis of all the overall impacts would be needed before any conclusions could be formed.
The Earl of Erroll
Does the Minister agree that the people who trade with Europe could get up an hour earlier, and that this would spread the load on the transport infrastructure and create less congestion on the trains and the road network? The more that we can spread start times at work, the better it will be. There is a lot of merit in that.
Lord De Mauley
My Lords, the point about that is that people who trade with Europe are already getting up an hour earlier.
Lord Jones of Birmingham
Will the Minister please comment on the fact that everything should be done, in this House and the other place, to ensure that at this time business has every single break to allow us to create jobs and make profit to pay tax? Will he reflect on the fact that, at the end of the day, if we are going to be internationally competitive, we have to be internationally attractive? That would mean that we could get the reward from the infrastructure investment in high-speed rail and in Eurotunnel. For once, let us sink a little bit of nationalism into the better cause of actually making money for the country.
Lord De Mauley
That was a wide-ranging question, my Lords, but I always listen to the noble Lord with great respect and interest.
Lord Young of Norwood Green
My Lords, will the Minister develop his idea on how consensus will be achieved? I reflect on the fact that, in theory, we are in summer time at the moment; perhaps we ought to change its name after the current spate. Seriously, can he give us some indication of the positive impact for business if we made this change? My recollection of the change 40 years ago is not quite that there was such an overwhelming rejection. It might have been less welcome the farther north you went, but it would still have some benefits.
Lord De Mauley
We have already had a bit of a discussion about the effects on trade and I do not think that I have a great deal to add. However, if I detect a sense of hesitancy in the noble Lord about going for a change, I can quote to him what the Prime Minister said:
“I want us to have a united time zone. It's up to those who want to make the change to make the argument to try to convince people right across the country that it's a good thing”.
Baroness Corston
My Lords, I recollect the experiment 40 years ago, which was voted for overwhelmingly in another place as an experiment and then voted against overwhelmingly at the end of it. Bearing in mind what was said just now about industry, will the Minister recall the damaging effect on the construction industry, with late starts in the morning?
Lord De Mauley
Yes, my Lords, I am aware of it. That and many other things would need to be taken into account.
The Duke of Montrose
Does my noble friend agree that there is a great danger of introducing permanent summer time without total agreement? The outstanding example is China, which has imposed a uniform time zone across the whole country, with the net effect that the western end of China has to quote both in Chinese time and in western time. There is a chance of everybody getting totally confused.
Lord De Mauley
My Lords, I am aware of the situation in China; I lived in that part of the world for nine years. Everything that my noble friend said is absolutely right.
Carers: In Sickness and in Health
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Pitkeathley
To ask Her Majesty’s Government how they intend to address the issue of the health of carers in the light of the report In Sickness and in Health, published on 18 June.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, we welcome the report and its focus on important health issues for carers. This echoes the priority that the Government attach to supporting carers to remain physically and mentally well, as set out in the coalition Government’s carers’ strategy, Recognised, Valued and Supported: Next Steps for the Carers Strategy. The department published its draft mandate to the NHS Commissioning Board for consultation on 4 July. It includes an objective about improving the support that carers receive from the NHS.
Baroness Pitkeathley
I thank the Minister for that Answer. In view of the shocking statistics in the report—that more than 80% of carers have found their health, both physical and mental, adversely affected by caring—does the Minister consider that there is perhaps an increasing risk of carers simply ceasing to care and the cost therefore falling on social care services or resulting in increased emergency hospital admissions? How will the announcement that the noble Earl is about to make ensure that the prospects are better for the health of carers and for the continued willingness of families to go on providing the vast majority of social care?
Earl Howe
I shall have to ask the noble Baroness to be patient for a few more minutes regarding the Statement I am about to make. However, I can tell her that the White Paper and the draft Bill will make a reality of our vision for transforming care and support both for carers and for the people they look after. As for the noble Baroness’s first point, she is absolutely right to flag this up as a concern. In the last financial year, we provided funding of almost £1 million to the Royal College of General Practitioners, Carers UK and the Carers Trust to take forward a range of initiatives, of which I am sure she will be aware, to increase awareness in primary healthcare of carers of all ages, including better training for GPs, and also to look at how we can build on that for the future with the medical colleges and nursing organisations and in hospitals and community health services. The NHS Health Check programme could be a very important ingredient in making sure that the health of carers is monitored and taken fully into account.
Baroness Gardner of Parkes
The Minister is aware of the great debt that we all owe to carers, particularly family carers. Can he assure me that respite care for those people, or those for whom they are caring, will be possible and will continue? It makes a very big difference if people can have even a small respite break.
Earl Howe
My noble friend is quite right. My department has allocated an additional £400 million to the NHS over four years, 2011 to 2015, to provide carers with breaks from their caring responsibilities. The 2012-13 NHS operating framework makes it clear that PCTs, local councils and local voluntary organisations should work together on plans to support carers. Those plans have to be published by 30 September at the latest. They must make clear the amount of money to be made available to support carers and separately identify the amount to be made available for carers’ breaks.
Baroness Greengross
My Lords, have the Government developed any plans to support carers after the person for whom they are caring dies? Many carers spend up to 20 years doing the caring job. Once the person for whom they are caring dies, they are stranded. They have no job to go back to. They have lost most of their friends and are totally isolated. They suffer bereavement in a different way from the rest of us and need long-term support. Are there any plans to deal with this problem?
Earl Howe
As ever, the noble Baroness makes a really important point, and it is one that we fully recognise. In our plans to roll out psychological therapies, carers are very much within the scope of our thinking. As the noble Baroness will know, last year we published a four-year plan of action. We are investing around £400 million—the same sum of money that I referred to but additional to the other sum—in talking therapies: the Improving Access to Psychological Therapies programme. I am sure the noble Baroness will be glad to know that that investment is already making marked improvements, and there is a substantial increase in the number of people receiving the benefit of IAPT.
Baroness Barker
My Lords, in view of the Government’s stated intention to increase personalisation, can the Minister tell the House what happens when the expressed wishes and needs of somebody being cared for are in conflict with the expressed wishes and needs of a carer? Whose needs take precedence in that case, and how is the conflict resolved?
Baroness Hollis of Heigham
My Lords, the Minister will be aware that in Grand Committee we are currently discussing the Local Government Finance Bill, which will reduce council tax benefit for a wide range of people, including carers. Given that he is concerned about financial support for carers, will the Minister talk to his colleagues in the DCLG to ensure that the same support which we hope will be extended to disabled people will also be extended to their carers?
The Lord Bishop of Bath and Wells
My Lords, in recognising the purpose of this report in relation to the health of carers, I ask the Government what action they are going to take, particularly with regard to the welfare and health of young people who may not formally be regarded as carers but who nevertheless undertake a vital role.
Earl Howe
The right reverend Prelate refers to an often unseen aspect of caring. My department and the Department for Education are encouraging children’s and adult services to work much more closely together to adopt whole-family approaches to identifying and supporting young carers. We are investing in the identification and sharing of tools, resources and good practice, and we have worked with key stakeholders to develop online training modules on young carers for GPs and school staff in particular.
NHS: Private Finance Initiative Costs
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Harries of Pentregarth
To ask Her Majesty’s Government what steps they are taking to ease the burden of Private Finance Initiative costs falling on healthcare trusts.
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, a lot has been done. All PFI schemes are having their contracts reviewed for potential savings, following a Treasury-led pilot exercise last year. We are providing the seven trusts worst affected by PFI schemes access to a £1.5 billion support fund over a period of 25 years, which will be available from 2012-13 directly from the department. We have worked with another 16 to address their long-term sustainability.
Lord Harries of Pentregarth
I thank the Minister for his reply and I am glad to hear about the support fund. Is it not the case that the contracts at this time of national financial crisis need to be renegotiated in order to bring them more in line with the austerity being suffered by the rest of the nation? Not only are they being required to pay 14% or 15% interest, they are having to pay maintenance charges such as those quoted to me of £500 to put in a new lock and £80 to change a light bulb. As the Minister knows, there are now 20 healthcare trusts responsible for 60 hospitals in serious financial trouble.
Earl Howe
The noble and right reverend Lord is right. We believe that a number of the PFI schemes from the previous Administration were not soundly based in terms of their sustainability. As part of the work that we are doing on the Foundation Trust Pipeline, we have had to work on long-term sustainability solutions to help NHS trusts with PFI schemes, hence the direct financial support that I have referred to.
We have also organised PFI trust forums to disseminate the lessons learnt and to share experiences. We have earmarked resources to support the front line in ways to secure savings and we are currently in negotiation with people who have experience in the NHS and private sector to form a new team to support existing contract managers and, where necessary, to support negotiations with private sector PFI companies.
Baroness Wall of New Barnet
Will the noble Earl agree that in addition to the detriment suffered financially by PFI hospitals, as the noble and right reverend Lord Harries described, they suffer from a stranglehold as regards the movement of services, which means that they have to hold services back? Is not such power to stop the increased movement of services preventing trusts modernising and developing?
Earl Howe
The noble Baroness makes an important point and it is one that I was aware of some years ago when I visited a PFI-funded hospital. She is right; it does sometimes depend on the relationship established between the contractor and the hospital management but many of these contracts do result in exactly the kind of sclerosis that she has described. It is a lesson that we need to learn for future PFI schemes.
Baroness Wheatcroft
Will the Minister tell the House whether the Government have investigated the possibility of clawing back fees from those private sector advisers who helped the previous Administration construct those PFI contracts?
Earl Howe
My Lords, I am not aware that we are doing that particular thing, although I understand my noble friend’s concern. There are contracts in place which are legally binding. Nevertheless, within the framework of those contracts there is often scope for looking creatively and flexibly at their provisions. We are endeavouring to do this in order to help the trusts work their way through their problems.
Lord Warner
My Lords, what role is the Treasury playing in trying to mitigate the effects of some of those PFI contracts, given the part that it played in particular at its official level in agreeing and signing them off under the previous Administration? Indeed, many are still in place in the Treasury today.
Earl Howe
My Lords, the Treasury has been very helpful in advising my department on the kinds of flexibility that we may have in these difficult situations. It has also been helpful in refining the current PFI model so that, as and when we use PFI again, we have a tighter structure which strikes a better balance between risk and reward to the private sector.
Baroness Jolly
My Lords, many community health schemes were funded using the LIFT programme. What is the Government’s view of their affordability now?
Earl Howe
My Lords, LIFT is one tool that we have in financing capital schemes in the community, many of which have been successful. Such schemes promote integrated services, which I know my noble friend will welcome. All LIFT schemes have been and will be assessed for affordability and value for money. It is not a universal prescription by any means, but we look constructively at LIFT as one way of delivering capital schemes.
Lord Hunt of Kings Heath
My Lords, I refer noble Lords to my health interests in the register. Will the Minister confirm that, under PFI, more than 100 new hospitals were built by the previous Administration? Will he also confirm that the annual expenditure on those schemes is less than 1%? In fact, does he agree that the real financial problem of the NHS is the £20 billion that his Government are taking out of it in a four-year period?
Earl Howe
We are not taking £20 billion out of the NHS; we are redeploying an increasing budget so that we get better value for money for the taxpayer. I say in answer to the noble Lord’s first point, which I think was more serious than his second, that we have confirmed that we remain committed to public/private partnerships. We think that they can continue to play an important role in delivering the country’s future infrastructure. However, it must be on the right basis, with tighter conditions attached.
National Minimum Wage (Amendment) Regulations 2012
Lord De Mauley
That the draft order and regulations be referred to a Grand Committee.
Groceries Code Adjudicator Bill [HL]
Lord De Mauley
That the amendments for the Report stage be marshalled and considered in following order:
Clause 1, Schedule 1, Clauses 2 to 4, Schedule 2, Clauses 5 to 9, Schedule 3, Clauses 10 to 26.
Care and Support
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State, Department of Health (Earl Howe)
My Lords, with the leave of the House, I shall now repeat a Statement made earlier in another place by my right honourable friend the Secretary of State for Health on the care and support White Paper, the draft Bill and the progress report on funding reform for social care. The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement on the future of care and support for adults in England. The coalition programme said that reform is needed urgently. We inherited a system that too often lets people down and is unfair, a system which was complex and confusing and which responded to a crisis but too rarely prevented it.
For many years, people have called for a system fitted around the needs of care users, not the preferences of the service—one that puts people at the heart of the service and delivers high-quality care with dignity and respect. We knew two years ago that we had to offer urgent support to social care. In the spending review 2010, we provided an additional £7.2 billion for social care over the course of this Parliament, including nearly £3 billion from the NHS to deliver more integrated care. This gives the current system resource backing, but not reform. We need also to build a better service for the long term.
The White Paper I am publishing today represents the greatest transformation of the system since 1948. The practical effect will be to give service users, their carers and their families more peace of mind. Services will be organised around each individual’s care and support needs, their goals and aspirations. Intervention will be earlier, promoting independence and well-being.
The White Paper will support people to remain active in their own communities, connected to their families, friends and support networks. We shall invest an additional £200 million over five years in the development of specialised housing for older and disabled people, so that people can stay independent in their own homes for as long as possible.
The role of carers is critical, so we will transform how the system views and treats carers. We will extend rights for carers to have an assessment and for the first time provide a clear entitlement to the support they need to maintain their own health and well-being.
The measures in the White Paper will make it easier for people to understand how care and support services work, and what their entitlements and responsibilities are. To give people greater consistency of access, we will introduce a national minimum eligibility threshold, as the Dilnot commission suggested. We will require councils to start supporting people as soon as they move into a new area, so that it is easier for people to choose to move home to be nearer to their relatives. Local authorities will be under a duty to ensure continuity of care and that care users are able to take their assessments with them if they move area.
We will establish a single website to provide clear and reliable information about all care and support services for self-funders and local authority-supported users and carers. As well as these improvements to national information, we will invest £32.5 million to ensure that there is better information about the range of local care and support services available in each area.
We want people to be confident that the care and support they receive is delivered by a compassionate and caring workforce. We will place dignity and respect for care users at the heart of a new code of conduct and minimum training standards for care workers. Alongside the new minimum standards, we will train more care workers, with 50,000 more apprenticeships by 2017.
A key requirement is for people to be confident that they will be treated with dignity and respect and that providers deliver high-quality care at all times. We will rule out the crude practice known as “contracting by the minute”, which can so undermine people’s dignity and choice. We should contract for quality and service, not by the clock. We will call on local Healthwatch organisations to make active use of their power of entry, allowing them to visit care services in their local area and make recommendations to the providers and local authority commissioners.
People should also be entitled to expect that services will be maintained if a provider fails. Working with local government and the care sector, we successfully handled the consequences of the Southern Cross crisis, but we also learnt lessons. So we will consult on how we can anticipate and act to ensure continuity of care if a provider goes out of business. Care itself, not the provider of care, is the most important factor.
A key theme of the White Paper is that those receiving care and support know what is best for them. It is right that they must be in control of their care and support. We will make sure that everyone is entitled to a personal budget, so they can be in control of their own care. We will offer all who want it a personal budget and, by 2015, a legal right to request this as a direct payment.
To make it easier for people to get the care they want, we will ensure that they have better access to independent advice. We will make it easier for people to see whether a care provider is good or not, so that they can make real choices through an online quality profile for each provider. We will work with a range of organisations to develop comparison websites so that people can give feedback and compare the quality of care for themselves.
Integrated care is important for everyone, regardless of age or the reason they need care and support. However, getting integration right is particularly important for people when they may be moving from one service to another. That is why we are transferring an additional £100 million in 2013-14 and £200 million in 2014-15, beyond previous plans, from the NHS to social care, to support social care services that benefit people’s health and well-being, and promote better integrated care.
The White Paper will help people get better joined-up care at key points in their lives. We will legislate to give adult social care services a power to assess young people under the age of 18 and we will ensure protection so that no young person goes without care while waiting for adult support to start.
We want people to receive the best possible care at the end of their lives, including a choice over where they die. The palliative care funding review recommended that all health and social care should be funded by the state once someone reaches the end of life and are entered onto the end-of-life care locality register. We think that there is much merit in this and will be using the eight palliative care funding pilot sites to collect the data and experience that we need to assess the proposal.
Alongside the White Paper, I am today publishing the draft care and support Bill. Many of the White Paper reforms need new legislation to make them work and the draft Bill is a major reform in its own right. The law for adult social care is complex and outdated. All those involved know how it has made the system harder to work in. The draft Bill sets out a single, modern statute for adult care and support. It brings together and simplifies provisions from at least a dozen Acts of Parliament, reflecting the recommendations of the Law Commission. It builds the law around the well-being, needs and outcomes of real people—clear principles, clearly set out in law.
I am also today publishing a progress report on funding reform. In July 2010, I asked Andrew Dilnot to review the funding of the system of care and support in England. I can confirm today the Government’s support for the principles of the Dilnot commission’s report as the right basis for any new funding model; that is, financial protection through capped costs and an extended means test.
It would, as Andrew Dilnot himself said, enable people to plan and prepare, so that they are not so vulnerable to the arbitrary impact of catastrophic care costs. The progress report sets out a detailed analysis of this funding model, giving us a better basis for making decisions about how these changes can be funded. Of course, any proposal which includes extra public spending needs to be considered alongside other spending priorities, which include the demographic pressures on the social care service itself. The right, the necessary, place to do this is at the next spending review. Our talks with the Labour Party were constructive, but no plan for funding Dilnot was agreed, or, indeed, proposed by either side.
A decision at the next spending review will allow time for continuing discussions with stakeholders and between the parties, and we can undertake open engagement on detailed implementation issues and options. These discussions will include the level of the cap, whether a voluntary or opt-in approach is a viable option in addition to the universal options and whether legislative provision is required.
However, as the report makes clear, we are also taking definitive steps now by accepting a number of the Dilnot commission’s recommendations. Most notably, we will introduce a universal deferred payments scheme. This will mean that no one will be forced to sell their home in their lifetime to pay for care. Provisions for this are included in the draft Bill.
The White Paper, the draft care and support Bill and the progress report on funding together set out our commitment to a modern system of care and support—one designed around the needs of individual people; one with dignity and respect at its heart; and one that brings care and support into the 21st century.
These reforms are the product of immensely helpful reviews by the Law Commission and the Dilnot commission and come from a positive and wide-ranging engagement with the care sector and the public, helping us to design the kind of care services and support that all of us would like to see for ourselves and our families. We are determined to secure these reforms—to achieve in this Parliament that which our predecessors failed to achieve in over 13 years. I intend to continue and develop this open co-operative approach to developing these reforms. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Baroness Wheeler
My Lords, I thank the noble Earl for the Statement. I am sure the House will agree that we have all waited a long time for this spring White Paper, and now the Government have finally managed to publish it by the skin of their teeth, with just 10 days to go before the Recess. Notwithstanding what is actually in it, we can at least take comfort that the White Paper’s publication at last fires the starter gun for the nationwide debate on the future funding of social care that we on these Benches and key stakeholders in the public, voluntary and independent provider sectors, as well as care professionals and service users—many of them forming part of the excellent Care and Support Alliance—have all been calling for.
The stakeholders know only too well the scale of the problems that have to be faced and the solutions that are needed on the full package of social care law and current and future funding. However, there is also an urgent need for social care to be pushed to the forefront of public debate and understanding as one of the biggest challenges facing Britain today. This public debate could and should have started much earlier if the Government’s stated momentum behind pushing the Dilnot commission into doing its work in six months had been maintained, and if the Government had put more energy and commitment into the cross-party talks and had seriously tried to address the critical funding issues. After all the delays, prevarication and speculation, those of us who were hoping against hope for some sense of an overall strategy, vision and action in the White Paper for dealing with the current and growing crisis in social care are sadly disappointed and let down. There is no vision of how a reformed system will work in practice or how it is to be sustained in the future in the face of growing demand and need.
At the minimum, we hoped for an outline programme and process for making key decisions on funding, including timescales and milestones for moving forward on addressing the full package of reforms that are needed. Instead, we have further consultation on issues, many of which have already been consulted on and on which there is already broad consensus. We have the failure to address the funding crisis, the prospect of the proposed care and support Bill not coming into effect until probably April 2015, and any implementation of the Dilnot options effectively long-grassed until after the next election.
The White Paper shows that the Government are completely out of touch with the scale and urgency of the care crisis. Across the country, elderly and disabled people are failing to qualify for basic personal care in their homes, or their package of care has been cut back to home visits of less than 15 minutes, or they have faced home care charges rising by 11% in some local authorities. We know, too, that the cost of residential home care is rising substantially in excess of what local authorities can pay, and people are spending their lifelong savings to pay for long-term care. The funding issues need to be faced and addressed now.
Of course we welcome the implementation of a large number of the much-needed changes to social care law proposed in the Law Commission’s excellent report of 2010. Social care law is in urgent need of reform, which is why the Labour Government set up the review in 2008. We welcome the proposals and consultation on reforming and simplifying the legal framework and ensuring that patient-centred services are better fitted to people’s lives and fit in with their need for choice and control. We strongly support new laws which help to make clear what people are and are not entitled to, and which help them to plan for the future.
In the time available, I have managed only a quick look through the documents, but it is worth pointing out to the House that an overwhelming number of the proposals were contained in Labour’s own White Paper on care, published before the last general election. Naturally, we welcome their reappearance, but it begs the question: why it has taken the Government nearly two years to regurgitate our proposals into their new draft Bill?
I stress that we also support proposals in the White Paper that take forward Labour’s personalisation of care agenda—again, as set out in our care White Paper. We support legislation to ensure the portability of social care packages, and we of course support proposals to extend carers’ respite breaks and their legal entitlements, as well as the extension of key information and advice services which we introduced through our landmark National Carers Strategy.
However, from these Benches we have repeatedly stressed that, unless these new social care laws are reformed in the context of also addressing the current and future funding problems, they will be ineffective and inoperable, and will lead to even greater unmet demand and suffering. Local authorities facing £1 billion of cuts will just not be able to afford to respond to laws designed to make care provision and eligibility consistent and more accessible across the country.
It is deeply disappointing and frustrating that the White Paper does not take the key step of recognising that there is not enough money in the system now. Not only is Dilnot implementation pushed into a further consultation and engagement process—despite the much-hyped promises of accepting Dilnot “in principle”—but the proposed transfer of funds of £300 million from the NHS to social care over a two-year period in 2013 and 2014 continues to support this fallacy: in other words, that it is all down to local authorities needing to better manage their finances and get their priorities right. Those councils are desperate for a new settlement on funding for social care, but the White Paper holds out little prospect of this happening and provides no answers to the funding crisis currently engulfing them. I cannot see any reference in the White Paper to how the Government propose to help councils to fund what seems to be their flagship proposal: to provide loans to older people so that their care costs can be paid for after they die. I should be grateful if the Minister could flesh out any of the details on this.
On long-term funding, the Alzheimer’s Society best summed it up when it said that accepting a cap on the funding contribution “in principle” is just an “empty promise”. People want to know what the contribution cap will be, when it will come in and how it will be funded. It is downright cruel to dangle in front of people the prospect of raising the savings threshold from £23,250 to £100,000 without a positive commitment and date for implementation when those people are currently struggling to self-fund their care, or part of it, and are seeing their life savings disappear now.
Labour has always been in earnest about the need for meaningful cross-party talks and entered into these last year in good faith. We meant business when we made the offer last year, and we mean it now. I ask the Minister whether his understanding of meaningful cross-party talks involves joint, two-way discussions on strategy, policy and options, and regular meetings, discussions and negotiations to reach a consensus, or whether it means irregular meetings, the last one of which was cancelled by the Government, who instead offered the Opposition a briefing just a few days before the White Paper was due to be published on what they intended to do—or not do, in this case. We know that that is what happened, although I welcome the behind-the-scenes signs over the past couple of days that the Government regret not putting more effort into making cross-party progress. For our part, Andy Burnham has pledged that if the Government offer a genuine, two-way discussion on the funding of care, with honesty about existing pressures and the difficult options, Labour will play its part.
I ask the Minister the following further questions. First, why was it not possible to reallocate to pay for social care a major part of this year’s £1.7 billion NHS underspend, which was clawed back by the Treasury? Would this not at least have been a start, providing real money behind the White Paper’s reform proposals? Secondly, will the Government be involving Andrew Dilnot himself in the implementation discussions once the consultation is completed? Does the Minister recognise that Mr Dilnot’s involvement would go some way towards building confidence among key stakeholders that the whole issue has not been long-grassed? Thirdly, can the Minister tell the House when the Government will publish an impact assessment of the cost of the overall changes proposed, and how they plan to implement the changes with no extra money and council budgets being slashed? Finally, in today’s Daily Telegraph NHS managers are warning that the NHS is at risk of collapse as cuts to social care budgets are leading to a huge rise in the number of admissions to hospital of older people who could be treated at home but cannot afford to pay for care. How do the Government propose to deal with this, and how will the White Paper proposals help to alleviate this alarming trend?
The White Paper reflects a positive sign of consensus on many of the key issues facing social care today, and some good promises about how social care should change. However, until these promises are backed by a recognition of the current scale of the crisis and proposals on how Dilnot can be implemented in the future—with firm commitments, timescales and milestones—schemes such as deferred payments and loans and pilots for end-of-life care can in effect be only interim, stopgap measures. They do not address the overall need for fairness, transparency, more resources across the whole system and long-term sustainability. Implementation of Dilnot must be the basis for that.
As a carer myself, I hope that the House will forgive me if I end by quoting the carer husband of a woman suffering from dementia who was movingly interviewed on Radio 4 this morning about his life as a 24-hour carer and the impact of social care cuts. He said:
“It’s the unknown that really gets to me … in the back of my mind is the constant feeling of uncertainty”.
In-principle decisions for implementation at some unspecified date in the future are no solution and offer no comfort, solace or relief to people who need help, care and support today.
The Government promised that they would legislate on a new legal and financial framework for social care in this parliamentary Session. The noble Earl promised that the Government would not shy away from or duck the funding issues—but I am afraid that that is exactly what they have done.
Earl Howe
My Lords, I thank the noble Baroness for her comments and questions. While she levelled a number of criticisms at the Government, I was glad to hear her positive comments—although I would characterise her speech as a glass half empty speech rather than the opposite. Nevertheless, I am grateful to her for recognising that this package of proposals represents progress. In many areas it is progress that her party and mine fully sign up to. However, she said at the start of her remarks that there was a lack of vision and strategy in these proposals. I was sorry about that because I do not share her view. The White Paper and the draft care and support Bill undoubtedly form the most comprehensive overhaul of care and support since 1948. They respond directly to the concerns that people have raised with us time and again.
I hope that when the noble Baroness reads the White Paper she will agree that the whole flavour is about creating a system that keeps people independent and well. There are many major commitments in the White Paper, including more support and equality for carers, housing investment, better information and personal budgets. Those things all combine to set out a new vision that tailors care around people’s well-being, rather than expecting people to conform to a system, which is what we have at the moment.
The noble Baroness criticised the Government for delay. I gently point out that more than 13 years ago there was a royal commission chaired by the noble Lord, Lord Sutherland. The previous Administration had 13 years to respond to it but did not do so. Nevertheless, progress was made in certain areas. We have gladly picked up on some of the areas of progress that the previous Administration put in place, not least in the area of carers. However, it is not true that since the present Government came to office we have seen no action. One of the first decisions that we made was to protect care and support in the spending review through an additional £7.2 billion over four years. That was an explicit recognition of the strains that local authorities were expected to come under. I announced through the Statement today further funding in recognition of those strains at local level.
It is true that some of the changes will take longer than others, but progress will be made within 12 months. It will include introducing quality profiles for every provider so that people have comparative information on the quality of different organisations, investing £200 million over the next five years to develop specialised housing, publishing a code of conduct and minimum training standards for care workers, and launching a new national information website at nhs.uk. I hope that the noble Baroness will welcome those innovations.
On the deferred payment scheme, there is a lot of discussion to be had. Our proposals are that deferred payments will be available in all local authorities. Currently they are available in some but not all. As the noble Baroness knows, the social care means test requires people to use their housing wealth when they go into residential care. We are announcing that we will allow people to pay later, giving them more time to sell their home at their convenience or even for it to be sold after their death. We are not confirming now exactly who will be eligible or the rate of interest that will be attached, but we have said we will consult on these issues with the care sector.
As regards the cross-party talks, I should like to put it on the record that we fully intend to continue to engage with Her Majesty’s Opposition and with the sector on options for implementing the Dilnot model as well as with Mr Dilnot himself. At this stage, we are open-minded as to what form that engagement should take. As has been the case to date, discussions on funding reform will be led by the Department of Health on behalf of wider government. We wish to continue what I believe has been a very constructive series of discussions, with the Opposition in particular. The disagreements and criticisms that blew up over the weekend were regrettable and we wish to draw a line under that. I hope the noble Baroness will appreciate from the correspondence that has flowed between our two lead spokesmen that that is indeed the intent.
The noble Baroness is not correct as regards the NHS underspend. It was not lost to the NHS. The overall year-end surplus of £1.6 billion for PCTs and SHAs last year will be carried forward and made available in 2012-13. That represents a 3% increase in funding available to the NHS relative to last year. As I mentioned earlier, we are allocating further funding on top of the £7.2 billion that we previously announced in support of local authorities.
There are many questions to answer in this package. I do not hide from that, but it is right that we take time to work through this, including engaging with all stakeholders to ensure that any reform is sustainable and fair.
Baroness Northover
My Lords, before we get into the session where all Peers can contribute, I remind noble Lords that the Companion states that ministerial Statements are made for the information of the House and that, although brief comments and questions are allowed, Statements should not be made the occasion for immediate debate. Perhaps I may emphasise brevity and therefore the courtesy of allowing as many noble Lords as possible to contribute.
Baroness Campbell of Surbiton
My Lords, I must briefly declare an interest. I am a 24-hour social care service user, and long may it last. Temporarily ignoring the social care funding elephant in the room, I feel there is much to welcome in this White Paper, which concentrates on independent living, empowerment strategies, and supporting people to stay at home and contribute to their communities instead of the current safety-net crisis interventions. That has been my life’s work.
I am also pleased to see that the Government are obviously keen to incorporate my Private Member’s Bill on social care portability. Naturally, I must ask the Minister whether the Government intend portability to offer an “equivalence of support” outcome so that disabled people feel confident that they can continue with their chosen occupations, responsibilities and lifestyle wherever they go, because this will put an end to the postcode lottery.
Earl Howe
My Lords, I pay tribute to the noble Baroness for all the work that she has done in this area, particularly on portability. This is a good news story. We are committing in the White Paper to breaking down the major barrier to portability: that people’s care is disrupted when they move local authority area. The draft Bill contains a clause that puts a duty on to local authorities to ensure that when a person—and their carer, if applicable—moves local authority area, their needs continue to be met until they are reassessed by that local authority. The clause also sets out that local authorities are under a duty to share information, and the receiving local authority has the power to assess the individual—and carer, if applicable—before they move. This seeks to ensure that the move is as seamless as possible. I do not doubt that this is an area that we shall debate over the coming months.
Lord Lipsey
My Lords, I emphasise the extraordinary importance of all-party consensus on this matter. Without that, older people and their families will not know what to plan for in the long term, and indeed insurance companies that could help out will not be able to design policies to help them do so. Will the noble Earl deplore the leaking of the documents in front of us this afternoon? The leaks greatly exaggerated the benefits that the actual policies announced will deliver, and have derailed the all-party talks. These policies should have been floated with the Opposition before they reached the public domain. I am not saying that he did it, but will he apologise as a way of getting those all-party talks back on an even footing?
Earl Howe
My Lords, I fully agree with the noble Lord about the need for cross-party consensus. If we are to have a long-term sustainable solution for the funding of social care, we must have that political consensus. Indeed, that was the intent behind the cross-party talks. I very much regret the leaks. These were not our doing, but they did create an impression of bad faith. Again, I regret that. No bad faith was intended from our quarter or indeed from any other quarter in government. I think there was an element of misunderstanding about our intentions, but I agree with the noble Lord that the cross-party bonhomie has been disrupted. We very much wish to put the whole process back on track, and I hope that his party will respond accordingly.
Baroness Jolly
My Lords, I am a glass half-full sort of person, so I heartily welcome the White Paper and the draft Bill on care and support, and note the progress report on funding reform. We are certainly looking forward to pre-legislative scrutiny. Can the Minister give the House some indication of the timetable and the process? Will he also tell the House what the Government’s view is on including enabling clauses in the draft Bill to allow the Dilnot-based scheme to be implemented?
Earl Howe
My Lords, my provisional understanding —and I stress that—is that pre-legislative scrutiny will begin in the autumn, probably in November. Between now and then, plans will be put in place to decide the composition of the pre-legislative scrutiny committee so that the process will conclude by the end of this Session of Parliament. In principle, there is no reason why enabling clauses should not be inserted into the legislation. As I have emphasised before, it would be preferable if they were clauses on which we could all agree.
Lord Howard of Lympne
My Lords, I declare an interest as chairman of Help the Hospices. I welcome both the extra money that the Government are making available for the palliative care pilot projects and the Government’s acceptance in principle that end of life care should be free at the point of delivery. Can my noble friend give the House some indication of the timetable by which this very desirable objective might be achieved?
Earl Howe
My Lords, the short answer to my noble friend is that we need to look in detail at the funding implications. At this stage all I can say is that our intent is to introduce this at the earliest opportunity. However, I am afraid I have not been given the green light to give him chapter and verse at this stage. As soon as I am able to do that, I will gladly do so.
Lord Laming
My Lords, may I ask the Minister two quick questions about domiciliary care? First, do the Government accept that during the past decade, there has been a marked deterioration in the availability and quality of community care? It has deteriorated so much that, as the Minister said, it now often seems to be measured in minutes, depriving very vulnerable people of dignity both in feeding and in toileting. Secondly, if that is the case, what mechanism are the Government going to employ across 150 local authorities to make sure that they deliver the standard of domiciliary care about which he spoke?
Earl Howe
The noble Lord is quite right; there is huge concern about the sometimes tick-box attitude to domiciliary care, very often resulting in nugatory time spent by care workers with those they look after, which one is tempted to say is hardly worth while in some cases. We are very aware of this. Part of the answer lies in our plans for personal budgets, which should give service users much greater scope to define what they want and what their needs are. The service should then work around those needs and requirements. However, we are also talking about the workforce here.
We are clear that the minimum standards for health support workers and adult social care workers in England that are being developed by Skills for Care and Skills for Health will set a clear national benchmark for the training of support workers and their conduct when delivering care. We expect that the standards produced will inform proposals for a voluntary register for adult social care workers in England, which could be in place by next year. This will allow unregulated workers to demonstrate that they meet a set of minimum standards and are committed to a code of conduct.
All those things combined should move us away from the kind of culture that in some places, although not in all, is degrading the quality of care that is delivered.
Lord Warner
My Lords, I congratulate the Minister, and pass these congratulations on to his right honourable friend, on making progress on the Dilnot commission recommendations, as well as on the other measures in the White Paper. I declare my interest as a member of the Dilnot commission.
I also congratulate the Minister and his right honourable friend on extracting his documents from the dead hand of the Treasury. In that connection, I ask him to confirm two things. First, it will, I believe, be impossible to deliver a deferred payment scheme by April 2015 without a clear decision on the cap that will be required to underpin it, and the extended means test. Can he confirm that decisions will have to be taken on these two issues in order for a deferred payment scheme to go ahead?
Secondly, his right honourable friend rightly said that he was in the market for open cross-party discussions on the way forward. Does this mean that the Treasury will participate in these and will not blackball politically contentious proposals that may be found for funding and sustaining the implementation of Dilnot, even where those proposals may recoup some money from the very population groups that are going to benefit from a better adult social care system?
Earl Howe
First, I thank the noble Lord for all that he did as a member of the triumvirate of the Dilnot commission. There is no doubt that we owe him and his fellow commissioners an enormous debt. I am grateful to him for his kind remarks about this set of announcements. We propose to introduce deferred payment without the cap necessarily being in place. We believe that that can be done. I understand the direction from which the noble Lord comes, but a system that obliges local authorities to offer deferred payment where certain eligibility criteria—yet to be defined, admittedly—are met is deliverable in the absence of a cap. That is not to say that we do not wish to work hard to define what that cap should be.
On the noble Lord’s second question about the dead hand of the Treasury, I would not characterise my esteemed colleagues in that venerable department as dead hands. However, I acknowledge his central point about affordability. That is why we have felt it necessary to defer final decisions on how the funding of the Dilnot principles will be worked through until the next spending review. That inevitably means that my colleagues in the Treasury will have a direct interest in the result; it would be strange were it otherwise. Nevertheless, that does not preclude creative and constructive discussions between our two parties.
Baroness Browning
I welcome my noble friend’s Statement, but does he accept that there is still a significant challenge in providing appropriate packages of care, particularly for elderly people, on discharge from hospital following an emergency admission? This relates to the type of care required when there is a significant change in needs and people are unable to return to their home, or sometimes even to a residential home. There is a transition, but some of those people could make more progress in their recovery. I am thinking of stroke patients in particular. I hope the Minister will be able to reassure me that these changes will include looking again at this group.
Earl Howe
I agree with my noble friend. Only last week, I talked to people at the Norwich and Norfolk University Hospital who emphasised that very point. Very often, the absence of packages of care that are tailored to the needs of the individual results in delayed discharge from hospital and often a deterioration in the condition of the patient. That helps no one. There is therefore a burning need for commissioners, providers and those providing care in the community to work together to define appropriate packages. I fully agree with my noble friend that those who have had strokes are particularly in need of the kind of packages that can best assist them when they move back into their own homes. This is an area that is crying out for further work. We hope that it will flow from the creation of clinical commissioning groups and health and well-being boards at a local level.
Lord Sutherland of Houndwood
My Lords, I am very happy to welcome the ministerial Statement as one of the first distant tweets of a swallow, perhaps announcing some hope of spring. However, as we all know this year, summer does not inevitably follow spring. I do not take the view that the glass is half-empty; I take the view that it is currently about 20% full. The real question is about how you put the other 80% in. That has to do with money—there are no two ways about it. Until that is confronted, I will not be convinced that the Government or—even more so—the Treasury understand the scale of the issues facing us. Demography has been announcing them for 15 or 20 years and they will get more and more urgent. There is a requirement not just for an incremental change but for a reassessment of priorities, as the Statement suggested.
One suggestion in the Statement is the importance of the integration of care. I thoroughly agree with that but have a question for the Minister. Can he reassure us that it will at least be considered that the integration of care be followed by the integration of budgets between health and social care? Many of us believe that that is one element that has to be put in place. I would not want it ruled out as an issue.
Earl Howe
I am grateful to the noble Lord and thank him for all his work in this area over the years. However, I am sorry that he regards the glass as only being 20% full. I would regard it as much more full than that, bearing in mind the contents of the White Paper that I outlined earlier. No, we are under no illusions about the scale of the issue, its importance or the need to get it right if the NHS is not to bear the brunt of serious strain within social care. It is an urgent matter. We are determined to fill the glass to its fullest at the earliest opportunity.
On integration, as I am sure the noble Lord knows, we have options open to us already to ensure that budgets can be pooled at a local level. This is happening in many areas. It is a very useful device to enable the NHS and social care to share responsibility for delivering care to patients and service users, who after all do not mind very much whether the service is delivered by the NHS or by social care as long as the right service is delivered. We need to work much harder on that area, too.
Baroness Bakewell
Can I draw the Minister’s attention to the characteristics of the very old? Time speeds up when you are old. Christmas comes round more regularly and the years pass faster. Coupled with that is increased anxiety about what those years will bring. The timescale of these matters that concern funding have a particular poignancy for people who have only a few years of life left. I urge the Minister to persuade his colleagues that the nature of defining these sums of money will give a lot of ageing people who are worried peace of mind—a phrase used in the White Paper.
Earl Howe
I pay tribute to the noble Baroness for all her work on behalf of the elderly. Of course she is right in her perception of the way that the elderly view time passing. We have yet to sort out the precise funding mechanism for Dilnot. However, in the mean time, as I have emphasised, we are channelling significant extra funds to local authorities to tide them over. We believe that that will be of help in the short term. Also, the deferred payment scheme should deliver considerable peace of mind to many elderly people who find that they need to move into residential care and, for whatever reason, do not wish to sell their houses. I hope that that proposal will find favour with her.
Justice and Security Bill [HL]
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Butler of Brockwell
Lord Butler of Brockwell
My Lords, I beg to move Amendment 35 and will speak to Amendment 38, standing in the names of my colleague the noble Marquess, Lord Lothian, and myself, and to which the noble Baroness, Lady Smith, and the noble Lord, Lord Beecham, have added their names. These two amendments invite the Government to look again at the drafting of Clause 3(3) and (7).
Subsection (3) says that the committee must send a draft of its report to the Government. This may reflect the old, rather patriarchal attitude, if I may describe it as such, that the Government took towards the committee. The committee submits its report; it is independent. It does not submit a draft report to the Prime Minister; the report is the report is the report. It submits its report and then the Prime Minister may insist on redactions: that is how the procedure works, so the reference to a draft report is technically incorrect, and impugns the independence of the committee.
Subsection (7) refers to matters that would be excluded from the ISC’s report to Parliament when it reports to the Prime Minister. Again, the words “the ISC considers” that they would be excluded under subsection (4) are necessary because, at the time the committee makes its report to the Prime Minister, he has not seen the report; he cannot decide what would be redacted in a report submitted to Parliament. So, again, the committee would submit a full report to the Prime Minister and when it comes to excluding things it would have to be the ISC which considers it, rather than anybody else.
These are two drafting amendments which would make the position clear.
The Marquess of Lothian
I shall add to what the noble Lord, Lord Butler of Brockwell, has said on these two amendments, to which my name is also attached. On the second one he makes the short point that it is for the committee to decide whether the report should be published to Parliament or to the Prime Minister. He makes it clear that it is only the committee that can make that decision. There is an additional factor, in that until the report is completed, only the committee knows that that report is being drafted, so no decision could be made before the committee had finished drafting its report. That is one reason why it is a necessary amendment.
With respect to the noble Lord, Lord Butler of Brockwell, I think that Amendment 35 is more than a drafting amendment. It is asking to remove subsection (3), the only drafting element of which is the word “draft”. It is an incorrect statement as it stands, because it suggests that the committee submit a report to the Prime Minister which is capable of alteration or amendment—that is the definition of a draft. In fact, it is the opposite that occurs. The report that is made to the Prime Minister can only be changed in respect of inserting asterisks—by redactions where there are matters which should not be seen in the public report submitted to Parliament, but of necessity are in the report that is sent to the Prime Minister. I suggest that, rather than being a drafting amendment, the removal of the subsection is the answer. The reason I say that is because, if the Government accept that this is not a draft, the whole subsection becomes otiose because the following subsection makes it clear that the report goes to the Prime Minister before redactions are made. I hope that, on this occasion, the Minister will feel able to consider very seriously the points we are making in this amendment.
Lord King of Bridgwater
I agree with my noble friend Lord Lothian. I do not have it in front of me, but I do not recall that “draft” ever appeared in the original 1994 Act that set up the Intelligence and Security Committee. For some reason it has crept into the drafting; he is absolutely right. It seems to me that subsection (7) then becomes redundant.
Lord Rosser
My Lords, we support the amendments tabled by the noble Lord, Lord Butler of Brockwell. Frankly, I cannot add anything to the points that have been made in support of them. The wording in the Bill does not do a great deal to show a degree of independence for the Intelligence and Security Committee from the Executive. That independence would be enhanced if the Government accepted the amendments.
Amendment 36 is basically a probing amendment. Its purpose is to seek to change the definition of the basis on which the Prime Minister may redact information from an ISC report. The Bill states that the Prime Minister may do so if the information is,
“prejudicial to the continued discharge of the functions of the Security Service”
and the other organisations mentioned. The amendment would provide that information should not be disclosed in the interests of national security or on the basis that the ISC report contained sensitive information as defined in Schedule 1(4). The reference in Schedule 1(4) to “sensitive information” refers to the basis on which a Minister of the Crown may decide under paragraph (1)(b) or (2)(b) that information should not be disclosed if the Minister considers that it is sensitive information, which is then as defined in Schedule 1(4), or information that, in the interests of national security, should not be disclosed to the Intelligence and Security Committee.
The criterion proposed in the Bill is either the same or basically the same as in the Intelligence Services Act 1994. The reason why this is a probing amendment is to try to find out why it is felt necessary to have what appears to be a fairly wide definition and not in fact to have a definition that would bring it in line with the criteria permitting the Government to veto the disclosure of certain information to the Intelligence and Security Committee, as set out in Schedule 1(4), which defines sensitive information that is referred to in Schedule 1(3)(a) and relates to the circumstances under which a Minister of the Crown may decide that information should not be disclosed.
Why does the definition need to be broader for the reports to Parliament from the Intelligence and Security Committee than it does for the disclosure of information to the Intelligence and Security Committee? It is not clear why there is that difference or indeed what its significance is. What, for example, would my amendment not include that would be included in the wording in the Bill? As I say, that appears to be a wider definition, and I am hopeful that the Minister will be able to explain why there is that difference in definitions and whether, in the Government’s view, what they are proposing in Clause 3(4) is wider than the definition of sensitive information that appears in Schedule 1(4) and relates to the definition that would be applied and that a Minister of the Crown would have to take into consideration if he was going to decline to agree that information should be released to the Intelligence and Security Committee.
In the amendment there is a further addition beyond the sensitive information; namely, that information should not be disclosed in the interests of national security.
Lord Campbell-Savours
My Lords, this amendment should be of great interest to present and former members of the committee because there is a problem in the legislation which they should be well aware of. As I read it, Clause 3(4) is a catch-all, whereby if one cannot block the provision of information to the committee under paragraph 3(4) of Schedule 1, one can block the information under the catch-all provision of it being,
“prejudicial to the continued discharge of the functions”,
of the services. This is a catch-all provision whereby the Prime Minister might want to block certain information which does not necessarily meet the criterion set down under sensitive information in paragraph 4 of Schedule 1. To my mind, the only defence for the committee under such arbitrary arrangements is the extent to which the committee is consulted. Clause 3(4) states:
“The ISC must exclude any matter from any report to Parliament if the Prime Minister, after consultation with the ISC”.
What form would that consultation take in the event that he wished to exercise a veto on the provision of that information under what I call this catch-all provision? I suppose that, in theory, it could be looked at the other way. The Prime Minister might, in certain circumstances, not wish to be tied down to the detailed criterion in the sensitive information provisions of Schedule 1. He might want to release information that was sensitive but would not be prejudicial to the services carrying out their functions. It will be interesting to see what the Minister says in response.
The Marquess of Lothian
Before the noble Lord sits down, I would like to raise a question with him. He has been a member of this committee and I have been on it since 2006. My understanding is that once the report is complete there are matters, such as the amounts of money spent on various parts of the services, which have to be in the report, but which should not be in the published version and therefore are redacted. That is the difference between those two types of information and it is quite right that they are redacted.
I am sure the noble Lord remembers that the process of redaction is that the full report goes to the Prime Minister and comes back with suggestions for redactions. The committee then goes through them with a great deal of care and independence. Certainly, in my recollection, we have never had a redaction without the committee having consented to it.
Lord Campbell-Savours
Yes, but the thrust of the amendment moved by my noble friend Lord Rosser is that for some reason, which I cannot understand and he clearly does not understand either, the Government have picked another set of criteria for refusing to provide information to the committee, instead of simply using the provisions set out under Schedule 1. Again, I shall be interested in the Minister’s response.
Lord Lester of Herne Hill
My Lords, the reason why I am sympathetic to Amendment 36 has already been explained. My difficulty with the Bill as it stands is that its wording is very subjective with regard to the Prime Minister. I like the way in which Amendment 36 seeks to spell out some criteria which are echoed in the Bill itself rather than leaving the matter entirely at large.
When I spoke last time in Committee, I briefly mentioned Humpty Dumpty to the Minister. I am not sure whether he got the import of what I was saying. I was referring to Liversidge v Anderson, the famous case in which the late Lord Atkin referred to Humpty Dumpty. The emergency legislation said, “If the Minister thinks”. The late Lord Atkin said, in dissenting in Liversidge, that that was similar to Lewis Carroll’s Humpty Dumpty. I, on the whole, prefer criteria to be spelt out in the Bill and I like the way in which that has been done in Amendment 36, unless there is some very good reason for the contrary.
The Minister of State, Home Office (Lord Henley)
My Lords, I will deal first with Amendments 35 and 38 standing in the name of the noble Lord, Lord Butler, and my noble friend Lord Lothian, supported by noble Lords on the Front Bench opposite. The noble Lord, Lord Butler, described these amendments as purely drafting amendments. My noble friend, a self-described simple Scottish lawyer, thought that they went beyond that. I take his point in that one of the points of the noble Lord, Lord Butler, is that using “draft” in Clause 3(3) could be seen to impugn the independence of the committee. I give some assurance that we will look at that in due course and whether “draft” is necessary. However, it might be worth my setting out the current arrangements and then the arrangements in the Bill
Under the current reporting arrangements, I think that I can give my noble friend Lord King an assurance that “draft” does not appear in the Intelligence Services Act 1994.
Lord Henley
It does appear in it. Well, I got that wrong. Under the existing Intelligence Services Act, the ISC makes an annual report on the discharge of its functions to the Prime Minister. The Prime Minister lays before each House of Parliament a copy of that report, together with a statement as to whether anything has been excluded from it by the Prime Minister on the grounds of its sensitivity. Under the Bill, the ISC will for the most part report to Parliament but will still be able to report to the Prime Minister on matters that would be excluded from any report. It would remain for the Prime Minister to decide whether grounds exist for excluding matters from the report after, of course, consulting. That is the important thing: the consultation with the ISC. That will continue to happen.
If, as I said, the word “draft” is not appropriate, I am sure that we can make arrangements. I am obviously not a draftsman. One way of doing that would be just to delete subsection (3) from Clause 3. We will have a look at it. We have, as we know, any amount of time because we have a long summer ahead of us with other matters to deal with.
The second amendment in this group of three, Amendment 36, spoken to by the noble Lord, Lord Rosser, changes the criteria—or definition, as the noble Lord, Lord Rosser, put it—whereby the Prime Minister might exclude any matter, if that report without that matter excluded would contain sensitive information as defined in Schedule 1, or information which should not be disclosed in the interests of national security.
The ISC must be able to report candidly to the Prime Minister on sensitive matters. Inevitably, the full contents of its reports cannot always be published because of the nature of the material contained within them. We are all agreed on that; it is quite clear. It follows, therefore, that there must be an ability to redact information before the ISC reports can be published or laid before Parliament. I must make it clear that the test in the Bill is modelled on the one in the 1994 Act. That has worked well and it is well understood by both the committee and by the Government. It has allowed material to be excluded where it should be excluded but it has also allowed the Government and the ISC to ensure that as much of the ISC’s reports that can be published are published. I do not believe that it is overly restrictive but it does cover certain categories of information which would not be covered were the Bill to be amended as is suggested in the noble Lord’s amendment.
The noble Lord, Lord Campbell-Savours, from a sedentary position, and the noble Lord, Lord Rosser, have put this point. They want to know why the criteria are different. If the noble Lord will allow me, I will explain that in due course. There is no need for him to make an intervention as he has already asked that point. The ISC needs to know what can be published and there are two different tests—one for publication and one for disclosure to the ISC. The tests therefore should be different. Tests for withholding from the ISC should be at a much higher threshold.
As both noble Lords will be aware, the functions of the agency are not solely exercisable in the interests of national security. It also has functions exercisable in the interests of economic well-being, United Kingdom fraud protection or prevention of serious crime. For those instances where including a matter in an ISC report to Parliament could cause prejudice to those functions of the agency but not to its functions in relation to national security, the existing Clause 3(4) would give the Prime Minister the power to require that that matter should be excluded from the ISC’s report whereas, unless the information in question fell within the definition of sensitive information under paragraph 4 of Schedule 1, the formulation of the clause proposed by this amendment would not.
With that, the noble Lord’s amendment is not necessary and in fact would not take us much further. I hope therefore that he will consider not moving it when it is called. I trust that my assurance that we will consider Amendments 35 and 38 in the names of the noble Lord, Lord Butler, and my noble friend Lord Lothian will enable the noble Lord to withdraw his amendment.
Lord Butler of Brockwell
I am grateful for the Minister’s assurance that the drafting points raised in Clauses 35 and 38—or a little more than drafting points, as my noble friend Lord Lothian said—will be looked at. With that assurance, I am happy to withdraw the amendment.
Lord Campbell-Savours
“( ) The ISC shall consider any request from a Select Committee of Parliament to the ISC to make a report on any particular issue related to national security and shall report to Parliament whether it has agreed to make such a report.
( ) The ISC shall consider any request from a Select Committee of Parliament for the transfer of information which that Select Committee of Parliament has stated it needs to carry out its functions as a select committee.”
Lord Campbell-Savours
Amendment 37 derives directly from conversations I had with the former MP Chris Mullin, a good pal of mine, while he was chairman of the Home Affairs Select Committee in the House of Commons and also conversations with members of the Defence Select Committee in the Commons. They were denied access to the agencies for reasons that at that time I was able to accept. But there were occasions when they felt that we could secure on their behalf access to material which, following discussion with the agencies, could under certain conditions possibly be made available by the ISC to those parliamentary Select Committees. It was their way of trying to ensure that questions would be asked of agencies where they were unable to ask those same questions themselves. It was not that they always sought to have access to the material, but that they wanted to be assured that the ISC was prepared to ask the questions.
I recognise that in the past 11 years since I was a member of the committee the relationship between the Select Committees and the agencies has changed, although the noble Lord, Lord Lester of Herne Hill, in his two interesting interventions on Monday, raised difficulties that his committee had experienced with the Joint Committee on Human Rights—no doubt he will wish to speak during this debate.
My amendment is only a modest attempt to clarify the relationship. There are two parts to it. The first part would place a requirement on the ISC to consider a request from a Select Committee for it to make a report to Parliament. It would not require publication of that report or its transmission to the Select Committee which had made the original request. The only requirement would be for the ISC, if it had complied with the request, to report to Parliament that it had made such a report—in other words, that it had carried out an inquiry.
The second part of Amendment 37 would place a requirement on the ISC to consider a request from a Select Committee for information to be given to that committee where it could show that it needed the information to carry out its functions as a Select Committee. Both parts of the amendment have been carefully crafted—although I am an amateur in these matters—so as to avoid either intentional or inadvertent breaches of national security. I beg to move.
Lord Lester of Herne Hill
My Lords, I support the amendment for the reason indicated by the noble Lord, Lord Campbell-Savours; that is, it seems to be a very practical way of solving the problem that I raised when we last discussed the Bill. It treats the ISC quite properly as within the inner ring of confidence and the best judge at that stage of the relationship between Parliament through its committees and the Intelligence and Security Service. I find the amendment attractive because it would mean, for example, that if the Joint Committee on Human Rights wished to be helped by the Intelligence and Security Service it could go to the ISC with a request instead of the awkwardness of writing and seeking direct help. The ISC could then act as the intermediary, decide what was appropriate and then come back to that committee. That seems a practical way of dealing with what would otherwise be an awkward situation. I am glad that the Minister has indicated that he will anyhow reflect on the points that I raise before Report, but the amendment seems an ingenious way of producing a practical answer which should not damage the work of the ISC, the Security and Intelligence Service or the public interest.
Lord Henley
My Lords, I assure my noble friend that I will always reflect on all points that are put to me in the course of these debates between now and Report. I appreciate the intention behind the amendments of the noble Lord, Lord Campbell-Savours, which is simply to create stronger links between the ISC and other committees. I appreciate that he has discussed this matter with former chairmen of the Home Affairs Select Committee such as Chris Mullin, whose diaries I have recently been reading and greatly enjoyed, as I imagine all of us have.
It is certainly our intention that the ISC should be a strong and effective committee and cover in its work matters of public and parliamentary interest and national importance relating to the agencies. Equally, an important feature of the committee is that it is party, as I have said on many occasions, to the most sensitive material and will scrutinise matters that are secret, some of which Parliament and the public will not have sight of for very good reasons.
While on the face of it the proposed changes seem helpful, I have some concerns about them. At the moment, obviously it is open to any Select Committee to write to the ISC and request that it focuses its work on a particular area. There is nothing in the new arrangements to prevent it from doing so and I am sure that the ISC will continue to take any such requests seriously, particularly if the noble Lord, Lord Campbell-Savours, was a member of the ISC, although I imagine it would be equally true with any other membership of that committee.
My concern is really about the idea of creating a formal statutory mechanism for making and considering these requests, with a requirement on the ISC to report on its decision-making process, which is what the noble Lord is seeking to do. I will give three very brief reasons why I do not think it is necessary to create a formal process, although, as I say, we shall take this away and consider it. First, I am concerned that the ISC could become overwhelmed with the number of requests to report on particular matters. If it acceded to all requests, its programme of work could be overwhelmed with matters that are of interest to other committees, taking its focus away from its core work of scrutinising matters that it alone should identify itself with.
Secondly, there is the question of what the ISC would be able to say in response to those requests, given the highly sensitive nature of the agencies’ work. Thirdly, if the ISC did not accede to all requests from Select Committees, tensions could develop between the ISC and those committees. That could undermine and damage the ISC’s reputation when the reality is that the ISC is carrying out important scrutiny, determining the priorities for that scrutiny in the light of its expertise and access to the relevant information in line with its remit.
With my assurance that other committees are welcome to make requests to the ISC, along with my explanation as to why I do not think it is necessary to make this into a statutory obligation and the fact that I have concerns about setting it down in that way, I hope that the noble Lord will be more than happy to withdraw his amendment. However, as I said at the beginning in response to my noble friend, we are always prepared to reflect on such points.
Lord Lester of Herne Hill
I quite understand the Minister not wishing this amendment to be in statutory form, but would it be beyond the wit of man or woman to embody the idea behind these amendments in a protocol, a memorandum of understanding or something of that kind? I have in mind just such an agreement between the Law and Institutions Sub-Committee of the European Union Select Committee and the Joint Committee on Human Rights as to how one deals with overlaps and so on. Could the Minister perhaps reflect on whether there are other ways of achieving this aim that are not simply an assurance from him but something short of statute?
Lord Henley
My Lords, I have served on one of the two committees that the noble Lord refers to—and felt considerably out of my depth—but not on the other. I note what he says about the memorandum of understanding between them. This might be something that the ISC and other committees could reflect upon between themselves and decide how they want to proceed. Again, however, I do not think that this is best set out in statute, although obviously we will reflect on these matters. That is the point of this House and why we are going through a Committee process. I have set out why I do not think that this is the best way of going about it, but I shall listen to the noble Lord, Lord Campbell-Savours, and trust that he will feel able to withdraw his amendment at this stage.
Lord Campbell-Savours
In some ways, that may be a helpful response. Following the intervention of the noble Lord, Lord Lester, and his reference to the memorandum of understanding, and on the basis of what the Minister said the other day—that there would be an ongoing process over the next few months during which this memorandum of understanding was to be drawn up—
Lord Henley
It is one thing if we are talking about a memorandum of understanding between the Government and the ISC. I think my noble friend was referring to a memorandum of understanding between the ISC and other Select Committees. That, obviously, would not be a matter for the Government.
Lord Campbell-Savours
It might not be a matter directly for the Government but it could well be incorporated into the document. The memorandum of understanding might deal with the whole question of the principle of the relationship that should or might exist between this halfway-house committee and Parliament.
I am grateful to the noble Lord, Lord Lester, for his intervention. I listened to the three reasons that he gave and I am not altogether sure that, apart from the last one, the first two would really register with members of the ISC. There may be some argument for the last one. On the basis of further consideration of these matters, I beg leave to withdraw this amendment.
Lord Faulks
“Statutory PII for national security sensitive material
(1) In any relevant civil proceedings in which the Secretary of State considers that—
(a) a party to the proceedings (whether or not the Secretary of State) would be required to disclose material in the course of the proceedings to another person (whether or not another party to the proceedings), and(b) such a disclosure would be damaging to the interests of national security,the Secretary of State must make a claim for public interest immunity in relation to that material under this section.(2) A claim for public interest immunity under this section must be made by the Secretary of State issuing a certificate relating to the individual documents in question and giving reasons why, in the Secretary of State’s view, disclosure would be damaging to the interests of national security.
(3) When deciding whether the material attracts PII under this section, the court must weigh, on the one hand, the degree of harm to the interests of national security if the material is disclosed against the public interest in the fair and open administration of justice on the other.
(4) When conducting the balancing exercise under subsection (3), the court shall—
(a) apply a presumption against disclosure of national security sensitive material held by, derived from or relating to an intelligence service, rebuttable only by compelling reasons, and(b) pay due regard to—(i) fair trial principles,(ii) the principle of open justice,(iii) the right to an effective remedy for violations of human rights,(iv) the ability of the media to report matters in the public interest, and(v) the need for state accountability for human rights violations.(5) If, after conducting the balancing exercise under subsection (3), the court considers that the balance of the public interest lies in non-disclosure, it must consider whether sufficient disclosure to enable a fair trial of the issues is possible by other means short of full disclosure, such as—
(a) redaction;(b) provision of a summary of the material;(c) disclosure subject to confidentiality undertakings;(d) hearings in private;(e) restrictions on reporting;(f) restrictions on access;(g) restrictions on the use of the material.(6) If, after conducting the process set out in subsection (3) to (5), the court concludes that the balance of the public interest lies in non-disclosure, the court must rule that the material shall not be disclosed.”
Lord Faulks
My Lords, in moving Amendment 39, I shall also speak to Amendment 40. These amendments are in the names of my noble friends Lord Lester of Herne Hill and Lord Macdonald of River Glaven, the noble Lord, Lord Pannick, and me. My noble friend Lord Lester and I are members of the Joint Committee on Human Rights. My noble friend Lord Macdonald, who unfortunately is in the British Virgin Islands at the moment and sends his apologies, and the noble Lord, Lord Pannick, are members of the Constitution Committee of your Lordships’ House.
We are now moving on to Part 2. These amendments would provide for the insertion before Clause 6 of the public interest immunity procedure to be reduced into statutory form, and would provide that, following PII, either party to civil proceedings could move on to closed material proceedings. A judge may at that juncture grant permission if the court considers that, first, the CMP is the only way forward and, secondly, that the public interest is served in having issues determined by the CMP, which outweighs the unfairness of either the claim or the defence being struck out.
At the moment, PII operates on the basis of common law. It is well understood and all the evidence suggests that judges are getting decisions in individual cases right. However, the Government’s complaint is that, despite the prime facie satisfactory way in which PII operates, there is a justice gap. Certain cases are effectively untriable. They have to be settled or even struck out. The provisions of Clauses 6 to 12 represent the Government’s solution.
The concerns expressed by many noble Lords at Second Reading suggest that there may well be considerable room for improvement in these provisions. I do not claim to speak for my co-signatories or for other noble Lords who have put forward similar amendments in this group, but I can be confident that all are concerned to understand quite how these complex provisions will work in practice. For example, Clause 6(5) states:
“Before making an application under subsection (1), the Secretary of State must consider whether to make, or advise another person to make, a claim for public interest immunity in relation to the material on which the application would be based”.
Many noble Lords and commentators have said that this is a meaningless obligation and that it runs the risk of merely being a tick-box process.
At Second Reading, I said that I would expect judges to require some convincing that the Secretary of State had gone through this process. I suppose there could, in theory at least, be a freestanding judicial review application in relation to that provision. Can the Minister reassure the House that the provision represents a real safeguard and explain how it works, or should work, in practice? Why not, as the amendment proposes, place the PII procedure in the Bill and make it an essential precursor to an application for a CMP?
Another concern expressed by many has been the fact that CMPs are open only to the Secretary of State and not to other parties to the litigation—that is, claimants. It is not immediately obvious what the circumstances are in which a claimant would want or have the ability to invoke a PII procedure and then move on to the CMP, but it surely does not help to make this legislation seem fair and proportionate if the recourse to so-called secret justice is available only to one side.
In the debate on the Bill, much has been made of the memoranda and evidence of the special advocates involved in these closed and open hearings. I share with many other noble Lords a respect for this body of highly qualified men and women, and I identify with many of their concerns. Their view is that PII is working well and that CMPs are an offence to open and natural justice. I do not go that far. These amendments do not attempt to remove the right to proceed by way of CMPs. It may be a form of justice that is very much one of last resort, but I am satisfied that the Government have made their case for the availability of CMPs in civil proceedings, just as CMPs operate in other fields. I am reinforced in this conclusion by the observations of the highly respected Independent Reviewer of Terrorism Legislation, David Anderson QC.
It may help if I take the Committee briefly through the amendment, which is on a, “Statutory PII for national security sensitive material”. It provides that the Secretary of State must make a claim for PII and issue a certificate giving reasons. The court must then weigh the balance between the degree of harm as against the fair and open administration of justice, and the amendment sets out the balancing exercise that the court should perform, including,
“a presumption against disclosure of national security sensitive material”.
Subsection (4)(b) of the amendment states that the court should,
“pay due regard to … fair trial principles … the principle of open justice … the right to an effective remedy for violations of human rights … the ability of the media to report … and … the need for state accountability for human rights violations”.
The amendment continues:
“If, after conducting the balancing exercise … the court considers that the balance … lies in non-disclosure, it must consider whether sufficient disclosure to enable a fair trial of the issues is possible by other means”.
The amendment then sets out a menu of other means that have been discovered over the years by judges as a way of mitigating any hardship by means of partial disclosure, and concludes by stating:
“If, after conducting the process … the court concludes that the balance of the public interest lies in non-disclosure, the court must rule that the material shall not be disclosed”.
This process gives the judge the balancing exercise for which he or she is well qualified, but leaves in the hands of the Secretary of State consideration of whether the disclosure of material would damage the interests of national security.
I confess to a little uncertainty about how Clause 6, as drafted, will operate in one important respect. Is it open to the judge to decide that in his view disclosure of the relevant material is not damaging to the interests of national security? In other words, can he second-guess the Secretary of State? In the helpful letter sent by Ministers following Second Reading, with the accompanying algorithm, that seemed to be the contention. If that is right, does it not mean that the CMP could be sidestepped altogether? My reading of the inclusion of “must” in Clause 6 does not sit easily with that construction.
Lord Carlile of Berriew
I am very grateful to my noble friend for giving way, and for the great clarity with which he has opened this debate. However, will he deal with this question: why are PII proceedings less secretive than CMP proceedings?
Lord Faulks
The PII proceedings, which we attempt to define in this amendment, would not normally be secret. The process contains a number of different options for a judge in dealing with an application. It is conceivable that in the course of responding to the particular facts of a case a judge might decide that a certain part of the hearing, even under PII, might have to be under a CMP. However, the purpose of the amendment is not to impose a straightjacket on the procedure but to ensure that the PII procedure is gone through—with all its inherent safeguards—before moving on to CMPs, which are by definition closed material proceedings and therefore do not involve access to the litigants or to the open advocate.
Lord Thomas of Gresford
Is not an answer to the question posed by the noble Lord, Lord Carlile, that the PII applications are heard in just as much secrecy as the closed material procedures? The difference is that in PII applications the judge’s decision over what is to be disclosed and what is not to be disclosed is discarded from consideration, whereas with closed material procedures he is supposed to consider it and take it into account. In terms of secrecy, there is no difference.
Lord Faulks
I am grateful for the clarification—that is indeed helpful. In dealing with whether or not it is appropriate to go through the PII process first, the Minister in his response to this suggestion at Second Reading said, at col. 1756, that do so would be “costly and illogical”. I do not expect any judge to spend much time and expense undertaking a process that has an inevitable outcome; nor would I expect advocates to insist on it. However, as I said earlier, the obligation to go through the PII process is an important portal. In this context, I would also expect judges to be very conscious of wasted costs. I cannot for the moment see why it would be illogical to go through the process.
The amendments in this group, which include a statutory definition of PII—for which I give credit to the legal adviser to the JCHR—represent an attempt to preserve the option of CMPs while ensuring that the resort to closed proceedings should be undertaken with extreme care and in a way that minimises the risk of injustice. I beg to move.
Lord Lester of Herne Hill
I am grateful to my noble friend for the way in which he introduced the amendments. It makes my task brief and rather less sophisticated. I will make a number of points. First, the report of the Joint Committee on Human Rights on the Green Paper summarised, in paragraph 97 onwards, the main differences between PII and CMP. It pointed out in paragraph 103:
“The Government’s position in the Al Rawi litigation”—
in which I appeared for a third party—
“was that it should be for the courts to make the determination and the Green Paper does not explain what has changed the Government’s position since that case”.
The Joint Committee emphasised the importance of a judge rather than a Minister making the determination. The germ of the idea of putting the horse before the cart rather than the cart before the horse—that is, putting the balancing of PII first and CMP second—came from Mr David Anderson QC in his evidence to the committee.
It is my impression that our allies in the United States are much more concerned about the Norwich Pharmacal point than they are about the closed material point. The closed material point is very much a matter of procedure in which it is not suggested that Wiley balancing, as it is known, would in any way jeopardise national security if it were considered to be the first step in that procedure.
The advantages of considering PII first are that it makes it less likely that there will be an unnecessary resort to CMP. I am agnostic—even though I am a party to our amendment—about the way in which this can be expressed. The noble Lord, Lord Hodgson, has another way of doing so, and no doubt it would be easy for the Government to find a way of doing so. I am concerned with the principle, which is that it should be for the judge and not the Minister to determine at the outset of a case whether to rush into the CMP procedure or to ask whether PII is desirable.
Lord Falconer of Thoroton
Perhaps I should put this question to the noble Lord, Lord Faulks. I very much applaud the efforts made to produce the amendment, for which I have considerable sympathy, but I am confused by one proposition. As I understand it, under the amendments tabled by the noble Lords, Lord Hodgson, Lord Faulks and Lord Lester, the court has to say, “We are not going to disclose under PII before we get to the possibility of a closed hearing”. In reaching that conclusion, the court has to exclude the possibility of a CMP hearing: it will approach the case on an ordinary PII basis. I can easily envisage a situation where a judge says, “It is a finely balanced case, but I have decided to order disclosure because a fair trial would be so damaged, even though significant damage will be done to national security”. Under the amendment of the noble Lords, Lord Lester and Lord Faulks, that fine balance would have to be struck before getting to CMP. It seems an odd conclusion. Am I right in my analysis of the amendment? If so, why is it put like that?
Lord Lester of Herne Hill
I did not understand it to impose that degree of rigidity. If it does, then I respectfully agree that some modification of the wording is necessary. I want to deal briefly with one or two other points.
The noble Lord, Lord Pannick, may want to say something himself about the Government’s response to the Constitution Committee’s report, which analysed the three flaws, as the committee saw it, in the existing scheme. I read and reread this government document and it gave me a headache because I simply did not understand what it was saying. It seems to be saying that there is very little difference between PII and a CMP, that there would be the same flexibility in a CMP as in PII, and that, having gone through a CMP, the judge can in any case go back to PII. It must be my fault but I simply do not understand what the Government’s settled position in that document really is. The Government say that the judge would have a number of important tools in a CMP to ensure that it was conducted fairly. They say that there is a similar level of flexibility to that available to the judge under PII. They say that it should be exceptional to use a CMP. All these points are certainly interesting but my basic point is on Wiley balancing. The noble and learned Lord, Lord Woolf, was responsible in his judgment in Wiley for articulating that Wiley balancing should be open to the judge first and that a CMP should be an exceptional procedure following it and that at all stages national security and other vital public interests should be preserved.
I have just one question for the Minister. Does he agree that there is no case in which an English or Scottish judge has breached national security or not shown the appropriate degree of deference to the executive branch of the security and intelligence services in his or her final adjudication? I ask that because I am very concerned that across the Atlantic there seems to have arisen a complete misunderstanding that our judges cannot be trusted with state secrets and national security. I do not know how that came about. My guess is that it arose in dialogue during the Binyam Mohamed case, especially at the Divisional Court level. However, it seems to me vital, as a matter of public record, that the Government make it absolutely clear that our judges can be trusted and have a fine record of trust of that kind.
Lord Pannick
My Lords, I have added my name to Amendments 39 and 40. I am very grateful to the noble Lord, Lord Faulks, for introducing the amendment. I recognise that there may well be a need in some exceptional cases for a CMP or closed material procedure, but it seems to me that this should be a last rather than a first resort. My answer to the question put by the noble Lord, Lord Carlile, is that PII certainly maintains secrecy just as effectively as a closed material procedure. If it did not, then it would not be a satisfactory alternative. The advantage of PII is that it does not enable the judge in determining the substance of the case—a point made by the noble Lord, Lord Thomas of Gresford—to rely on material that is seen by only one party and not by the other party. The evidence that is admitted is seen by both sides in the case. My answer to the question posed by the noble and learned Lord, Lord Falconer of Thoroton, is this. If, as a result of the PII—
Lord Carlile of Berriew
I apologise for intervening again but this seems to be a very important point. I am not sure that the noble Lord, despite all his great distinction, is right in the answer he has just given.
In criminal cases, when a PII application is made, generally the defence knows absolutely nothing about that application and has seen absolutely no documentation underlying it. I have relevant professional experience in criminal cases; I do not have any relevant experience in civil cases so this in a spirit of genuine inquiry. Is the noble Lord saying that in civil cases where a PII application is made, the claimant will have seen the document for which the PII application has been made? If not, we have a problem, do we not?
Lord Pannick
The noble Lord is absolutely correct. In my experience of both civil and criminal cases, the relevant material is presented to the judge by the public authority that has possession of it. The claimant does not see the material. The judge will determine the PII application either by reference to a general description of what it contains or, in appropriate cases, the judge will privately see the material and determine the PII application. Therefore, the noble Lord is absolutely right. Other than in wholly exceptional cases, the claimant will not see it. The point, however, is that it is only if the judge decides that the information may be seen by the claimant—or the defendant in a criminal case—that the material is taken into account by the judge in determining the substantive issues in the case.
That is the advantage of PII: it avoids the case being determined on its substance by reference to material that only one side has seen. If the judge says that PII excludes this material, it is not made public, but equally it is not taken into account by the judge when he determines the case. The whole point of this amendment—as far as I am concerned; I cannot speak for my co-signatories—is that surely the law should seek to ensure that the PII process is gone through in order to identify whether it can provide a satisfactory solution, as it very often will, before we go to the wholly unsatisfactory in principle procedure of the judge deciding the case on its substance by reference to material that only one side has seen.
PII can ensure that even the most sensitive material can be seen by both sides in the case through this means. PII is often used in practice to ensure the redaction of sensitive material so that what is— properly—disclosed to the claimant is not the whole of the document but a redacted version; for example, the names of security agents are removed, or only the gist of the material is disclosed and the judge decides the substance of the case by reference to that document rather than the sensitive material. The amendment seeks to ensure that that process is gone through before there is any question of a closed material procedure.
The noble and learned Lord, Lord Falconer of Thoroton, says that in PII there is supposed to be a balancing process and the judge might decide that this is very sensitive material but the public interest outweighs the sensitivity, which would leave us in the same difficulty. There are two answers to this. The first answer is that as given by the noble Lord, Lord Lester of Herne Hill. Nobody can point to any case where the judge deciding a PII application has decided to reveal something that the security services or the public authorities in general regard as sensitive. Judges do this job with enormous sensitivity and with very considerable knowledge of what is required by the public interest.
Lord Pannick
We know that because there is absolutely no evidence of which I am aware of public authorities appealing against PII decisions and saying that it is unacceptable, because sensitive material or any other public information is going to be revealed by the judge.
However, there is a second answer to the noble Lord, which is that under a PII application, even if the public authorities take the view that the judge has balanced matters and decided to reveal that which is sensitive, the public authority has no obligation to reveal it. It can decide that it would rather lose the case than disclose this information. That is why we need a procedure for CMPs, because there may be cases where PII does not produce a satisfactory result for public authorities. I am prepared to accept this, not least because David Anderson QC, the independent reviewer, has concluded that there ought to be such a procedure. My point is that it ought to be a last resort, rather than a first resort. My fundamental objection—
Lord Lester of Herne Hill
The noble Lord, Lord Pannick, has much more experience than I have in the uses of PII. Subsection (5) of the proposed new clause lists the different matters which the judge should regard when making his decision. Am I right in thinking that these are matters to which the judge has regard to in a PII case? Are those the kind of considerations that the judge will look at carefully in order to tailor the needs of national security and justice?
Lord Pannick
The noble Lord is absolutely right. The purpose of the new clause before Clause 6, and the detail that is set out in Amendment 39, is that it is an attempt—with the very considerable assistance, as the noble Lord, Lord Faulks, said, of the legal advisers to the Joint Committee—to set out in statutory form the common law position. That is its purpose; but I emphasise that PII is not a procedure that requires disclosure. It is distinct, as the noble and learned Lord, Lord Lester, says, from the issues that we will be discussing on Norwich Pharmacal where the concern is that if the judge makes an order, there must be disclosure.
My fundamental objection to Clause 6, and the reason I support these amendments, is that under subsection (5) the Secretary of State, before he decides whether to make an application for a closed material procedure, must first consider whether to make a claim for PII. So the obligation is on the Minister to consider whether to apply for PII or not. That is all to the good. However, if a closed material procedure application is made by the Secretary of State—or indeed by anybody else—Clause 6(3) provides that,
“the court must ignore … the fact that that there would be no requirement to disclose if … the material were withheld on grounds of public interest immunity”.
As I understand Clause 6, the judge is obliged to ignore the possibility of PII. I take the view that, just as the Minister ought to consider whether PII provides a satisfactory means of resolving the conflict between security and fairness before he applies for a closed material procedure, equally, the judge should have to consider that.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
The noble Lord made the same point at Second Reading. Perhaps I might explain how subsections (2) and (3) interact. I understand the point that he is making but it is not as fundamental as he represents it. If I have got that wrong, I apologise. He will realise that under subsection (3) the court has to decide,
“whether a party to the proceedings would be required to disclose material”.
That relates back to the first leg of the two conditions that must be satisfied in subsection (2)—namely, that in paragraph (a). The point is that the judge cannot say, “You wouldn’t have been required to disclose this because it could have been dealt with by PII”. This provision tries to ensure that, if you did not have PII, there would nevertheless be an obligation to disclose evidence under, I think, Part 31 of the Civil Procedure Rules. I hope that explains why this is not a matter of principle but one that indicates what might otherwise be required to be disclosed.
Lord Pannick
I am very grateful to the noble and learned Lord, who is characteristically very helpful on these matters. However, I hope he will accept that it is absolutely vital, in a matter of such importance and sensitivity, that we make it very clear in the legislation that the judge, when asked to decide whether to go into a closed material procedure—in which he will decide the case by reference to evidence that has not been seen by one side—will do so only if he is satisfied that there is no other lawful, proper means of resolving the question. If the Minister is telling me that the Government’s intention is that the judge should first ask himself whether the problem can be resolved by, for example, gisting or redacting the material or by some other means, or that the judge has a power to say to himself, “This material is really not very important in determining the case. Therefore, I do not need to go into a closed material procedure”, I would be very relieved and satisfied.
I ask the noble and learned Lord to reflect on this point. The issue is not really about the proper interpretation of the very difficult words in Clause 2. The question is one of principle, about what we seek to achieve. For the reasons that I have sought to identify, I hope that the Committee and the noble and learned Lord will agree that we should end up in a position whereby the clause states unambiguously that—given the disadvantages that it inevitably involves and the unsatisfactory nature of such a procedure—a closed material procedure, although it may be needed in exceptional cases, should be adopted only if there is no other fair and proper procedure that can be adopted, and if that is the view of the judge who is hearing the case.
Lord Hodgson of Astley Abbotts
My Lords, I have amendments in this group that refer to the inability of parties other than the Secretary of State to access CMPs. Amendment 41 and consequential Amendment 50 would omit “The Secretary of State” from the first line of Clause 6(1) and replace it with:
“Any party to relevant proceedings”.
I propose this on the grounds of fairness. Throughout the briefing and our debates so far, the Government have stressed the importance of fairness. In my view, the present drafting of the clause represents an unacceptable inequality of arms. A party who is suing the Government has no right to apply for a CMP, yet one of the justifications for CMPs in the Green Paper was unfairness to claimants. The Green Paper claimed that some claimants might find their cases being struck out because a fair trial was impossible due to the fact that the issues were so steeped in secret, undisclosable material that the Government would be unable to defend themselves. The Government claimed CMPs would be necessary to protect the claimants from that eventuality.
In the Government’s briefing, which they circulated ahead of the proceedings on this Bill, they said:
“It is also clear that in some cases, the absence of CMPs is particularly unfair on the claimant. In a recent naturalisation case (AHK and Others) the judge ruled that without any means by which sensitive intelligence could be heard in court, ‘the Claimant is bound to lose, no matter how weak the grounds against him, there is obvious scope for unfairness towards a Claimant’”.
If it is advantageous to any party to use closed material proceedings, why should they not be able to so?
Lord Thomas of Gresford
I will speak to Amendments 42 and 47, which are grouped with the other amendments that have been spoken to. I acknowledge the assistance of the Bingham Centre for the Rule of Law in drafting my amendments.
The approach in the amendments introduced by the noble Lord, Lord Faulks, is to create a special, statutory public interest immunity procedure, limited to material sensitive to national security, which must be followed by the Secretary of State as a precursor to a closed material application. I consider that to be preferable to the clause as drafted but it is a bit of a straitjacket, as the noble and learned Lord, Lord Falconer, pointed out. It means that the judge would have to go through a series of hoops set out in Amendments 39 and 40 before he could proceed. I hope to suggest a different model that runs more with the grain of the Government’s proposals and is more flexible but achieves the safeguards that I am sure all noble Lords—except possibly my noble and learned friend the Minister—consider necessary.
The present position, as outlined already by other noble Lords, is that public interest immunity springs from a common-law basis, with its principles derived from a number of cases. I need not go into that. The Government’s approach in the Bill is to leave public interest immunity to the common law and not introduce a statutory procedure, but as an alternative to introduce statutory closed material procedures at the Secretary of State’s discretion for the protection of material sensitive to national security. All the Secretary of State need do is consider whether to make a PII application under Clause 6(5)—but he does not have to make such an application.
It is necessary to restate and hold in the forefront of our minds whenever we discuss this topic the essential distinction between the two applications. In a PII application, the judge weighs the material on Wiley principles and orders disclosure or partial disclosure where he determines that the public interest in the administration of justice outweighs the public interest in non-disclosure. But material that is not disclosed under PII—being, in the judge’s judgment, too sensitive —is not admissible and therefore plays no part in his determination of the case. Under CMPs, closed material is admissible even if it is not disclosed. Indeed, the Secretary of State may wish the secret information to be central to the judge’s determination. I am sorry to restate what has been said over and again but it is important to bear that in mind because it impacts on the amendments I am putting forward.
Therefore, if sensitive material in the hands of Secretary of State undermines his case or supports the the claimant’s case, it is in the Secretary of State’s interest to make a PII application and to persuade the judge not to disclose it or have it form any part of his determination. If, on the other hand, the Secretary of State is in possession of sensitive material which he wishes to rely on and which he wishes to be admissible—which he wishes the judge to take into account—it is in his interest to make application for closed material procedures. Remember, under the Bill it is entirely for the Secretary of State to determine which sort of application he makes.
The choice given to the Secretary of State by Clause 6(5) as to which procedure to follow gives him a significant litigation advantage over the claimant in two respects. First, it may deny to the claimant access to material in his favour when a PII application is made. Secondly, by the use of closed material procedures, if that choice is taken, it puts unchallengeable but admissible evidence in the Secretary of State’s favour before the judge for his determination of the issues. This consequence of Clause 6 is in direct conflict with the motivation of the Bill, as stated publicly by the Lord Chancellor—repeated in speeches and in the documentation that has been supplied to us—that this proposal in the Bill is not to protect secrets, because PII and closed material procedures equally protect secrets, but to make litigation fairer. Yet the proposal to make litigation fairer gives, as I say, a litigation advantage to the Secretary of State.
This brings me to Amendment 42. An astute litigator on behalf of the claimant should suspect that if the Secretary of State makes an application for public interest immunity, the chances are that the sensitive material which is withheld is in the claimant’s favour. The purpose of the amendment, like Amendment 41, is to permit any party to the proceedings to make a closed material application if he has reason to believe it would be in his interest to do so. That would go some way towards equality of arms.
The noble Lord, Lord Carlile, pointed out that in criminal proceedings, with which he and I are particularly familiar, very often a defendant will not know that an application has been made at all. Nothing may be said. I think, but I may be subject to correction, that in civil proceedings a claimant would know that a Secretary of State’s certificate had been issued to claim public interest immunity.
Lord Carlile of Berriew
We heard from the noble Lord, Lord Pannick, that in civil proceedings, as in criminal proceedings, there are certain circumstances in which one might know—there are categories set out in judicial decisions—but there are certainly cases in which one might not know, whether in civil or criminal proceedings. I am sure that that is right.
Lord Thomas of Gresford
That is a matter for clarification by people who know about it and we will look into that later.
Lord Falconer of Thoroton
I am impressed by what has been said about the opportunistic opportunities that this gives. At the moment I am bewildered by what it is suggested the claimant would want to use closed material proceedings for. I can see the point about the appearance of equality of arms, but it strikes one initially as being a slightly odd conclusion to reach. I am sympathetic to the idea that the courts should make sure, as the noble Lord, Lord Pannick, is saying, that every other option has been tried, but I would be grateful if the noble Lord, Lord Thomas, would explain what are the circumstances in which the claimant—a man such as Binyam Mohamed in an ordinary civil litigation—would want to keep things secret. The noble Lord, Lord Lester, is going to answer.
Lord Lester of Herne Hill
I wonder whether this is helpful. In the case of Binyam Mohamed there was a parallel case in the district court of Columbia by another Guantanamo detainee facing a capital charge. This was a habeas corpus case and the question was whether Binyam Mohamed’s evidence, which had pointed to this man as an evil rogue, could be relied upon. The applicant in the habeas corpus case wished to show that Binyam Mohamed had been tortured, so the federal court had to decide that question. It was very much in the interests of the applicant for habeas corpus that that “closed”, secret material be placed before the court to exonerate him. In the end, Judge Kessler came to the conclusion, since it was not contested by the American Government, that he had been subjected to gross ill treatment and that this other man should be granted habeas corpus because Binyam Mohamed’s evidence was unreliable by being induced by torture. That is a real-life example in the context of habeas corpus in which it was in the interests of the applicant to rely upon that material.
Lord Pannick
As a matter of principle, the claimant may believe that the secret material would exonerate him. PII would prevent the secret material from being disclosed to him because it concerns security information, but he is confident that he has done nothing wrong—there is no reason why he should not be given naturalisation or some other benefit. He just wants the judge to be able to look at it. The claimant might prefer the judge looking at it without the claimant seeing it to the judge not seeing it at all.
Lord Thomas of Gresford
It is more than the judge merely looking at it, though; the claimant might want the judge to take it into account through closed material procedures. That is the point. If I were acting for a claimant, knowing that the Secretary of State had a discretion over whether to go for a PII application that would exclude material or a closed material procedure that would include material, make it admissible and allow the judge to take into account, and the Secretary of State chose PII, I would think—and I am not a very suspicious person—that the Government were seeking to conceal something that the judge should have in mind in my favour. I might very well advise my client to take the risk.
In, I think, the case of Gillan the court suggested to the litigant, having looked at the material, that perhaps closed material procedures would assist him, but his counsel did not take the risk and he was stuck with that. So even though the material apparently assisted him, because he would not ask the closed material procedures —unfamiliar territory to most of us—that material, which might have been in his favour, could not be taken into account by the judge. The judge might know about it but he has to cast it to one side under PII.
That is why I say there is such litigation advantage in the way that the Bill is framed. PII applications can exclude stuff that might be favourable to the applicant. I hope that that answers the question that the noble and learned Lord, Lord Falconer, raised.
I suggest that Amendment 47 is a neater way than Amendments 39 and 40 of incorporating further safeguards. It would provide that the judge must not make the declaration that a closed material application be made to the court unless he considered that the material was inadmissible on the existing common-law public interest immunity principles and that it was strictly necessary in the interests of justice. These simple amendments of course infer, first, that the judge has considered the question of public interest immunity. It may not be necessary for him to go through the whole process; one recalls that in the Guantanamo case there were some 9,000 documents, so it was likely to take months for a judge to carry out the public interest immunity exercise if he had to do it first. He could look at the nature of the documents and realise that at least some of them would be inadmissible. However, it is the judge and not the Secretary of State who decides whether closed material procedures should be introduced, after the judge has considered whether PII would be a better approach. Secondly, it requires the judge to consider whether it is strictly necessary in the interest of justice. That amendment puts the judge firmly in control of case management. As the Bill is drafted, the Secretary of State not only has the litigation advantage to which I have already referred but actually controls the procedure to be followed.
Lord Carlile of Berriew
My Lords, there are a few brave souls who are not lawyers still left in your Lordships’ House after 55 minutes of this debate. There are three to my right and I suspect that they are the ones who can recognise that there is quite a small pin with some lawyers dancing the rumba of closed material procedures on it and others doing the cha-cha-cha of PII. We owe it to them to give a comprehensible explanation of the difference and of how a proper outcome of this debate is reached. Given that, I suppose I can be forgiven for confusing the matter further by using two Latin phrases, as old lawyers like me tend to do. The first arises from hearing during this debate from the formidable duo of my noble friend Lord Lester and the noble Lord, Lord Pannick. I am not sure which way round they appear on the spine of the book on my bookshelf—whether it is Pannick and Lester or Lester and Pannick on human rights—but I suspect that age probably comes before beauty. I see the noble Lord, Lord Pannick, nodding in agreement. There is a danger of argumentum ad maiorem on any issue of this kind. Oh, dear. I give way to the older of the two.
Lord Lester of Herne Hill
I remind my noble friend that we are in the presence of the noble and learned Lord, Lord Woolf, who has banned Latin from use in courts. On this occasion it would be desirable if my noble friend spoke English and not some archaic antique language.
Lord Carlile of Berriew
The writ of the noble and learned Lord, Lord Woolf, certainly ran through the courts in those days, but I am not sure that the use of Latin has yet been banned in your Lordships’ House. I want to use what I regard as a very meaningful Latin phrase, which I read in the first administrative law textbook that I studied, de Smith’s Administrative Law, before Lester and Pannick reached the shelves. It was a seminal work and I remember the phrase “audi alteram partem” being an important part of what I learnt from that book. I am pleased to see the noble and learned Lord, Lord Woolf, nodding at least in recollection if nothing else.
Audi alteram partem is extremely important because it depicts that both sides should be heard wherever possible and it is presumed that both sides should be heard in a legal dispute. For those reasons, in shorthand, I support the succinctly moved amendment of my noble friend Lord Hodgson. For the reasons that he and my noble friend Lord Thomas of Gresford gave, it seems that there may be cases in which it is a perfectly legitimate tactic and it may be proved to be right in substance for a party other than the Government to apply for a closed material procedure—if CMPs are to survive this legislation.
I hope I am right in saying—and it was certainly evident from the way in which the amendment was moved by my noble friend Lord Faulks—that we are all trying to achieve the same thing with this group of amendments. I firmly believe that the draft legislation shows that the Government and my noble and learned friend on the Front Bench, the Advocate-General, are trying to achieve the same aim. The overriding objective, as we call it, is that civil proceedings should be decided justly and fairly for both sides. I therefore agree with the principle that for the overriding objective to be achieved the proceedings should be as transparent as possible and that hearings in secret in which both sides are not heard should be as rare as possible. I certainly agree with that part of what my wise and successful successor as independent reviewer of terrorism legislation, David Anderson QC, has said. I am a little puzzled as to why so many people seem to believe that PII is fairer than closed material procedures. My experience of PII is limited to criminal proceedings, but it is instructive.
In one case in which I was instructed—a lengthy police corruption case—it turned out that, unknown to me as leading counsel for a defendant, there had been a number of PII applications. Some two to three months into the case, the High Court judge trying it came into court and said: “I wish to hold a further PII hearing in relation to some documentation that I have seen to determine whether it should be disclosed to the defence”. He then retired into chambers with leading counsel for the prosecution, his two juniors and a solicitor from the Crown Prosecution Service. After a lengthy hiatus in which we drank a large number of cups of Nottingham Crown Court’s best coffee, the judge emerged in court and two redacted pieces of paper were revealed. They were rather important and my junior and I wondered why we had not been given these documents at the beginning of the trial. We felt that we should have been but, already many weeks into the trial, the prospects of the jury being discharged and the trial starting again were realistically zero. The same would apply in civil proceedings, where, as the noble Lord, Lord Pannick, has confirmed from his experience, which is different from mine, the same processes are followed. The public authority in question makes its application for PII, usually in secret, the other side—the claimant in civil proceedings—knows absolutely nothing about it, and a few weeks into the trial the judge may decide that he or she should review PII.
What the Government are offering through closed material procedures is not for both sides to be heard but, given the provision in this Bill for the appointment of special advocates, in reality it would become the norm for a special advocate to be appointed. Although not instructed by or on behalf of the claimant, the special advocate would represent the interests of the claimant. Having read a very large number of control order case transcripts, including a lot of closed transcripts, I happen to believe that special advocates have sold themselves rather short and that they were extremely successful, as results have shown, in a large number of control order cases. I was interested and encouraged to hear the noble and learned Lord, Lord Woolf, saying “Hear, hear!” as I made that statement.
Although one would not have a wholly transparent process, one would have a process in which highly skilled advocates, often leading counsel, would represent the interests of the litigants concerned. That looks to me much more like a transparent legal procedure. I do not think for one moment that these procedures, whichever we adopt, should become the norm. They should remain rare. I firmly believe that, although it is inevitable that in almost all cases a public authority will make the application, the decision that determines how the case progresses, if at all, should be made by a judge, having weighed up all the arguments placed before him or her. It is of course inevitable that the issue will be raised in 99 cases out of 100 by the public authority because the public authority is the custodian of national security and of secret material.
Although I can see grounds for amending the legislation, I remain unpersuaded that the cha-cha-cha is a more attractive dance than the rumba here. My noble friend wants to do a waltz, I think.
Lord Lester of Herne Hill
I would like to do a quick-step. Is my noble friend going to be sympathetic to Amendment 62 in order to improve his dance?
Lord Carlile of Berriew
I am sympathetic to any amendment which will improve the justice of decisions made. I am broadly sympathetic to Amendment 62. When I was independent reviewer of terrorism legislation, I frequently expressed the view that there should be stronger discussion between special advocates and those whose interests they represent. I remain of the view that the security services are over-sensitive, if not hyper-sensitive, about such communications. The short answer to my noble friend is yes.
I therefore invite the Minister to assist this Committee, particularly the non-lawyers here, by answering the fundamental question as to whether the Government have chosen a fairer procedure. Surely that is all we are trying to achieve. I say “that is all” but, if we achieve it, it will be a noble achievement indeed.
Lord Pannick
Will the noble Lord assist the Committee with why he thinks that so many special advocates, with all their experience, regard closed procedures as so fundamentally unfair?
Lord Carlile of Berriew
They have spoken for themselves and I have read what they have said. The answer is that I do not know. I simply do not agree with them. Each special advocate represents his or her own experience. No special advocate does more than one case at a time. If I have an advantage in this, it is one of observation over a period of years of the work of the body of special advocates.
I say to the noble Lord, Lord Pannick, that there are considerable improvements that can be made in the way in which special advocates receive and carry out their instructions. However, there is no doubt that they have been more effective than they diffidently appear to accept.
Lord Woolf
My Lords, I should perhaps begin by making certain disclosures. First, I have to confess that, together with the director of the Bingham Centre for the Rule of Law, I am among the editors of De Smith, which was referred to in argument as a book that deals with some subjects that are dealt with so admirably by the other book that has been referred to. Secondly, and perhaps more significantly, I should indicate not only that I was a judge who had to deal, as I did from time to time, with PII applications in both criminal and civil proceedings, but that for five years I was what was known as the Treasury Devil, one of whose tasks was normally to appear on behalf of the Government in cases where PII was being sought because of national security. I therefore have a certain degree of practical experience of the position as it arises, alive, within the court system.
The position in criminal proceedings is different from that in civil proceedings, because the issues in criminal proceedings are different from those in civil proceedings. In criminal proceedings, the state is bringing the prosecution. It has the burden of producing the evidence that is to be relied upon. One of the criticisms that have understandably concerned special advocates is that, if the defendant in criminal proceedings does not know the case that is being made against him, it is very difficult for him to give instructions that may be highly relevant and which the special advocate would wish to have in order to do what he is obliged to do: represent the defendant.
In civil proceedings, on the other hand, the probabilities are that the claims for PII or closed proceedings will arise on the grounds of national security where the state is the defendant as opposed to the equivalent of a claimant in civil proceedings, and the person who is the claimant will have full knowledge of the case that he wants to present so as to get the relief that he is seeking. There may be civil proceedings—I put it only as “may be”—in which a special advocate who represents the interests of the claimant can do that more successfully than is possible in criminal proceedings. There may not necessarily be the same inherent unfairness that is always involved in the use of special advocates in criminal proceedings.
While I still stress that the claimant may be under a real disadvantage, and the proceedings may be inherently unfair in that respect, special advocates are certainly better than nothing so far as the party who is being represented by them is concerned. I apprehend that if one were to question special advocates, they would always concede that what they could do was better than their not being there. It is a contribution that must not be ignored, although obviously if one does not need to have secret proceedings and if one is able to disclose all the evidence, the best possible way for that to be done is for it to be done in public, as it should be done in normal civil or criminal proceedings. However, as I say, a special advocate being there is better than nothing.
That brings me to the approach that we are adopting in this legislation. I would say that it has been accepted that there is a need for a procedure that enables in the very few cases that involve national security for material not to be placed before the court in circumstances in which the judge can rely on it. That can be important to the claimant and to the Government because, if the evidence and material are not placed before the court in that situation, the judge may be aware of the material but cannot rely on it in coming to his conclusions, because it is part of his responsibility to determine cases on the evidence that is placed before him in court, whether it is placed before him in the normal way or in the special way that we are considering here.
Only in a small minority of cases is it necessary to resort to the special procedures that we are debating in the course of these proceedings. Certainly on the basis of my experience, usually you can find ways of squaring the circle—ways in which the evidence can be put forward so that it is valuable to the judge without having to risk causing damage to such interests as national security. Justice is done through the advocates involved co-operating, through agreements that certain things are to be redacted, and through the trust that usually exists between the advocates appearing in the proceedings on behalf of the Crown in matters of these sorts and the advocates appearing on behalf of the other parties.
As has been said in argument and as appears in the overriding principle set out in Part 1 of the CPR, the court is seeking to achieve justice, and that should always be the criterion that has to be applied. I would urge that flexibility is very important here. PII has been developed as a common law principle, and if it is accepted on all sides, as I believe it is, that PII in the present proceedings should remain, I question whether we need to reduce into statute that which the common law has developed. Of course, if the common law has developed it, it can continue to develop according to new circumstances that we may not anticipate in the course of the argument taking place in this debate.
I would also urge that it is highly undesirable that we should put the seeking of a PII and a closed hearing into separate watertight containers. If the judge hearing the matter is going to do justice, it is important that he should have before him the knowledge that PII is still available and he can say whether the best way to deal with the matter is through PII or the alternative—through a closed hearing.
The hearing itself might have to be conducted in an unusual way, or might have to be closed, to discuss these matters. However, on this sort of issue the special advocate can be of great assistance to the judge as to the best way of going about it. The advocate on behalf of the Crown will be before the judge and the special advocate can be before the judge, and the judge will take care to ensure that the best way of achieving justice in the situation before him is the one that is adopted.
Many of the amendments here set out principles that I find wholly admirable on the procedure to be adopted on PII. They could have been contained in a text-book; they do not have to be in a statute. So long as it is absolutely clear, as I believe it always has been, that PII is still available, I suggest that that is sufficient for legislation.
Lord Lester of Herne Hill
I respectfully agree with everything that the noble and learned Lord has said. Does he appreciate that the reason for this variety of amendments is to achieve precisely the position that he would advocate, and that to get rid of straitjackets seems to be present in the Bill as it stands?
Lord Woolf
I agree that there are dangers, in the way the Bill is drafted at present, of it being thought that there is a straitjacket, but there would be an equal danger of a straitjacket if we adopted either of the alternative forms of amendment that have been proposed so far, although I am bound to say that I prefer the option of the noble Lord, Lord Thomas, and the reasons he explained, to the reason previously put forward by the noble Lord, Lord Lester, and others. If you come second in line in putting forward amendments, you can usually do things marginally better than the previous attempt, and I think that has applied here.
As the noble Lord, Lord Pannick, rightly pointed out, the Bill as it is at present is not as clear as it should be. It is very difficult to express it in a more satisfactory way than has been expressed already, but it could be done and I am sure that if the matter is reconsidered it will be possible to make the situation clear beyond peradventure. I would urge that this approach is adopted.
I should also make it clear that I think that the noble Lord, Lord Carlile, is right in saying that in most situations that are covered by the Bill the result will be preferable to both sides if the closed hearing procedure is adopted rather than PII, because PII has the very unfortunate effect that you cannot rely on the material that is in issue, whereas both the claimant and the Government may want to rely on that material. That is a good reason for having the closed-hearing procedure.
Baroness Berridge
My Lords, I had planned to speak to Amendments 39 and 40 but what I am about to say relates to what is now being described as the overriding objective of this group of amendments. Whichever it is, it is important that the name “public interest immunity” is retained as, even when we are dealing with national security-sensitive information, it is not government immunity, although it is often claimed by the Government as a party. When it is, it is done on behalf of and for the benefit of the public and not the Government.
Baroness Manningham-Buller
My Lords, I hesitate to rise in this very interesting debate, which has been monopolised by noble and learned Lords. I am not learned, so the point I would like to make is a practical one and very short. As the independent reviewer of terrorism has noted, there are a very few cases that are so saturated with extensive roomfuls of highly sensitive material that talking about the odd document and the residue will not work. I make that point because I think there are these very few cases where the whole case is substantially based upon highly sensitive material, and we need to be aware of that.
Lord Falconer of Thoroton
It has been an excellent debate. I would like to single out for special mention the noble Lord, Lord Hodgson of Astley Abbotts, and the noble Baroness, Lady Manningham-Buller, the only two non-lawyers who participated. It is important that we put this debate into a non-legal context because normally the legal answer that follows comes from the facts.
In the next two days of Committee we shall deal with two completely different problems. The problem we are dealing with here is not ultimately the protection of national security; it is how there can be fairness in a trial brought by a claimant for damages when he alleges things against the Government to which they may well have an answer which if disclosed to the claimant would damage national security. I say that national security is not in play in this first group of issues is because ultimately the state can refuse to disclose that material in litigation. They can protect national security that way, and indeed they will, but at the cost, as they would see it, of unfairness to them in not being able to deploy their full case.
In this first group of amendments—those to Clauses 6 and 7—we are dealing with fairness in the context of a claim for damages or judicial review being brought against the state. Just picking up what the noble Baroness, Lady Manningham-Buller, said, which seems absolutely right, it is easy to envisage a situation where a Minister or government department has come to a conclusion based entirely on intelligence material which would in this hypothetical case reveal the reason they came to it, but they cannot disclose a word of it because it would damage national security. That is the situation that the first section of this debate is dealing with—fairness.
The second group of amendments—which we shall come to, perhaps, in five years’ time at the rate we are going at the moment, having had an hour and 38 minutes on this absolutely fascinating topic—is not ultimately to do with fairness but with national security. The amendments touch upon Norwich Pharmacal orders, where the court can order disclosure of information or documents to a claimant and the defendant is not able to say, “OK, we leave the pitch here and we do not agree to any of that”. They must, under the current arrangements, disclose things, and that has two potential affects—
Lord Lester of Herne Hill
I am just wondering whether it is right for the noble and learned Lord to put these issues into such neat boxes. Let us take the case of Binyam Mohamed and assume that there was closed material procedure so that the Government would not have had to pay a lot of money to settle the case. That would be a case saturated with national security on both sides. I am not speaking with any personal knowledge of the case, but Judge Kessler in the United States would have looked at the material showing serious ill-treatment. He would have wanted that material to be put forward. No doubt there would have been material within the intelligence and security service showing that Mr Binyam Mohamed was not an ideal citizen. Both sides would have been reliant upon heavily saturated material from the intelligence and security service. Therefore, I suggest national security would be involved in the first category as well as the Norwich Pharmacal one.
Lord Falconer of Thoroton
I have read the eight judgments in the Binyam Mohamed case and, although it was dressed up as a judicial review application at one stage, the case was essentially an application for a disclosure of documents and is therefore a Norwich Pharmacal case.
Lord Lester of Herne Hill
I am talking about when he was seeking damages in the civil claim after he had been released and brought back to this country. That is the process to which this would be relevant.
Lord Falconer of Thoroton
Yes, indeed, and in relation to that the Government would be free to withdraw their defence—indeed this is the route that was taken, as I understand it—at which point national security would be protected. It is that situation that we are dealing with first. As I was saying in relation to Norwich Pharmacal, which we shall deal with at a later stage in proceedings, the Government do not have the option of withdrawing from the case. The consequence of this is that they may be forced to disclose information that any reasonable person would think damaging to national security. Equally significantly, those foreign intelligence agencies that provide us with information might consider that it is no longer politick or sensible to do so.
This evening, however, we are dealing with the category of fairness in the context of civil proceedings, rather than danger to national security. The change proposed by this Bill is significant. Very helpfully, in answer to one of the many reports that Parliament has produced on this issue, the Government have set out the list of circumstances in which closed proceedings are possible at the moment. Generally, they are terrorist-related and not usually in relation to resolving a dispute between two civil claimants; it is about whether the state is going to do something not good as far as the individual is concerned. Therefore, this would be a significant change.
Issue number one for the Government is to establish that there is a sufficient problem—unfairness to the state—to demand this quite significant change. Here in the Chamber we are all aware that in the Al Rawi case the Supreme Court said closed proceedings generally are not fair. That does not mean this is not the answer because it may be the best that can be done. However, we need to pause before introducing a system where, as the noble and learned Lord, Lord Kerr of Tonaghmore, said—and everybody agreed with this—closed proceedings could lead to a situation where a judge is looking at material that is not only not cross-examined but might be misleading.
What is the case for the change? The Joint Committee on Human Rights, on which the noble Lords, Lord Faulks and Lord Lester, and the noble Baroness, Lady Berridge, sit, had quite detailed hearings about this. To start with, it did not get any evidence. After it closed its witness sessions, it got evidence from Mr David Anderson QC who said that there may be “a small but indeterminate” number of cases,
“both for judicial review … and for civil damages, in respect of which it is preferable that the option of a CMP … should exist”.
In relation to those cases, it was his view that,
“there was material of central relevance … that it seemed highly unlikely could ever be deployed”,
except in closed proceedings.
David Anderson QC divided his two sets of cases into judicial review and ordinary civil damages claims. The judicial review proceedings were all in respect of refusing naturalisation or excluding an undesirable from this country. Those judicial review proceedings are now dealt with under Clause 12, so we put them to one side. He said that three civil damages claims were the foundation of his case that there was this small group of cases in respect of which CMP might be useful.
In response to what David Anderson QC said, a number of special advocates put in evidence in which they questioned his conclusion that the evidence referred to could be deployed only in closed session. They referred to the fact that in every case in which they had been involved, which slightly reflects what the noble and learned Lord, Lord Woolf, said, there always proved to be a way, whether by redactions, gisting or some other means, in which the material was deployed in some way without damage to national security. That is where the evidence rests at the moment.
I should say that I was Solicitor-General for a period of time. One of the things that the Solicitor-General does is look at PII certification. There were some difficult problems that were getting worse when I left the post. I suspect that they got worse after I left because the situation in the world changed. I should also say that David Anderson gave very sensible advice and was highly respected. We are in a position where the only person who has seen the detail of the cases is David Anderson QC for whom I have great respect. We are also in a situation where it is perfectly possible—the noble Baroness, Lady Manningham-Buller has said this—to envisage cases where intelligence is completely the defence on which the Government would legitimately rely but could not disclose. As the Joint Committee on Human Rights has said, the Government have slightly damaged themselves by the strange way in which they have deployed their case. We are willing to be persuaded, but we need to be persuaded.
Baroness Berridge
There is a slight update on the position of the Joint Committee on Human Rights. As a result of Mr David Anderson QC seeing those cases, he came back to give evidence to us. The suggestion was put to him that the special advocates look at those three cases. After he saw those cases and said what the noble and learned Lord has outlined, we received representations saying, “That is not a correct procedure. We need to go in as well to see those cases and to see whether they cannot be dealt with”. At the moment, I believe that the special advocates with security clearance have been invited to go in and look at those cases, so that we can have two views on whether those cases can be determined under the present system.
Lord Falconer of Thoroton
I was aware of that. The Joint Committee on Human Rights said:
“The flexible and imaginative use of ancillary procedures (such as confidentiality rings and ‘in private’ hearings) has meant that to date there is no example of a civil claim involving national security that has proved untriable”.
So the committee is saying that there may be ways around that. I find it difficult to imagine that the key point about the closed material procedure is that the claimant does not see the documents. From what has been said—this may well be right—the claimant is the person you do not want to see the material. How does a confidentiality ring or an in-private hearing deal with that fundamental point about closed material proceedings? From this side of the House, we understand what is being said but query whether the case is yet proved.
On the second issue, let us assume that you need something because the case is to be treated as proved in relation to these three cases, which is what is relied on. Is what the Government are proposing the right answer? Remembering that the point here is fairness and not the protection of national security, in our respectful submission, the solution is obviously flawed. There are two problems with it. First, it says that where a Minister certifies or contends that national security would be damaged—no balancing exercise: end of story—closed material proceedings are allowed. No balancing would be allowed.
There is a little bit of movement on the other side in relation to that. I say that because Clause 6(1) states:
“The Secretary of State may apply to the court seised of relevant civil proceedings for a declaration that the proceedings are proceedings in which a closed material application may be made to the court … The court must, on an application under subsection (1), make such a declaration if the court considers that … such a disclosure would be damaging to the interests of national security”.
There is no balancing of any sort before you get to the declaration of Clause 6(1).
Clause 7(1)(c) makes provision for rules of court and states that,
“the court is required to give permission for material not to be disclosed if it considers that the disclosure of the material would be damaging to the interests of national security”.
Once even the most minor damage to national security is established, the door comes down and you do not disclose.
I cannot believe that that is what the Government intend in relation to this. They do not even include in the provision anything along the lines of “Before you do that, think very carefully about whether the problem can be avoided by any one of the many means currently used”. My two big worries about the Bill in this respect would be, first, that there is no balancing exercise and, secondly, that there is no requirement for there to be thinking about whether there are means by which it could be avoided in other ways.
The noble Lord, Lord Thomas, and the noble and learned Lord, Lord Woolf, came together in an unusual combination in relation to this. They said that maximum flexibility is the answer and I agree. This is not a maximum flexibility situation. For the two reasons that I have given, I would respectfully submit that the Government have got it wrong in relation to this.
What is the answer? For the reasons I have given, I think that what the noble Lords, Lord Faulks, Lord Lester and Lord Pannick, have proposed does not quite get there. I cannot understand why the obvious answer, at the moment, is that you give a judge the power to rule that it is PII and is not disclosed; or that it is disclosed in full; or that, in exceptional circumstances, it should be heard in a closed material proceeding. With the amendment in the names of the noble Lords, Lord Faulks, Lord Lester and Lord Pannick, you end up in a situation where only if you say no to disclosure can there then be a closed material procedure. However, there must be cases where it is a finely balanced thing. If the court was forced to choose between disclosure and non-disclosure, it would choose disclosure, but if it also had the option of a closed material procedure, it would take that. The amendment does not allow for that flexibility.
Lord Lester of Herne Hill
The spirit of liberty is the spirit that is not too sure that it is right, but I tried to indicate agnosticism about the precise way of approaching it. I entirely agree with the noble and learned Lord, with the noble and learned Lord, Lord Woolf, and with my noble friend Lord Thomas of Gresford that flexibility is key and that if we can achieve that, we do not want to put it into a straitjacket. We simply produced a form of words that were an attempt to be formal but were not intended to be the last word at all.
Lord Falconer of Thoroton
I hope that the noble and learned Lord, Lord Wallace of Tankerness, takes the same view of this Bill. I am grateful for what the noble Lord, Lord Lester, said and one can recognise that view around the House. I am not yet persuaded of the need for it, but it could be that the noble and learned Lord will persuade me. If there is a need for it, the question is then: what is the right course? In my respectful submission, neither the Government’s proposals nor the amendment quite get there.
With the greatest respect to the noble and learned Lord, Lord Woolf, who I agree with in relation to flexibility, in the light of the decision in the Al Rawi case I do not think it is possible simply to leave the position for the common law to develop. As I understand the Al Rawi decision, it is effectively saying, “You cannot have a closed material procedure unless the parties agree; and even then we are not sure”.
Lord Woolf
I was saying that PII should be left flexible. I was not suggesting that you could do without legislation.
Lord Falconer of Thoroton
That was my fault. More generally, I have two further points. First, I now understand the point made by the noble Lords, Lord Hodgson and Lord Thomas. I did not understand it previously. I thought that they were talking about the claimant keeping material back, but I now understand that they were saying that it should be possible for the claimant to say that he has not seen the material, but that the judge should see it, even if the claimant does not. I can see force in relation to that. Even though it appears to give equality of arms to the claimant, it is in fact a very unequal equality because the claimant has not seen the material and the defendant has seen it. The tactical decision that the claimant will make in litigation is quite tricky.
Lord Thomas of Gresford
I think I made precisely that point—that it was not equality of arms but a step towards equality of arms, and it was better than the present situation.
Lord Falconer of Thoroton
Yes, and indeed my noble and learned friend—although I should not refer to him as learned, but he is learned in every other respect—Lord Beecham is saying that that is exactly the point that the noble Lord, Lord Thomas, made. There is agreement all round on that.
Where we come out in relation to this is: prove your case. If you do that, then having no balancing or requirement to go through steps beforehand is an inadequate response. We favour more the amendments tabled. We particularly like the idea of flexibility that the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Thomas, have advanced. We hope that the Government will, having heard the debate, produce a reformed approach that will reflect a pretty unanimous view around the House on how best to deal with this issue.
Lord Wallace of Tankerness
My Lords, I join the noble and learned Lord, Lord Falconer of Thoroton, in congratulating all who have taken part in the debate. It has been very helpful. I certainly welcome the spirit in which various proposals were put forward.
Perhaps I may deal first with the noble and learned Lord, Lord Falconer, who said that he remains to be convinced. I noted that most other contributors to the debate thought that there were cases, albeit a small number, where closed material proceedings would be required. He quoted David Anderson QC, who has had access to some of the material and has been satisfied. There is only a small number of cases. No one is claiming that there is a huge number, and I will come on to that in a moment. There is the experience of people such as the noble Baroness, Lady Manningham -Buller, who have seen the kind of cases where this issue could arise. I generally agree with the analysis where the noble and learned Lord, Lord Falconer, indicated at the outset of his speech that there were two different issues here—fairness in civil proceedings that by their nature are not of the Government’s instance, and other cases that we will consider later in Committee with regard to Norwich Pharmacal.
We are trying to secure fairness. The Bingham Centre for the Rule of Law, which has been quoted and referred to in this debate, said, in its response to the public consultation that,
“we consider that the prospect of claims alleging very serious wrongdoing on the part of state agencies (such as complicity in kidnapping, forced disappearances and torture—as have been made in several recent cases) being dismissed because key evidence inculpating state agencies is held to be immune from disclosure, to be a very concerning one from the perspective of the rule of law”.
We are seeking to ensure that there is material there and, if so, that it can be placed before a judge, obviously subject to safeguards, and that if national security issues are involved they would not be prejudiced by the material coming into the public domain.
I detected in the debate a sharing of that objective. It is perhaps worth reminding the Committee that in the Green Paper that the Government published last year, we made it clear in paragraph 2.4 that:
“CMPs should only be available in exceptional circumstances, and where used, every effort is and should continue to be made to have as much material considered in open court as possible. But in the small number of cases where sensitive material is crucial to the outcome, it is better that the court should be able to decide the case, despite the additional complexities a CMP might create, than—in a worst case—that the case should not be tried at all”.
We also said in paragraph 2.5:
“An appropriate mechanism for triggering the CMPs will help to ensure that they are only used where it is absolutely necessary to enable the case to proceed in the interests of justice. The principle of open justice is an extremely important one, and any departure from it should be no more than is strictly necessary to achieve a proper administration of justice”.
I hope that that provides reassurance to a number of my noble friends; the noble and learned Lord, Lord Woolf, emphasised the importance of it—as did the noble and learned Lord, Lord Falconer.
Perhaps I may first address the amendment of my noble friend Lord Faulks. It would introduce a system of statutory public interest immunity for national security material only. I fully recognise that the purpose of the amendment is, as it were, as a precursor to Amendment 40. As the noble and learned Lord, Lord Woolf, indicated, nevertheless it would represent a change from a situation where public interest immunity has proceeded on a common-law basis. Putting it on a statutory footing would be a significant change. We obviously need to put closed material proceedings in civil cases on to a statutory footing, because in Al Rawi the Supreme Court indicated that there was no common-law basis for them. We are dealing with two different things in that respect.
PII is a principle that the courts have developed over a number of years to deal with the handling of sensitive material, and a wide and flexible range of public interests falls within its ambit. However, I have concerns that to change all these things may lead to more difficulties than the problem the change was intended to resolve. The Government ruled out a statutory PII in the Green Paper because it would offer little advance on the current system in providing clarity on the applicable principles, stability and certainty. If you start to create a statutory presumption in relation to national security when PII is asserted, it would start to raise questions when PII is claimed and sought in respect of some other grounds.
However, I accept that the primary purpose of the amendment was to prepare the way for Amendments 40 and 47, on which my noble friends Lord Faulks and Lord Thomas raised important issues about the relative benefits and interaction of closed material proceedings and public interest immunity.
My noble friend Lord Faulks asked whether Clause 6(5) was a tick-box exercise. It is important to emphasise that it is a statutory duty. The Secretary of State would consider whether a claim for PII should be made before applying for a CMP on the basis that it is a statutory duty and a legally binding obligation. Were someone to apply for judicial review of that exercise, the Secretary of State would in practice need to show the court that he or she had in fact properly considered PII as an alternative to a CMP application. That entails giving the matter serious consideration, taking into account all relevant considerations, ignoring irrelevant ones, and coming to a rational conclusion on the facts of a particular case.
The statutory duty would mean that, were PII successfully claimed, for example, the Secretary of State would consider factors such as what this would mean in terms of exclusion of materials which CMPs would otherwise allow the court to take into account. It may relate to the volume of national security material, or only one piece of evidence in the case might be relevant. Why go through the requirement for PII if indeed there is only one piece of evidence or—at the other extreme, and this is the term that has been used—if it is saturated? It may also relate to how relevant or sensitive the national security material is to a particular case. However, it is not a tick-box exercise.
Lord Lester of Herne Hill
I do not understand why it is sensible to do this by way of satellite litigation—judicial review of a Minister—rather than leaving the judge at the centre to make the judicial decision himself.
Lord Wallace of Tankerness
My Lords, I come on to why I do not agree that the PII ought to be exhausted first, and that that should be the test of what should apply with regard to an application. I have indicated why it would not be advisable, and I totally accept what my noble friend said: he is agnostic as to the terms of this. We are just trying to find a way of reaching proceedings that are acceptable.
Lord Lester of Herne Hill
Just to clarify, I am not talking about which comes first. I do not understand why it is sensible to say that a Minister makes the decision, and then it can be judicially reviewed. Why is that a more practical and sensible approach than leaving the flexibility to the judge from the very beginning?
Lord Wallace of Tankerness
Of course, it has been Ministers who have asserted PII, and I think that is what we expect the Minister to do: to give consideration to whether that would be appropriate in this particular case before considering an application for closed material procedures.
We do not find an exhaustive proceeding of PII satisfactory because, where it is obvious from the outset that the Government would be claiming PII, and national security counts for the overwhelming majority of relevant material, why go through the PII exercise before applying to the court for a declaration that closed material procedure can be used? That may be the kind of case that the noble Baroness, Lady Manningham-Buller, was talking about. As I have indicated, the Government’s proceedings specifically include a duty to consider it. However, Mr David Anderson QC in his evidence to the Joint Committee on Human Rights said that the termination could be made without conducting a whole PII. He said that,
“if the exercise is plainly going to be futile, I do not think legislation should require it to be performed”.
Lord Pannick
I ask the noble and learned Lord whether he agrees with the evidence that Mr Anderson gave in answer to a question from the noble Baroness, Lady Berridge, when he said:
“The closed material procedure is a weapon that could usefully be added to a judge’s armoury, but it should be for the judge to decide on the fairest way to dispose of a case”.
Lord Wallace of Tankerness
The noble and learned Lord, Lord Woolf, talked about trying to square the circle. By the time I come to the end of my remarks, I will perhaps suggest that the circle is not as far from being squared as may appear from some of the comments that have been made. The noble Lord, Lord Pannick, is a member of the Constitution Committee of your Lordships’ House, and its report did not go so far as to recommend that the Bill require PII to be exhausted before a CMP declaration is sought from the court. The report stated:
“We can see force in the argument that it will sometimes be otiose to push the PII process to its completion before turning to CMP”.
Therefore, the idea that we should exhaust PII beforehand has some practical difficulties. Amendment 47 of my noble friend Lord Thomas of Gresford may try and avoid that, but I am not sure that it would because it still appears to require an exhaustive process. My noble friend referred to the Guantanamo civil damages claims, where there were 250,000 potentially relevant documents for which PII might have to be considered. We are talking about having to go through all that.
I come on to the two stages of the closed material procedures, an important part of what I wish to say to your Lordships. There is what might be described as the gateway application—basically covered by Clause 7—and then there is detailed consideration of the documents once a CMP has been granted. Of course, on the detailed consideration of the documents, not quite the same test would apply, and we would have to go through all these documents again to see if a CMP should apply to each one individually. That could take considerable time and cause delay to the claimant, which is of quite considerable importance as well.
My noble friend Lady Berridge asked if the court should have gone through PII in the Al Rawi case because it could have resulted in a balancing act and things might have gone into open court. The point is that if the court had overturned the PII certificates on Wiley grounds, the result would not necessarily have been disclosure of the material in open court, if disclosure would have damaged national security. The Government would have to seek to have the material removed from the litigation by making concessions or by seeking to settle. Indeed, that is one of the issues that we are trying to address with these proposals.
Some have suggested that under public interest immunity more material would be heard in open court than in a CMP. We do not believe this to be the case. Nothing heard in open court now should be heard in secret in consequence of these provisions. In practice—and for the very reason I have just given to my noble friend Lady Berridge—claimants will have access to the same level of information, because, where the court declares that the case is one where closed material procedure may be used, this does not mean that all material in those proceedings is automatically heard in closed proceedings. As with PII, there will be a painstaking exercise to ensure that as much of the evidence as possible is heard in open court.
This painstaking exercise has sometimes been overlooked. The noble and learned Lord, Lord Falconer, said that the Clause 6(3) test is passed and the door closes. That is not the case. The Clause 6(3) test is only that the CMP may be used in principle, and there is then a detailed assessment at stage 2 with regard to the provisions that are available, with the rules of court to be promulgated under Clause 7. I hope this addresses some concerns. The noble Lord, Lord Pannick, and my noble friend Lady Berridge made a point about the second stage of the process. The decision to go into closed material procedures is an in-principle decision, and there is no equivalent with regards to PII. That is stage 1.
In stage 2, in Clause 7, the court considers what might then be done with the material. It may be on a document-by-document basis. It could lead to redaction, and it could lead to gisting. It would be quite possible for every piece of material relevant to proceedings to be partially disclosed, redacted or gisted, If this could be done without damaging national security. I hope that that gives reassurance that there is a stage which, although not exactly the same, is a very similar test and process to PII. As we said in the Green Paper, we wish to be in open court as much as possible, and we believe that that can be facilitated by going through a stage 2 process.
My noble friend Lord Faulks asked about the points made by our noble and learned friend Lord Mackay of Clashfern on Second Reading with regard to Clause 7(3). The importance of Clause 7(3) is that it follows Clause 7(2)—obviously—and covers circumstances where if the court refuses permission for particular evidence to be heard in closed proceedings, and the Government elect not to disclose that material, the court has the power to direct that that material should not be relied on and should be excluded from the proceedings, or to give directions that concessions must be made. These are very important safeguards.
Lord Falconer of Thoroton
My understanding of the point made by the noble Lord, Lord Thomas, is that the Government can choose to go for PII and get the material out completely or, if it helps them, to say, “Let’s have it in secret without the other side seeing it”. The Government can make that choice and nothing in the Bill would make it wrongful for them to make their choice by reference to what would give them the best prospect in litigation.
Lord Wallace of Tankerness
Certainly I am aware of that concern. It was perfectly legitimate for the noble and learned Lord to raise it, because it motivated the amendments tabled by my noble friends Lord Thomas and Lord Hodgson.
For the sake of completeness, I will indicate that it is important to remember that the court will need to be satisfied that disclosure of that material would damage the interests of national security, and that any obligations under Article 6 of the European Convention on Human Rights are met. Of course the court will have the assistance of special advocates representing the interests of excluded parties in testing whether these conditions are met. I endorse what was said by the noble and learned Lord, Lord Woolf, and my noble friend Lord Carlile, that perhaps special advocates have sometimes undersold themselves. I think it was in the case of M v Home Office that the noble and learned Lord, Lord Woolf, indicated that he had been very impressed by what the special advocates had done in challenging evidence.
I move on to the point about the Secretary of State and the important amendment spoken to by my noble friend Lord Hodgson. It raises an important issue that the Constitution Committee flagged up with very seductive arguments that we should consider. I am aware that there is concern about the potential unfairness of the Secretary of State being the only party to proceedings who can make an application. However, I will explain to the Committee that we heard that the motivation behind the amendment was concern that there would be too much control in the hands of the Government, and that were they to apply for PII to exclude material from the case, the other party would not be able to request a CMP so that the information would be put before a court. As I indicated, this matter was picked up by the Constitution Committee.
There is an important constitutional point here. Under our system of government, the Executive are the guardian of the United Kingdom’s national security interests. The courts have frequently stated that the Government’s function to protect national security by claiming PII is a duty rather than an option. Correspondingly, we believe that it should be the responsibility of the Secretary of State to apply for a declaration that a closed material procedure may be used when the sole criterion is that of national security. There would have been stronger arguments if some of the other grounds that were floated in the Green Paper had been included—but we confined this purely to national security. We believe that the courts can play an essential role.
Lord Faulks
I entirely accept what the noble and learned Lord said about the relative roles of the judge and the Secretary of State. Perhaps this might give him an opportunity to deal with the response in the Second Reading debate. It was suggested in the algorithm that the judge could decide what was in the interests of national security.
Lord Wallace of Tankerness
It was helpful of my noble friend to raise that. Clause 6(2) states that there are two ways in which a judge must be satisfied before he must grant an application for closed material proceedings. The first is that the party to the proceedings would be required to disclose material to another person in the course of the proceedings. That would normally come under Rule 31 of the Civil Procedure Rules. Again, I say to the noble Lord, Lord Pannick, that Clause 6(3)(a)(i) is there because there could be circumstances in which a judge could take the view that you would not be required to disclose something because you could assert public interest immunity, and that argument would succeed. Apart from the fact that there might be public interest immunity, if disclosure would be required under normal rules in civil proceedings, that would be the first test that the judge has to apply.
The second test is that it would be damaging to the interests of national security. It was said by a number of noble Lords, including my noble friend Lord Lester of Herne Hill, that the courts over many years have been very respectful of the government position on that. The Bill makes it very clear that the application would be one in which special advocates would be involved. They could assert to the judge that the case had nothing to do with national security and that the Government were trying to cover up some embarrassment. That is why the second test is there. The two conditions must be fulfilled: first, there must be a requirement to disclose; and, secondly, disclosure would be damaging to the interests of national security.
In practical terms, the Secretary of State would be in the best position to judge the scope and nature of national security-sensitive material. Despite the fact that the absence of a CMP might be detrimental to their interests, other parties will not even be aware that relevant national security information exists, and would not be able fully to judge what damage there might be if the information were released. It is therefore clear that the argument for the Secretary of State making the application is a strong one. Nevertheless, it can remain open to a third party to approach the Secretary of State and request an application for a CMP should they require one. One example of this might be if the police were party to proceedings involving national security-sensitive material, for example in relation to counterterrorism. The Secretary of State would assess the risk of damage and make an application for a CMP on their behalf.
If the public interest were more widely drawn than national security, there would be a stronger case for other parties to the proceedings to be able to apply for a CMP. However, as my noble friends Lord Thomas of Gresford and Lady Berridge made clear—I was asked about this by the noble and learned Lord, Lord Falconer—one concern is that the Government might want to have their cake and eat it, and might choose between claiming PII and applying for a closed material procedure opportunistically—opting for PII to exclude material and cover up wrongdoing and CMP where closed material would help their case. We do not believe that this is a realistic concern.
I assure noble Lords that the intention behind the CMP proposals is precisely that allegations against the Government are fully investigated and scrutinised by the courts. The intention is that all relevant material, helpful or unhelpful, will be put before the courts. Although it is in the first instance for the Secretary of State to instigate the CMP application, or to make a claim for PII, the power to order CMP or accept a PII certificate will rest with the judge, who will be alert to any unfairness to the non-government party, and with the CMP would have the case-management powers under Clause 7 to ensure that individual pieces of evidence are treated fairly through requiring disclosure or exclusion. It is inconceivable that a judge assessing the PII claim would conclude that the public interest in excluding material outweighed the public interest in its disclosure if the Government were cynically seeking to use PII to exclude material that undermined their case or assisted another party to the proceedings, especially where the court would know that the possibility existed of making an application for the use of a closed material procedure.
This is where the point made by the noble and learned Lord, Lord Woolf, is relevant. He said that these matters could be looked at in the round and should not be put in silos. That is what we anticipate happening. The concern is perfectly legitimate and I fully understand it. However, we do not believe in reality that that would happen, and that the judge who was asked to grant a closed material proceeding or a public interest immunity certificate would allow such cynical ploys to succeed.
Lord Thomas of Gresford
That sounds like one of the great lies. “I am from the Government and I am here to help you”. The noble and learned Lord is saying that a Minister faced with a claim against him is inevitably going to be like a judge and not weigh one thing against another. If he can win his case by going for PII instead of closed material procedures, which I suggest he can, why would he not choose to go for PII? That is why I say my suspicions would be aroused if the Minister who had that choice went for PII, knowing that excluded material could not form part of the judgment. That is the problem. For the past five minutes the noble and learned Lord has been emphasising that the judge has this decision; he has this discretion; he looks at this material; he makes up his mind. The Bill is a straitjacket whereby the Minister controls which procedures are to be followed as well as what material is to be disclosed. So I hope the noble and learned Lord will reflect on what he has been saying.
Lord Wallace of Tankerness
My Lords, I do not accept that it is a straitjacket. I have sought to indicate that at the second stage proceedings each individual piece of material will be looked at. If disclosure subject to redaction is needed, that is what will be ordered. If gisting is needed, the power will be there for the court to do that. I do not believe there is terribly much between anyone as to what we seek to achieve. I have made it clear that it is not the intention of the Government that uncomfortable, unhelpful evidence should be held back. Indeed, I have just said that it is our intention that all relevant material should be before the court. If your Lordships do not think that the wording achieves that, it would be only proper, given the quality of the debate we have had, for me to reflect on the points that have been made. We are all grappling with how we get the procedure that achieves an objective which is widely shared.
I hope noble Lords will also consider the points that I have made. Some of the comments made suggested that it had not been fully understood what the nature and extent of the second stage procedure would be with regard to individual documentation and evidence once the gateway had been opened and the principle of closed material proceedings had been accepted. I hope noble Lords will reflect that that procedure is available. I am more than willing to engage with the Opposition, with my noble friends and with Cross-Benchers to see if we can address the objective in a way which does not defeat the object of this but ensures that in cases where justice and fairness demand that material should be made available, material which would be damaging to national security were it to go into the public domain, that that can be achieved. I have no doubt that when I invite my noble friend to withdraw his amendment he will indicate that we will come back to it at the Report stage. I sincerely hope that over the summer months we can have some consideration of it and perhaps the agnostics might become believers.
Lord Lester of Herne Hill
Just to be clear, is the Minister saying that he accepts that the judge at the first stage should have complete discretion in deciding on case management and whether it should be dealt with first by PII or not? If not, why is that such a bad idea?
Lord Wallace of Tankerness
My Lords, that is not what I said. I did say, however, that the judge at the first stage has to be satisfied that two tests are met before he even opens the gateway to closed material proceedings. There has perhaps been some misunderstanding that when you pass through the gateway, everything suddenly becomes subject to closed material proceedings. That is not the case. It is at that stage that individual pieces of evidence are looked at. That is a materially different position from the one which has sometimes been suggested that the gateway is the be-all and end-all and once you go through the gateway the doors and the shutters came down. That is not what is proposed but obviously if noble Lords do not believe that is properly reflected in the drafting, I am more than happy to try to find a way in which we can proceed.
Lord Falconer of Thoroton
My Lords, I am grateful for that constructive indication. I would co-operate fully in trying to draft an answer that reflects what the noble and learned Lord is saying. I understand him to be saying that if a PII application were made, the judge would be able to say, “You cannot keep all this secret. You should deal with it in a CMP”. That is what I understand the noble and learned Lord to be saying. I think he is nodding, although it may be an involuntary twitch. Assuming that he is nodding, there seems to me to be a problem in the drafting because it gives the court the power to make a CMP order only where there is an application by the Secretary of State. I would be more than happy if the solution reached was to apply to the judge who has the power to decide, balancing all the factors, whether this should be PII, complete disclosure or a CMP. That is not what the Bill says now but that is broadly what I understand the noble Lord, Lord Thomas, to be arguing for—the noble Lord, Lord Lester, is nodding—and the noble and learned Lord, Lord Wallace, to be saying. I am more than happy to sit down with everybody and draft that but that is not the current position.
Lord Thomas of Gresford
Perhaps I may add that my Amendment 45, which we have not come to, is designed to replace the word “must” in Clause 6(2) with “may”—in other words, a discretion for the judge to decide whether to make a declaration based on the criteria that he must apply.
Lord Wallace of Tankerness
My Lords, again we are falling into the trap of jumping to stage 2 and thinking that the application immediately rules everything as closed material, which is not the case. If there is a body of evidence which can be presented to the judge showing that interests of national security are absolutely pertinent to the determination of this case, it is “must”; there must be closed material proceedings. But, as I have indicated, that does not mean that every piece of evidence is to be excluded and is not to be disclosed. If the Secretary of State cynically applies for PII when a CMP is available, the judge may not be disposed to grant PII. What I understood from the noble and learned Lord, Lord Woolf, is that the reality, particularly if you have special advocates arguing the case, is that unless the Secretary of State seeks a CMP for this kind of material he will have less of a chance of getting his PII accepted. Even if a CMP application was not made by the Secretary of State and a request was made to him for a CMP which he refused, that in itself would be judicially reviewable. If that refusal was seen to be unfounded and irrational, or the only rationality was to hide malfeasance, then clearly that would weigh heavily with the Secretary of State. I have indicated what we intend to achieve by this. I repeat: the intention is that all relevant material, helpful or unhelpful, will be before the courts. I think we can have a worthwhile discussion as to how that could be brought about.
Lord Faulks
My Lords, this has been a lengthy but helpful debate. I am grateful to all noble Lords for taking part and for the very constructive comments that the noble and learned Lord, Lord Wallace, has made. It seems to me that we are moving, if not dancing as the noble and learned Lord would have it, towards some sort of consensus here. The question is whether we have found the right route to CMPs—an option which should be exercised only in the last resort. As the noble and learned Lord, Lord Woolf, said, it is certainly better than nothing. It is hoped that there will not be many cases that need CMPs. Like the noble Lord, Lord Lester, I do not wish to be competitive about which amendment is preferable. The amendments are intended to probe the somewhat complex provisions. There has been a great deal of clarification from the noble and learned Lord, Lord Wallace, for which I am grateful. It is still not entirely clear to me how some of the various parts of the procedure are going to work with each other. I think it is accepted that there is room for some improvement in that regard.
The noble and learned Lord, Lord Falconer, asked for the evidence that PII is actually working. Apart from the anecdotal evidence and the absence of appeals, there is some substantial evidence from the special advocates themselves, who say that not only is it working but it is enough, and they do not support the possibility of CMPs at all.
I accept that there is always a danger in putting in statutory form something that is in common law; it could perhaps remove the possibility of growth. None the less, PII is a mature form of the common law and the definition of PII contains a great many checks and balances, as this statutory interpretation has set out. Taking Amendments 39 and 40 together, it looks a rather complex procedure, formulaic or even a straitjacket. In practice, all it is doing is summarising what is well established, and there will indeed be a great deal of flexibility even if one were to follow the terms of the amendment.
Flexibility is clearly desirable, but I would reiterate that it is most important—as the Government acknowledge in Clause 6(5)—that the question of PII should be properly considered, and potentially judicially reviewable. This amendment puts in the Bill an obligation to go through the process before going to CMPs. I suggest that, with modifications, that represents a positive safeguard on what I hope will be a rarely resorted to but undoubtedly necessary procedure. In the light of what has helpfully been said, I am happy to withdraw the amendment.
Baroness Stowell of Beeston
My Lords, before I resume the House, I take this opportunity to offer some assistance to noble Lords who will be participating in the next debate in the name of my noble friend Lord Astor. As is obvious from the list of speakers, there is great interest in this debate, which has led us to have to limit speaking times to three minutes, with the exception of my noble friend Lord Astor and my noble friend the Minister. I know that noble Lords are familiar with the way that the clock operates and will want to work with my noble friend the Whip on duty tonight to ensure that we finish the debate in the hour to which it is limited.
Railways: High Speed 2
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Viscount Astor
To ask Her Majesty’s Government what progress they have made in reviewing the economic viability, value for money and benefit-cost ratio of the High Speed 2 London to Birmingham, and London to Leeds and Manchester, lines.
Viscount Astor
My Lords, HS2 is a controversial proposal designed to operate a high-speed rail link between London and Birmingham, and eventually onwards to Leeds and Manchester. It is controversial for a number of reasons.
The first is the route: a new line cutting through some of the most unspoilt countryside in England, where there are already two existing lines, one operated by Virgin Trains and the other by Chiltern Railways. Either line could be upgraded or the new line could follow one of the existing motorway routes—an option suggested by the Transport Select Committee—which would cause minimal disruption compared with HS2.
However, I want to concentrate on cost. The question is whether the cost of £33 billion is worth the benefits that might accrue. We all want better services from north to south, but I challenge the assumption that HS2 is the answer. The Government’s case rests on the assumption that rail travel is destined to grow at the rate projected by the Department for Transport, but one has to say that the department’s record in projecting future passenger numbers is not good.
In the words of the National Audit Office, the department used “hugely optimistic assumptions” about passenger numbers on HS1. Passenger numbers from 2007 to 2011 were only one-third of the original 1995 forecast and two-thirds of the 1998 forecast. The NAO went on to say that the costs had exceeded the savings from shorter journey times, and the Public Accounts Committee said that costs would eventually rise to £10 billion.
I am sure that the Minister will quote the support of the All-Party Parliamentary Group for High Speed Rail. However, it is a group set up specifically to support high-speed rail, so I would remind him of another report by the Public Accounts Committee, which came to the opposite conclusion and recommended:
“The Department must revisit its assumptions on HS2 and develop a full understanding of the benefits and costs of high speed travel compared to the alternatives”,
and that it should consider the alternatives, such as investment in more local train routes.
The department claims to have improved its forecasting, with better computer modelling and more computer power, but of course wrong assumptions in produces wrong statistics out, whatever the rise in computer power. What it has failed to take into account is that the projected benefits are largely dependent on business use, and business use is changing.
Why travel so often when Skype and internet conferencing are becoming the norm? Reductions to already short journey times are largely irrelevant to business efficiency as carriages are now linked to the internet and provide a good working environment. To assume that all time spent on trains is wasted is simply not credible. The department’s own report Productive Use of Rail Travel Time and the Valuation of Travel Time Savings for Rail Business Travellers asserts that a reduction of 10 minutes in journey time increases the amount of working time by only 0.75 of a minute.
HS2 does not deliver a step change in journey times. It connects to the centre of Birmingham but there is no onward connectivity and a change is required; nor does it connect to Heathrow, as promised in the Conservative Party manifesto. This connection is offered as a possibility, some time after phase 2, in 2033. What is more, a route via Heathrow would cause the least damage to the Chilterns, crossing through its narrowest part. HS2 will cut the journey time from London to the centre of Birmingham but only by barely half an hour, and much less if you want to make an onward connection.
By the Government’s own admission, the benefit-cost ratio for phase 1 declined from 2.4 in March 2010 to 1.4 in January 2012, and to just 1.2 in April 2012. However, even this overestimates the true position, as the DfT also admits that its assumptions are based on out-of-date gross domestic product figures. If one takes into account the latest GDP forecast and uses the later rail demand model, the benefit-cost ratio dips below 1—well below the Government’s own ratio for acceptable capital expenditure benefits.
In an earlier statement to the Transport Select Committee, the then Transport Secretary Philip Hammond agreed that below 1.5 he would need to seriously review the viability of the project. A full Y route to Manchester and Leeds produces only a modest increase to 1.4 in the benefit-cost ratio. It seems to me that the department is going to have to review the project.
We know that peak-time services from Euston in the evenings are only 56% full and that Manchester services are 45% full. We know that total journeys per person by all transport modes are declining, not increasing, so to justify the projected increases by 2032 there would have to be a large shift from road to rail. Looking ahead to 2032, we know that most cars will be electric and therefore very fuel-efficient. The Government accept that HS2 does not reduce CO2 emissions. There is no evidence that HS2 is going to cut road usage. By 2032, electric cars could easily be driving themselves on the main routes, as has already been tested in America.
What will increase in the future, as I think everybody agrees, is commuter use of the rail network, but HS2 does not solve that issue. I believe that the answer is an upgrade of the existing line, more frequent services, more carriages and longer platforms—which could all be achieved at a fraction of the cost for the same result.
The recent growth following the upgrade of the west coast main line led to huge improvements in service frequencies and journey times and shows what can be done by improvements to existing services. Upgrading is estimated to cost about £2 billion and the department says that it produces a benefit-cost ratio of over 5.0. That is real value for money. This would cater for all the future demand predicted by the department and provide the capacity much sooner so that any crowding problems were addressed much faster. It would also cause significantly less disruption to the existing network than what is proposed.
We are also told that 1 million jobs will be created, but the evidence to support this claim is questionable. Various comparisons are made concerning Europe and the TGV, but a close analysis of what has happened in Europe shows a very local movement in jobs and not necessarily a total increase in jobs in the wider area. Just 1,500 permanent jobs will be created by HS2, but the department admits that seven out of 10 jobs attributed to phase 1 will benefit London, not the regions. We could create a lot more jobs in the north by supporting industry there with direct investment, grants, help with bank finance and better local services.
We need to spend money upgrading our entire rail network. We need infrastructure spending that links the rail network to airports and then to city centres. Those in the north have been pressing for a northern hub that connects key northern cities by rail. East Anglia, for example, is desperate for better services and connections. The concern is that HS2 will inevitably drain funding away from the rest of the network and that desperately needed improvements will not get funding.
The commendable House of Commons Transport Committee report called for a proper transport strategy before HS2 phase 1 and phase 2 proceed. It also called for an explanation of how HS2 fits within an overall transport strategy and for the summary and assumptions of the financial case so they can be properly examined.
We need a rail strategy that will bring real benefits to northern businesses rather than just marginally faster journey times to London. The planned HS2 does not connect to HS1, which is not much help to passengers arriving from Europe. They will still have to get the Tube or the bus across London.
HS2 fails on the four key principles that even HS1 managed to pass: it does not follow existing noisy transport corridors; it does not follow the shortest route through areas of outstanding natural beauty; it is not proposed to be tunnelled through the most sensitive areas; and it does not provide benefits for local communities affected by the route or by access to the service.
I have done a quick canter through this about as fast as a train will go, because time is limited. I have given notice to the Minister of the questions I have asked this evening. I am sure he will be able to address the issues of cost and benefit and try to prove the Government’s case for HS2.
Lord Adonis
My Lords, the international rule of high-speed rail is that everyone wants the stations but no one wants the line. England is no exception, and the noble Viscount, Lord Astor, has been honest enough to admit that he certainly does not want the line anywhere near him. He wrote in the Spectator recently:
“I admit I am biased ... I have walked and ridden over the Chilterns all my life”.
I was not biased as the Secretary of State for Transport. The previous Government proposed HS2, and the present Government are carrying it through because it is the best decision for the infrastructure of the country. This is for two reasons. First, it is false to suggest that there is a choice between building HS2 or saving billions of pounds by not doing so. I fear that that is wishful thinking. The real choice is whether to build HS2, to treble inter-city capacity between London, Birmingham, Manchester, Sheffield and Leeds, or instead to carry out successive patch-and-mend upgrades of the four existing main lines from London to the north, ultimately spending more money for less capacity. The cost-benefit analyses show a strong business case for HS2. But it is equally important to consider the alternative. What would need to happen if there were no HS2? On this, Network Rail's assessment is clear:
“Even modest demand growth causes problems and significant rail enhancement is needed … train lengthening beyond 12-cars would have major implications for terminal stations and signalling systems. Further incremental enhancements at key locations may provide some capacity but not enough to be sustainable for the long-term and not where it is most needed”.
There is no need to gaze into the crystal ball. It is only four years since the last upgrade of the west coast main line referred to by the noble Viscount was completed. It cost £10 billion, and that £10 billion did not price the cost of a decade of chronic disruption to passengers as open heart surgery was performed on a Victorian railway operating at capacity.
There is a second compelling argument for HS2. By using 21st century technology, rather than trying to squeeze yet more out of what by the 2030s will be a 200 year-old railway, you get a transformation of capacity, speed, reliability and passenger service all in one. That is why most advanced European and Asian countries, with an economic and physical geography similar to ours, have already built high-speed lines to link their major cities. The claim that London to Birmingham, Manchester and Glasgow are distances too short for high-speed rail is quite unfounded. The world's most successful high-speed lines are between Paris and Lyons, Frankfurt and Hamburg, Tokyo and Osaka, Rome and Milan, distances comparable to those between Britain's major conurbations. Britain is right to be following suit.
Lord Bradshaw
The noble Lord, Lord Adonis, will remember when I came over with his noble friend, Lord Berkeley, to contest the use of COBA, the system for cost-benefit analysis which is used. This was invented in 1960—at least it entered transport in 1960—and it was used to create a case for the Treasury about the building of the Victoria line. It is based on the theory that one can add up all the small time savings of everybody, multiply them, and then end up with a big sum of money. However, it is not real money, it is imaginary money. I ask the Minister to go back to the department again and challenge the use of COBA, because it is wrong. It is a great industry among the consultants and the department, but it does not lay a single piece of track and it does not properly justify itself.
There is a very strong case that the noble Lord, Lord Adonis, has just referred to, for providing more capacity. However, in the figures he has quoted, the noble Viscount has ignored the fact that the freight industry will double or treble its demand in the timescale of the building of HS2. In so doing, it will wipe out any extra capacity, together with the better train services which will be available at most of the intermediate stations on the west coast main line. I was talking to a newly elected MP from Kent. I asked him how many complaints he received about the HS1 which runs through his constituency, and he said, “None”. He said that people have accepted it, that it is quiet and efficient, and that it does not have any of the things that clutter up motorways like lights and places for people to rest. The noble Viscount, Lord Astor, should take some of his friends to Kent and see the actual effect, because many people are talking up the effects in the hope of compensation.
Lastly, there are huge cost reductions available for HS2. I believe that it should run from Old Oak Common through to HS1 and probably connect at Ebbsfleet. Old Oak Common should be developed in a way in which it becomes the main terminus. We should try not to inflict more people on Euston, which is already full.
Baroness Seccombe
My Lords, I am grateful to my noble friend Lord Astor for bringing this highly important, and for some of us, hypersensitive matter before the House this evening. First, I wish to declare my interest as the President of the Kenilworth and Southam Conservative Association. The constituency lies in the heart of magnificent rolling country of fields, trees and hedges. It comprises glorious productive farming land where at present the residents live with the constant threat of monstrous wind turbines. Now a blight has been added to their fears, with the further threat of high-speed trains ripping through their homes and farms.
I know that many of your Lordships have studied the project in detail. I am not in that category but, as a commuter who has heard innumerable local views, I feel I should express my position. If the fearsome amount of £33 billion has been identified, it should be used for the maximum benefit of us all, not for the few rich northern commuters who would save minutes from a journey at the expense of the long-suffering travelling public and the whole network.
Turning to the chosen route of HS2 Ltd, I am saddened that the company has refused to meet community forums. It has also refused to allow bilateral meetings at which specific counterproposals would have been suggested, which denies local people the chance to give their views. I can imagine that when HS2 Ltd finalises the route in November, there will be considerable irritation.
Lastly, I turn to blight. The planned consultation on a long-term compensation scheme is yet to begin, despite being expected in the spring. The delay is obviously causing anguish. The exceptional hardship scheme allows compensation only when your reason for sale is included on the Government’s list. That is not acceptable so I hope that great care is being taken to produce a system that people can live with. If we have to live with this scheme, I plead that someone who needs to downsize for income or medical reasons, for instance, but is able to sell only at a discount price, should be listened to with understanding and compassion.
Altogether, this is a bad scheme and a huge waste of money which should be dropped. I know that the Minister is fair and sensible and will take our message to his colleagues. I look forward to his reply.
Lord Stevenson of Balmacara
My Lords, I congratulate the noble Viscount, Lord Astor, on securing this all-too-short debate this evening. I can only imagine the frosty reception around the family dinner table when he announced that this debate was taking place tonight, particularly after the revelations in “Mrs Cameron’s Diary” in this morning’s Guardian.
I declare an interest in that my family and I live in Little Missenden, which is only a few hundred metres from the proposed line. It runs through the very heart of the AONB designed to protect the Chilterns. It may be said that, as a result of my living so close, my comments should be discounted. However, it is the very fact that the line runs so close to our village that made me take a close interest in the woeful economic case and the very sketchy consultations carried out to date. I put on record that had there been an overwhelming case in the national interest for proceeding with the line, we would have accepted the situation. However, this is the wrong solution to the perceived lack of future passenger rail capacity, it is in the wrong place, and the project is unaffordable now and will be in the immediate future.
In his excellent speech, the noble Viscount, Lord Astor, gave a withering assessment of the economic viability, value for money and benefit-to-cost ratio of the High Speed 2 line. I agree completely with his comments and conclusions. To strengthen the point made at the end of his speech, I suggest not only that the Major Projects Authority—the MPA—should be asked to report on the HS2 project and publish its results, but that the OBR should take a look at the overall economic impact of the scheme.
Despite my antipathy to the present scheme, I am not against investing in our rail network. I could support a high-speed rail network, but only if it had the following characteristics. The whole high-speed network should be planned coherently from the start and include east and west coast links to Scotland, Wales and the south-west. Greater priority should be given to the need to switch passenger traffic from air to rail, and to linking directly with HS1 and the Channel Tunnel. This would imply routing the line through Heathrow and considering a second hub at Stratford, as recently suggested by the Labour Party.
Serious attempts need to be made to limit the damage done by a new rail line by respecting our heritage and countryside, whether designated or not, by sticking to existing major transport corridors and being prepared to spend what is necessary to provide proper twin tunnels. For example, in the Chilterns, it is an outrage that the current plans do not provide for such a deep tunnel. I urge Ministers to look very carefully at the proposals put forward by groups such as the Conserve the Chilterns campaign group. The Government need to come up with a proper compensation package that reflects the real costs borne now and in the future by those with property blighted by the plans and whose lives will be adversely affected by the construction and operational phases for 20 or more years.
Lord Bates
My Lords, in my short contribution I shall try to agree with my noble friend Lord Astor and the noble Lord, Lord Adonis, about the benefits of HS2. I speak from the perspective of the north-east of England. In doing so, I declare an interest as a weekly traveller on the east coast main line to Newcastle. The journey of three hours and six minutes is the most pleasurable part of my week and probably the most productive. The idea of people cutting it short does not exactly fill me with joy. If they wanted to extend it, I would probably be quite happy and even more productive in that time. However, I accept that I am unusual in that.
My question is: what will the way in which HS2 has been phased do for disparities between the north and south? The south-east has benefited enormously from significant infrastructure investment, starting with the Channel Tunnel, which received £11 billion in current money. Then there was HS1 and the Olympics, which brought £10 billion into the south-east. There is talk of a potential third runway at Heathrow. Crossrail received around £15 billion. Significant infrastructure investment is taking place in the south-east. If HS2 is added to it in its current proposed phasing, it will simply draw more and more business to the south-east of England and cause overheating so that Birmingham becomes simply part of the commuter belt for Greater London. That holds some dangers.
I propose that we solve the problem by starting the high-speed rail network in the north and working south. There are some strategic benefits to so doing. As a northerner, I am also slightly suspicious of 20-year infrastructure contracts. Ten years in, when the first bit has been built as far as Birmingham, will we find that the money has run out? High Speed 2 Ltd will say, “We’re terribly sorry”, and we will not see it completed. If people think that is a bit far fetched, we live with the unmotorised part of the A1 to this day. Starting in the north and moving to Birmingham would allow people time to see how Crossrail is working out, sort out what they will do with Heathrow Airport and assess whether it is needed.
Lord Gardiner of Kimble
My Lords, I thank my noble friend Lord Astor for initiating this debate. I declare my interest as a board member of the Countryside Alliance, which has expressed concerns about HS2.
HS2 is not without controversy. One of the most contentious elements is the fact that the line will run through the heart of the Chilterns, a designated area of outstanding natural beauty. I know the Chilterns and the route north of Aylesbury well. I have a profound respect for the communities there and know many people who will be directly affected. If we are to desecrate some of our finest countryside and place such a heavy and lasting burden on communities, we need to be clear that it is in the national interest.
Under this Government, all infrastructure projects are to include the value of natural capital, as set out in the natural environment White Paper. This approach is commendable. It is illogical, therefore, that the current business case for HS2 does not include a proper account of natural capital. The Transport Select Committee’s recommendation that the revised business plan for HS2 should take account of this is entirely in keeping with the Government’s overall approach.
The justification for HS2 has changed since its inception. First, it was championed as green but that claim is now discredited as it will not lead to any significant reduction in emissions. Then there was speed, but HS2 will cut journey times from London to outside Birmingham by barely 20 minutes. On capacity, many experts say that future commuter demand can be fulfilled by upgrading existing lines. Many groups have pointed out that predicted demand for HS2 is extremely high. Now we hear that addressing the north/south divide is used as validation. However, this is far from certain and many people fear that HS2 could funnel resources and growth towards London and the south-east.
What strikes me most is the lack of consensus around this project. If we are to spend £33 billion of taxpayers’ money on it, does there not need to be more certainty and transparency? The claim is that HS2 will offer genuine value for money, foster growth, improve the transport network and be an investment that benefits the whole nation rather than the few. In its current form, HS2 is a long way off that.
Baroness Scott of Needham Market
My Lords, this is the second time this week that I have found myself engaged in the parliamentary equivalent of speed dating—but here we go. High Speed 2 is not about shaving a few moments off the journey time between Birmingham and London. To really appreciate its true economic value, it has to be seen in the context of a national plan with links to both local schemes and European networks. Despite a highly disruptive £10 billion upgrade, the west coast main line has little room for additional trains while demand on the route has grown over 50% in the last decade and is forecast to keep growing. The challenge of operating long-distance commuter and freight services on the same line is almost insurmountable without further expensive and disruptive work.
Capacity released by HS2 will improve services to many West Midlands towns and into Wales. The east-west rail link for which I have campaigned for 15 years could become a reality. Phase 2 could relieve pressure on the east coast main line and avoid work, for example, on the Welwyn viaduct. With the amount of freight coming into UK ports increasing at 6% per annum, extra rail capacity is needed to prevent more HGVs on our roads. HS2 can be co-ordinated with local transport schemes and housing growth—for example, the new HSR station at Birmingham Moor Street as part of a local regeneration scheme, or the new station at London Old Oak Common providing a link into the City and east London. Experience from the Jubilee line extension shows that these benefits have traditionally been underestimated in conventional BCR analysis.
There is a growing network of European cities connected by high-speed rail, from which the UK outside London and the south-east is currently excluded. This is despite the growing evidence that it is successful at reducing journeys by air. High-speed rail can form an important part of our aviation policy in other ways. For example, Heathrow should be linked to places outside London via high-speed rail. Accessibility to Manchester in phase 2 could make a huge difference to its viability. Indeed, under phase 1, Birmingham Airport will be closer in time to London than will Stansted. The Government need better ways of capturing these benefits and of quantifying the cost of inaction. Applying expensive and disruptive sticking plasters to the west coast main line is not a viable option. We need to create a coherent vision for transport which extends 30 years into the future, as our European neighbours have done. Only then will we have a transport system that will deliver a dynamic economy. Everyone says we need to invest in infrastructure for growth. Let us not talk ourselves out of delivering it.
Lord Cormack
My Lords, like the noble Baroness, this is the second high-speed debate this week in which I have taken part. I am delighted to be able to support my noble friend Lord Astor, who introduced the debate with a powerful, cogent speech, the figures carefully marshalled. For all the eloquence of the noble Lord, Lord Adonis, whom I admire very much indeed, I do not think that he adequately refuted the points made and the figures advanced by my noble friend.
I approach this from a slightly different point of view. The interest that I have to declare is a passionate love of the English countryside—the British countryside, too. Nearly 35 years ago, I wrote a book called Heritage in Danger, in which I pointed to some of the dangers to our very finite countryside. This is not a great, enormous country in geographical terms like France or Germany but one of finite beauty and size. The march of the wind farms and the driving of this link through some of the most glorious countryside in England would remove for ever something that should be imperishable and is of absolutely priceless worth. If you are going to do that, you have to demonstrate that there really is a case for it. I do not think that that has been done.
I have much sympathy with the points made by my noble friend Lord Bates in his speech. I agree with him about the work that one could do on trains. If there is a case for a high-speed rail link of this sort, then start in the north. We are far too London-centric. If we have got this money to spend—we have not; we are always being reminded of the economic stringencies of the time—then let us go back to Beeching and reinstate some of the lines that were so unnecessarily taken up. Communities were deprived of vital links. That would be a better way of reviving the economic fortunes of many parts of this country. Give Lincoln, where I live now, more than one direct train a day from London. Bring to the people a system that really benefits the people.
Many have cast doubt on this scheme and I quote but two. My former colleague Archie Norman, who sat for some few years in the other place and who is the chairman of one of the great companies of this country, believes that the economic case has not been made. Andrew Tyrie—he has been much in the news recently, is to chair this very important committee and has a real knowledge of economic affairs—questions the economic viability. The case has not been made. If we have money to plan for spending money of this sort over the next 20 years, there are far more deserving cases that can bring far more benefit to far more people and preserve our glorious countryside in the process.
Lord Scott of Foscote
My Lords, I will say a word or two in the gap in support of all those who have criticised this HS2 train proposal. I draw attention to the report produced by Mott MacDonald’s consortium, commissioned by and on behalf of the Department for Transport, investigating the economic consequences of the proposed train. In particular, the consortium’s report deals with the supposed economic benefits of the time to be saved by businessmen travelling on the train from London to Birmingham or, later, from Birmingham onwards. I am sure that the Minister will be familiar with this report. He may not agree with me that the information I have about it—I have been unable so far to obtain a copy; it runs to 170 pages—indicates that the supposed economic benefits of the journey in the new train saving businessmen’s time will be at best trivial and at worst spurious. I suggest that this particular report deserves a bit of attention before the Government decide to commit themselves irrevocably to this scheme.
Lord Rosser
My Lords, I thank the noble Viscount, Lord Astor, for securing this debate. Our position is that we strongly support the transformation of our rail network to provide greater capacity and reduce journey times. This will require a combination of both new high-speed lines alongside upgrading the existing network through a programme of electrification and a new generation of high-speed intercity trains. We delivered Britain’s first new high-speed rail line, High Speed 1, and before the last election we set out plans for a second high-speed line, HS2, connecting London to Birmingham, Manchester, Sheffield and Leeds. The Government have backed this project and it should continue to be taken forward on a cross-party basis.
We have some concerns over the way the Government are planning to deliver the new high-speed line. We support creating a major transport hub near Heathrow which would improve connections between our largest airport, Crossrail and the Great Western main line. Since that would mean some change in alignment, it might enable better protection of the Chilterns. If the Government are determined to reject this sensible alternative, we will accept their decision but will expect credible alternatives to be brought forward to address the issue.
We disagree with the Government’s decision to legislate only for the first phase of the high-speed rail line in this Parliament. By splitting the route between two pieces of legislation, the Government are risking national support for the scheme and raising unnecessary concerns about the cross-party commitment that exists to complete the entire Y-shaped route. We also believe that high-speed rail should be a service that is affordable for the population as a whole and not just certain sections of the community, as envisaged by the previous Secretary of State in evidence to the Commons Transport Select Committee in September last year.
All noble Lords who have spoken will want to hear from the Minister whether the Government’s position on High Speed 2 remains as set out in the Written Statement by the Secretary of State for Transport on 10 January 2012. I, too, would like the Minister to answer that question. I would also like the Minister to say whether any subsequent developments have significantly changed the figures to the extent of appreciably weakening the case contained in Command Paper 8247 on high-speed rail, presented to Parliament in January 2012, the Atkins paper of January 2012—the High Speed Rail Strategic Alternatives Study—and the two January 2012 HS2 Ltd/Department for Transport papers on the economic case for HS2.
Will the Minister also say, assuming that the Government’s position on HS2 has not changed since the Written Statement of January 2012, whether the Government’s main—but certainly not only—argument for HS2 is the saving in time for those travelling by rail between London, Birmingham, Manchester and Leeds, or whether it is the need to address the projected serious capacity problems arising from continuing significant projected growth in passenger demand on the west coast and east coast main lines between London and Birmingham, London and Manchester and London and Leeds as well as growth in freight traffic?
Earl Attlee
My Lords, I congratulate my noble friend Lord Astor for securing this debate on a very important subject. I also thank noble Lords for their typically well informed contributions. It is certainly not a matter of nimbyism. It is important and right to raise questions about a project as significant as HS2 and I am happy to try to address such questions this evening. Large scale infrastructure projects are not new or unusual. They have been going on for many years and they have been controversial. For instance, the Jubilee line extension was controversial at the time of its conception, but where would we be without it now?
In his opening speech, my noble friend questioned the benefits that we expect HS2 to deliver. I want to reassure him on this point. I believe passionately in a successful Britain, a country that can compete and thrive in a global economy. To achieve this we need infrastructure fit for the 21st century and beyond. We cannot just make do and mend. Good transport equals good economics. One of the best ways to support British business, power up the recovery and put people back to work is to invest in, and modernise, our transport networks. HS2 will revolutionise travel in our country, transforming connectivity between London, the Midlands and the North, and, as the noble Lord, Lord Adonis, said, it is the best decision. It will provide a step change in the capacity of the rail network to accommodate the growing demand for long-distance travel, providing up to 18 trains an hour, each with up to 1,100 seats. Without it, our main north-south rail arteries will become increasingly disrupted and overcrowded, damaging both our economy and our way of life.
HS2 will slash journey times for passengers between our key cities and regions. It will be a truly national network benefiting the whole country. While the high-speed line itself runs to Birmingham, Manchester and Leeds, the new trains will be designed to continue onto the current network, providing direct services to destinations further afield, such as Liverpool, Newcastle and Glasgow. It will help rebalance the economic geography of the country, supporting thousands of jobs and unlocking growth and opportunity for generations to come. It will be a truly transformative project.
Some noble Lords have questioned whether a new high-speed network is the best way to provide the additional north-south capacity our country needs, suggesting instead a programme of enhancements to the existing network, but this would provide only a short-term answer to the demand challenges addressed by HS2, and even then, only at the cost of significant disruption to passengers on affected lines, all the while sacrificing the connectivity benefits high-speed rail will bring.
Several questions related to the approach taken to assessing the economic viability of the project. In January, when my right honourable friend the Secretary of State for Transport announced her decision on HS2, she set out the economic case underpinning this project and the department will shortly be publishing further updated economic analysis. However, the benefit-cost ratio analysis forms only one part of the decision-making process for this strategically important project. There are wider strategic considerations as well, which I outlined a moment ago. I will try hard to answer as many supplementary questions as I can and when I fail I will, of course, write.
The noble Lord, Lord Rosser, asked about the two hybrid Bills. He will know that each hybrid Bill requires a very considerable amount of work to determine what powers are needed. Several noble Lords, including my noble friend Lord Astor and the noble Lord, Lord Stevenson of Balmacara, claimed that there is no economic case for HS2. I beg to disagree. HS2 continues to have a good economic case. The Government have always been clear that as well as offering good value for money in itself, there are wider social and economic benefits associated with improving connectivity and supporting regeneration in our major cities.
My noble friend Lord Bates was concerned that HS2 will not rebalance the economy. He talked about the north-south divide and the unintended benefit for London at the expense of the regions. The Government’s position has the support of businesses and their representative organisations across the country, which express their belief in the importance of improving our transport network, and specifically our intercity rail network, in order to enable higher economic productivity.
The noble Lord, Lord Stevenson, asked about the release of the Major Projects Authority report. The Cabinet Office has a policy of not releasing the reports for two years, but they will be released at the appropriate point. Noble Lords asked me about the DfT’s record in forecasting and modelling transport demand and they suggested that it is poor. The Department for Transport has significantly improved its passenger forecast modelling in recent years. As acknowledged by my noble friend Lord Astor, we have a better understanding of what drives passenger demand, better computer modelling and our approach to risk analysis has improved.
The position of HS1 and HS2 are very different. Eurostar was accessing a completely new market for intercapital rail travel in competition, it transpired, with a burgeoning short-haul deregulated aviation market. HS2 will relieve a seriously congested existing railway between the two largest conurbations in the country—a long-existing market where demand is well understood and predicted to grow. My noble friend Lord Bradshaw suggested that our appraisal is based on the over-inflated value put on business travellers’ time. The analysis underpinning HS2 has been based on the Department for Transport’s well established approach to appraisal, one that is recognised across the transport industry and conforms to the highest standards of evidence. I know that my noble friend is very concerned about this point, especially in connection with the appraisal of road transport schemes.
Many noble Lords talked about route selection. In terms of the London to West Midlands alignment, HS2 Ltd considered more than 90 options for stations and sections of the route. There are obvious benefits to staying close to existing transport corridors where possible, which is why HS2 Ltd’s recommended route crosses part of the Chilterns close to the A413 and the Chiltern line and, indeed, uses part of the Great Central line. Overall, an M40 route would be an inferior option. It would be longer, have lower maximum speeds, impact on more population centres, resulting in unacceptable impacts on communities and it would be more expensive. In answer to one noble Lord—I think it was my noble friend Lord Bates—since the main capacity constraint is in the south, HS2 will start in the south.
The noble Lord, Lord Stevenson of Balmacara, suggested that the nation could not afford it. The nation cannot afford not to invest in HS2. Investment in HS2, and our wider rail network, can help us overcome the economic challenges we face and secure the country’s economic future. The construction costs will be spread over two decades and on this basis will involve an average level of annual spending of less than £2 billion a year at 2011 prices.
My noble friend Lord Astor suggested that a new railway is not needed to solve the railway capacity problem. By the mid-2020s forecasts show that without HS2, our main north-south rail arteries will be becoming increasingly disrupted and overcrowded, damaging our economy and our way of life, as pointed out by my noble friend Lady Scott of Needham Market. The Government have carefully considered the option of providing additional rail capacity, including upgrading existing lines. These might provide a short-term fix, but not a long-term solution. While alternatives may offer a good benefit-cost ratio, none is able to offer the scale of benefits or change that HS2 offers and would not deliver the increase in capacity that we require. Even the best alternative proposed would lead to decades of disruption on the existing network and lead to unreliable and overcrowded services and more freight on our roads. In answer to the question from the noble Lord, Lord Rosser, the capacity constraints make HS2 essential. The value of time saved is taken into account in the BCR.
My noble friend Lady Seccombe talked about community engagement. The Government and HS2 looked long and hard at possible changes to the route. However, the final design of the route is not yet set. The final design will be developed in consultation with local communities as part of the environmental impact assessment. Once that is complete, we expect to consult on the environmental statement in spring 2013. I encourage everyone with an interest to participate in that consultation. We want local communities to get engaged in the design through their local forums. I do not understand how the problem described by my noble friend arose. I hope that she will brief me later after the debate.
Viscount Astor
My Lords, as we have 10 minutes, may I ask my noble friend to address one issue? Does he accept that the benefit/cost ratio has fallen below 1.5? I will quite understand if he is unable to give a detailed answer, but perhaps he would be kind enough to write to me and other noble Lords who have spoken today.
Earl Attlee
My Lords, I have already undertaken to write where I have not answered. I am endeavouring to get through all my Box notes as fast as possible.
I know that there is no easy way of building a railway in our country but the concerns of local residents are an important priority for the Government and HS2 Ltd will ensure that local views are fed into the design process and that local communities are aware of what progress has been made with the railway.
My noble friend Lady Seccombe asked what the Government are doing to address blight. The Government recognise that HS2 is already having an impact on communities along the line of route. That is why the exceptional hardship scheme was introduced. When the Secretary of State for Transport announced the decision to proceed with HS2 in January 2012, the Government also committed to introducing a generous compensation package for the long term that goes beyond what was required in law. Developing the right property compensation package for HS2 is complex, as it must be fair to those affected by HS2 proposals while also recognising our broader responsibilities to the taxpayer. The Government will shortly be consulting on the detailed proposals to help affected property owners, with the aim of introducing long-term compensation measures as soon as possible.
My noble friend Lord Astor asked about the HS2/HS1 link, a point raised previously by the noble Lord, Lord Berkeley. I can assure my noble friend that the Government intend to connect HS2 to HS1 through a link built in the first phase. This will enable trains to run directly between HS2 and HS1 without the need for passengers to change trains. There are clear strategic advantages from integrating Britain’s new high-speed rail network with the only existing high-speed line in this country and thence to the growing high-speed rail network on the continent.
My noble friend Lord Astor talked about the demand for HS2 in a digital age. Some have questioned the demand projections underpinning the case for HS2, positing a world in which improved digital communication replaces the handshake and the face-to-face conversation and thus the train journeys that make them happen. If we turn to history, it is clear that the advent of the telegraph, the telephone and now the tweet have not lead to reductions in travel demand—far from it. I reassure the House that the Government will continue to keep the economic case and indeed the wider business case under review throughout the life of the project to ensure that it reflects the latest research, evidence and understanding of the project.
HS2 is much more than just a BCR. It is about a step change in capacity and connectivity for passengers. It is about unlocking the potential of our major cities and regions, supporting jobs and driving growth. It is about building a dynamic society, a thriving economy and a successful Britain. HS2 is not just viable; it is a vital part of our future prosperity.
Viscount Younger of Leckie
My Lords, I beg to move that the House do now adjourn during pleasure until 8.42 pm.
Justice and Security Bill [HL]
(12 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Hodgson of Astley Abbotts
My Lords, I shall also speak to Amendments 44, 46, 48 and 49. They say that you should never begin your remarks with an apology, but I apologise because I had understood that there would be a mini-debate and the noble Lord, Lord Thomas of Gresford, and I were in the second half. He de-grouped so I am something of a tail-end Charlie.
I will cover some of the ground that we discussed earlier—in particular, the use of PII before a CMP application—but with some differences, which I shall come to later. I do not expect my noble and learned friend on the Front Bench to give a long and considered answer, because he gave one before the dinner break, but I hope that he will be able to take on board some of the points that I shall make in the next few minutes.
As this is the first group of amendments that I have proposed, I should declare interests. I am a trustee of Fair Trials International and treasurer of the All-Party Parliamentary Group on Extraordinary Rendition. However, as I said at Second Reading, I am not a lawyer and I have never been involved in the security services. I said then that I ventured out on to the ice with some trepidation and, watching the legal thunderbolts that flew across the Chamber earlier this evening, my trepidation has not reduced. However, I was encouraged by another contributor to our Second Reading debate who said that this was too important a matter to be left to the lawyers, so I am venturing a bit further on to the ice.
All these amendments are probing and I hope to tease out the Government’s thinking on a number of issues. To guard against the more obvious ways of making a fool of myself in your Lordships’ Chamber, I have enlisted the help of Tony Peto of Blackstone Chambers and of the campaigning group Reprieve, to whom I am extremely grateful. All the amendments that I have tabled, and more that we shall discuss later and no doubt at our next sitting, have a common theme and background about which I feel strongly. I hope that the Committee will forgive me if on this first set of amendments I explain the background in a little more detail—I will not have to do it again—and, if this appears slightly unlawyerly, I apologise.
I said at Second Reading that I recognised that there was an important issue here, and before the dinner break the noble and learned Lord, Lord Woolf, said that there were going to be a number of cases where national security was inherently and implicitly involved in the case. At the nexus of civil liberties and national security lies the fact that not everybody can know everything and there are legitimate reasons for having to keep some things secret. However, to keep matters secret is undesirable, so I believe that there has to be a strict test of justification. My amendments, all of which are probing at this stage, are designed to develop the Government’s thinking about this justification and, in doing so, to have a chance to benefit from the legal expertise in your Lordships’ House.
My concerns about the Bill can be grouped under two headings. Both concern fairness and are what I have described before as regulatory capture and the possible impact of these proposals on our society. I have said before that I am always concerned about the naturally inherent risk of the adverse nature of regulators, and the security services are one such example. In all fields, whether it be national security, social services or financial services, regulators are judged by failure or at least by the absence of failure. Therefore, regulators tend to want to set the bar as high as possible to give themselves the maximum amount of power or points of leverage to deliver their allotted task.
That, of course, is the entirely positive aspect of the regulatory case, but I am afraid that there can be a less attractive aspect, which is that of spreading a blanket of confidentiality over a matter so as to avoid issues of incompetence or embarrassment being revealed, or the revelation of a smoking gun. I am hoping to find out during our Committee proceedings how we can lean into the wind, so to speak, and make sure that the procedures that we set up really do enable the sorting of the wheat from the chaff in these difficult and critical areas.
My second area of concern is about the impact on our society of these measures, and this underlines the critical importance of our discussions. This is not about legal technicalities but real life. I take part in the Lord Speaker’s outreach programme. It is a fascinating experience which I thoroughly enjoy. I never go to one of these meetings without learning something about our society and the way in which your Lordships’ House and Parliament are viewed. Most of my visits are to schools, to young men and women of 17 or 18 years of age, doing A-levels. I am a West Midlander, so my visits take me to schools in Birmingham and the Black Country, where there is a large black minority ethnic, particularly Muslim, population. I emphasise, as background to our discussion on the Bill, that these young men and women are keenly interested in our judicial system and its application to them and their communities. When you see them, you get questions—I welcome the questions, because I get such a lot from them—about Guantanamo Bay, Binyam Mohamed, and all these aspects which are the background to what we are discussing during the passage of the Bill.
My second reason for tabling my amendments is therefore to ensure that we do not strain the fabric of our society too much and so, indeed, to ensure that when I begin my visits again to the schools in the autumn, I can look these young men and women in the eye, and say, “Yes, we did look at these issues; yes, we did explore the ramifications; yes, we did have legal expertise bearing down on it; yes, we did make the Government justify their policies; and no, this is emphatically not a system with any in-built bias”.
So, with that rather long-winded explanation of the amendments that I have tabled, to horse! Amendment 43 is a trigger for the operation of Clause 6(1), the application for a CMP. During the earlier debate, I was interested in the balance of advantage for PII and CMPs. Amendment 44 sets out the conditions to be fulfilled before the trigger can be pulled. Four of these are listed: that the court has gone through a PII process; that the process has resulted in excluded material; that material includes evidence damaging to national security; and that, as a consequence, the court is prepared to consider an application for a closed material proceeding.
Amendment 46 sets three tests for the court to consider before making a deliberation: that the threshold conditions have been met; that only a CMP can provide a just resolution and PII will not work; and, lastly and perhaps most importantly, that,
“there is no serious risk of injustice to either party”.
I have been advised—I say that with care—that the earlier amendments that we looked at did not cover that in quite the same way. Indeed, with this, you increase the amount of judicial discretion and therefore improve the application of justice and reduce the ability of the Government to dominate the proceedings.
Amendment 48 inserts a new set of tests for the court to consider in deciding to allow an application. There are five of them, which are self-explanatory, but I draw attention to the last one, on which I am again told that in the interests of open justice and natural justice the statement of whether it would be in the interests of justice to grant the application is again likely to increase judicial discretion.
Finally, Amendment 49 requires the Secretary of State or another party to go through the PII process before applying for a CMP, as opposed to considering whether to make such an application for a CMP outright. The purpose behind these amendments overall is to increase the amount of judicial discretion, and to do so to a greater extent than the alternatives that have been put before us tonight. I beg to move.
Lord Lester of Herne Hill
My Lords, in a sense, we have been through this before. This is another means of tackling the problem. I entirely agree with the noble Lord, Lord Hodgson, in raising issues of public confidence. It is a matter of great concern to me that what we call civil society—often very uncivil civil society—has reacted to the Green Paper and the Government’s proposals in extreme terms, it even having been suggested that we should deny the Bill a Second Reading. There is a great deal of cynicism and suspicion about the work done by our security and intelligence agencies. The fact that the press feel aggrieved that the principle of open justice is necessarily limited by the Bill that we are now considering again leads to the impression that something perfectly unconstitutional and disgraceful is being put forward.
I have never taken that view and have agreed with the Bingham institute and Tom Hickman in particular in the way in which they have approached the problem. However, the Government have not done themselves any service by the way in which they produced a Green Paper and put forward far too broad terms, which gave rise immediately to a justifiable negative reaction, and they are now rightly narrowing what they originally sought to do. We have to be careful to realise as we sit in this Chamber at this hour that what we are now doing will probably not enhance confidence outside but, rather, do the opposite, much as we regret it. We must do what we can to combat cynicism and lack of confidence in the work done by the security and intelligence agencies.
I sometimes worry that, unless we give our judges appropriate powers and discretion, we will in the long run also undermine public confidence in the judiciary. It will be most undesirable if the judges are seen merely to be rubber stamps. I just want to give one example. The only time I took part in closed evidence material proceedings was when I represented the People’s Mujahideen of Iran, which had been proscribed by Jack Straw and was seeking to have the proscription removed. It was prevented from collecting funds, having meetings or publishing material. I turned up as its advocate. There was a special advocate but the special advocate was unable to be of any use at all because what we needed to know was the gist of the case against the People’s Mujahideen of Iran.
After two days, my clients came to me and said that this was a completely unfair procedure, that they did not have the faintest idea of the gist of what they were supposed to have done and that they were now going to withdraw from the proceedings and withdraw my instructions. I perfectly understood their view. Later, they chose another counsel, David Vaughan QC, who went to Luxembourg. The Court of Justice in Luxembourg eventually found in their favour, as a result of which I think that the organisation is no longer proscribed.
I say all that because, having lived through that experience, I understand perfectly why the closed material procedure causes such anxiety to the press, to members of the public who take an interest, to those who go through the procedure and to the special advocates. It is no use saying that special advocates underrate their own capacity. They have to live with this procedure and do the best they can, and I perfectly understand why they have these reservations.
Baroness Berridge
My Lords, I rise briefly to concur with the comments of my noble friend Lord Lester, as well as my noble friend Lord Hodgson, particularly bearing in mind his quote about the possible impact on our society. Although we had an incredibly in-depth legal discussion on the previous group of amendments, I felt some frustration as what we were rightly considering was whether we can in particular cases get the least imperfect solution. That is the purpose of the Bill. However, I believe that there is a wider purpose—that of public confidence in our judicial system, which, along with the Royal Family, is one of only two institutions in our society that have remarkably high levels of public trust.
Baroness Manningham-Buller
My Lords, I am surprised to be compared to a regulator on the strength of the organisation to which I once belonged. I see very little parallel between the security and intelligence agencies and regulation. The conclusion that that makes them overcautious is therefore entirely spurious.
Of course, public opinion of and confidence in the judiciary is extremely important, and we do not want to do anything to damage that. Notwithstanding comments in the Daily Mail, I think that public confidence in the security and intelligence community is not helped by the fact that, in many cases, we have been unable to defend ourselves because of the problem that we are describing today. None the less, as I said at Second Reading, the support that my colleagues get from the public is extensive and perhaps greater than the noble Lord, Lord Lester, suggests.
Another point relates to secret information. We need to have the confidence of those—including many young men and women from the communities to which the noble Lord, Lord Hodgson, referred—who give information to the security and intelligence agencies at risk of their lives and in secret. That is one of the fundamental reasons for secrecy. I ask the Committee to remember that in thinking of the confidence in other regards that we want to maintain.
Lord Thomas of Gresford
I respect the views that the noble Baroness has just put forward, but I do not think that public confidence is improved if a closed judgment is given on closed material to the Government in a particular case. It is essential that the public know what is going on as much as is conceivably possible. The interests of national security can be invoked in only the smallest area of cases if confidence is to be maintained.
Lord Falconer of Thoroton
The noble Lords, Lord Hodgson and Lord Lester, and the noble Baroness, Lady Berridge, have made important points, but we must surely address the issue on the basis of what within our court system produces the most just result available, recognising that imperfect justice may be involved. Everybody accepts that two conflicting principles are valid, namely a properly functioning justice system and the need to protect national security. My view is that if a case is made that unjust results might be being reached, with claimants making claims that they know the Security Service cannot defend, then we should do enough to enable our justice system to properly defend those cases. Open justice is a means to producing justice. The courts have always recognised that if you cannot do justice that is open—for example, if you destroy the confidentiality that the justice system is designed to protect—then exceptional measures are needed for exceptional cases. I do not think our security services are being well served if they are forced to admit claims that they should not, and neither is respect being paid to our judges if they are simply a rubber stamp.
The right answer in relation to this issue is, first of all: is the case proved? That is an open question at the moment, as far as I am concerned. If the case is proved that some measures are needed then these should be kept to a minimum and the judges should decide what is required in order to create the fairest possible system. The problem with the amendments from the noble Lord, Lord Hodgson of Astley Abbotts, which I think he would be the first to acknowledge, is that they involve the judge considering whether there would be any serious risk of injustice to either party if the application for a closed material procedure were to be granted. However, everybody involved in closed proceedings knows perfectly well that if you have procedure that reveals evidence about person A and A never knows what is said about him or her, the prospect of an injustice is significant. However, that may be the best that can be done under the circumstances.
I respect the noble Lord, Lord Hodgson of Astley Abbotts, for raising these points. I just do not think the House of Lords can avoid asking: what is the right answer? The only guide we have is to try to reach the right answer. That is the only way we shall retain respect for what we do. The task we are engaged in is trying to balance those two factors. As I said before supper, what we are aiming for in this bit of the debate is fairness because ultimately national security can be protected by the security services pulling a case, so it is all about deciding whether there are a sufficient number of unfair cases that some special procedure needs to be crafted.
As it happens—and I think the noble Lord, Lord Lester of Herne Hill, is right here—the points raised by the noble Lord, Lord Hodgson of Astley Abbotts, are pretty well the same points we had before supper, and he acknowledged this in his opening remarks. The noble Lord’s basic approach in Amendment 44 is to say that one should go the PII route first; then only if the PII decision is non-disclosure do you go on to CMP. I do not like that approach for the reasons I advanced in response to the amendment from the noble Lord, Lord Faulks, in concert with the noble and learned Lord, Lord Woolf. It is too inflexible. I do not see why we cannot give the court all the options at the time it makes the decision, as the noble Lord, Lord Thomas of Gresford, suggested. This would avoid opportunistic applications and allow the court to come to the fairest possible results. I would be repeating myself if I went on about that. The noble Lord’s amendment has promoted debate, but the effect of that debate is that we do not want the lack of flexibility that his amendment proposes.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, I thank my noble friend Lord Hodgson of Astley Abbotts for putting forward these amendments and for indicating his concerns: that we should be seeking fairness and reflecting on the possible impacts upon society.
I repeat again the passage from paragraph 2.5 of the Green Paper, which is pertinent here, where the Government assert that the,
“appropriate mechanism for triggering the CMPs will help to ensure that they are only used where it is absolutely necessary to enable the case to proceed in the interests of justice. The principle of open justice is an extremely important one, and any departure from it should be no more than is strictly necessary to achieve a proper administration of justice”.
Inasmuch as we are testing this legislation, that is where this House serves an important part of our democratic procedures. Before the dinner break we tested it very well with all the points that were made. I hope that when my noble friend does the outreach he can say that, in trying to ensure no more than is strictly necessary to achieve the proper administration of justice, these tests have been applied and that there has been a very active engagement of Members of your Lordships’ House in trying to ensure that that outcome is reached.
If we are trying to ensure fairness and that there should be no in-built bias, there will be cases where the use of closed material proceedings means that people who might otherwise have been excluded get an opportunity for material to be heard which might well exculpate them. That may be more relevant to one of the later clauses.
The noble Baroness, Lady Manningham-Buller, made a point about fairness. Indeed, it might be important fairness in terms of how the public approach these matters. If the intelligence service, the Security Service, has a full answer to many of the allegations made against it, it is inherently wrong that it should be denied being able to put forward an answer. I perhaps can do no better than again to quote Mr David Anderson QC, much quoted in today’s deliberations:
“We are in a world of second-best solutions: but it does not seem to me that the level of injustice inherent in the use of CMPs in a case of this nature necessarily exceeds either the injustice to the claimant of a case being struck out, or the moral hazard and reputational damage to the intelligence agencies that is caused by settling a case which, had it been possible to adduce all the evidence, would have been fought”.
Bearing in mind these considerations too, I think that all parts of the House are trying to ensure that we find a way forward to achieve the objective.
My noble friend indicated the type of safeguards that he wished to put in. I will not go over them in any detail again but, in response to the previous debate, I think that I explained why the Government do not believe that an exhaustive use of PII before applying for a CMP is appropriate. There clearly will be cases when it could be futile to do so because it is very obvious that to exclude all that evidence by way of PII could render the case that a proper defence could not be put forward.
If my noble friend’s intention is to ensure that CMPs are used only in extremely rare circumstances, I am not persuaded that these amendments are the way in which to achieve that. The noble and learned Lord, Lord Falconer, indicated some of the difficulties inherent in the requirement that there should be no serious risk of injustice. The point to remember is that important safeguards are built into this Bill to ensure that national security is not claimed erroneously and that the fair trial rights of all parties are respected. The court will grant a declaration that a CMP may be used only where disclosure of relevant material would otherwise damage national security. As I indicated earlier, there is a second stage in which the court—with the full engagement of special advocates appointed to represent the interests of an excluded party—will adopt a painstaking process to ensure that only material heard in closed session will be material, the disclosure of which would damage national security.
In addition, I mentioned that the operation of the procedure is explicitly made subject to the right to a fair trial protected by Article 6 of the European Convention on Human Rights under Clause 11(5)(c). In a CMP, the court will make the necessary orders to ensure that the proceedings are conducted in a manner that complies with the article. The judge, with the assistance of the special advocates, will ensure that as much information as possible can be disclosed into open court. If the full document cannot be disclosed, the court will also consider whether it could be disclosed in part through redactions or whether a summary could be provided to the other parties without damaging the interests of national security.
If there is a serious risk of injustice of the kind which my noble friend describes, the court can take the steps which I have described. Equally, if the judge is not satisfied that a CMP has properly enabled the fair testing of closed material he will simply put no weight on it. That approach is the right one in the national security context. A court will grant a declaration under Clause 6 or permit material to be heard in closed session only on the extremely narrow ground that disclosure of material would damage the interests of national security and there are strong safeguards already available to the court.
It is important that we air not only some of the details of my noble friend’s amendment but look at the context in which he proposed it. However, I believe that these balancing considerations have been considered in the proposals before your Lordships’ House. While I do not in any way quibble that these amendments raise an important issue, I hope that I have explained why they are unnecessary, given the other safeguards in the Bill. I ask my noble friend to withdraw the amendment.
Lord Falconer of Thoroton
The noble and learned Lord referred to Clause 11(5), which states:
“Nothing in sections 6 to 10 … affects the common law rules as to the withholding, on grounds of public interest immunity, of any material in any proceedings”.
He referred to paragraph (c), but I am looking at paragraph (b). Does it mean that, in considering a PII application, the court cannot have regard to the subsequent possibility of a CMP application?
Lord Lester of Herne Hill
My Lords, perhaps I may ask a question related to the same provision. Subsection (5)(c) states that nothing in those sections,
“is to be read as requiring a court or tribunal to act in a manner inconsistent with Article 6 of the Human Rights Convention”.
I take it that what that means is, “in breach of the duty imposed by Section 6 of the Human Rights Act”, which requires courts to act in a way that is compatible with convention rights, including Article 6. One might think about amending that paragraph to make it clear that one is talking about not just the international treaty but domestic law, which imposes that duty under Section 6 of the Human Rights Act. Can thought be given to that?
Lord Wallace of Tankerness
Certainly, it could be thought about. We just wanted to make it clear in the Bill that Article 6 was pertinent. I am answering this to the best of my ability. The noble and learned Lord asked whether Clause 11(5)(b) ousted PII when a court was thinking about closed material proceedings. I am not sure if that was his question.
Lord Falconer of Thoroton
The noble and learned that Lord said before supper, “Oh, well. You could always bear in mind if a PII application was made that the court could say that it was not very keen on it. The much better course would be to apply for a closed material proceedings”. I read Clause 11(5)(b) as saying that you have to ignore the possibility of a CMP application when you are considering PII, because the clause states:
“Nothing in sections 6 to 10 … affects the common law rules as to the withholding, on grounds of public interest immunity, of any material in any proceedings”.
I am not therefore sure that it would be open to a judge to say, “I am not going to look at PII because I want you to do a CMP”.
Lord Wallace of Tankerness
My Lords, obviously we will reach Clause 11. My understanding is that concerns were expressed in some quarters that what we were proposing in some way ousted PII and that it was, as some of the more extreme comments suggested, dead in the water. The purpose of the provision was to make it clear that PII is not lost in time or space, and that the common-law rules relating to PII are not affected. If that is not a full answer, we can deal with this in more detail when we consider Clause 11.
Lord Hodgson of Astley Abbotts
My Lords, I am grateful to my noble and learned friend for that lengthy reply. It was rather lengthier than I expected it to be, bearing in mind that we covered quite a lot of this ground before the dinner break. I thank my noble friend Lady Berridge for her support, and of course I accept the strictures of the noble Baroness, Lady Manningham-Buller. I promise her that I will not do it again. In the mean time, I beg leave to withdraw the amendment.
Lord Hodgson of Astley Abbotts
Amendment 45 takes us to Clause 6(2), which begins:
“The court must, on an application under subsection (1), make such a declaration”.
My amendment seeks to replace “must” with “may”. I intend to be quite brief and to call up very shortly the heavy artillery of my noble friend Lord Thomas of Gresford in support. There have been, of course, many references to the key role of judicial discussion in the operation of CMPs under Clause 6. This amendment simply seeks to ensure that the Government’s claim that a judge will have the final say on whether a CMP takes place is a reality. As drafted, the Bill does not seem to do this. While it gives the judge the last word, the reviewer of terrorism legislation has said that:
“The only difficulty is that that word is dictated to the judge by the Secretary of State”.
The special advocates have warned that the Bill creates a statutory straitjacket for judges, and we came across this earlier this evening. Martin Chamberlain said this in his evidence to the Joint Committee on Human Rights. He said that a key safeguard that had been promised—enabling a judge to have the final say on when secret proceedings are needed—was missing from the draft Bill. He went on to say that,
“in fact the position is that the judge is required to accede to the Secretary of State’s application for a Closed Material Procedure—the word ‘must’ is used—if there is any evidence at all whose disclosure would be contrary to the interests of national security. So, there is no ability for a judge to say, ‘I think this is the type of case that could perfectly fairly be tried using normal Public Interest Immunity rules’”.
Finally, he said,
“you are going to be giving them”—
that is, the judges—
“a statutory straitjacket that requires them to ensure that nothing is disclosed contrary to the interests of national security … there is to be no balance between national security on the one hand and fairness on the other”.
I argue that we should replace “must” with “may” to once again improve judicial discretion. I beg to move.
Lord Thomas of Gresford
My Lords, I support this amendment. I have already made the point that the procedures of the court should be controlled by the judge and not by the Secretary of State. The words “rubber stamp” have been used on a number of occasions, not least by my noble friend Lord Lester, in relation to these provisions. It is a rubber stamp when one combines the provisions in Clause 6(2) with what the judge must do in determining the application, under the provisions of Clause 7(1)(c). This is a point that the noble and learned Lord, Lord Falconer, made in his original submission on an earlier amendment, and we have not followed it up very much. Clause 7(1)(c) states:
“that the court is required to give permission for material not to be disclosed if it considers that the disclosure of the material would be damaging to the interests of national security”.
Now, who gives evidence about the interests of national security? It must be, by virtue of the nature of the proceedings, the uncontested evidence of those who are responsible for security. What exactly is meant by the interests of national security is something that I wish to pursue, perhaps at the next sitting of this Committee. In some definitions, it can refer to economic interests, and there are all sorts of others, as well as simply terrorism, which is the context in which we think of national security at the moment. We will need a better definition in due course.
The use of “must” in this clause reduces the judge’s power virtually to nil. The grounds put forward by the Minister may be reduced to the interest of national security, but as I have said, as the Bill is drafted those interests will be defined by the Minister himself. Clause 6(3) instructs the judge to ignore two very relevant considerations: first, that there may be no requirement on the Secretary of State to disclose; and, secondly, that the intercept evidence which the Secretary of State intends to put before him is inadmissible in the very proceedings he is supposed to be judging. If intercept evidence is inadmissible in open court, surely it is inadmissible in closed court. Intercept evidence would have to be normally regarded as inadmissible in such circumstances.
The word “may” will give the judge a discretion to decide what is proportionate and necessary in all the circumstances that come before him. It will give the judge control and power to manage proceedings, and the ability to decide how the procedure will be carried out and which type of procedure would be more appropriate. It will give the flexibility that I talked about in relation to the amendment that we debated earlier.
Lord Falconer of Thoroton
My Lords, this is a key amendment. It has to be read alongside Clause 7(1)(c). The effect of the amendment tabled by the noble Lords, Lord Hodgson and Lord Thomas of Gresford, would be that once it was established that a disclosure to a claimant would be damaging to the interests of national security, it would be open to the court, balancing all the factors for and against non-disclosure, to determine that the case should involve the option for the defendant to have a closed material proceeding. If the position were exactly as the noble Lord, Lord Thomas, suggested, and there was some damage to national security but it was extremely minor and only in respect of one document when there were millions of other documents whose disclosure would not do any harm at all, even if the Secretary of State certified that minor harm would be done, it would be open to the court to say, “Yes, we accept that there will be damage to national security but it does not warrant a CMP procedure”. That would give the judges some degree of control.
Currently, if the Secretary of State for Foreign and Commonwealth Affairs said, “I have spoken to the security services and they tell me that if you disclose this, it will damage national security, and I believe that to be true”, I find it very difficult to imagine that a responsible judge would be able to say no. Once the judge has said yes to that proposition, he or she would be obliged under Clause 6(2) to say, “This is now a case in which an application can be made”. The consequence of that is that Clause 7(1)(c) would apply. Rules of court would have to be made that would then allow the Secretary of State or the relevant party to make an application. If in respect of an individual document or piece of information the Secretary of State says, “I have spoken to the security services and they tell me that disclosure of these 25 documents would damage national security in quite a mild way”—they would not say that, but let us imagine that they did—the judge would have no discretion.
The correct course, if the case is made that we need to change the legal position, is that the judge should have a discretion. Again, I emphasise that what the Bill is trying to do is not protect national security—that can be protected by the case being pulled—but ensure a fair trial. I look to the noble and learned Lord to justify the fact that there is no balance and no discretion. Why is there an obligation to opt for CMP even if the damage to national security would be very mild? The noble Lords’ amendment would get round this and give the judges real discretion.
Lord Wallace of Tankerness
My Lords, once again I thank my noble friend for moving his amendment. It highlights an important issue in the Bill relating to judicial discretion. Under the proposed proceedings, the Secretary of State would apply for a declaration that a closed material procedure might be used in the case. The judge will need to be satisfied of two things before he grants the application. The two conditions set out in Clause 6(2) are that the material is so relevant that normally a party would be required to disclose it, and that disclosure of the material would damage national security.
The construct is that if both conditions are met, there is no discretion; the judge says that this is a case where a closed material procedure will happen. As I started to explain prior to the dinner break, that is a gateway. It does not mean that every piece of material is necessarily going to be the subject of evidence led in closed proceedings. Things would then move on to the second stage where, similar to what happens in PII, evidence documents are then tested. It may be that, subject to proper redaction, certain documents then could be admitted, or permission might be refused for them to be in closed material proceedings and they could be admitted to open proceedings if the redaction was made. In other words, the redaction would be the non-disclosure. Equally, as indicated in Clause 7(1)(d), if permission is given by the court not to disclose material, the rules of court must provide that the court should consider requiring the relevant person to provide a summary—the gisting—of the material. As subsections (2) and (3) of Clause 7 indicate, there are consequences. If the court does not give the relevant person, most likely the Secretary of State, permission to withhold material and the Secretary of State elects not to disclose it, there are consequences that can flow from that and these are set out in Clause 7(3).
That is the process we envisage. Obviously, the court will be assisted and will receive representations from special advocates. It is the intention that the court should have the power to refuse non-disclosure or permit non-disclosure only to parts of a document or require summaries or require a party to take action for refusal to disclose or to summarise—for example, not to take certain points or to make concessions. That is certainly the intention. I am more than willing to look at the wording to see that it gives effect to the intention.
Lord Lester of Herne Hill
Is the answer to the noble and learned Lord, Lord Falconer, that the principle of proportionality is intended to apply here—in other words, that the court must exercise a sense of proportion once a case is through the gateway? If that is so, it is very important. Can the Government think about writing in the need for proportionality as the previous Government did in their Equality Bill?
Lord Wallace of Tankerness
My Lords, I am not conceding at this point that it is proportionality. The dynamic of representation is from special advocates and the court considering the material may be able to disclose a particular document if there are certain redactions. I understand that that is the nature of many of these cases and that representations can be made.
The important point I wish to make is that that is at the second stage. The amendment which my noble friend has moved relates to the first stage. That is a gateway which we believe the case ought to be allowed to go through if the two tests are met—namely, that it is a case where disclosure of material is required. We envisage that the Secretary of State would present the material to the court. If there were a vast number of documents, he could present a sample, giving the flavour of why he believes that issues of national security are involved, and ask for the principle of closed material proceedings to be accepted. But the detail takes place at the second stage. Therefore, our view is that the discretion would not be appropriate at the first stage because it is at the second stage that individual documents are being looked at. If the two tests are met, it is important that closed material procedures are allowed to take place, although what actually becomes closed material will be subject to no doubt considerable discussion, debate and representation. It is for that reason that we do not believe it would be appropriate to allow judicial discretion in these circumstances.
However, I certainly take the point about Clause 7(1)(c) that was made by the noble and learned Lord, Lord Falconer, and referred to by my noble friends Lord Hodgson and Lord Thomas. If they feel that that is a total barrier and does not allow the kind of discussion, debate and representation to be made at the second stage that we clearly intend should be part of this process, we are happy to look at it.
Lord Hodgson of Astley Abbotts
Perhaps I might ask for clarification for a non-lawyer. Clause 6(2) has the two tests: a requirement to disclose and whether the disclosure is damaging. No matter how trivial or tiny the case is, you go through that sequence. Then we have the second stage of a gateway that could result in further actions to open up material by redaction and enable it to be disclosed and so on. Where does that second stage come in? Am I right in thinking that Clause 6(2) applies no matter how trivial the matter is?
Lord Wallace of Tankerness
My Lords, if the test is made as to whether it,
“would be damaging to the interests of national security”,
with all due respect, I do not think that is a trivial matter, and I do not think the Secretary of State would actually seek to do it if it was a very minor matter. We are talking about matters that would have to satisfy the court that it,
“would be damaging to the interests of national security”.
That is quite a serious level of consideration. We are not talking about something that is trivial. What I am trying to say is that if the Secretary of State sought to do something that perhaps was not so much in the interests of national security but might be thought in some way to be hiding an embarrassment, as is clear also from the Bill—I think it is in Clause 10(4)—special advocates are engaged at the gateway stage and obviously we would make representations to that effect. If the court was not satisfied that this was a matter of damaging the interests of national security, the test would not be met and it would not be appropriate for the closed material procedure application to succeed.
Lord Lester of Herne Hill
I was trying to be helpful—and obviously failing—in asking why the Government do not accept that the principle of proportionality must apply at the second stage. It is an ancient principle of our common law that you do not take a sledgehammer to crack a nut. Provided that the judge has that discretion, it seems a very important safeguard. Could whether or not to write it into the Bill be considered before Report?
Lord Thomas of Gresford
If I may add to that, my Amendment 58 seeks to add words to Clause 7(1)(c) that would introduce a test of proportionality. Clause 7(1)(c) says,
“that the court is required to give permission for material not to be disclosed if it considers that the disclosure of the material would be damaging to the interests of national security”,
to which my amendment would add,
“and that damage outweighs the interests of justice in disclosure”.
That would introduce a balancing test for the judge. As I understand what my noble and learned friend is saying, Clause 6(2) is concerned with the gateway and that could be satisfied by the production of a sample of material. But when you get to the second stage, the judge would be considering things in absolute detail, endeavouring to perhaps make things available by redaction or other means. Even when doing that, my Amendment 58 would be a very appropriate addition to Clause 7(1)(c).
Lord Wallace of Tankerness
My Lords, I know my noble friends are trying to be helpful and I am sure that equally they will understand why I am not prepared to make a concession on the hoof, as it were. This is clearly something one would wish to consider and clearly we will also have the opportunity in good time to consider my noble friend’s Amendment 58. I am glad that he made the distinction between getting through the gateway—which is what Amendment 45 applies to—and the second stage. We are of the view that if the two tests in Clause 6(2) are satisfied to the discretion of the judge, the application for the closed material procedure must succeed and thereupon the detailed consideration of the documentation takes place under the rules of court, which are to be set out under Clause 7.
Lord Falconer of Thoroton
I understand that the noble and learned Lord is seeking to say that there is no discretion to determine whether the threshold is passed. However, something akin to a discretion is reached in Clause 7. Looking at the wording of it, the Clause 7 requirement is rules. Under Clause 7(1)(a), you are not allowed to have the claimant present when you are looking at the individual material. If the court is satisfied that there is damage to national security, it has give permission for it not to be disclosed. It is not a discretionary matter. It is simply determining, as the noble Lord, Lord Thomas, said, whether the threshold is met. If the threshold is met, there is no discretion. One additional power is given; namely, can a summary be given that does not give away the national security material? It is not a question of proportionality. It is exactly the same test in practice as that which is referred to in the gateway in Clause 6(1). If the Secretary of State says, “If you disclose that document I am advised by the security services that it will damage national security”, unless the judge thinks that the Secretary of State is irrational, which would be very rare, he will be obliged to give effect to that. It is not a question of discretion at all. There are no balancing factors. It is simply, “Right, the consequences are that I cannot disclose that. Can a summary be given?”. That is the only thing that a judge is allowed to consider under this Bill. Although I understand what the noble and learned Lord is trying to say, it is not really right to say that there is a gateway under Clause 6 and then some sort of discretion under Clause 7. There is not a discretion under Clause 7.
Lord Wallace of Tankerness
My Lords, I make the following point in response to what the noble and learned Lord says. He is right to say that Clause 7(1)(d) would give rise to gisting. However, under Clause 7(1)(c), it may well be that after representations, argument and debate a document is redacted, and of course the redaction may well be the material that should not be disclosed because it is the material which could be damaging to national security. However, once redacted, the remainder of the document might then be admitted to open proceedings. That is an important part of the process. It is not a blanket application to the document as a whole. It may be that the non-disclosure extends to only part of that document. Only part of that document would be a matter of damaging national security. For example, it could be that a document gives the name of an agent. If that was redacted, the rest of the document could well be admitted to open proceedings, but the name of the agent is something which quite properly should not be disclosed.
Lord Wallace of Tankerness
The noble and learned Lord says that it would not get through the gateway, but it is not a gateway for every document. It is a gateway to trigger the closed material proceedings. It may be a sample document saying, “Here is the kind of defence we want to mount. There is material here on which we will wish to rely but it cannot be put into the public domain because it would be damaging to the interests of national security”. If the judge agrees that there is documentation there that would satisfy that, the application is granted and thereafter the documentation or evidence is gone through page by page. It may be that you can take something out of a document and the rest of it would be quite safe from the point of view of national security to allow into open proceedings.
That is the process that we envisage being gone through at stage 2. It is an important part of the process, which means that only a small amount of material would be subject to closed material proceedings. However, to get to that process of going through material document by document, you must first get through the gateway. It is on getting through the gateway, if the two tests are satisfied, that the application should be granted. Going back to my noble friend’s amendment, he argues that there should be some discretion at that point. The Government’s position is that the two tests should be met but can be challenged. Special advocates can be involved at that stage to challenge whether the tests have been met. However, if they are met, we should get through the gateway and, thereafter, we can look at issues such as redaction and gisting. That is an important part of the stage 2 proceedings.
Lord Lester of Herne Hill
I am sorry to pursue the matter once more. When a judge is deciding on the scope of an injunction, or on whether a restraint of trade is no more than is necessary, that judge is then applying the principle of proportionality. I do not understand why the same does not apply here. When the judge is deciding on such things as redaction and looking at documents, surely he or she will decide that there should not be overkill, that the interests of justice are to be weighed and that the principle of proportionality should therefore apply. However it is expressed, that is the same as the European test under both EU and convention law. It is also the same under our own scheme. I do not understand why that does not apply here.
Lord Wallace of Tankerness
My Lords, I think I have already replied to my noble friend. I indicated that he had raised the issue of proportionality and that I would not make a concession on that point on the hoof. However, I also undertook to consider it.
Lord Hodgson of Astley Abbotts
My Lords, I am grateful to my noble and learned friend for those comments. I have listened carefully to him on the interplay between Clauses 6 and 7. Obviously, we shall look further at Clause 7 in relation to what can and cannot be revealed and the implications for the gateway, as he put it, under Clause 6(2). I have a slight instinctive dislike of the word “must”, which remains in my mind because of the issue of judicial discretion. However, we will no doubt get further illumination on that as we get to Clause 7 and the later amendments. That may make me wish to consider this again but, in the mean time, I beg leave to withdraw the amendment.
Lord Thomas of Gresford
Lord Thomas of Gresford
My Lords, the closed material procedure applies when a court is, under Clause 6(1),
“seised of relevant civil proceedings”.
Clause 6(7) defines “relevant civil proceedings” as,
“any proceedings (other than proceedings in a criminal cause or matter) before … the High Court … the Court of Appeal, or … the Court of Session”.
CMP applications can be brought only where a disclosure of material would be damaging to the interests of national security. However, can such applications be appropriate in habeas corpus proceedings or judicial review involving the liberty of the subject or claims for wrongful arrest against the police or prison officers? Not even the United States goes that far. As my noble and learned friend will be well aware, the habeas applications in the Guantanamo cases have a special procedure whereby sensitive material is released to security-cleared advocates acting on behalf of the applicant. Then the court, in such special procedures, can give permission to those security-cleared advocates to discuss specific matters or questions laid out by the court with the client.
In habeas corpus proceedings, the onus is on the respondent to the writ to justify the restraint of the applicant. Blackstone cites the first recorded use of habeas corpus in 1305, during the reign of King Edward I. He explains the basis of the writ in these terms:
“The King is at all times entitled to have an account, why the liberty of any of his subjects is restrained, wherever that restraint may be inflicted”.
I am always conscious of the Magna Carta Lords who look down on our proceedings in this Chamber. At Runnymede nearly 800 years ago, they insisted that:
“No Freeman shall be taken or imprisoned, or be disseised of his Freehold, or Liberties, or free Customs, or be outlawed, or exiled, or any other wise destroyed”.
Are actions against the police for wrongful arrest to be defeated by secret evidence? Let us take the example of someone arrested on a bus for smoking a fake cigarette. He brings proceedings against the police for wrongful arrest. Those acting for the police go to see the judge in secret and say, “We had a tip-off from the security services. We cannot tell the claimant in this particular case. You must strike his claim out or find in our favour”—or whatever. Is his claim then to be defeated? I suggest that that would be quite contrary to the basis of habeas corpus and the protection of freedom of the individual as we have known it for centuries.
In my submission, the Government should define much more closely the relevant civil proceedings in which CMPs may be applied for. We have been talking all day but only in the context of civil claims for damages brought in the High Court in the ordinary way. We have not discussed habeas corpus and matters of that sort. I suggest that they should be specifically excluded. I beg to move.
Lord Beecham
My Lords, I have some sympathy with the suggestion of the noble Lord, Lord Thomas, that habeas corpus proceedings should fall within the civil proceedings provisions of the Bill. I am less persuaded by the argument to include any action against the police. It would probably seem wrong to exclude these specific actions from the procedures, not least in the light of the Crime and Courts Bill, with the creation of the National Crime Agency, the extension of powers to the border agency and the like, and the possible involvement of ordinary police forces under the auspices of the NCA in matters which could go to issues of terrorism or other aspects of national security.
The noble Lord may have a point about habeas corpus and it would be interesting to hear the Minister’s response to that, but I do not think that the Opposition could necessarily support the amendment as it stands. There is the problem that we will refer to later about definitions of national security and the like, which possibly offer a more fruitful way of narrowing the scope of the provisions of the Bill. Having said that, I entirely concur with my noble and learned friend’s view. Anything that I say on subsequent amendments or indeed in relation to this amendment is without prejudice to the stance that we take, but we are yet to be persuaded of the case for closed material procedures in the first instance. All the discussions that have taken place so far, and that we will continue to have in relation to this part of the Bill are subject to that distinct reservation. We are not, therefore, conceding the point when we look to see what ultimate fallback provisions might be desirable and necessary if it is the wish of your Lordships’ House on Report to go forward with the Bill in much the condition that we now find it. We will be looking to discuss amendments and we hope that the Government will respond positively to some of them but in relation to this amendment we will be commending the latter part to the Minister’s attention.
Lord Wallace of Tankerness
My noble friend’s amendment seeks to narrow further the contexts in which a CMP can be used. I hope I can demonstrate to your Lordships that the Bill is already very narrowly drafted and that the amendment could remove justice from those who are entitled to it. The Bill as drafted allows CMPs to be used only in relation to information damaging to the interests of national security, only in the High Court, Court of Appeal or Court of Session, and not in a criminal cause or matter.
The amendment would mean that CMPs could not be used in any action against the police or law enforcement agencies, or any action seeking a person’s release from detention. Where such cases involve information that cannot be disclosed for reasons of national security, this amendment would not allow judges to reach a judgment based on all the facts. Claims relating to national security should, surely, be capable of being heard, rather than material being excluded by way of public interest immunity, regardless of whether the defendant is the police or a government department. As was reflected in the comments of the noble Lord, Lord Beecham, the police play a vital role in national security in, for example, counterterrorism investigations. There may be many civil cases which would involve the police—it would not necessarily be directed against a Secretary of State—and it would be unfortunate if they were to be excluded from the possible use of CMPs. Judges should be able to come to a judgment on the full facts in any case relating to national security.
The Bill is designed to increase justice for claimants and defendants in all civil cases where national security means that, otherwise, information could not be put into open court. This amendment would take that justice away from claimants who bring a national security case against the police or law enforcement agencies, or where, as my noble friend explained, the case is about a person’s release from detention. Cases about a person’s release from detention in the UK will generally be in the context of a criminal cause or matter where CMPs are not available, but should this not be the case, it is important that all of the material is before the court, if possible, rather than being excluded by PII.
My noble friend gave a quotation about habeas corpus going back to the reign of King Edward I. I hope that I do not strike too nationalistic a tone, but north of the border, Edward I is not seen as a fount of justice and liberty. That apart, my noble friend raises a serious point. It is our considered view that in the context of habeas corpus cases it is vital that the court is in possession of relevant material before making a decision to issue a writ. Without all of the relevant information, it may not be possible for the court to come to the right decision.
I know that noble Lords are concerned that the nature of the types of cases covered by this amendment creates a greater need for transparency, and that, indeed, in some circumstances, such as proceedings into potential violations of Article 5 of the European Convention on Human Rights, there is a requirement for transparency. The argument that public confidence requires fully open proceedings in such cases is an understandable one, but I believe that these concerns can be addressed through our current proposals. Nothing in this Bill is incompatible with the ECHR. My noble friend has raised a serious point about detention. I will reflect further on it, but our approach is that it is important, even in these cases, that all the material, if possible, is made available to the court before a decision is made, rather than some of being excluded through PII. I will reflect on what he has said, but our view is that we have struck the right balance. I hope that on that basis he will be able to withdraw his amendment.
Lord Thomas of Gresford
I know that my noble and learned friend is heading for the sleeper so perhaps we can send homewards to think again about this issue. Habeas applications in the United States have a special procedure and the importance of it is that the applicant for habeas is given some idea of what he is facing. I am not saying that habeas corpus applications should be completely open, but it is inappropriate to apply the strictures and limitations contained in the Bill to applications of that sort. It is a matter that we can discuss. On that basis, I beg leave to withdraw the amendment.